author: Lewis, J. Conway, J.

text:
    Metropolitan Life Insurance Company, Appellant, v. Union Trust Company of Rochester, Respondent, et al., Defendants.
    Argued April 9, 1945;
    decided May 24, 1945.

      Robert F. MacCameron, Frank Ewing and Brooks M. Tibbetts for appellant.
    I. The relationship of the parties imposed upon defendant a duty to disclose the unpaid improvement cost. (Nasaba Corp. v. Harfred Realty Corp., 287 N. Y. 290; Noved Realty Corporation v. A. A. P. Co., Inc., 250 App. Div. 1; Burlington Savings Bank v. Prudential Insurance Co., 218 N. W. 949; Travelers’ Ins. Co. v. Jones, 27 Pac. 807; Harding v. Home Inv. & Sav. Co., 297 Pac. 1101; Anglo Eastern Trading Co., Inc., v. New Tread Tire Co., 222 App. Div. 475; Rommel v. Metropolitan Life Ins. Co., 70 F. 2d 832; Webb v. Southern Trust Co., 11 S. W. 2d 988; Grossman v. Herman, 266 N. Y. 249; Wendt v. Fischer, 243 N. Y. 439; Meinhard v. Salmon, 249 N. Y. 458; Krafft v. Citizens’ Bank, 139 App. Div. 610; Rector, etc., Ch. St. Matthew, etc., v. Title G. & T. Co., 246 App. Div. 251, 272 N. Y. 568; York Mortgage Corp. v. Clotar Const. Corp., 254 N. Y. 128.) II. The undisputed evidence required a finding that defendant misrepresented to plaintiff on the mortgage applications that the cost of the street, sewer and sidewalk construction therein described, was paid. (Gray v. Richmond Bicycle Co., 167 N. Y. 348; Downey v. Finucane, 205 N. Y. 251; Donovan v. Aeolian Co., 270 N. Y. 267; Noved Realty Corporation v. A. A. P. Co., Inc., 250 App. Div. 1; Ultramares Corp. v. Touche, 255 N. Y. 170; Hotaling v. Leach & Co., 126 Misc. 845, 221 App. Div. 756, 247 N. Y. 84; Albert v. Title Guarantee & Trust Co., 277 N. Y. 421; Sager v. Friedman, 270 N. Y. 472.) III. Due to the Referee’s death no findings have been made in this case. If the Court of Appeals should conclude that a question of fact was involved the judgment and amended judgment must be reversed because the Referee failed to make any findings. (Smith v. Geiger, 202 N. Y. 306; People ex rel. Central N. E. R. Co. v. State Tax Comm., 261 App. Div. 416; Matter of Frasch, 245 N. Y. 174; People v. Ryan, 274 N. Y. 149; Riggs et al. v. Palmer et al., 115 N. Y. 506; Fuller v. Galeota, 268 App. Div. 949; Adams v. Nellis, 59 How. Prac. 385; Servidone v. Hirschman, 268 App. Div. 347; Krause v. Krause, 171 Misc. 355, 287 N. Y. 27; Hunn v. N. Y. State Teachers’ Retirement System, 176 Misc. 643, 289 N. Y. 171; B. W. G. Cooperative Corporation v. Collison, et al., 24 N. Y. S. 2d 651; Flierl v. Hickey, 24 N. Y. S. 2d 573.)

      Andrew R. Sutherland, Charles S. Wilcox, Kenneth B. Keating and Arthur E. Sutherland, Jr., for respondent.
    The decision made by Justice Edgcomb was sufficient of itself and conformed in every respect to a like decision of the court. Presuming that Justice Edgcomb’s decision does not conform to the requirement of a like decision by the court, and presuming that Justice Love and the Appellate Division are incorrect by reason of the same error, and presuming that appellant was entitled to submit requests to find, appellant has had that privilege but has failed to exercise it. The appellant could have asked the Appellate Division to make findings of fact and conclusions of law. (Corr v. Hoffman, 256 N. Y. 254.)
   Lewis, J.

In this action the plaintiff insurance company seeks to recover damages allegedly sustained by having been induced by false and fraudulent representations made by the defendant trust company to purchase numerous mortgages on land in four townships near the city of Rochester. The action was severed as to the two corporations named as defendants and an order made allowing separate trials. In the action against the defendant Abstract Title and Mortgage Corporation, a motion by that defendant for summary judgment was granted dismissing the complaint upon the merits. (Metropolitan Life Ins. Co. v. Union Trust Co., 283 N. Y. 33.)

The action now before us against the single defendant was referred to former Supreme Court Justice Eenest I. Edgcomb as an Official Referee to hear, try and determine ” the issues presented. Following the conclusion of hearings which had consumed forty trial days the Referee, by what he styled a “ memorandum ”, signed by him and filed in Monroe County Clerk’s Office on May 2, 1943, made the following direction: “ * * * the complaint should be dismissed with costs. Judgment is so ordered. Prepare findings in accordance with this memorandum and send me for my signature.” The Official Referee died on June 7, 1943, before proposed findings had been submitted by either party.

Thereafter the plaintiff moved at Special Term to restore the case to the calendar by reason of the death of the Referee prior to the making and signing of formal findings and conclusions. Special Term denied that motion by order dated July 16, 1943, on which date the defendant-respondent entered judgment in its favor upon all the issues in this action and [adjudging] that the said action be * * dismissed ”. Following such entry of judgment the plaintiff moved to set aside the judgment or, in the alternative, for an order resettling the judgment by striking therefrom the words judgment against the plaintiff upon all the issues in this action ’ ’. Special Term denied the motion to vacate but amended the judgment to read: “ Adjudged that the defendant Union Trust Company of Rochester have judgment against the plaintiff dismissing the complaint herein on the merits ”.

The plaintiff appealed to the Appellate Division from the original and amended judgments and from the two orders of Special Term denying (1) the motion to restore the case to the calendar for trial and (2) the motion to vacate the judgment. The Appellate Division unanimously affirmed the judgments and orders and thereafter allowed the present appeal upon its certificate that a question of law is involved which should be reviewed by this court.

Upon this appeal from the judgment entered upon the order of the Appellate Division we consider first the question whether the “ memorandum ” of the Referee was a “ decision ” upon which judgment could be entered.

Procedure incidental to the decision by a referee is clearly . defined by the Civil Practice Act. A referee has powers equal to those exercised by a trial court without a jury (§ 469); his report must comply with requirements which prevail as to a decision by the court in a like case (§ 470); before a cause is finally submitted to a referee the attorney for either party may submit in writing a statement of the essential facts which he deems established by the evidence and of the rulings upon questions of law which he desires the referee to make. “ * * * At or before the time when the report is rendered, the referee must note in the margin of the statement the manner in which each proposition has been disposed of, and must file the statement thus noted; but an omission so to do does not affect the validity of the report ” (§ 471); the referee’s decision like the decision of the court — * * * may be oral or in writing and, except where a nonsuit is granted, must state the facts which it deems essential(§ 440) (Emphasis supplied.)

