author: Desmond, J.

text:
    Simon Beloff et al., Individually and on Behalf of Themselves and All Other Stockholders, Similarly Situated, of Brooklyn Edison Company, Inc., Appellants, v. Consolidated Edison Company of New York, Inc., Respondent, et al., Defendants.
    Argued June 3, 1949;
    decided July 19, 1949.

      Henry Cohen, Ralph Montgomery ArTcush and Daniel Rhoades for appellants.
    I. As construed below, the merger statute permitted Consolidated Edison to deprive the minority stockholders of their right to participate in the assets and business of Brooklyn Edison as a going concern, and to share in any benefits accruing from the merger, on the same terms as the majority. It permitted the parent company to deprive the minority of their share in the proceeds of its own antecedent wrongdoings by extinguishing the derivative causes of action before opportunity for suit thereon. The appraisal provision was inadequate to provide relief to the minority stockholders wishing to stay in the enterprise and to share in the benefits of the merger. The statute required no warning to the minority, no opportunity to meet, discuss the terms of the proposed merger with the majority, consult among themselves, carry on a joint investigation or take concerted action by way of injunction suit, derivative action or otherwise. The merger statute, so construed, violates the due process, contract obligation and equal protection clauses and is unconstitutional. (Hubbard v. Jones & Laughlin Steel Corp., 42 F. Supp. 432.) II. Minority stockholders have a right to opportunity for mutual consultation, joint investigation and concerted action by way of injunction suit, derivative action or otherwise. (McGahan v. United Engineering Corp., 118 N. J. Eq. 410; Brown v. Central Home Trust Co., 129 N. J. L. 213.) III. Minority stockholders are entitled to submit intercorporate transactions to judicial scrutiny. (Chelrob, Inc., v. Barrett, 293 N. Y. 442.) IV. Minority stockholders have a right to receive fair offer of participation in surviving or resulting corporation. V. Minority stockholders are entitled to the preservation of tneir interest in the corporate assets and business as a going concern, and to share the benefits accruing from the merger, on the same terms as the majority. (Ervin v. Oregon Ry. & Navigation Co., 20 F. 577, 27 F. 625; Lebold v. Inland S.S. Co., 82 F. 2d 351,125 F. 2d 369; Theis v. Spokane Falls Gas Light Co., 34 Wash. 23; Paine v. Saulsbury, 200 Mich. 58; Matter of San Joaquin Light & Power Corp., 52 Cal. App. 2d 814; Zimmerman v. Tide Water Associated Oil Co., 61 Cal. App. 2d 585; Breslav v. New York & Queens Elec. Light & Power Co., 249 App. Div. 181, 273 N. Y. 593; Outwater v. Public Service Corp. of N. J., 103 N. J. Eq. 461,104 N. J. Eq. 490.) VI. Minority stockholders are entitled to their ratable interest in a cause of action of their corporation against the majority stockholder arising out of abuse of the stock control. (16 C. J. S., Constitutional Law, § 254.) VII. Appraisal under section 21 of the Stock Corporation Law is inadequate. (Breslav v. New York & Queens Elec. Light & Power Co., 249 App. Div. 181; Anderson v. International Minerals & Chemical Corp., 295 N. Y. 343; Matter of Fulton, 257 N. Y. 487.) VIII. Merger statute does not confer right of eminent domain. (Litchfield v. Bond, 186 N. Y. 66; Erie R. R. Co. v. Steward, 170 N. Y. 172.) IX. Merger statute denies equal protection of laws. (Fountain Park Co. v. Hensler, 199 Ind. 95; Aerated Products Co. v. Godfrey, 290 N. Y. 92; Matter of Benvenga v. La Guardia, 182 Misc. 507, 268 App. Div. 566, 294 N. Y. 526; Atlantic Coast Line R. R. Co. v. Ivey, 148 Fla. 680.) X. The merger statute being unconstitutional0, and the merger invalid, the first cause of action should nbt have been dismissed. The defense of loches and estoppel, interposed to the first cause of action, has no basis in law or fact. (Pollitz v. Wabash R. R. Co.,
      207 N. Y. 113; Monroe County Sav. Bank v. Baker, 147 Misc. 522; Harvey v. Guaranty Trust Co., 134 Misc. 417, 229 App. Div. 774, 256 X. Y. 526.) XI. The “ merger ” being invalid, the second cause of action, as pleaded, should not have been dismissed for insufficiency. (Chelrob, Inc., v. Barrett, 293 N. Y. 442.)

      Jacob H. Goetz, Henry S. Reeder and Horace E. Whiteside for respondent.
    I. The merger of the Brooklyn Company into the Edison Company was effected in strict compliance with the applicable provisions of law. II. The Legislature has constitutional power to amend section 85 of the Stock Corporation Law to permit merger of utility corporations upon less than 100% ownership, and the amendments in question do not contravene any constitutional rights of plaintiffs-appellants. (Anderson v. International Minerals & Chemical Corp., 295 N. Y. 343; Colby v. Equitable Trust Co., 124 App. Div. 262,192 N. Y. 535; Bingham v. Savings Investment & Trust Co., 101 N. J. Eq. 413; Alpren v. Consolidated Edison Co., 168 Misc. 381; Beechwood Securities Corp. v. Associated Oil Co., 104 F. 2d 537.) III. The merger statute does not deny to appellants the equal protection of the laws. (New York R. T. Corp. v. City of New York, 303 U. S. 573; New York Central & Hudson Riv. R. R. Co. v. Williams, 199 N. Y. 108.) IV. Appellants’ contentions with respect to the procedural requirements as to notice to stockholders of merger under section 85 of the Stock Corporation Law do not give rise to any substantial constitutional question. (Offield v. New York, New Haven & Hartford R. R. Co., 203 U. S. 372; Wright v. Minnesota Mut. Life Ins. Co., 193 U. S. 657; Polk v. Mutual Reserve Fund Life Assn., 207 U. S. 310; Matter of Mount Sinai Hosp., 250 N. Y. 103.) V. Appellants are barred by their inexcusable loches from raising an issue in the present case as to the constitutional validity of section 85 of the Stock Corporation Law. (Persky v. Bank of America Nat. Assn., 261 N. Y. 212; Jones v. Bevillard, 209 N. Y. 446; National Supply Co. v. Leland Stanford Jr. Univ., 134 F. 2d 689; Windhurst v. Central Leather Co., 101 N. J. Eq. 543, 107 X. J. Eq. 528.) VI. The statutory remedy afforded to dissenting stockholders by section 85 of the Stock Corporation Law is adequate. (Anderson v. International Minerals & Chemical Corp., 295 N. Y. 343; Langfelder v. Universal Laboratories, 68 F. Supp. 209; Adams v. United States Distributing Corp., 184 Va. 134.)

      Nathaniel L. Goldstein, Attorney-General (Wendell P. Brown and Ruth Kessler Toch of counsel), appearing, pursuant to section 68 of the Executive Law, in support of the constitutionality of section 85 of the Stock Corporation Law.
    I. Neither the substantive nor procedural provisions of section 85 of the Stock Corporation Law, pursuant to which the merger was effected, violate any provision of the Constitution of the United States or of this State. (Ashley v. Ryan, 153 U. S. 436; Colby v. Equitable Trust Co., 124 App. Div. 262, 192 N. Y. 535; Electric Bond & Share Co. v. State of New York, 249 App. Div. 371, 274 N. Y. 625; Matter of Bergdorf, 149 App. Div. 529, 206 N. Y. 309.) II. The power of the Legislature to amend the corporation laws of a State is plenary. It applies to statutory provisions dealing with the relationship of the corporation with its stockholders as well as to the relationship of the corporation with the State. (McNulty v. W. & J. Sloane, 184 Misc. 835; Hinckley v. Schwarzschild & Sulzberger Co., 107 App. Div. 470,193 N. Y. 599; Grobe v. Erie County Mut. Ins. Co., 39 App. Div. 183; Polk v. Mutual Reserve Fund Life Assn., 207 U. S. 310; Offield v. New York, New Haven & Hartford R. R. Co., 203 U. S. 372; Wright v. Minnesota Mut. Life Ins. Co., 193 U. S. 657; Colby v. Equitable Trust Co., 124 App. Div. 262, 192 N. Y. 535; Logan v. New Amsterdam Gas Co., 224 N. Y. 664; Anderson v. International Minerals d Chemical Corp., 295 N. Y. 343.) III. Cas and electric companies are public utility corporations and as such affected with a public interest. They are universally subject to governmental control. (People ex rel. New York Edison Co. v. Willcox, 207 N. Y. 86; Nebbia v. New York, 291 U. S. 502; New York R. T. Corp. v. City of New York, 303 U. S. 573; New York Central & Hudson Riv. R. R. Co. v. Williams, 199 N. Y. 108.)
   Desmond, J.

The complaint herein has been dismissed at Special Term, and, from the unanimous affirmance by the Appellate Division of that dismissal, plaintiff appeals here as of right, asserting the presence in the case of a substantial constitutional question. The statute attacked for unconstitutionality is section 85, subdivisions 1, 5 and 7, of the Stock Corporation Law, which, as amended in 1936 (ch. 778) and 1937 (ch. 815) authorizes the merger of electric, gas or steam corporations, if approved by the Public Service Commission, where the merging or taking corporation owns 95% or more of the stock of the merged, or taken, corporation. Before those 1936 and 1937 amendments ownership of all the merged corporation’s stock was necessary for merger (although not necessary for consolidation). By a 1949 amendment (ch. 762) not of course applicable here, permission to merge when there is ownership of 95% of the taken corporation has been granted by the Legislature to stock corporations generally.