In strict conformance with the statutory requirements for a referee’s decision the “ memorandum ” with which we are here concerned contained a detailed statement of the facts which the Referee deemed essential to his decision. The several contentions advanced by the plaintiff in support of its complaint and requiring proof of substantiating facts were in each instance followed by a conclusive, unequivocal statement of the Referee’s finding that the contention lacked evidentiary support. An example of the type of statement last above mentioned is furnished by the following — which refers to one of the plaintiff’s chief contentions: “ The evidence fails to warrant a finding of any willful withholding by the bank of knowledge pertinent to the sale of these mortgages, or to their value or desirability, which it was in duty bound to disclose, or of any misstatement of a past or existing fact. Without such a misrepresentation, or something equivalent thereto, there can be no fraud, and nothing for the other party to rely upon. The misrepresentation being missing here, plaintiff cannot recover, and it becomes unnecessary to inquire whether the other elements required to sustain an action for fraud and deceit have been established.”

When, in the closing paragraph of his ‘ ‘ memorandum ’ ’ the referee stated that “ * * ' * the complaint should be dismissed with costs,” which statement is immediately followed by the direction “ Judgment is so ordered,” we think the language so employed “ * * * carried direct and immediate legal consequences ” (Corr v. Hoffman, 256 N. Y. 254, 268) — one of which was that judgment might be entered thereupon as a ministerial act. (Rules Civ. Prac., rule 198; Corr v. Hoffman, supra, p. 263; Vogel v. Edwards, 283 N. Y. 118, 121.) The fact that in a written “ memorandum ” the Referee included a conclusive statement of his findings as to factual issues and a direction for the entry of judgment, qualifies that “ memorandum ” as a decision upon which a judgment was properly entered. (Tallmadge v. Lounsbury, 13 N. Y. S. 602, 603, affd. 126 N. Y. 655.) The decision in Smith v. Geiger (202 N. Y. 306) is not authority to the contrary. There, unlike our present case, the Referee (p. 307) “ found no facts * * * and gave no direction for judgment. ’ ’ Likewise in Ventimiglia v. Eichner (213 N. Y. 147), this court was careful to point out (p. 149) that there was no document by the trial court which directed the entry of judgment in accord with the conclusion reached.

The appellant stresses the fact that in the “ memorandum ”, after the direction for the entry of judgment, appears the sentence —1 ‘ Prepare findings in accordance with this memorandum and send me for my signature.” We do not think the sentence last quoted above makes the Referee’s decision legally insufficient as a basis for the entry of judgment. The Referee specified that proposed findings, if any, must be “in accordance with this memorandum ” — a strong indication that he considered as final the decision embodied in that document. It must also be remembered that if, in response to the permissión thus given by the Referee, any party chose to submit proposed findings at a time which was concededly long subsequent to the submission of the case, not only were they untimely (Civ. Prac. Act, § 471) but, had the Beferee marked proposals thus delayed, the privilege thus given would have been a favor, not a right. Had he lived to make any findings proposed by the plaintiff —■ which presumably would have been “ in accordance with (his) memorandum ” — they could not have affected the decision previously rendered in the case and the judgment entered thereon. (See Matter of Joroco Silk Corp. v. Nova, 265 App. Div. 1061.)

In the circumstances disclosed by this record we do not find the conclusion to be warranted that the relationship between the appellant and the respondent imposed upon the latter a duty to disclose the cost of unpaid local improvements upon the mortgaged lands; nor do we find sufficient evidence to warrant, a finding that the respondent misrepresented to the appellant on mortgage applications that the cost of such local improvements had been paid.

The judgment should be affirmed, with costs.

Conway, J.

(dissenting). The question presented upon this record is whether that which an Official Beferee denominated a ‘‘ memorandum ”, following a trial before him as Beferee to hear and determine, is a decision within the meaning of the Civil Practice Act. The concluding two paragraphs of the ° memorandum ” are as follows, and we quote them to indicate how serious was the deprivation to plaintiff of the opportunity to have findings of fact passed upon by the Official Beferee:

‘ ‘ The evidence fails to warrant a finding of any willful withholding by the bank of knowledge pertinent to the sale of these mortgages, or to their value or desirability, which it was in duty bound to disclose, or of any misstatement of a past or existing fact. Without such a misrepresentation, or something equivalent thereto, there can be no fraud, and nothing for the other party to rely upon. The misrepresentation being missing here, plaintiff cannot recover; and it becomes unnecessary to inquire whether the other elements required to sustain an' action for fraud and deceit have been established.
“ If I am correct in the conclusions already reached, it follows that the complaint should be dismissed with costs. Judgment is so ordered. Prepare findings in accordance with this memorandum and send me for my signature.”

Following the filing of the “ memorandum ” on May 2, 1943, attorneys for the plaintiff sent to the Official Eeferee the following letter:

“ 'We would like to submit to you requests to find on behalf of the plaintiff. Since receiving your decision I have been busy preparing for a certiorari trial which commences next Tuesday and may run into the following week. It will probably not be until June 1st that I will be able to submit our requests. Also, I would appreciate it very much if the proposed findings of fact and conclusions of law be settled on notice, so that we might have opportunity of examining them.
Thanking you for sending back the exhibits which we received in due course. With kindest personal regards.”

On May 10th, the Official Eeferee wrote in reply:

“ Your letter just received. I note that you wish to submit requests to find in the Metropolitan Insurance Co. case. I think you should have that privilege, and will be glad to give it to you.
I also note that you want to have the defendant’s findings settled on notice. I am sending a copy of this letter to Mr. Sutherland, and am asking him to serve a copy of his proposed findings on you, and if you cannot agree upon them, I will be glad to settle them. Let me know when it would be agreeable to you and Mr. Sutherland to settle any dispute between you, and I will try to take care of you at that time.”

The Official Eeferee died on June 7, 1943, before proposed findings of fact had been served by defendant or prepared by plaintiff.

There can be but one decision, and it seems clear that the only inference which may be drawn from the reference by the Official Eeferee to the paper filed by him as a “ memorandum ” and the correspondence quoted is that the Official. Eeferee did not intend the “ memorandum ” to be a decision but was directing the submission to him of a proposed formal decision. The Official Eeferee makes clear his intention at the time of filing his “ memorandum ” by indicating in his letter of May 10th that he proposed to “ settle ’’ the findings, prior to their incorporation in a decision, if the counsel could not agree upon them. The learned Official Eeferee labored under no impression that his judicial power had been exhausted and that judgment could be entered forthwith without further ado upon his ‘1 memorandum. ’ ’

The intent of the Official Referee" is further made clear by the . affidavit of counsel for plaintiff, submitted in support of his motion to restore the case to the calendar, which, stands uncontradicted: • •

“'After the. evidence had been closed on December 3,1942, the said referee directed on the record that briefs be exchanged between the parties, and that the case be orally-summed up on approximately March 1, 1943. ■ Prior to the placing on the record of the dates on which briefs should be exchanged and the case orally summed up, there was considerable discussion on -the subject off the record. During this discussion deponent asked Judge Edgoomb [the Official Referee] whether he wished to have requests and findings submitted with the briefs. He indicated that the matter of submitting findings and requests. should be left until a later date. ” ;

. The learned Official Referee "knew well from his long experience the distinctions and differences among memoranda, opinions and. decisions. ' The learned Official Referee, never intended thereafter to file a “ memorandum ” which would deprive counsel of .the opportunity afforded by law “ to submit findings ” before the case was “ finally submitted ”, and such a distinguished lawyer and jurist would never request submission of findings “ in accordance ” with his “ memorandum ” if he had intendód that judgment should be entered by the .clerk before there was opportunity for him to sign such findings.

. The' memorandum ’ ’ would constitute a ‘ ‘ decision ” if it appeared that: the Official Referee intended that the papers should be his final determination of the issues and of fact submitted to him,- and that a judgment might be entered by the clerk as directed therein, “ on filing the decision or report ” in accordance with rule 198 ‘of the Rules of Civil Practice. The record- of the proceedings discloses, it seems to us, that the contrary was the intention of the Official Referee.

The judgment appealed from should be reversed, with costs, and a new trial granted.

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

Judgment affirmed. [See 294 N. Y. 962.]


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    In the Matter of Donald MacDonald et al., as Executors of H. Mabel MacDonald, Deceased, Appellants, against Rollin Browne et al., Constituting the State Tax Commission, Respondents.
    Argued April 10, 1945;
    decided May 24, 1945.

      Harold J. Treanor and Morway Picket for appellants.
    In taxing petitioners under section 186-a of the Tax Law, the Legislature has made an unreasonable, arbitrary and discriminatory classification, which is void under the Fourteenth Amendment of the Federal Constitution. (Nashville, C. &

      St. L. Ry. Co. v. Taylor, 86 F. 185; Fid. Mut. Life Assn. v. Mettler, 185 U. S. 308; Colgate v. Harvey, 296 U. S. 404; Missouri, etc., Ry. Co. v. May, 194 U. S. 267; Barrett v. Indiana, 229 U. S. 26; Union Sulphur Co. v. Reed, 249 F. 172.)

      Nathaniel L. Goldstein, Attorney-General (Wendell P. Brown and Orrin G. Judd of counsel), for respondents.
    Section 186-a of the Tax Law, as amended by chapter 137 of the Laws of 1941, does not violate the due process or equal protection clauses of the United States Constitution. (Matter of 436 West 34th St. Corp. v. McGoldrick, 262 App. Div. 1002, 288 N. Y. 346; Matter of Lacidem Realty Corporation v. Graves, 263 App. Div. 428, 288 N. Y. 354.)
   Per Curiam.

The appellants, as executors of the estate of H. Mabel MacDonald, are the owners of a four-story building at 115 Lenox Avenue, New York City, and they lease stores, offices and assembly rooms in the building to tenants to whom they furnish water and electricity. By proceedings brought in accordance with the provisions of article 78 of the Civil Practice Act they have challenged the determination of the respondents ‘ ‘ constituting the State Tax Commission of the State of New York ” that they are subject to. the tax imposed by section 186-a of the Tax Law (as amd. by L. 1941, ch. 137) upon '“ the gross operating income ” received by them upon the “ sale ” or the “ furnishing ” of electricity and water to some of the tenants. The Appellate Division has unanimously confirmed the determination and the appellants have appealed from the order of the Appellate Division.

In the Appellate Division and in this court they have contended that if the statute “ is construed to include the petitioners within the purview of the tax therein provided ”, the determination of the Tax Commission and the law upon which it is predicated

“ are illegal, void and unconstitutional and violate the Constitution of the United States of America in that
“ (a) they are predicated on erroneous assumptions of fact;
“(b) they are discriminatory and single out one group or a class of business, and treat that group or class differently from other groups or classes similarly situated, and thus violate the Constitution of the United States, more particularly Amendments 5 and 14 thereof; and
“(c) the tax is arbitrarily and unreasonably imposed upon certain landlords and not upon other landlords similarly situated, performing like services and functions, all in violation of the Constitution of the United States, more particularly Amendments 5 and 14 thereof.”

In Matter of Lacidem Realty Corp. v. Graves (288 N. Y. 354) and Matter of 436 W. 34th St. Corp. v. McGoldrick (288 N. Y. 346) this court rejected a challenge of the validity of the statute when construed in the same manner as it has been construed in this case, on the ground that it violated the provisions of the Constitution of' the State of New York. The contentions that the statute violates similar provisions of the Constitution of the United States are properly raised in this case and must necessarily be decided by this court. In principle the question is the same as the question presented and decided in the cited cases, and for the reasons stated in the opinions in those cases the order of the Appellate Division is affirmed.

The order should be affirmed, with costs. '

Lehman, Ch. J., Loughran, Lewis, Conway, Desmond, Thacher and Dye, JJ., concur.

Order affirmed.


author: Lehman, Ch. J.

text:
    In the Matter of the United States of Mexico et al., Respondents, against Peter Schmuck, a Justice of the Supreme Court of the State of New York, et al., Appellants.
    Reargued April 3, 1945;
    decided May 24, 1945.

      Jerome S. Hess, Irving I. Goldsmith, Frank Rashap and Monroe Collenburg for respondents.
    I. A sovereign by consenting to be sued in a foreign court is not held to have also consented to the seizure of its property by the foreign court. (Lamont v. Travelers Ins. Co., 281 N. Y. 362; Ex Parte Peru, 318 U. S. 578; Fields v. Predionica i Tkanica, 265 App. Div. 132, 290 N. Y. 740; Hassard v. United States of Mexico, 29 Misc. 511, 46 App. Div. 623, 173 N. Y. 645; Dexter & Carpenter v. Kunglig Jarnvagsstyrelsen, 43 F. 2d 705; Oliver American T. Co. v. Government of the U. S. of Mexico, 5 F. 2d 659; Kingdom of Roumania v. Guaranty Trust Co., 250 F. 341; Auer v. Costa et al., 23 F. Supp. 22; Matter of Suarez [1917], 2 Ch. 131; Matter of Suarez [1918], 1 Ch. 176; Mighell v. Sultan of Johore, 1 Q. B. 149; Duff Development Company v. Government of Kelantan [1924], A. C. 797.) II. The levy upon and seizure of Mexican Government national property as the basis for obtaining jurisdiction over Petróleos Mexicanos being invalid, the service of the summons by publication predicated upon the seizure of such inviolate property is fatally defective and no jurisdiction has been obtained over Petróleos Mexicanos. (Lamont v. Travelers Ins. Co., 281 N. Y. 362; Dexter and Carpenter, Inc., v. Kunglig Jarnvagsstyrelsen, 43 F. 2d 705; Mason v. Inter-Colonial Railway Co., 197 Mass. 349; Matter of Suarez [1917], 2 Ch. 131; Anderson v. N. V. Transandine Handelmaatschappij, 289 N. Y. 9; Schram v. Keane, 279 N. Y. 227; Sturcke v. Link, 176 Misc. 93; Geary v. Geary, 272 N. Y. 390; Jackson v. Jackson, 290 N. Y. 512; Guffey v. Grand Trunk Railway Co., 67 Misc. 553; Pennoyer v. Neff, 95 U. S. 714.) III. Orders of prohibition may be used to restrain courts which are exceeding their jurisdiction as well as to restrain those which have no jurisdiction whatever. (Thomson v. Tracy et al., 60 N. Y. 31; People ex rel. Newton v. Special Term, Part 1, 193 App. Div. 463; People ex rel. Nassoit v. Young, 195 App. Div. 513; Quimbo Appo v. The People, 20 N. Y. 531; Compania Espanola Navemar, 303 U. S. 68; Lamont v. Travelers Ins. Co., 281 N. Y. 362.) IV. The Supreme Court has no jurisdiction in the action before it to decide any issue of law or of fact. The sole basis of any jurisdiction over the defendant in that suit was and is the seizure of property which is immune from attachment. (Thomson v. Tracy et al., 60 N. Y. 31; Lamont v. Travelers Ins. Co., 281 N. Y. 362; Fields v. Predionica i Tkanica, 265 App. Div. 132; Hassard v. United States of Mexico, 29 Misc. 511, 46 App. Div. 623, 173 N. Y. 645; Dexter & Carpenter v. Kunglig Jarnvagsstyrelsen, 43 F. 2d 705; Matter of Suarez [1907], 2 Ch. 131; Matter of Baltimore Mail SS Co. v. Fawcett, 269 N. Y. 379; Ex parte Peru, 318 U. S. 578; Ex parte United States, 319 U. S. 730; United States v. Caffey, 141 F. 2d 69; Matter of Culver Contrg. Corp. v. Humphrey, 268 N. Y. 26.) V. The exercise of jurisdiction by the courts of this State over national property of the Mexican Government is inconsistent with the sovereignty of Mexico and the attachment herein should be vacated by this court.