Following the procedures set out in section 85 {supra), ' there was merged into defendant Consolidated Edison Company of New York, Inc., on July 31, 1945, Brooklyn Edison Company Inc., in behalf of which latter corporation, plaintiffs bring this action, suing in their individual capacities as well. Just before that merger, which plaintiffs say was illegal and abortive, and for more than ten years prior thereto, defendant Consolidated Edison ” owned 1,244,165 of the 1,248,300 outstanding shares of Brooklyn Edison ” stock, or about 99.6% thereof. At that same pre-merger time, plaintiffs owned, as they had for some seventeen years, a total of 59 shares or 1/200 of 1% of Brooklyn Edison’s stock. It is undisputed that the procedures established by section 85 {supra), for such a merger of utility companies, were followed: that is, Public Service Commission approval of the proposal was obtained after published notices and after hearings, then the board of trustees of Consolidated Edison adopted a resolution merging Brooklyn Edison into itself, the resolution setting forth all the terms of the merger as approved by the commission, and providing for the payment by Consolidated Edison of $135 per share for and upon surrender to it of such shares of stock of the Brooklyn, or merged corporation, as were not already owned by Consolidated, the surviving corporation. No meeting of the stockholders of Brooklyn Edison was held (§ 85, supra, requires none) and no notice of the merger was sent to plaintiffs, or other outside stockholders of Brooklyn Edison, except the statutorily required notice, after the event. However, about a month later, Consolidated Edison sent to the outside stockholders of Brooklyn Edison, a letter pointing out that, under section 21 of the Stock Corporation Law, such stockholders, if not satisfied to accept the offered price of $135 per share for their holdings, might have appraisers appointed by the Supreme Court to value the stock and report their findings to the court for its determination of the price at which stockholders would have to surrender. Some of the other Brooklyn Edison shareholders took such appraisal proceedings, but these plaintiffs did not, nor have they ever accepted the price offered by Consolidated Edison. Instead, they kept their Brooklyn Edison stock and brought this suit, attacking the merger, or attempted merger, as illegal and a nullity.

The first cause of action, brought by plaintiffs for themselves and for all other Brooklyn shareholders who may join in, says that section 85 (supra) permitting as it does, merger in the event of 95% or more ownership, without notice to, or consent of, the minority, deprives plaintiffs and Brooklyn Edison of their property without due process of law, denies them the equal protection of the laws, and impairs the contract rights of plaintiffs and of Brooklyn Edison, all in alleged violation of section 1 of the Fourteenth Amendment to the United States Constitution, section 6 of article I of the New York State Constitution, and section 10 of article I of the United States Constitution; an accounting is prayed for. The second, third and fourth causes of action in the complaint (each brought by plaintiffs on their own behalf and in behalf of Brooklyn Edison) set out alleged transactions between Consolidated Edison and Brooklyn Edison, before the merger, in which transactions, it is said, the former, dominating the latter, took advantage of that dominant position to benefit itself to the latter’s detriment. Insofar as those three counts are pleaded by plaintiffs individually, they are plainly not maintainable since no individual stockholder has any such right of action (Niles v. New York Central & Hudson Riv. R. R. Co., 176 N. Y. 119). Insofar as those same three counts are set forth on behalf of Brooklyn Edison, the alleged wrongs they describe are actionable only if Brooklyn Edison still exists, that is, if there has been no effective merger of that entity into Consolidated Edison. Since we conclude that section 85 (supra), and its application to this merger, are not unconstitutional, we need not further examine into the internal sufficiency of the second, third and fourth causes of action, nor investigate the question of whether, if their allegations were otherwise sufficient, plaintiffs would still have to meet the demands of section 61-b of the General Corporation Law (stockholders not owning 5%, or $50,000 worth, must give security, etc.).

It is the settled law of this State that under the express reservation of power therefor in our State Constitution (art. X, § 1; see Clearwater v. Meredith, 1 Wall. [U. S.], 25, 39), the Legislature has the right at any time it sees fit to alter, suspend and repeal the charters of corporations ” (Colby v. Equitable Trust Co., 124 App. Div. 262, 265, affd. 192 N. Y. 535), that this constitutional provision is part of the contract or charter of every New York corporation (see Ashley v. Ryan, 153 U. S. 436), and that it authorizes the Legislature to make appropriate non-confiscatory statutory provisions for mergers (Colby v. Equitable Trust Co., supra; People v. O’Brien, 111 N. Y. 1, 46 et seq.; Matter of Bergdorf, 206 N. Y. 309, 313). It is fully as well settled that if the merger (or consolidation) is duly consummated in accordance with the statutes, the remedy of appraisal and payment is the only one available to dissenting shareholders, and that such dissenters on such an appraisal are entitled to receive fair and full compensation for all their rights (Matter of Timmis, 200 N. Y. 177; Logan v. New Amsterdam Gas Co., 224 N. Y. 664; Anderson v. International Minerals & Chemical Corp., 295 N. Y. 343, 350; see Matter of Fulton, 257 N. Y. 487, 494). It is settled, too, that statutes authorizing mergers may lawfully be applied even to corporations formed and stock acquired before their enactment (Colby v. Equitable Trust Co., supra). In short, the merged corporation’s shareholder has only one real right; to have the value of his holding protected, and that protection is given him by his right to an appraisal (see Voeller v. Neilston Warehouse Co., 311 U. S. 531, 535). He has no right to stay in the picture, to go along into the merger, or to share in its future benefits. He has no constitutional right to deliberate, consult or vote on the merger, to have prior notice thereof or prior opportunity to object thereto. His disabilities in those respects are the result of his status as a member of a minority, and any cure therefor is to be prescribed by the Legislature, if it sees fit. In none of this do we see any deprivation of due process, or of contract rights.

Plaintiffs argue that an appraisal (of which they did not avail themselves) would not have brought them fair return for their shares, since, as they say, the appraisers would not have reckoned as an element of value plaintiffs’ proportionate interests in Brooklyn Edison’s choses of action alleged in counts 2, 3 and 4 of this complaint. Indeed, as plaintiffs show, when other dissenting Brooklyn Edison holders went to an appraisal, the appraisers refused to value those same causes of action. We do not now attempt an all-inclusive listing of the items that such appraisers should add into their totals, any more than this court did in Matter of Fulton (257 N. Y., supra, at p. 494) but we say again, as in Matter of Fulton, and in Anderson v. International Minerals & Chemical Corp. (295 N. Y., supra, at p. 350) that “ every right of a dissenting shareholder is to be appraised and paid for ” (and see Wall v. Anaconda Copper Mining Co., 216 F. 242, 244, affd. sub nom. Wall v. Parrot Silver & Copper Co., 244 U. S. 407). But, when the Legislature has provided for such an appraisal and for appropriate judicial control and review thereof, plaintiffs may not refuse such an appraisal and upset the merger itself, merely on their assertion that the appraisal, if had, would not have done them justice.

It should be said, in passing, that when the Legislature, in 1936, permitted the merger of utility companies, despite lack of 100% ownership of one by the other, it set forth reasons for so doing. A Joint Legislative Committee to Investigate Public Utilities reported to the Senate and Assembly on February 12, 1935 (N. Y. Legis. Doc., 1936, No. 78, p. 149) that “ the consolidation of operating companies held by holding companies will tend to effectuate greater economies, more efficient management and rate reductions.” The commission recommended that legislation be enacted which will permit the merger of operating utility companies with less than 100 per cent of stock control, such mergers to be approved by the Public Service Commission.” Evidence had been submitted to the commission to the effect, as the report shows, that simplification of holding and operating company relationships in the public utility field had been made difficult by the blocking tactics of small minority interests (the same evil ” described by this court many years before in Matter of Timmis, 200 N. Y. 177,181, supra). We know from history that, in 1935, and for years thereafter, there was a nationwide demand for such simplification of the complex intercorporate structures of public utilities, and it is apparent that the 1936 and 1937 amendments to section 85 were part of an effort to meet that demand.

Plaintiffs say that the amendments conferred a special privilege on a special class of corporations ”, since they made an exception, as to public utility corporations, to the requirement, for merger, of 100% ownership. Plaintiffs say there is no reasonable basis for such preferential treatment for gas and electric corporations — indeed, they say the amendments were passed for the particular benefit of Consolidated Edison.” Whether the latter statement be true or not, the amendments to section 85 apply to all corporations of the particular class. That public utility corporations may, for a multitude of purposes and in innumerable ways, be subjected by Legislatures to treatment differing from that applied to other kinds of corporations, is too well settled for argument. And in this instance the Legislature had and stated a reason for this differentiation, as noted above.

In view of our conclusion that all the causes of action were properly dismissed for insufficiency in law, the defense of loches need not be discussed herein.

The judgment should be affirmed, with costs.

Loughran, Ch. J., Lewis, Conway, Dye, Fuld and Bromley, JJ., concur.

Judgment affirmed.


source: Caselaw Access Project

author: Bromley, J. Conway, J.

license: Public Domain

text:
    Doris S. Harman et al., Appellants and Respondents, et al., Plaintiffs, v. Board of Education of the City of New York et al., Respondents and Appellants.
    Argued May 26, 1949;
    decided October 13, 1949.

      Joseph H. Kohan and Louis Kohan for plaintiffs, appellants and respondents.
    I. Section 889 (now § 3102, subd. 4, par. [b] ; § 3103) of the Education Law establishes minimum salaries for the teaching staffs in New York City schools at not less than the salaries and increments fixed by the schedules and schedule conditions adopted by the board of education and on file in the State Commissioner of Education’s office March 5,1931. (Matter of Putnam v. Marshall, 286 N. Y. 485; Nelson v. Board of Higher Education of City of N. Y., 263 App. Div. 144, 288 N. Y. 649; Matter of Cox v. Board of Education of City of N. Y., 178 Misc. 95, 263 App. Div. 740; Cottrell v. Board of Education of City of N. Y., 181 Misc. 645, 267 App. Div. 817, 293 N. Y. 792.) II. Section 889 of the Education Law is mandatory and only the salary schedule and schedule conditions set forth in section 65, subdivision 8(b), of the by-laws on file March 5, 1931, is legally effective. (Matter of Putnam v. Marshall, 286 N. Y. 485; Wuesthoff v. Germania Life Ins. Co., 107 N. Y. 580; People ex rel. Lawton v. Snell, 216 N. Y. 528; French v. Edwards, 13 Wall. [U. S.] 506; People ex rel. J. B. Lyon Co. v. McDonough, 173 N. Y. 181; People ex rel. Huff v. Graves, 277 N. Y. 115; Matter of Chase Nat. Bank of City of N. Y. v. Guardian Realties, 283 N. Y. 350; Matter of Metropolitan Life Ins. Co. v. Boland, 281 N. Y. 357; Lockwood v. Gehlert, 127 N. Y. 241; People ex rel. Cayuga Nation v. Land Comrs., 207 N. Y. 42.) III. If section 95, subdivision 8(b), of the by-laws of the board of education is legally effective, then section 23 of the regulations of the board of examiners in effect in 1932 is discriminatory to the extent that credit for teaching in schools of the city of New York is not granted for teaching in schools other than the schools of the city of New York. (Cottrell v. Board of Education of City of N. Y., 181 Misc. 645, 267 App. Div. 817, 293 N. Y. 792; Merchants Refrigerating Co. v. Taylor, 275 N. Y. 113.) IV. If section 95, subdivision 8(b), of the by-laws of the board of education is legally effective then the plaintiff Kratzke on reappointment was entitled to the salary provided in such by-law. (Matter of Varian, 150 App. Div. 453, 206 N. Y. 658; Throckmorton v. State of New York, 128 Misc. 599.)

      John P. McGrath, Corporation Counsel (Arthur H. Kahn, Seymour B. Quel and Michael A. Castaldi of counsel), for defendants, respondents and appellants.
    I. Section 95, subdivision 8(b), of the by-laws of the board of education was validly adopted on January 8,1930, and validly amended on September 25,1930. The filing of such by-law beyond the thirty-day period provided by section 889 of the Education Law in no way affected the validity of the by-law. Accordingly, the complaints of the “ Harman group ”, which are based entirely upon the asserted invalidity of such by-laws, were properly dismissed. (Matter of Brenner v. Bruckman, 253 App. Div. 607; Matter of O’Connor v. Emerson, 196 App. Div. 807, 232 N. Y. 561; People ex rel. Huff v. Graves, 277 N. Y. 115; Matter of Rochester Gas & Elec. Corp. v. Maltbie, 188 Misc. 39, 272 App. Div. 162; Looney v. Hughes, 26 N. Y. 514 ; New York City Employees’ Retirement System v. Eliot, 267 N. Y. 193; New York Tel. Co. v. Board of Education, 270 N. Y. 111; City of New York v. Wilson & Co., 278 N. Y. 86.) II. The failure to grant reinstated teachers the same salary credit for prior teaching experience as is granted to original entrants is not discriminatory, nor does it result in any lack of uniformity in the salary schedules within the meaning of section 882 of the Education Law. (Matter of Stracquadanio v. Department of Health, 285 N. Y. 93; Faingnaert v. Moss, 295 N. Y. 18; Matter of Brady v. Board of Education of City of N. Y., 136 Misc. 1, 229 App. Div. 853; Barringer v. Powell, 230 N. Y. 37; Welker v. Lathrop, 210 N. Y. 434.) III. Reinstatement is discretionary with the board of education and the board could condition reinstatement upon such terms as it deemed proper. The board had the power to repeal the voluntary grant of salary credit to reinstated teachers notwithstanding the provisions of section 889 of the Education Law. Accordingly, the complaints of the “ Connolly group ” should have been dismissed. (Matter of Doering v. Hinrichs, 289 N. Y. 29; Matter of Bricker, 58 N. Y. St. Dept. Rep. 452; Stein v. Board of Education of City of N. Y., 284 N. Y. 768; Firestone v. Board of Education of City of N. Y., 284 N. Y. 770; McCaughn v. Hershey Chocolate Co., 283 U. S. 488; Matter of Mounting & Finishing Co. v. McGoldrick, 294 N. Y. 104; Matter of Kolb v. Holling, 285 N. Y. 104; Story v. Craig, 231 N. Y. 33.) IV. Aside from the fact that the validity of the rejection of the 1928 application is not properly raised herein, it would seem that a delay of almost twenty years should bar plaintiff Kratzke as a matter of law. (Matter of Curtin v. Dorman, 293 N. Y. 505.)
   Bromley, J.

These are consolidated actions by twenty-nine schoolmistresses, employees of the Board of Education of the City of New York, against that body, the superintendent of schools and the board of examiners. By cross appeals all parties challenge the judgment below, which affirmed an award in favor of eleven plaintiffs and a judgment of dismissal as to the remainder. Madeline Stattel, a member of the victorious group, had discontinued her action after judgment in the trial court.

We are confronted with questions concerning the validity and effect of a number of by-laws of the board relating to the salary credits to be accorded teachers re-employed by the board on account of their previous experience in the schools of New York City. All of the plaintiffs are reinstated teachers who seek increased salary credits and payment of such sums as should have accrued since their reinstatement and within the applicable Statute of Limitations.

A summary of the statutes and by-laws involved will aid in posing the questions at issue. For thirty years past the board of education has been empowered to fix the salaries of its teaching employees through its by-laws, so long as those salaries were not lower than the minimum salary schedules set forth in the Education Law (Education Law, §§ 882, 883, now §§ 3101, 3102). Section 882 also has commanded that school districts employing eight or more teachers must adopt uniform schedules of salaries for all teachers.” During the same period the Education Law has provided that any by-laws containing salary schedules or conditions, and any amendments thereto, ‘ ‘ shall within thirty days after the adoption thereof be filed in the office of the state commissioner of education ’ ’ (Education Law, § 839, now § 3103). The schedules of salary credits to be accorded for previous experience to teachers employed in the New York City school system clearly fall within the scope of the last statute.

Prior to 1930, a teacher who was reinstated in the schools of New York City received full credit for all years of prior experience in those schools, pursuant to by-law, section 95, subdivision 8, of the board of education. At the same time, a new teacher, with previous experience in schools without the New York City system or in an industry related to his proposed subject of instruction, received a salary credit equated under by-law, section 23, of the board of examiners. The maximum credit under that schedule ivas seven years for twelve or more years of prior experience in a high school or college.

On January 8, 1930, the board of education adopted a new provision concerning reinstated teachers, by-law, section 95, subdivision 8(b). Therein it was provided that a reinstated teacher, who had applied for re-employment more than one year after withdrawal, should receive “ credit for so much of the service standing to his credit, immediately prior to his withdrawal, as is equal to said service credit divided by the time computed in years and fractional parts of a year, which shall have elapsed between the date of his withdrawal and the date of his reemployment; provided, however, that on reemployment, he shall not receive a greater service credit than is equal to the number of years prescribed in his schedule for the maximum salary less three years.” That by-law was amended, on September 25, 1930, so as to afford all who had applied for re-employment prior to September 24, 1930, full credit for all prior service.

Since 1931, section 889 of the Education Law has contained a provision that no salary schedule or condition for teachers in New York City may provide less than the salary schedules adopted by such board of education * * * and on file in the office of the state commissioner of education ” on March 5, 1931 (L. 1930, ch. 530, as amd. by L. 1931, ch. 540. The original freeze date ” was February 1,1930). By-law, section 95, subdivision 8(b), was not filed with the commissioner until April 20,1932.

On July 15, 1942, the board of education repealed all of its by-laws relating to salary credit for reinstated teachers. No teacher re-employed since that date has received any credit for prior experience.

All of the plaintiffs had taught in the schools of New York City and had resigned their positions prior to 1930. All are now employed as teachers, having been reinstated at various times since that year. For our purposes they fall into two groups. The “ Connolly group ” now consists of eleven teachers who were reinstated after July 15, 1942, pursuant to applications filed prior to September 24,1930. They have received no salary credits for their prior experience. The “ Harman group ” includes seventeen teachers who have been reinstated under applications filed after September 24, 1930. Some, re-employed prior to 1942, have received salary credits under by-law, section 95, subdivision 8(b); the remainder have received no credits.

All plaintiffs alleged four causes of action, seeking.(1) a declaration that by-law, section 95, subdivision 8(b), is invalid under section 889 of the Education Law, since it was not filed within thirty days of adoption and since it affords less credit than the by-law which was then on file; (2) recovery of the difference between their lawful salaries, under the by-law on file at the freeze date, and the salaries which plaintiffs have received; (3) a declaration that the same by-law (§ 95, subd. 8[b]) is invalid under section 882 of the Education Law, since it affords less credit to plaintiffs than they would have received under by-law, section 23, of the board of examiners, and thus discriminates against reinstated teachers in favor of their colleagues whose prior experience has been gained in other schools; (4) recovery of the difference between the salaries plaintiffs have received and salaries equivalent to those afforded under by-law, section 23.

Respondents have contended that the award of salary credit to reinstated teachers is a matter within the discretion of the board, and that the by-law of July 15, 1942, effectively cancelled all provisions for such credit.

As the case now stands both courts below have held that the by-law of 1942 is invalid under the freeze ” provisions of sectian 889. By-law, section 95, subdivision 8(b), has been sustained under section 889, upon the grounds that the delay in filing was merely a clerical error, that the filing provisions of the statute are merely directory, and that the by-law — duly adopted before March 5, 1931 — shall be deemed to have been on file at that date. The two dissenting Justices in the Appellate Division felt that the statute would be offended unless plaintiffs received full credit under the by-law actually on file on March 5, 1931. The by-law also has been sustained under section 882, upon the ground that plaintiffs have failed to establish an unlawful discrimination.

Consequently, the ££ Connolly group ” of plaintiffs have received judgment in their favor on their first two causes of action, under the express terms of by-law, section 95, subdivision 8(b), rather than the theory of their complaint. The “ Harman group ” have suffered dismissal as to those claims, and the third and fourth causes of action have been dismissed as to all plaintiffs.

With respect to the amendment of 1942, the judgments below are manifestly correct; that by-law must fall under the mandate of section 889. We have said before that “ The provisions of section 889 are clear, unambiguous and mandatory. Little room, if any, is left for construction or for discretion in their application. * * * The salaries of positions as fixed in 1931 may not be reduced ” (Matter of Putnam v. Marshall, 286 N. Y. 485, 490, Lehman, Ch. J.). In light of the more recent case, in which similar action of the board with respect to the credit granted for £< outside ” experience under by-law, section 23, of the board of examiners was held invalid (Cottrell v. Board of Education of City of N. Y., 181 Misc. 645, affd. 267 App. Div. 817, affd. 293 N. Y. 792), it is impossible to conclude that the 1942 amendment should be sustained. That the board has regarded as completely discretionary its power to grant credit to reinstated teachers is immaterial, since no reservation to that effect was contained in its by-laws on March 5, 1931.

In considering plaintiffs’ first challenge to the validity of by-law, section 95, subdivision 8(b), it must be conceded that the provision should have been filed with the commissioner months prior to March 5, 1931. It was not on file at that date, and was not filed until April 20, 1932. It was the duty of the secretary of the board to file the document, and we cannot questian the trial court’s finding that his default was due solely to inadvertence and clerical error. There is no indication that the commissioner performed any function with respect to the by-laws on file, save to act as their custodian.

The act of filing was a ministerial duty. We can but look to the statute to ascertain whether the Legislature has ordained that filing be essential to the validity of such a by-law. The language of section 889 prior to enactment of the ‘ ‘ freeze ’ ’ provision, and past experience with analogous statutes (People v. Karr, 240 N. Y. 348; People v. Board of Supervisors of Ulster Co., 34 N. Y. 268; Sears v. Burnham, 17 N. Y. 445; and see People ex rel. Huff v. Graves, 277 N. Y. 115,119-122), indicate that the command was merely directory, so that an inadvertent failure to comply would not be fatal. In the amendment of 1930, the Legislature spoke of schedules “ adopted * * * and on file ” at the “ freeze ” date (L. 1930, ch. 530). I feel that those terms were intended only to denote the salary schedules then in effect, and that no special significance should be attached to the words on file ”. Had it been intended to strike down any amendments properly adopted prior to the ‘ ‘ freeze ’ ’ date but not then filed, that purpose surely would have been set forth more explicitly. Thus construed, the statute permits us to sustain the conclusion below that the challenged by-law should be deemed to have been on file on March 5,1931, and to affirm the judgment in respect of the first two causes of action.