      Joseph C. Slaughter, Arthur B. Hyman and Morris Katz for appellants.
    I. The Court of Appeals having held that Special Term has jurisdiction of this action, the order of the Appellate Division should have been reversed. The court was without authority to sustain it in part. II. The writ of prohibition should never be used as a substitute for appeal. (People ex rel. Livingston v. Wyatt, 186 N. Y. 383; Hannes v. Kingdom of Roumania Monopolies Institute, 260 App. Div. 189.)
   Lehman, Ch. J.

Upon its complaint alleging that the defendant Petróleos Mexicanos is “an entity created under and by virtue of the laws of the Eepublic of Mexico ”, Associated Metals and Minerals Corporation obtained an order of attachment and the Sheriff of New York County made a levy thereunder on moneys or property belonging to Petróleos Mexicanos. Property upon which a levy is made pursuant to process of a court issued according to law is in the custody of the law and the court has jurisdiction over such property. So long as it remains in its custody, the court can render a judgment which will subject that property to the demand of the plaintiff in the action in which the attachment was issued. (Cooper v. Reynolds, 77 U. S. 308.)

After the levy, United States of Mexico and Petróleos Mexicanos appeared specially in the action and moved for an order dismissing the action and vacating the warrant of attachment on the ground that Petróleos Mexicanos is an agent and instrumentality of the Mexican Government and property and moneys standing in the name of Petróleos Mexicanos belong to the Mexican Government in its sovereign capacity and are not subject to the jurisdiction or judgment of the court. The court, upon that motion, was officially advised that United States of Mexico had informed the Secretary of State that moneys standing in the name of Petróleos Mexicanos had been seized under a warrant of attachment in the pending action, and that Petróleos Mexicanos is an “ agent and instrumentality of the Mexican Government created, organized and existing for the sovereign and governmental purposes ” of that government. A letter from the State Department of the United States, signed by the Secretary of State and submitted to the court by direction of the Attorney-General, states that “ the Department accepts as true the statements * * * to the effect that ‘ Petróleos Mexicanos ’ is a public Agency or instrumentality of the Sovereign State of Mexico ” and the Department “ in the absence of evidence * * * in the present instance ” of consent to be sued by the sovereign foreign State recognizes and allows the claim of the Government of Mexico that ‘ Petróleos Mexicanos ’ is immune from suit and its property from attachment.” In spite of the official suggestion, based upon that letter and submitted to the court, that “ the claim of immunity made.on behalf of said Petróleos Mexicanos and recognized and allowed by the State Department be given full force and effect by this Court; that the said Petróleos Mexicanos and its property be declared immune from the jurisdiction and process of this court ”, the court, upon the motion to dismiss, referred four “ questions of fact arising out of the papers submitted on this motion ” to a referee, “ to try such questions of fact and to report his findings to this court for its further action ”. The referee has not yet tried such questions and the motion of United States of Mexico for cm order dismissing the action brought against Petróleos Mexicanos and vacating the ivarrant of attachment has not been decided because, after the order of reference was made, the Appellate Division, upon the application of United States of Mexico, made an order prohibiting the judges and officers of the Supreme Court of the State from taking any further steps and proceedings in the action brought against Petróleos Mexicanos and from enforcing any order or decision in such action.

The first three “ questions of fact ” formulated in the order of reference relate to the claim of United States of Mexico that Petróleos Mexicanos is a public agency of the sovereign State of United States of Mexico and that as such it is immune from suit and its property from attachment. Upon certification to the court that the claim of sovereign immunity was recognized and allowed by the Department of State, it became the duty of the judicial department of the government to follow the action of the political branch and to decline an antagonistic jurisdiction to determine independently the claim of immunity. Á sovereign State cannot be required to sustain in court a claim, which has been allowed by the Department of State, that it is immune from suit and that property which has been attached belongs to it and is not subject to attachment. Accordingly, upon the argument of this appeal we agreed with the decision of the Appellate Division prohibiting the referee and the court from hearing or deciding any question relating to the claim of United States of Mexico to immunity, so far as that claim had been recognized and allowed by the Department of State. But since the Department had recognized the claim of immunity of United States of Mexico only in “ the absence of evidence * * * in this instance of consent to be sued, we held that the courts were bound to pass upon the effect of evidence which might be offered on that point, and we modified the order of the Appellate Division insofar as it prohibited judicial consideration and determination of that question. (Matter of United States of Mexico v. Schmuck, 293 N. Y. 264.)

After that decision was rendered we granted an application of United States of Mexico for a reargument (293 N. Y. 768). Jurisdiction of the person of a nonresident defendant is not obtained by attachment of the defendants property, and United States of Mexico now urges that, even assuming arguendo that the court might find that United States of Mexico had consented that its agency Petróleos Mexicanos be sued in the courts of New York, consent ef a foreign sovereign to be sued is not to be construed as a waiver of immunity of the property of the sovereign from attachment; and that therefore, by the levy upon such property under a warrant of attachment, the court did not in this case acquire jurisdiction of the property or the person of the defendant.

That argument may be appropriately presented upon the application made by United States of Mexico to dismiss the action and to vacate the warrant of attachment and the levy thereunder. Now we are reviewing an order which prohibits the judges and officers of the Supreme Court of the State from taking any further steps or proceedings in the action. Pending decision by the Supreme Court of the application made to it to dismiss the action, it does not appear that any “ steps or proceedings are contemplated by that court other than to try and determine issues which, in the opinion of that court, have been raised by the papers submitted to it upon that application ; and the only question which we may consider and decide, upon this appeal, is whether the Supreme Court may pass upon such issues. Denial to the court of jurisdiction to determine the issues of fact or law involved in the application made by United States of Mexico to vacate the process of the court and to dismiss the action which the plaintiff has commenced, or has attempted to commence, by seizure of property of the defendant, is in effect a denial to the court of jurisdiction to decide that application. Whether a court by service of process has acquired jurisdiction of the person of a defendant is a judicial question to be decided by the court in which a challenge of its jurisdiction is made. So, too, the question whether a court shall decline jurisdiction must be decided, at least in the first instance, by the court whose judicial powers have been invoked, and ordinarily every issue of fact -or of law must be decided in that court.