Plaintiffs ’ challenge of the by-law as discriminatory, in violation of section 882 of the Education Law, rests upon the thesis that there can be no rational basis for the alleged distinction between reinstated teachers and those whose prior experience was gained in other schools or in industry. The challenge was rejected by the trial court upon the ground that plaintiffs had failed to establish that the entire class of reinstated teachers had suffered in relation to the entire class of teachers with outside experience. The court also held that section 882 related only to geographical uniformity of salary within the area administered by a board of education. Both conclusions are unsound. In the context of our well-established constitutional prohibitions against arbitrary and baseless discrimination by law (U. S. Const., 14th Amendt., § 1; N. Y. Const., art. I, § 11), the statute must be construed to prohibit all such distinctions. Nor should plaintiffs’ challenge fail merely because they fall within a subclass which has suffered an unlawful discrimination not shared by some other members of their class.

However, plaintiffs’ contention clearly lacks merit. Although they do not squarely raise a constitutional question, the essential similarity of the issues arising under the equal protection clauses of the State and Federal Constitutions makes it pertinent to recall that “ One who assails the classification * * *

must carry the burden of showing that it does not rest upon any reasonable basis, but is essentially arbitrary ’ ’ (Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61, 78-79). The record herein demonstrates that plaintiffs have not met that burden. On the contrary, the evidence tends to establish a rational basis for any discrimination which may exist. Eligibility requirements are far more stringent for original applicants than for those who seek reinstatement, and examinations for the latter are much simpler. Teachers seeking reinstatement take a shorter and less arduous qualifying examination, while new applicants take a competitive examination. Bearing in mind those facts and the distinctions between the two formulas — that teachers with outside experience receive an equated credit under a schedule which gives seven years’ credit for twelve years of previous experience in a high school or college, while reinstated teachers receive a credit equal to their years of prior service divided by the interval between withdrawal and re-employment — it would be impossible to hold that any difference in credit was unreasonable. Therefore, the third and fourth causes of action were properly dismissed as to all plaintiffs.

Plaintiff Kratzke, re-employed under an application filed after September 24, 1930, cannot challenge herein the rejection of her prior application proffered before that date (cf. Matter of Curtin v. Dorman, 293 N. Y. 505, 509). Her complaint was properly dismissed as to the first and second causes of action, “ without prejudice to her administrative remedy, if any,” under the Education Law.

The judgment should be affirmed, without costs.

Conway, J.

(dissenting). By chapter 645 of the Laws of 1919 and chapter 680 of the Laws of 1920 (the latter popularly known as the Lockwood-Donohue Law ”) the Legislature increased State aid to the school systems of the cities of the State, and in connection therewith a new article, numbered 33-B and entitled “ Salaries of the Members of the Supervising and Teaching Staff in City Schools ”, was added to the Education Law. It was therein provided that the board of education of each city of the State shall adopt by-laws fixing the salaries of members of the teaching staff, among others. (Education Law, § 882.) But by section 883 of article 33-B, the Legislature further provided that the salaries and salary increments so fixed by the Board of Education of the City of New York should not be less than those expressly prescribed by the Legislature in schedules contained ■ in that section. This in effect imposed a mandatory minimum salary for teachers in the New York City school system. In order to assure compliance by the board and to provide for a ready reference point for the Legislature, the act further provided that a 1‘ copy of the schedules and schedule conditions approved by the board of education of each city together with a copy of such changes in schedules and schedule conditions as are made in conformity with this article, certified by the secretary of the board, shall, within thirty days after the adoption thereof, be filed in the office of the state commissioner of education.” (§ 889.)

In succeeding years, additional State aid was forthcoming (cf. L. 1927, ch. 572, the Dick-Rice Law; Matter of Russell v. Buck, 294 N. Y. 50, 54) and salaries 'were generally increased over the statutorily prescribed minimum levels. But, during that period, the board, by virtue of the power granted in section 882 permitting it to adopt by-laws fixing teachers ’ salaries and salary increments, could still reduce such increased salaries so long as such reductions did not fall below the mandatory minimum levels.

In 1931, the Legislature determined that a further limitation on the board’s power was necessary. As we said in Matter of Russell v. Buck (supra, pp. 54-55) u The State, granting large sums to New York City in aid of its school system, insisted upon minimum standards, including minimum pay. ’ ’ The Legislature accordingly amended section 889 of the Education Law. That section, unchanged since 1919, required that a copy of the schedules and schedule conditions approved by the board of education, certified by the secretary of the board, be filed in the office of the State Commissioner of Education within thirty days after the adoption thereof. The amendment, popularly known as the Salary Freezing Law ”, operated to “ freeze ” such previously adopted and filed schedules and schedule conditions so that the board could not reduce the salaries therein fixed. In pertinent part, the amendment, as first enacted (L. 1930, ch. 530), provided as follows: “ * * * The schedules and schedule conditions fixing the salaries of members of the teaching and supervising staffs * * * of the board of education of a city having a population of one million or over * * * shall be not less than the salaries and salary increments fixed by the schedules and schedule conditions adopted by such board of education * * * and on file in the office of the state commissioner of education on the first day of February, nineteen hundred thirty. * * * ” (Emphasis supplied.) The following year, 1931, the Legislature extended the freeze ” date to March 5,1931. (L. 1931, ch. 540.)

This court has stated that the provisions of section 889, as thus amended, are clear, unambiguous and mandatory. Little room, if any, is left for construction or for discretion in their application. The Legislature, which has conferred upon the Board of Education power to determine the salary and compensation of all employees, has placed a rigid restriction upon its exercise. The salaries of positions as fixed in 1931 may not be reduced. * * * The Legislature has power to reduce a salary which seems to it excessive. It has withheld such power from the Board of Education.” " (Matter of Putnam v. Marshall, 286 N. Y. 485, 490.)

This limitation on the board’s power, it should be noted, applies not only to the actual salary schedules on file on the “ freeze ” date, but also to the schedule conditions ” affecting the determination of salary, which were on file at that time. Thus, any attempted amendment by the board of its filed schedules or of its filed schedule conditions which operates to reduce the salary of a position below that fixed by the filed papers and frozen on March 5,1931, is invalid. (See, e.g. Nelson v. Board of Higher Education of City of N. Y., 288 N. Y. 649; Adams v. Board of Higher Education of City of N. Y., 288 N. Y. 652; Kory v. Board of Higher Education of City of N. Y., 292 N. Y. 547; Dexter v. Board of Higher Education of City of N. Y., 293 N. Y. 39; Cottrell v. Board of Education of City of N. Y., 293 N. Y. 792.)

This statement of background leads us to a consideration of the facts of the instant case. The plaintiffs here are all reinstated members of the teaching staff of the Board of Education of the City of New York. For present purposes, we may concern ourselves only with their first two causes of action. The first cause of action is for a declaration that section 95, subdivision 8(b), of the by-laws of the board of education, which purported to replace by-law, section 95, subdivision 8, is invalid. The second cause of action is for recovery of the difference in salary between that paid the plaintiffs and the salary to which they would be entitled if the amendment to by-law, section 95, subdivision 8, be invalid.

By-law, section 95, subdivision 8, in its original form provided as follows: The certificate of the Superintendent of Schools that a principal, a supervisor, or a teacher has been credited by the Board of Examiners with a certain number of years of experience for service in schools other than the public schools of the City of New York, and the certificate of the Superintendent of Schools that a principal, a supervisor, or a teacher has rendered any number of years of satisfactory service in any part of what is now The City of New York, shall entitle such principal, supervisor, or teacher to the salary prescribed for the stated year of service by these By-laws. * * *” Under that by-law, it is clear that the present plaintiffs, as reinstated teachers, would be entitled to full credit for their years of teaching service in the public schools of New York City, prior to their temporary withdrawal from the school system. That by-law was adopted on February 6,1929, and was filed in the office of the State Commissioner of Education, on February 26, 1929, within the requisite thirty days. That by-law was the one on file on March 5,1931, the “ freeze ” date fixed by section 889,

By action dated January 8,1930, and September 25,1930, however, the board of education substituted for said by-law a new provision known as subdivision 8(b) of by-law, section 95. The new provision read as follows:

In fixing the salary of supervisors, teachers, et al., who have withdrawn from the employ of the Board of Education, and who thereafter, are reinstated, service credit shall be given as follows:

“ (b) If the withdrawn teacher shall apply for reemployment at a time more than one year after his withdrawal became effective, and he shall be reemployed pursuant to such application, he shall on reemployment receive credit for so much of the service standing to his credit, immediately prior to his withdrawal, as is equal to said service credit divided by the time computed in years and fractional parts of a year, which shall have elapsed between the date of his withdrawal and the date of his reemployment; provided, however, that on reemployment, he shall not receive a greater service credit than is equal to the number of years prescribed in his schedule for the maximum salary less three years. But if the withdrawn teacher shall be reemployed pursuant to an application for such reemployment filed prior to September 24, 1930, the salary of said reemployed teacher shall be fixed in accordance with the By-laws as they existed on January 1,1930.”

Thus, if the substitution of this by-law be valid, instead of receiving the full credit for prior years of service provided for by by-law, section 95, subdivision 8, a teacher re-employed pursuant to an application filed after September 24, 1930, would be entitled to only partial credit computed in accordance with the new subdivision 8(b) of by-law, section 95. The board’s purported substitution accordingly results in a reduction of salary for those subject to its terms.

As applied to the instant case, the new by-law, if it be valid, would have the following effect: One group of the present plaintiffs (the so-called Connolly ” group who had submitted applications for re-employment prior to September 24, 1930) would be entitled to full salary credit under the very terms of the amended by-law. The other group of the present plaintiffs (the so-called “ Harman ” group who submitted their applications for re-employment after September 24, 1930) would only be entitled to a lesser salary credit computed in accordance with the amended law.

The date of final adoption of this new by-law by the board of education was September 25, 1930. It is undisputed that the board did not file a copy of the change in the by-law in the office of the State Commissioner of Education within thirty days of its adoption as required by the statute. It is further undisputed that a copy of the amended by-law was not on file on March 5, 1931, the “ freeze ” date. On that date, as indicated above, only the original by-law, section 95, subdivision 8, which had been adopted and filed in February, 1929, was on file in the office of the commissioner.

Subsequently, on April 20,1932, about a year and a half after its final adoption, and a year after the statutory freeze ” date, the board filed a copy of the new by-law in the office of the commissioner. The failure to file within the requisite time was ascribed to inadvertence and clerical error on the part of the secretary of the board of education whose duty it was, under the board’s practice and procedure, to file such by-laws.

Special Term held that the provisions of section 889, requiring the filing of a copy of the board’s by-laws in the commissioner’s office within thirty days of adoption, were directory only, and not mandatory; that the amended by-law, even though not filed, was effective to govern the determination of plaintiff’s salaries; and that pursuant to that by-law only the “ Connolly ” group of plaintiffs was entitled to full salary credit, upon re-employment, for years of service in the system prior to withdrawal. The majority in the Appellate Division affirmed, over the dissent of two Justices who took the position that “ plaintiffs’ rights in accordance with the mandate of the statute must be determined on the basis of the filed schedules on the freeze date, and * * * defendant was not entitled to act upon the basis of different schedules which, though adopted, had not been filed.” (275 App. Div. 694, 695.)

We agree with the dissenting Justices in the Appellate Division that plaintiffs’ salaries must be determined on the basis of the schedules and schedule conditions on file in the office of the Commissioner of Education on March 5,1931. The precise question has not previously been before us, but we have already indicated generally our view of the 1931 amendment to section 889. The provisions of that section, we have stated, ‘ ‘ are clear, unambiguous and mandatory. Little room, if any, is left for construction or for discretion in their application.” (Matter of Putnam v. Marshall, supra, p. 490.) The obvious purpose of the filiug requirement in section 889 was to insure compliance by the board with the restrictions placed upon its power by the statute and to provide the Legislature with a convenient and readily available place of reference to the board’s current by-laws affecting schedules and schedule conditions. Knowledge by the Legislature of the board’s currently effective schedules and schedule conditions was a necessary prerequisite to any intelligent action by the Legislature thereon. In view of the thirty-day filing requirement of section 889, which antedated the adoption of the 1931 “Salary Freezing Law”, the Legislature could properly conclude that all of the board’s current schedules and schedule conditions were then on file and available for inspection in the commissioner’s office. The Legislature’s judgment with respect to the wisdom of changes or modification of such schedules and schedule conditions, of necessity, was predicated upon the belief that only those by-laws, properly on file, were currently in effect. The whole history of salary legislation in this field makes clear that reliance was placed upon such filed by-laws and that the legislative will was repeatedly exercised in view of the condition of affairs demonstrated by the by-laws then on file in the commissioner’s office. The commissioner’s office is the statutory repository of such by-laws. The Legislature had no need to search any further for information as to possible recent amendments by the board. Thus, when the Legislature, in its wisdom, decided in 1931, to impose new minimum salaries, it could do so with confidence by the simple expedient of adopting in toto, the schedules and schedule conditions on file as of the selected date, March 5, 1931. We have absolutely no assurance that the Legislature would have so acted if, at that time, the board’s attempted change of by-law, section 95, subdivision 8, had been on file in the commissioner’s office and thus, constructively at least, called to the Legislature’s attention. The Legislature could have demanded that the by-law be continued in its original form if the board had disclosed, by filing it, the new and substituted by-law now under consideration and, in default of accession to its wishes in that respect, the Legislature might well have refused to enact the statute. The failure of the board to comply with the plain mandate of the statute, even if such failure be ascribed to inadvertence and clerical error, resulted in the reasonable assumption by the Legislature that by-law, section 95, subdivision 8, in its original form and without amendment, was in effect on the “ freeze ” date, March 5,1931. The schedules and schedule conditions then on file were expressly adopted as the new minimum standards. There is no warrant for holding that a schedule condition not then on file was nevertheless umoittingly so adopted by the Legislature.

There is no need to discuss the many cases cited by the parties on the question whether a particular act specified in a statute is directory or mandatory. The cases involve countless factual variations, but one basic principle is consistently made clear — the function of the court in each case is to ascertain the intent of the Legislature. For the reasons stated above, which are to us compelling, we think the only possible view of legislative intent in the instant case is that the Legislature meant literally what it said so plainly, i.e., that salaries in the New York City Board of Education were to be frozen at least at the levels then provided in the schedules and schedule conditions actually on file in the office of the Commissioner of Education on March 5, 1931. Any other construction of the statute does violence to the clear and unambiguous wording of section 889, and unjustifiably imputes to the Legislature, in making its enactment, a knowledge of a board by-law which was not filed and recorded in accordance with the legislative command.

We, of course, agree with the courts below that the board’s attempted change in its by-laws in 1942, so as to deny any credit for prior years of service contravenes the mandate of section 889 and is thus invalid.

Since we now decide in favor of the plaintiffs on their first and second causes of action, it is unnecessary to consider their third and fourth causes of action. Even if successful on those latter causes of action, the plaintiffs would not obtain as great a financial benefit as they do by prevailing on the first and second causes. Accordingly, the plaintiffs in this situation do not press said third and fourth causes and we do not pass upon them.

For convenience, we have referred above to the sections of the Education Law as they were numbered prior to the revision of that law in 1947. The provisions of section 882 are now found in subdivision 1 of section 3101, and the provisions of section 889 are now substantially incorporated in section 3103 and paragraph (b) of subdivision 4 of section 3102.

The judgment should be reversed and the case remitted to Special Term for further proceedings not inconsistent with this opinion and the stipulation dated January 30,1948, entered into by the parties.

Lewis, Desmond, Dye and Fuld, JJ., concur with Bromley, J.; Conway, J., dissents in opinion in which Lotjghran, Ch. J., concurs.

Judgment affirmed. [See 300 N. Y. 644.]

       I follow the trial court in employing the section numbers used prior to the reeodification of 1947. (L. 1947, chs. 778, 820.)


author: Loughran, Ch. J.

text:
    In the Matter of the Application of Herbert A. Warden, Appellant. Police Department of the City of Newburgh et al., Respondents.
    Argued October 4, 1949;
    decided October 14, 1949.

      Henry Grusky, individually, for petitioner-appellant, and, as Corporation Counsel, for Lemma B. Crabtree, as City Clerk of the City of Newburgh, respondent.
    I. Chapter 590 of the Laws of 1917 of the State of New York, as amended (the Charter of the City of Newburgh) is and was intended to be a skeleton of framework of the governmental structure. II. There is no valid relation between the proposed local law for submission and the existing provisions of the Charter of the City of Newburgh. (Matter of Astwood v. Cohen, 291 N. Y. 484; Mills v. Sweeney, 219 N. Y. 213; Burke v. Kern, 287 N. Y. 203; Matter of McCabe v. Voorhis, 243 N. Y. 401; Matter of Maylender v. Morrison, 260 App. Div. 892, 284 N. Y. 575; Matter of Steinberg v. Meisser, 291 N. Y. 685; Livermore v. Waite, 102 Cal. 113.) III. The proposed amendment does not come within the purpose, intent, contemplation or authority of section 19-a of the City Home Rule Law. (Schroeder v. Zehrung, 108 Neb. 573; Dooling v. City Council of City of Fitchburg, 242 Mass. 599; Long v. City of Portland, 53 Ore. 92; Brazell v. Zeigler, 26 Okla. 826; Kleiber v. City & Co. of San Francisco, 18 Cal. 2d 718; Keigley v. Bench, 97 Utah 69; Murphy v. Gilman, 204 Iowa 58; Hopping v. Council of Richmond, 170 Cal. 605; People ex rel. Holvey v. Kapp, 355 Ill. 596; Meade v. Dane County, 155 Wis. 632.)

      Bonald A. Walsh for New York State Conference of Mayors and Other Municipal Officials, amicus curiae, in support of appellant’s position.
    . Only legislative acts are the proper subject for initiative and referendum. (Seaton v. Lackey, 298 Ky. 188; Keigley v. Bench, 97 Utah 69; State of Washington v. City of Spokane, 17 Wn. [2d] 24; Dwyer v. City Council of City of Berkeley, 200 Cal. 505.)

      Henry Hirschberg and Ernest M. Levinson for Police Department of the City of Newburgh and another, respondents.
    I. Matter of Astwood v. Cohen (291 N. Y. 484) does not invalidate the police petition. (Matter of Maylender v. Morrison, 284 N. Y. 575.) II. The police petition is valid and within the scope of the City Home Rule Law. (Burke v. Kern, 287 N. Y. 203; Johnson v. Etkin, 279 N. Y. 1; Matter of Steinberg v. Meisser, 181 Misc. 433; Matter of Arditti v. Jacobson, 180 Misc. 884; Matter of Mooney v. Cohen, 272 N. Y. 33; Matter of Grenfell [Lawyer], 185 Misc. 558, 269 App. Div. 600, 294 N. Y. 610; State
      v. Charles, 136 Kan. 875; People ex rel. Hovey v. Smith, 260 Ill. App. 166; State ex rel. Leo v. Tacoma, 184 Wash. 160; State ex rel. Knaz v. Seattle. 176 Wash. 283; State v. Eastcott, 53 S. D. 191.)

      Edward G. O’Neill for Newburgh Firemen’s Welfare Association, amicus curiae, in support of respondents’ position.
    I. The City Home Rule Law recognizes that orderly government may require change or curtailment of the powers of a local legislative body, and provides procedure for such change. II. The proposed amendment herein is a valid charter amendment within the scope of section 19-a of the City Home Rule Law. (Matter of Maylender v. Morrison, 260 App. Div. 892, 284 N. Y. 575; Matter of Astwood v. Cohen, 291 N. Y. 484.)

      Charles E. Gaffney for Kingston Patrolmen’s Association, amicus curios, in support-of respondents’ position.
    A local law amending a city charter so as to provide for a mandatory minimum salary for certain city employees is within the purview of the City Home Rule Law. (Matter of Astwood v. Cohen, 291 N. Y. 484; Matter of Steinberg v. Meisser, 291 N. Y. 685.)
   Loughran, Ch. J.

This case presents questions as to the scope and meaning of several provisions of the City Home Rule Law.

On May 18, 1949, there was filed with the City Clerk of the City of Newburgh a petition for submission to the electors of the city of a proposed local law which would alter the city charter by adding thereto a provision fixing minimum annual salaries for members of the police department of the city. After making an examination thereof, the clerk was of opinion that the petition was legally insufficient and so certified to the council of the city. (See City Home Rule Law, §§ 16,19-a.)