Though a court may have jurisdiction to determine every issue of fact or of law involved in litigation brought to it, yet the court, in the exercise of such jurisdiction, must follow established rules of law and of procedure. Some issues of fact or law may have been conclusively -determined by prior decision of a judicial tribunal. Then the court will not again try these issues, but must base its decision upon such conclusive determination of some or all of these issues. Even then, however, it weighs the scope and effect of the prior determination, and if other issues remain it must determine those issues. The court may err in the exercise of its judicial functions but ordinarily it cannot by order in the nature of mandamus or of prohibition be commanded or advised in advance to exercise such functions in a prescribed manner.

An extraordinary situation calling for extraordinary remedy may be presented, however, when a court assumes to try issues which are beyond its competency or to exercise a jurisdiction which, in accordance with well-established rules of policy which have the force of law, it should decline to exercise. (Ex Parte Peru, 318 U. S. 578; Matter of Baltimore Mail S. S. Co. v. Fawcett, 269 N. Y. 379.) Judicial inquiry may be precluded of claims of immunity previously determined by a competent political branch of the Government upon the request of a foreign sovereign State. In such cases, as the courts have frequently pointed out, the courts “follow the action of the political branch, and will not embarrass the latter by assuming an antagonistic jurisdiction.” (United States v. Lee, 106 U. S. 196, 209.) Then judges who assume a jurisdiction which may embarrass the Department of State in the conduct of foreign relations may be commanded to relinquish jurisdiction upon the request or suggestion of the political branch of the Government.

Nonetheless, a party may not be refused access to the courts for the determination of judicial questions except insofar, as the claim of the foreign sovereign has been recognized and allowed by the Department of State and the court has been so. advised. “ In the absence of recognition of the claimed immunity by the political branch of the government, the courts may decide for themselves whether all the requisites of immunity exist. * * * recognition by the courts of an immunity- upon principles which the political department of government has not sanctioned may be equally embarrassing to it in securing the protection of our national interests and their recognition by other nations.” (Mexico v. Hoffman, 324 U. S. 30, 34, 36.) We followed that principle in our decision upon the original argument (293 N. Y. 264). We construed the communication of the Department of State as intended to leave open for judicial determination whether in this case the evidence shows that the United States of Mexico through its agent consented to be sued; and when that question is determined, the Supreme Court still has jurisdiction to decide whether the warrant of attachment should be vacated and the action should be dismissed. We see no reason to change that decision.

We emphasize here that in holding that the court has jurisdiction to decide whether the warrant of attachment should be vacated and the action dismissed, we are not impliedly suggesting that in our opinion there is substance to the claim of the plaintiff that there has been any consent to be sued by the defendant or any waiver of its claimed right of immunity of its property from seizure. We hold only that these are judicial questions which must be decided in the court where they have been presented, even if upon examination of these questions it should appear plainly, and as matter of law, that the claim of immunity of United States of Mexico is sound and that the action should be dismissed. It would be anomalous if the Supreme Court of this State should, upon the application of United States of Mexico, be prohibited from determining the issues of fact or of law presented upon the motion to dismiss which United States of Mexico has itself made in that court, except insofar as questions there involved have been authoritatively decided by the Department of State.

Without attempting in this opinion to analyze in detail the relevant decisions of the Supreme Court of the United States and of this court, we state our conclusion that these decisions establish the following general principles. The question whether a court has acquired jurisdiction over the person of a defendant or the subject matter of an action, and the question whether a court should relinquish jurisdiction, are judicial questions which ordinarily must be decided by the court whose jurisdiction is challenged. Where such challenge is made by a foreign sovereign State claiming for itself and its property immunity from process of the court, the court must relinquish a jurisdiction based upon service of such process when it appears that the claim of immunity has been recognized and allowed by a competent political branch of the government, and a “ suggestion ” has been properly presented to the court that the judicial branch of government should follow the action of the political branch; but the judicial branch, even in such case, retains jurisdiction to determine any question left open by the political branch of onr government for decision by the judicial branch. Applying these general principles, we find that, in this case, though the Supreme Court of the State must relinquish its jurisdiction to determine those questions which have been authoritatively determined by the Department of State, the court still retains a jurisdiction limited to the determination of the question, left open by the Department of State, whether the sovereign State of Mexico has consented that its agency Petróleos Mexicanos may be sued in this State and by such consent has made its property subject to process of the courts of this State. The court cannot be prohibited from exercising that limited jurisdiction. We repeat that the arguments made by the United States of Mexico in support of its application may be appropriately made when the Supreme Court exercises its jurisdiction. We may not consider them now.

The plaintiffs upon the reargument attack the decision of this court upon the original argument on the ground, among others, that in proceedings brought under article 78 of the Civil Practice Act a court may not issue an order of prohibition limited to particular issues but must either dismiss the application for such an order or prohibit the judicial tribunal from assuming any jurisdiction in the matter. The power of the court to make an order of prohibition is not so limited. The remedy of the writ or order of prohibition, though ordinarily employed to restrain a subordinate tribunal from entertaining a cause or proceeding over which it has no jurisdiction, “ may be exercised also to enjoin a lower court from exceeding its authorized powers in a proceeding over which it has jurisdiction.” (Matter of Culver Contrg. Corp. v. Humphrey, 268 N. Y. 26, 39.)

No reason has been presented upon the reargument which persuades us that the decision rendered upon the original argument should be changed.

The order of the Appellate Division should be modified to the extent that the order of prohibition is confined, in accordance with this opinion, to the first three questions in the order of reference, and, as so modified, affirmed, without costs.

Loughran, Lewis, Conway, Desmond, Thacher and Dye, JJ., concur.

Ordered accordingly.


author: Lewis, J. Lehman, Ch. J.

text:
    Agnes Foley, Respondent, v. State of New York, Appellant. Harry A. Foley, Respondent, v. State of New York, Appellant. Eugene F. Foley, Respondent, v. State of New York, Appellant. Harry A. Foley, Respondent, v. State of New York, Appellant. Audrey C. Foley, Respondent, v. State of New York, Appellant. Janet Foley, Respondent, v. State of New York, Appellant. William E. Foley, Respondent, v. State of New York, Appellant.
    (Claim No. 25961.)
    (Claim No. 25962.)
    (Claim No. 25963.)
    (Claim No. 25964.)
    (Claim No. 25965.)
    (Claim No. 25966.)
    (Claim No. 25967.)
    Argued March. 5, 1945;
    decided May 24, 1945.