Within thirty days after the filing of the petition, a taxpayer of the city brought the present proceeding in the Supreme Court for an order denying the right of the electors to enact the proposed local law. In substance his objections were these: (1) the proposed local law has no relation to any provision of the existing city charter; (2) the power to fix salaries is administrative rather than legislative in character and is now validly confided by the charter solely to the council of the city. These objections were dismissed at Special Term. The Appellate Division affirmed, two Justices dissenting. The objecting taxpayer now presses upon us his challenge to the proposed local law.

He relies in the main upon our decision in Matter of Astwood v. Cohen (291 N. Y. 484), a case in which we were called upon to determine the validity of a referendum petition filed pursuant to section 19-a of the City Home Rule Law. The local law there proposed would have provided a bonus to the policemen and firemen of the city of New York. In that city, however, the salaries of the policemen and firemen were then and are now fixed by an administrative code and not by any charter provision. In the Astwood case (supra, pp. 488, 489) this court in 1943, held the chief question to be whether the proposed law is in truth an amendment of the Charter or is so far unrelated to the Charter as to be an amendment only in name. * * * In applying the statutory test to the proposed local law we must relate the law to the short form Charter of the City of New York and determine whether the law is in truth an amendment of the Charter or is merely labeled as such. ’ ’ Under that test, this court in the Astwood case rejected the local law there in question.

But the Charter of the City of Newburgh is no mere skeleton or framework of governmental structure like the Charter of the City of New York. The Newburgh Charter contains many provisions in respect of such matters as assessments and local taxes, the operation and control of public works, the supply of water and charges therefor, and the organization and regulation of the police and fire departments. Furthermore, the City of New-burgh has no administrative code such as was enacted to harmonize with the short-form Charter of the City of New York. In a word, the Astwood case (supra) affords no solution of the first issue here presented.

On the other hand, the answer to that problem is dictated by amendments made in 1944 to sections 2 and 19-a of the City Home Rule Law. The amendment to section 2 added a new subdivision 5 in these words: “ (5) the term 6 charter amendment ’ means any change in an existing charter presented as such under authority of this chapter or any charter or state statute. A charter amendment may be of any extent and may deal with any number of subjects. A proposal presented as a charter amendment shall not be rejected as such on the ground that it constitutes a new charter.” (L. 1944, ch. 602.) The amendment to section 19-a made that section applicable to a local law amending a city charter “ however extensively ”. (L. 1944, ch. 602.) There is no escape from words so plainly used. In the light thereof, the present proposed local law cannot be successfully questioned on the score of its being wholly alien to the text of the Charter of the City of Newburgh.

Whether the above 1944 amendments to the City Home Rule Law permit additions to a short-form charter of matters unrelated to existing provisions thereof is a question which is not here presented.

The second objection of the taxpayer — that the power to fix salaries is administrative rather than legislative in character and hence is not subject to the power of referendum — can be shortly disposed of. The above amendments to the City Home Rule Law now make such a distinction entirely inadmissible as a reason for invalidating a charter amendment proposed to be made by a local law.

The order should be affirmed, without costs.

Lewis, Conway, Desmond, Dye, Fuld and Bromley, JJ., concur.

Order affirmed.


author:
      Per Curiam.
     Fuld, J.

text:
    The People of the State of New York ex rel. Hamportzoon Choolokian, Appellant, against Mission of the Immaculate Virgin et al., Respondents. The People of the State of New York ex rel. Hamportzoon Choolokian, Appellant, against New York Foundling Hospital et al., Respondents.
    Argued June 2, 1949;
    decided October 20, 1949.

      Samuel M. Blinken for appellant.
    I. Eelator has an absolute right guaranteed by the United States Constitution and by statute to emigrate and expatriate himself and to take his children with him. (Murray v. Schooner Charming Betsy, 2 Cranch [U. S.] 64; Talbot v. Janson, 3 Dallas [U. S.] 133; Inglis v. Trustees of Sailor’s Snug Harbour, 3 Pet. [U. S.] 99; Comitis v. Parkerson, 56 F. 556; Williams v. Fears, 179 U. S. 270; United States v. Karnuth, 19 P. Supp. 581.) II. The right of expatriation is utterly meaningless unless it includes the right of parents to emigrate and to take their children with them. (Matter of Livingston, 151 App. Div. 1; People ex rel. Van Dyk v. Van Dyk, 33 N. Y. S. 2d 766; Matter of Thorne, 240 N. Y. 444; Matter of Munn, 101 Misc. 171; People ex rel. Boulware v. Martens, 232 App. Div. 258, 258 N. Y. 534; Matter of Boulware, 144 Misc. 235; Roba

      lina v. Armstrong, 15 Barb. 247; People v. Landt, 2 Johns. 375; People ex rel. Sisson v. Sisson, 246 App. Div. 151; People ex rel. Meredith v. Meredith, 297 N. Y. 692.) III. The courts below erred in overruling the administrative determination of the commissioner of welfare that relator was a fit parent and ordering the release of his children to him, as that determination was plainly warranted in the record and had a reasonable basis in law. (Social Welfare Law, §§ 383, 400; Matter of Miller v. Kling, 291 N. Y. 65; Matter of Marburg v. Cole, 286 N. Y. 202; Matter of Agoglia v. Mulrooney, 259 N. Y. 462; Matter of Murphy v. Delaney, 179 Misc. 436; Matter of Sheridan v. McElligott, 278 N. Y. 59; People ex rel. Schau v. McWilliams, 185 N. Y. 92; Matter of Ormsby v. Bell, 218 N. Y. 212; People ex rel. Lodes v. Department of Health, 189 N. Y. 187; Matter of Krysak v. Hodson, 155 Misc. 699.) IV. The education of the children, including their religious and political education, is a matter within the absolute control and discretion of their parents, and that control will not be interfered with by the courts. (Meyer v. Nebraska, 262 U. S. 390; Pierce v. Society of Sisters, 268 U. S. 510; Berea College v. Kentucky, 211 U. S. 45; Matter of Kananack, 272 App. Div. 783; Matter of Vardinakis, 160 Misc. 13.)

      Raymond L. Wise and Margaret K. Udell for American Civil Liberties Union, amicus curiae, in support of appellant’s position.
    I. The court below erred in finding the detention legal. The determination by the department of welfare that relator was fit for the custody of his children and ordering their release to him was reasonable and proper, and is binding and conclusive in the absence of evidence that it was arbitrary, unreasonable or capricious. (Matter of Marburg v. Cole, 286 N. Y. 202; Matter of Murphy v. Delaney, 179 Misc. 436; Matter of Sheridan v. McElligott, 278 N. Y. 59; People ex rel. Schau v. McWilliams, 185 N. Y. 92; People ex rel. Lodes v. Department of Health, 189 N. Y. 187; Matter of Rosenstrauch v. Reavy, 174 Misc. 446; Matter of Davier v. Reavy, 179 Misc. 425; Matter of Ormsby v. Bell, 218 N. Y. 212.) II. A parent has the right to determine the place of abode and residence of his minor children, which includes expatriation, and this right is superior to any considerations of citizenship. Relator’s attempt to return to Armenia with his family was in pursuance of the policy of the United States Government for the repatriation of Armenian nationals based on an agreement with Soviet Russia and constitutes the supreme law of the land. (United States v. Pink, 315 U. S. 203; United States v. Gurtiss-Wright Corp., 299 U. S. 304; Santovincenzo v. Egan, 284 U. S. 30.) III. Relator was deprived of his constitutional rights which include the right to determine the religion of his minor children. (Matter of Vardinakis, 160 Misc. 13; Meyer v. Nebraska, 262 U. S. 390.)

      Richard K. Gregory for the Human Relations Commission of the Protestant Council of the City of New York and the Prelacy of the Armenian Apostolic Church in America, Inc., amici curiae, in support of appellant’s position.
    I. Relator is a member of the Armenian Church by birth and baptism. He has the absolute right to decide the religious and educational affiliations of all his minor children and that decision will not be interfered with by the courts. (Meyer v. Nebraska, 262 U. S. 390; Pierce v. Society of Sisters, 268 U. S. 510; Hamilton v. Regents of Univ. of California, 293 U. S. 245.) II. The administrative determination of the commissioner of welfare that relator was a fit parent was fully supported in the record, had ample basis in law, and should not have been overruled by Special Term. (People ex rel. Sisson v. Sisson, 271 N. Y. 285; Matter of Thorne, 240 N. Y. 444; Matter of Mounting da Finishing Co. v. McGoldrick, 294 N. Y. 104; Red Hook Cold Storage Co. v. Department of Labor, 295 N. Y. 1.)

      Armenian National Council of America, by Charles A. Vertanes, director, and Oksen Sarian, acting chairman, amicus curiae, in support of appellant’s position.
    I. The decision of Special Term violates the Constitution and foreign policy of the United States Government for the emigration and expatriation of Armenians in refusing to allow relator to depart with his children. II. Paramount considerations of natural law and justice require that the Choolokian children be restored to their family.

      Charles G. Coster for Mission of the Immaculate Virgin, respondent.
    I. The evidence before the trial court amply sustains its decision that the release of the children was not for their best interest and welfare. (Finlay v. Finlay, 240 N. Y. 429;
      Matter of Bock [Breitung], 280 N. Y. 349; People ex rel. Anonymous v. Perkins Adoption Soc., 271 App. Div. 672, 297 N. Y. 559.) II. The court below properly considered the dangers to the American citizenship of the children. (Perkins v. Elg, 307 U. S. 325; Mencher v. Chesley, 297 N. Y. 94.)

      Joseph V. McKee and Philip G. Reilly for New York Foundling Hospital, respondent.
    I. Alice Choolokian was never discharged to appellant by the department. (Persky v. Bank of America Nat. Assn., 261 N. Y. 212.) II. The order of the Appellate Division was proper in affirming Special Term’s findings that appellant is not fit, competent and able duly to maintain, support and educate Alice Choolokian and that the interests of said minor will not be promoted by her discharge to the custody of appellant. (Matter of Lee, 220 N. Y. 532; Matter of Presler, 171 Misc. 559; Matter of Bock [Breitung], 280 N. Y. 349; Perkins v. Elg, 307 U. S. 325.)
   Per Curiam.

In these habeas corpus proceedings there was ample evidence to sustain the findings of the trial court, unanimously affirmed by the Appellate Division, that the relator was not fit, competent or able to care for his children and that it would not be to their best interests to be taken by him to Armenia. (See Finlay v. Finlay, 240 N. Y. 429.) The dismissal of the writs of habeas corpus herein should therefore be affirmed, but insofar as the final order below imposed conditions upon relator’s right to make further application or seek new writs of habeas corpus, it should be modified so as to eliminate such conditions.