      Nathaniel L. Goldstein, Attorney-General (Henry S. Manley and Orrin G. Judd of counsel), for appellant.
    I. Section 8 of the Court of Claims Act is not an assumption of liability by the State for damages resulting from its maintenance of traffic lights, a function for which its municipalities are not liable. (Cleveland v. Town of Lancaster, 239 App. Div. 263, 264 N. Y. 568; Parsons v. City of New York, 248 App. Div. 825, 273 N. Y. 547; Murphy v. Village of Farmingdale, 252 App Div. 327, 276 N. Y. 690; Paige v. State of New York, 269 N. Y. 352; Bloom v. Jewish Board of Guardians, 286 N. Y. 349; Holmes v. Coumty of Erie, 291 N. Y. 798.) II. Failure of the traffic light bulb by burning out, undiscovered for twenty-one hours before occurrence of the collision, was not prima facie evidence of negligent maintenance. III. Assuming that the traffic light failure and failure to discover it was prima facie evidence of negligent maintenance, it was overcome by the State’s proof. IV. The bulb failure was not the proximate cause of the collision, and the claimants were not free from contributory negligence. (Ward v. Clark, 232 N. Y. 195; Shea v. Judson, 283 N. Y. 393; Ferraro v. Garden City Park Fire Commissioners, 259 App. Div. 121; Slavik v. Cab Transportation Corp., 267 App. Div. 98; Plunkett v. Heath, 1 N. Y. S. 2d 778; Adams v. Berkun, 2 N. Y. S. 2d 98.)

      Alfred L. Hetzelt and Samuel Sapowitch for respondents.
    I. Section 8 of the Court of Claims Act when construed in connection with the sections of the Vehicle and Traffic Law, must be held to be an assumption of liability by the State for damages resulting from its negligent erection, operation or maintenance of its traffic light. (Vehicle and Traffic Law, §§ 95-a-95-k; Slavin v. State of New York, 249 App. Div. 72; Egan v. State of New York, 255 App. Div. 825; McArdle v. State of New York, 251 App. Div. 773; Kline v. State of New York, 253 App. Div. 788; Paige v. State of New York, 269 N. Y. 352; Jackson v. State of New York, 261 N. Y. 134; Bloom v. Jewish Board of Guardians, 286 N. Y. 349; Holmes v. County of Erie, 291 N. Y. 798; Sipple v. The State, 99 N. Y. 284; Augustine v. Town of Brant, 249 N. Y. 198; Dulinak v. State of New York, 177 Misc. 368.) II. The questions of the State’s negligence in the maintenance of the signal light and of the claimants’ contributory negligence were questions of fact which have been determined favorably to the claimants. III. Claimants were free from contributory negligence. IV. The negligent maintenance of the traffic signal light was the proximate cause or one of the proximate causes of the collision. (Lee v. City Brewing Corporation, 279 N. Y. 380; Dulinak v. State of New York, 177 Misc. 368, 177 Misc. 372, 262 App. Div. 1064; Gardner
      v. Friederich, 49 N. Y. S. 1077, 25 App. Div. 521, 163 N. Y. 568; O’Neill v. City of Port Jervis, 253 N. Y. 423; Stanley v. Woolworth Company, 153 Misc. 665; Halstead v. Village of Warsaw, 43 App. Div. 39; Schermerhorn v. N. Y. C. & H. R. R. R. Co., 33 App. Div. 17; Schubart v. Hotel Astor, Inc., 168 Misc. 431; Sweet v. Perkins, 196 N. Y. 482; Rosenholz v. Shattuck Co., 112 Misc. 468; Hall v. New York Telephone Co., 159 App. Div. 53; Clark v. New York Hotel Statler Co., Inc., 223 App. Div. 237.)
   Lewis, J.

At a point in the Town of Amherst, Erie County, two miles northeast of Buffalo, a State highway known as Union Boad intersects Wehrle Drive at right angles. At that intersection traffic is controlled by an electrically illuminated signal device ’ equipped with red and green lights which face two-way traffic on each highway and are so arranged that when lights are red facing northbound and southbound traffic on Union Boad the lights facing eastbound and westbound traffic on Wehrle Drive are green, and vice versa. At eleven o’clock on the morning of Sunday, August 4, 1940, an automobile driven by the respondent Audrey Copeland Foley, in which the other four respondents were passengers, was proceeding easterly on Wehrle Drive when it collided at that intersection with an automobile driven by Ethel Mendy which was proceeding northerly on Union Boad. When the Foley car reached a point 150 to 200 feet west of the intersection its driver saw the Mendy car approaching the intersection from the south along Union Boad. The speed of the Foley car, which had been reduced when the light was red against it, increased when the light turned green. When the car entered the intersection it was struck on its right side by the-northbound Mendy car.

The evidence is not disputed that at the time of the collision all lights in the traffic control signal were operating except the red light facing the Mendy car as it approached Wehrle Drive; that when the light facing the eastbound Foley car was green, the light which then should have shown red against the approaching northbound Mendy car was blank by reason of the failure of an electric bulb which had burned out prior to 2:30 p.m. of the previous day and had not been replaced.

The impact of the Mendy car overturned the Foley car causing the respondents personal injuries and property damage for which claims were filed against the State based upon alleged negligence in the maintenance of the traffic control signal. The present appeals by the State are by our permission from judgments entered upon orders of the Appellate Division which affirmed unanimously awards made to the respondents.

Resisting judgments thus rendered against the State the Attorney-General concedes upon the present appeals that there are no issues of fact or as to the support for the findings of fact which were made, but only issues concerning the conclusions of law which were based upon certain uncontradicted testimony and findings.” Upon that concession the argument is advanced that there has been no assumption of liability by the State for damages resulting from negligence involved in its maintenance of traffic lights.

We do not agree with that statement of law when applied to the facts now before us. By article 7 of the Vehicle and Traffic Law the Legislature created the State Traffic Commission and prescribed its functions. By section 95-a of that article it is provided that “ The state traffic commission shall have the power and it shall be its duty to regulate the type, location, erection, maintenance and removal of all traffic control signals and signal lights on or along any state highway maintained by the state, and every such signal or light shall hereafter be maintained at the expense of the state.” (Emphasis supplied.) The traffic control signal here involved was erected on Union Road, a “ state highway maintained by the state.” It also appears from unreversed findings by the Court of Claims — * ‘ That the maintenance of Union Road and the traffic lights on said road were taken over completely by the State of New York and maintained solely by the Department of Public Works Division of highway approximately four years prior to August 4, 1940, the date of the accident herein ”; that it was the duty of the members of the Police Force of the Town of Amherst while daily touring the road and passing this traffic light to look at it and see if it was working right, and if it was not, to report it to the State Highway Department.” If, as has been found by the Court of Claims and the Appellate Division, the State, at the time of the accident here involved, had failed properly to perform the statutory duty it had undertaken to maintain the lights in the traffic control signal on Union Road, we think such breach of duty is made actionable by the State’s waiver of immunity from liability declared by section 8 of the Court of Claims Act: “ The state hereby waives its. immunity from liability and action and hereby assumes liability and consents to have the same determined in accordance with the same rules of law as applied to actions in the supreme court against individuals or corporations, provided the claimant complies with the limitations of this article.”

We have had occasion to say that By section 12-a [now § 8 of the Court of Claims Act] liability when proved by the rules of law applicable to individuals, has been affirmatively assumed [by the State] and jurisdiction to determine whether such a liability has been proved is conferred upon the Court of Claims.” (Jackson v. State of New York, 261 N. Y. 134, 138; see, also, Holmes v. County of Erie, 291 N. Y. 798; Bloom v. Jewish Board of Guardians, 286 N. Y. 349, 353; Paige v. State of New York, 269 N. Y. 352, 356.)