The order of the Appellate Division and the orders of Special Term should be modified in accordance with this opinion, and, as so modified, affirmed.

Fuld, J.

(concurring). Section 383 of the Social Welfare Law provides that the parent of a child committed to an institution may regain its custody by obtaining either the consent of the court, public board, commission, or official responsible for the commitment of such child, OR. * * * an order of a court or judicial officer of competent jurisdiction, determining that the interest of such child will be promoted thereby and that such parent is fit, competent and able ” to care for it. (Emphasis supplied.) In the case before us, the father, pursuing the first alternative, sought the consent of the Welfare Commissioner of the City of New York, the official responsible for his children’s commitment.

There is no doubt in my mind that consent by the committing officer constitutes the determination of an administrative agency. The Legislature recognized that the body “ responsible ” for the child’s commitment was peculiarly competent to pass upon the question whether the child should be returned to its parent or retained by the institution to which it had been committed. Once having gained that consent, a father is not required to vindicate his right anew in our courts. The administrative determination must stand unless a court justifiably stamps it unreasonable and capricious. (See, e.g., Matter of Park East Land Corp. v. Finkelstein, 299 N. Y. 70, 75; Matter of Fiore v. O’Connell, 297 N. Y. 260, 262; Matter of Marburg v. Cole, 286 N. Y. 202, 214.)

If, then, it here appeared that the Commissioner of Welfare had granted the requisite statutory consent, I would be impelled to vote for reversal. I concur in the decision to modify only because I perceive in the record some basis for the finding made by the court at Special Term that that consent had not been given.

Lotjghran, Ch. J., Lewis, Conway, Desmond, Dye and Bromley, JJ., concur in Per Curiam opinion; Fuld, J., concurs in separate opinion.

Ordered accordingly. [See 300 N. Y. 622.]


text:
    Wallace L. Brinkman, an Infant, by Isabel Brinkman, His Guardian ad Litem, Respondent, v. Oil Transfer Corporation, Appellant.
    Argued October 6, 1949;
    decided November 23, 1949.

      G. B. M. O’Kelley and Hervey C. Allen, Jr., for appellant.
    I. A seaman is not entitled to recover as maintenance and cure expenses which he has neither paid nor legally obligated himself to pay. (Calmar S. S. Corp. v. Taylor, 303 U. S. 525; The Banker No. 2, 241 F. 831; Marshall v. International Mercantile Marine Co., 39 F. 2d 551; Reed v. Canfield, Fed. Cas. No. 11,641; Johnson v. United States, 160 F. 2d 789, 333 U. S. 46; Murphy v. American Barge Line Co., 169 F. 2d 61, 335 U. S. 859; Robinson v. Swayne & Hoyt, 33 F. Supp. 93; Sonnesen v. Panama Transport Co., 298 N. Y. 262; Zurich Gen. Accident & Liability Ins. Co. v. Childs Co., 253 N. Y. 324.) IT. If the negligence actions had not been settled hut had gone on to trial, infant plaintiff could not have recovered, as part of his damages, his parents ’ expenses for his medical care and support. They were recoverable only by the parents in their action. Merely changing the form of his action has given plaintiff no right to call such expenses his own: nor any greater right to recover them from defendant than he had in his Jones Act action. (Panama R. R. Co. v. Johnson, 264 U. S. 375; Engel v. Davenport, 271 U. S. 33.)

      Edward J. Keane for respondent.
    I. The duty of the shipowner to pay “ maintenance and cure ” to a seaman, who is injured in the course of his work is contractual, and of ancient origin. Negligence has no part in the doctrine of maintenance and cure. (Harden v. Gordon, Fed. Cas. No. 6,047; The Montezuma, 19 F. 2d 355; Calmar S. S. Corp. v. Taylor, 303 U. S. 525; Aguilar v. Standard Oil Co. of N. J., 318 U. S. 724; O’Donnell v. Great Lakes Dredge & Dock Co., 318 U. S. 36; Smith v. Lykes Brothers-Ripley S. S. Co., 105 F. 2d 604.) II. The payment of some of the maintenance and cure bills, and the obligation to pay others, by the parents of the infant do not discharge the contractual duty of the vessel owner to pay the legitimate maintenance and cure expenses which were proven by the uncontradicted evidence. (Coler v. Callahan, 105 Misc. 457; Pulcher v. Qualtiere, 187 Misc. 727.) III. The decision of the parents not to seek a recovery for medical and hospital expenses in the loss of services action, which is predicated on negligence, merely was in the exercise of a legal right granted to the parents by the law of this State. IV. Prudence demanded that the infant seek to recover the medical, hospital, nursing and maintenance expenses in this maintenance and cure action, because the defendant’s obligation is contractual, hence negligence need not be proved against the vessel owner in a maintenance and cure case. (Aguilar v. Standard Oil Co. of N. J., 318 U. S. 724.) V. Seamen are ‘1 wards of admiralty ’ ’ and, as such, are entitled to the fullest protection of the court. (Robertson v. Baldwin, 165 U. S. 275; Socony-Vacuum Oil Co. v. Smith, 305 U. S. 424; Murphy v. American Barge Line Co., 169 F. 2d 61; Cortes v. Baltimore Insular Line, 287 U. S. 367; The Arizona v. Anelich, 298 U. S. 110; Calmar S. S. Corp. v. Taylor, 303 U. S. 525.)
   Desmond, J.

Plaintiff, then sixteen years old, was, while employed as a seaman on defendant’s tug and tow proceeding through the New York Barge Canal, so seriously injured that his leg had to be amputated a few hours after the accident. The young man’s father was master of the tug at the time, and his father and mother arranged for urgently required surgical and hospital care. Plaintiff was confined in a hospital for about a month, then convalesced at his parents ’ home for more than two years. This suit was brought by the infant mariner, through Ms mother as guardian ad litem, to enforce defendant’s obligation to pay for his maintenance and cure. Judgment was granted to plaintiff for about $2,700, made up as follows: about $1,200 for expenses paid or incurred by plaintiff’s parents for hospital, physicians’ and nurses’ bill and an artificial leg, and $1,500 for the reasonable value of plaintiff’s board and lodging at his famiy home. At the Appellate Division defendant argued, although no such point seems to have been made at the trial, that, although plaintiff’s accident was, admittedly, in the service of the ship, he had no right to any award of maintenance and cure since he himself had neither incurred any expense nor obligated himself to reimburse those who had paid the costs. The Appellate Division majority held that “ the circumstance that the parent paid for some of the items of maintenance and cure, without express agreement providing for reimbursement by a minor son, ought not to relieve the defendant from the obligation to pay therefor.” (274 App. Div. 985.) Two dissenting Justices (citing Johnson v. United States, 333 U. S. 46, 50, and other cases) thought that the maritime law forbade any such recovery when the seaman had neither paid anything nor obligated himself to pay anytMng, for his treatment and care. We tMrik the award to plaintiff was proper, under applicable rules of maritime law.

It has often been said, in one form of words or another, that a seaman who is hurt or falls sick on a voyage, may recover from the shipowner, for “ maintenance and cure ”, only such amounts as the seaman has spent or for which he has obligated himself (Calmar S. S. Corp. v. Taylor, 303 U. S. 525, 531; Johnson v. United States, supra; Sonnesen v. Panama Transport Co., 298 N. Y. 262, 267). But, relating that rule to the facts of the cases in which it has been announced, we find that it has never been applied so as to excuse a shipowner from liability for moneys actually spent in an emergency by relatives or other interested persons, on behalf of an injured man. When the cases say that the owner is liable for the seaman’s expenditures for his own cure only, they are merely expressing the anciently settled holding that an owner, sued for maintenance and cure, is liable not as in tort, for indemnity or completely compensatory damages, but only for the actual expense of the medicines, physicians’ and nurses’ services and food and lodging needed by the sick or injured crewman (Reed v. Canfield, 1 Sumner 195, 20 Fed. Cas. No. 11,641). For the obligation to “ maintain and cure ” is a contractual one, absolute but covering specific items of expenditure only. The seaman’s physical needs are the measure of the ship’s liability. In the oldest American case: Harden v. Gordon (2 Mason 541, 543, 11 Fed. Gas. No. 6,047 [1823]), Justice Story pointed out that it was the sailor’s right “ to be healed at the expense of the ship ”, and added that his claim for such expenses “ constitutes, in contemplation of law, a part of the contract for wages ”. The Osceola (189 U. S. 158, 175), a classic decision in American maritime law, put the rule in this form: “ That the vessel and her owners are liable, in case a seaman falls sick, or is wounded, in the service of the ship, to the extent of his maintenance and cure, and to his wages, at least so long as the voyage is continued. ” The point left open by the last clause in that quotation from The Osceola (supra) was settled in The W. L. White (25 F. 503), which, in a holding now unquestioned (see Calmar S. S. Corp. v. Taylor, supra, p. 529), declared that the expenses recoverable were for a reasonable time after the voyage, also. Applying those concepts to modern mariners like this plaintiff who undertake no long sailing voyages, but work on harbor or inland craft, the Second Circuit, in the well-known The Bouker No. 2 (241 F. 831, 835), realizing that such vessels do not ordinarily 1 ‘ maintain ” or “ cure ’ ’ their sick or disabled on board, but send them to hospitals or to their homes, allowed recovery for lodging in the seaman’s own home, plus medical and other similar expense. The Bouker No. 2 (supra) took note of a fact, discussed in many later cases, that the United States Government was, in various ports, providing free service to seamen in marine hospitals. The court in the Bouker case made it plain that a seaman cannot “ deliberately refuse ” to go to such a marine hospital and instead charge the owner with expensive accommodations elsewhere, but it made it equally clear that where, as in our present case, the owner does not suggest removal to a marine hospital and the seaman in good faith goes or is taken elsewhere, his hospital costs are recoverable. (The cases such as Davis v. The Erie, 1 Betts Dec. 32, 7 Fed. Cas. No. 3,632a, where the seaman, in a foreign port, gets gratuitous care in a charitable institution have, obviously, no relevance here.)

From the brief summary we have given, of the development of the American doctrine of maintenance and cure, it will be seen that the owner’s obligation either directly to furnish necessary care and lodging, or to pay for it, is absolute. If the seaman pays for it, his employer must reimburse him. We do not see why the owner should escape this absolute contractual obligation merely because the parents of an infant sailor, in the emergency situation of a grievous injury, went ahead and, as parents, obtained and paid for what their son immediately needed.

It is ancient learning that seamen are the wards of the admiralty courts, which are particularly solicitous as to their rights, and that the policy of the law maritime is to avoid the application, to seamen’s cases, of the harsh rules of the common law (Gabrielson v. Waydell, 135 N. Y. 1, 5; Socony-Vacuum Oil Co. v. Smith, 305 U. S. 424, 431). It has even been said that the employer occupies a position of guardianship ” (Murphy v. American Barge Line Co., 169 F. 2d 61, 64, certiorari denied 335 U. S. 859). Here the suffering man was not only a seaman, to be protected by the law like an infant (Robertson v. Baldwin, 165 U. S. 275, 287), but he was in fact an inexperienced boy, badly hurt. The owner’s representative on board was the boy’s own father. The owner’s obligation to care for his infant employee was as fixed as its duty to pay wages. It cannot discharge that obligation except by paying this judgment. The common-law rules as to this infant’s nonliability to his own parents to reimburse them for their expenditures for him should not be brought into play to bar recovery here. It would, we think, badly serve the interests of these wards of the courts ” to hold that an owner may escape his burden by standing aside while parents or relatives succor the ailing seaman.

Certain other facts confirm the propriety of an affirmance here. After the accident, the young man’s parents, on his behalf and their own, commenced an action against this defendant. That action, as originally brought, demanded full recovery for the injured man’s pain and suffering, for the parents’ loss of his services, and for the cost of his treatments. An attorney appeared for defendant and informed the parents that he (the attorney) represented an insurance company whose policy covered all defendant’s liability to plaintiff and his parents except as to maintenance and cure, which latter was the subject of another insurance policy issued to defendant by another insurance company not represented by that attorney. Arrangements were then made whereby the parents’ claims and the infant’s claim, except for maintenance and cure, were compromised and the compromise amounts paid, the infant’s settlement being duly approved by the proper court. The settlement papers made it clear that the maintenance and cure items were specifically excepted from-the compromise, and the complaint in this action was then amended to cover maintenance and cure only. The second insurance company, through a different attorney, then took over the defense. These circumstances, we think, are further proof that this defendant, insured by two different insurers, has so far performed only part of its duties toward these people. Insured or uninsured, defendant itself is liable for this debt. When the original settlement was made, defendant through the attorneys who first appeared for it, knew of this claim for maintenance and cure and, without indicating any objection to it, arranged that the compromise documents should specifically exclude it. Had the action continued as originally brought, as a negligence suit, plaintiff’s parents, as part of their own damages, could have recovered for the same items which are contested on this appeal. It would be inequitable and inconsistent with maritime law principles to let this contest succeed, because, of a series of incidents not related to defendant’s liability, but resulting from the fact that defendant carried two liability insurance policies.

The decisions referred to in appellant’s brief and in the memorandum filed by the Appellate Division minority, do not forbid recovery here. Some of them, like our Sonnesen case (298 N. Y. 262, supra), merely state the settled doctrine that maintenance and cure includes only expenditures actually made or owed for. Others, like United States v. Johnson (160 F. 2d 789, affd. as to maintenance and cure sub nom. Johnson v. United States, 333 U. S. 46, supra) and Robinson v. Swayne & Hoyt (33 F. Supp. 93), are concerned with special situations where the seaman either refuses marine hospital services or leaves such a hospital voluntarily, and refuses further treatment and goes home. The courts treat such situations as if the cure had been completed and the owner’s debt discharged (The Kenilworth, 144 F. 376, certiorari denied 202 U. S. 617). This young man was never offered any such choice between hospitals but, under the direction of physicians and his parents, followed a proper and prescribed course of hospitalization, surgery and convalescence, without any suggestion by defendant that some other course be followed.

The judgment should be affirmed, with costs.

Loughrae, Oh. J., Lewis, Coeway, Dye, Fuld and Bromley, JJ., concur.

Judgment affirmed.


text:
    In the Matter of Margaret Molinari, Appellant, against Frank J. Quayle et al., Constituting the Board of Trustees of the New York Fire Department Life Insurance Fund, Respondents.
    Argued October 19, 1949;
    decided November 23, 1949.

      David A. Savage and Donald A. Savage for appellant.
    Petitioner’s husband was validly appointed a member of the fire department on June 19, 1944, and automatically became a member of the fire department life insurance fund. Petitioner, in the absence of a designated beneficiary, is entitled to the money due from the life insurance fund. (Military Law, § 246, subds. 6, 9; People ex rel. Kastor v. Kearny, 164 N. Y. 64; Matter of Williams v. Walsh, 289 N. Y. 1; Matter of Berger v. Walsh, 291 N. Y. 220; Kelly v. Quayle, 70 N. Y. S. 2d 52; People v. Pinckney, 32 N. Y. 377; Trustees of Exempt Firemen’s Fund v. Roome, 93 N. Y. 313; People ex rel. Coveney v. Kearny, 44 App. Div. 449,161 N. Y. 648; Canteline v. McClellan, 171 Misc. 327.)

      John P. McGrath, Corporation Counsel {Helen R. Cassidy and Seymour B. Quel of counsel), for respondents.
    Petitioner’s husband never received a final complete appointment as a fireman and was not a member of the life insurance fund of the fire department provided by section B19-8.0 of the Administrative Code. Petitioner is, therefore, not entitled to receive any widow’s benefit from this fund. (Kelly v. Quayle, 70 N. Y. S. 2d 52; Matter of Berger v. Walsh, 291 N. Y. 220.)
   Desmond, J.

Petitioner’s husband, Francis J. Molinari, entered the United States Army in June, 1943. He was reported missing in action on January 12, 1945, and the War Department recorded the presumptive date of his death as January 13,1946. While Molinari was away on active military service he was, on June 19, 1944, appointed a fireman in the New York City Fire Department, by an order of the fire commissioner. That order stated that Molinari was assigned to the military service division of the department, * ‘ subject to a medical examination by the Fire Department Medical Board ”, the appointment to be without compensation until Molinari (and others similarly appointed at the same time by the same order) should be discharged from military services and actually begin to perform their duties as firemen. Molinari never came home from war service to take the fire department medical examination, or take an oath of office, or go to work as a fireman. His widow applied to respondents, trustees of the New York Fire Department Insurance Fund, for payment to her of the $2,000 death benefit provided for by section B19-8.0 of the New York City Administrative Code. That section says that there shall be deducted from the pay of each fireman, $1 per month which deductions shall make up a special fund (separate from the pension system and not contributed to by the city) out of 'which, on the death of a member or pensioned or retired member of the fire department, there shall be paid to his named beneficiary, or to his widow, $2,000. Subdivision f of section B19-8.0 provides that any member of the fund on leave of absence for military duty shall continue to be a member of the fund, his contributions thereto to be deferred until his return from military service, and further provides that, if he shall die during absence on military duty, his beneficiary or widow shall receive $2,000, less unpaid contributions. The trustees refused to pay the death benefit to Mrs. Molinari, on the ground that her husband had received a “ conditional ” appointment, only, to the fire department, and that he had never satisfied the conditions thereof by submitting to and passing the fire department medical examination and by taking an oath of office, so that, according to the trustees, he never became a fireman or a member of the life insurance fund. In this proceeding, brought by the widow to compel payment to her of the $2,000 benefit, less contributions, the courts below have denied her relief. We think that the special facts of this case, and a fair application thereto of the several pertinent statutes, require a holding that petitioner is entitled to payment of the death benefit.

Molinari passed the required civil service examination for fireman in December, 1941, and was, on February 1, 1943, certified by the civil service commission to the fire commissioner as eligible for appointment as a probationary fireman. He was refused appointment at that time by the commissioner, however, because his status in selective service was such that the commissioner thought it unwise or improper to appoint him (and many others similarly situated). In November, 1943, this court, in Matter of Berger v. Walsh (291 N. Y. 220), held that the commissioner had exceeded his authority in treating the draft status of those civil service eligibles as a ground for refusing them appointments. That determination, of course, meant that Molinari should not have been turned down by the commissioner in February, 1943, on that ground. The commissioner thereafter did what he could to correct his error but found that Molinari, and some two hundred of the others who had been denied appointment in February, had meanwhile entered military service. The commissioner, as to those two hundred eligibles, then made use of subdivision 6 of section 246 of the Military Law, which permits the appointment or promotion, from eligible lists, of persons absent on military service. The commissioner therefore promulgated the formal order of June 19,1944, referred to in the first paragraph hereof, by which order Molinari and many others were “ appointed as Firemen ” with assignment to the military division, without compensation and subject to the department’s medical examination. That order made immediate, presently effective, appointments to the department, and the requirement of medical examination obviously referred to the future event of return from war and assumption of active duties as firemen.

Respondents concede that the Military Law makes no reference to a “ conditional appointment ” but argue that these appointments were, of necessity, conditioned upon the men passing medical examinations and filing oaths of office. True, there is a fire department rule (Rules and Regulations for the Uniformed Force, § 125) mandating an examination of applicants by a departmental medical board. But the department could waive its own rule, or modify it in special circumstances like these, and the commissioner’s June 19,1944, order, appointing as firemen, Molinari and others in like plight, subject to later physical examination, was such a modification • of the rule, worked out to undo the damage done by the commissioner’s own earlier mistake. Similarly, as to the oath of office, section 30 of the Civil Service Law and section 487a-5.0 of the Administrative Code require a fireman to take an oath of office, but the Civil Service Law requirement is that he take such oath before he shall be entitled to enter upon the discharge of any of his duties Reading those two statutes with subdivision 6 of section 246 of the Military Law, we have a statutory scheme that permits civil service appointments of eligibles away at war, the requisite oath of office to be taken on return from military service and before entering actively on the duties of the civilian positions. The fire commissioner’s order, as to Molinari and the others, thus could legally accomplish just what it said it did: that these men, away in war service, be appointed forthwith, the appointments to be without pay and without active duty until they should come back to New York, pass medical examinations, and begin work as firemen. It is no answer to this that the fire commissioner, under Matter of Berger v. Walsh (291 N. Y. 220, supra), was not required to appoint any particular eligible. The fact is that by the June 19, 1944, order, the commissioner did formally and legally appoint Molinari and the others. They thus became members of the fire department and of the fund, and as such, became entitled to the benefits set up by section B19-8.0 of the Administrative Code, which says (subd. f) that “ in case of death of any such member during his absence in such [military] service ” his named beneficiary or widow shall collect $2,000, less contributions, etc.

While no decision in point is found, we consider that the result herein arrived at is in accord, generally, with Matter of Verdecanna v. Carey (285 N. Y. 130).

The orders should be reversed, with costs in all courts, and the relief prayed for in the petition granted.

Loughran, Ch. J., Conway, Dye, Fuld and Bromley, JJ., concur with Desmond, J.; Lewis, J., dissents and votes for affirmance.

Orders reversed, etc.