Upon the facts of record before us we cannot rule as matter of law, as the Attorney-General would have us do, that the failure of the traffic light bulb — unreplaced for at least twenty-one hours before the accident — was not prima facie evidence of negligent maintenance; or, if it be assumed that the traffic light failure and omission to discover it was prima facie evidence of negligent maintenance, that it was overcome by the State’s proof of the practice it had adopted for bulb replacements. Nor can we say as matter of law upon this record that the bulb failure was not the proximate cause of the collision which occurred, or that the acts of the claimants constituted contributory negligence. “ Several acts may occur to produce a result, one or more being the proximate cause. (Ring v. City of Cohoes, 77 N. Y. 83; Ivory v. Town of Deerpark, 116 N. Y. 476.) When varying inferences are present, a jury question is raised. (O’Neill v. City of Port Jervis, 253 N. Y. 423.)” (Carlock v. Westchester Lighting Co., 268 N. Y. 345, 349.)

The judgments should be affirmed, with costs.

Lehman, Ch. J.

(dissenting). I agree that by the provisions of the Vehicle and Traffic Law the duty is imposed upon the State to “ maintain the signal lights placed by authority of the state ” on or along any State highway maintained by the State. The Department of Public Works, Division of Highways, is the agent of the State in carrying out the statutory duty imposed upon the State and the State has assumed liability for negligence of its agent in carrying out that duty. To establish their claims in these cases the claimants must, However, prove that their injuries resulted from the negligence of the agent of the State. In my opinion proof that a bulb in the traffic signal was not replaced within twenty-one hours after it ceased to function is insufficient to establish negligence in the maintenance of the light where the division or department of highways charged with duty to maintain the light had no notice that it was not functioning and where it was the practice of the department to replace the bulbs after reasonable periods of use. No duty to inspect the lights in the interval rested upon the highway division or department and negligence, if any, by members of the police force of the Town of Amherst in failing to note that a light was not functioning and to report that fact to the State Highway Department would not be the negligence of agents of the State in carrying out the statutory duty assumed by the State and would not be imputed to the State or give rise to liability of the State under ‘ ‘ the same rules of law as applied to actions in the supreme court against individuals or corporations.”

It also appears as a matter of law that the proximate cause of the accident was the negligence of the driver of the Mendy car in crossing the intersection after the green light was extinguished.

The judgments should be reversed and claims dismissed.

Loughran, Conway and Desmond, JJ., concur with Lewis, J.; Lehman, Ch. J., dissents in memorandum, in which Thacher and Dye, JJ., concur.

Judgments affirmed.


text:
    William H. Purvin, on Behalf of Himself and All Other Creditors of the Estate of Louis L. Grey, Deceased, Appellant, v. Harold N. Grey et al., Respondents, et al., Defendants.
    Argued April 2, 1945;
    decided May 24, 1945.

      Meyer Kraushaar for appellant.
    I. The complaint is not insufficient in failing to allege that the deceased insolvent paid the premiums with his own money nor is it otherwise insufficient for failure to state facts sufficient to constitute a cause of action. (Civ. Prac. Act, § 275; Condon v. Associated Hospital Service, 287 N. Y. 411; Beals v. The Home Insurance Co., 36 N. Y. 522; Kain v. Larkin et al., 141 N. Y. 144; Vollkommer v. Cody, 177 N. Y. 124; Calkins v. Stedman, 146 App. Div. 202; Citizens Nat. Bank v. Hodges, 80 Hun 471; Cooke v. Chase, 85 Hun 616; Holland v. Grote, 56 Misc. 370, 125 App. Div. 413, 193 N. Y. 262; Shenk v. Oliva, 94 Misc. 702; Gould v. Fleitmann, 188 App. Div. 759, 230 N. Y. 569; Merchants’ Transp. Co. v. Borland, 53 N. J. Eq. 282; Doehler v. Real Estate Board of N. Y. Bldg. Co., Inc., 150 Misc. 733.) II. Plaintiff’s cause of action is founded on section 55-a of the Insurance Law and the erroneous reference in the complaint to section 166, subdivision 4, of the Insurance Law must he treated as surplusage. (McHarg v. Eastman, 25 Barb. 205; Belmont v. City of New York, 191 App. Div. 717; Rosselle v. Klein, 42 App. Div. 316.) III. The complaint states a cause of action in equity. (Bate v. Graham, 11 N. Y. 237; Lichtenberg v. Herdtfelder et al., 103 N. Y. 302; Harvey v. McDonnell, 113 N. Y. 526; Agne v. Schwab, 123 App. Div. 746; Gould v. Fleitmann, 188 App. Div. 759, 230 N. Y. 569; Matter of Lange, 172 Misc. 437; Matter of Starbuck, 251 N. Y. 439; Proctor v. MacClaskey, 278 Mass. 238; Hearn 45 St. Corp. v. Jano, 283 N. Y. 139; Keys v. Leopold, 241 N. Y. 189.)

      Edward E. Hoenig and William M. Sullivan for respondents.
    I. The complaint is insufficient in that it fails to allege that the deceased insolvent paid the premiums sought to be recovered with his own money. (Purvin v. Grey, 267 App. Div. 813, 292 N. Y. 671; Clark v. Dillon et al., 97 N. Y. 370; Johansson
      v. Kemp, 211 App. Div. 276; Koch v. Estes, 146 Misc. 249, 240 App. Div. 829, 264 N. Y. 480; Isaacs v. Washougal Clothing Co., Inc., Nos. 1, 2, 233 App. Div. 568; Stabilimento Metallurgico Ligure v. Joseph, 189 App. Div. 173; Maccarone v. Hayes, 85 App. Div. 41; Fairchild v. Leo, 149 App. Div. 31; Vollmer v. Automobile Fire Insurance Co., 207 App. Div. 67; La Montagne v. Bank of New York, 94 App. Div. 219; Beals v. The Home Insurance Co., 36 N. Y. 522; Jones v. Phoenix Bank, 8 N. Y. 228; Scofield v. Whitelegge, 49 N. Y. 259.) II. No equitable cause of action is alleged. This action may only be maintained, if at all, in law. (Perlman v. East Annadale Beach Corporation, 233 App. Div. 599 ; Melnick v. Kukla, 228 App. Div. 321; Holland v. Grote, 193 N. Y. 262; City of Syracuse v. Hogan, 234 N. Y. 457; Westergren v. Everett, 218 App. Div. 172; Turner v. Glickstein & Turner, Inc., 283 N. Y. 299; Marvin v. Brooks, 94 N. Y. 71; Yuengling v. Betz, 120 App. Div. 709; Hastings v. Byllesby & Co., 293 N. Y. 404; Atkins v. Trowbridge, 162 App. Div. 629; Cherry v. Howell, 4 F. Supp. 597; Ullman v. Cameron, 186 N. Y. 339.) III. The complaint is insufficient in that it fails to allege facts of actual intent to defraud creditors as distinguished from intent implied by law. (In re Wil-low Cafeterias, 22 F. Supp. 617; Willcox v. Goess, 16 F. Supp. 350; Doehler v. Real Estate Board of N. Y. Bldg. Co., Inc., 150 Misc. 733; Goldstein v. Schachne, 261 App. Div. 922; Pitcher v. Sutton, 238 App. Div. 291, 264 N. Y. 638; Guarico v. Massachusetts Bond. & Ins. Co., 167 Misc. 875; Vanderveer Crossings v. Rapalje, 133 App. Div. 203; Aldrich v. New York Life Ins. Co., 235 N. Y. 214; Brody v. Pecoraro, 250 N. Y. 56; American S. S. Co. v. Wickwire Spencer Steel Co., 42 F. 2d 886; Washington Central Bank v. Hume, 128 U. S. 195; Masonic Mut. Life Ass’n. v. Paisley, 111 F. 32; Rosenstock v. City of New York, 97 App. Div. 337, 181 N. Y. 550; Bernheim v. Burden, 253 App. Div. 232; City of New Rochelle v. Echo Bay Waterfront Corporation, 268 App. Div. 182.) IV. This action is not maintainable under section 166, subdivision 4, of the Insurance Law, the creditor’s claim having been incurred prior to the effective date of that statute. (Dagood Holding Corporation v. Rosenbluth, 231 App. Div. 470; Boissevain v. Boissevain, 224 App. Div. 576; Lonsdale v. Speyer, 249 App. Div. 133; Southwick v. First Nat’l. Bank

      of Memphis, 84 N. Y. 420; Neudecker v. Kohlberg et al., 81 N. Y. 296; Melnick v. Kukla, 228 App. Div. 321; Matter of Resource Holding Corp. v. Friedman, 262 App. Div. 879.)
   Lehman, Ch. J.

In a complaint containing eight causes of action, the assignee of a judgment creditor of Louis L. Grey, deceased, suing as plaintiff on behalf of himself and all other creditors of the estate of Louis L. Grey, deceased ”, alleges that the deceased “ while insolvent, and with intent to hinder, delay and defraud his creditors, including the plaintiff’s assignor ”, paid premiums upon policies insuring the life of the deceased “ without consideration paid or given ” by the persons named by the deceased as the beneficiaries of these policies. The plaintiff asks, among other things, that the payment of such premiums be declared null and void; that the defendant Harold N. Grey named as beneficiary of the policies which are the subject of the first five causes of action be adjudged to hold the proceeds or avails of such policies received by him in trust for the creditors of said decedent, or subject to a lien of such creditors to the extent of the amount of such premiums paid and accrued interest ”; that the individual defendants be required to account for all sums received by them on any policy; that all moneys in the hands of the defendants, including the insurance companies who have not yet paid the full amount of the insurance, “ be subjected to a lien to the extent of such premiums paid and accrued interest ”; and “ that said defendants be required to pay the amount of said liens from the proceeds of said policies still in their hands into court to be administered according to law, pursuant to section 19 of the Personal Property Law

The individual defendants have challenged the sufficiency of the allegations of each cause of action. The Appellate Division (269 App. Div. 652, 653) by a divided court has sustained the challenge on the ground that the complaint does not allege that the policy premiums were paid by the deceased with his own money ”, and on the further ground that the plaintiff has an adequate remedy at law, citing Terner v. Glickstein & Terner, Inc. (283 N. Y. 299). The plaintiff appeals to this court from the judgment dismissing the complaint.

The complaint alleges that the defendant violated the provisions of section 166, subdivision 4, of the Insurance Law. The Insurance Law now in force was enacted by chapter 882 of the Laws of 1939 as “ Chapter 28 ” of the Consolidated Laws, and superseded the provisions of the Insurance Law enacted by chapter 33 óf the Laws of 1909 and constituting the previous chapter 28 of the Consolidated Laws. Section 166, subdivision 5, of the Insurance Law now in force provides that the rights of creditors whose claims were contracted or incurred prior to the effective date of this chapter shall be governed by sections fiftyíive-a, fifty-five-b and fifty-five-c of chapter twenty-eight of the consolidated laws. This section insofar as it may differ, in form, language or substance, from said sections, is not intended, in any way, to affect the interpretation or construction of said sections as applied to such rights.” The claims of the plaintiff in this action were contracted and incurred prior to the effective date of the Insurance Law now in force. It is for that reason unnecessary to decide whether difference in the form and language of section 166, subdivision 4, from the form and language of sections 55-a, 55-b, and 55-c, were intended to change in substance the rights of creditors whose claims were contracted thereafter. It is plain that subdivision 4 of section 166 may not be interpreted or construed as intended to affect the rights of the plaintiff’s assignor, and we must measure the sufficiency of the complaint in this action in accordance with the provisions of the earlier statute as previously interpreted and construed.

Under such interpretation and construction of that section, the allegation contained in each cause of action pleaded by the plaintiff, that the deceased “ while insolvent, and” with intent to hinder, delay and defraud his creditors, including the plaintiff’s assignor ”, is sufficient, even without any further allegation as to the source of the moneys used for such payment, or that the fraudulent intent was actual and not constructive. (Kain v. Larkin et al., 141 N. Y. 144; Vollkommer v. Cody, 177 N. Y. 124; Gould v. Fleitmann, 188 App. Div. 759, affd. 230 N. Y. 569.) It is true, of course, that the effect of a general allegation of payment with intent to defraud creditors may be destroyed when qualified by specific allegations which, unexplained, show that payment by the debtor was made from moneys belonging to another, and which the creditor could not reach even if such payment had not been made. In Purvin v. Grey (292 N. Y. 671), we affirmed a judgment dismissing the complaint for insufficiency for that reason. Upon that appeal the plaintiff conceded that the effect of the allegation, contained in the third cause of action pleaded in the complaint, that the moneys were paid with intent to defraud creditors, would be destroyed by the specific allegation that such payment was made by withdrawals of cash sums from a third party which were then charged to the beneficiary of the policies, unless the court read into the third cause of action allegations of earlier fraudulent transfers of property of the debtor to the third party or to the beneficiary of the policy, contained in other causes of action to set aside such transfers, but not incorporated in the third causé of action. We held that in testing the sufficiency of the allegations contained in the third cause of action, the court may not supply deficiencies by reading into that cause of action allegations which, though contained in other causes of action, are omitted from the third cause of action. Upon this appeal, as upon the earlier appeal, we consider only the sufficiency of the allegations contained in the challenged pleading. We do not decide what evidence would be required to prove the ultimate facts, alleged by the plaintiff, and to establish the plaintiff’s causes of action. The facts alleged, if proven, are sufficient to constitute a cause of action in equity even though no accounting in equity might be necessary to establish the amount of the premiums which the plaintiff claims were paid by the decedent in fraud of creditors. We said and decided nothing to the contrary in Terner v. Glickstein & Teener, Inc. (283 N. Y. 299, supra). Though in that case the plaintiff brought an action in equity nominally in behalf of himself and all others similarly situated, any judgment recovered in that action would be in favor of an individual plaintiff for money damages fixed in accordance with the statute. There was no allegation of fraud or of any fact which if proven would establish a trust relationship. In such circumstances no action in equity will lie. The nature of the causes of action pleaded in this case, the breach of duty involved, the relationship of the parties and the relief demanded are different, and we are agreed that an action in equity will lie for the relief demanded.

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

Loughran, Lewis, Conway, Desmond, Thacher and Dye, JJ., concur.

Judgment accordingly.


author: Thacher, J.

text:
    Howard L. Kerfoot, as Administrator of the Estate of Madeline M. Kerfoot, Deceased, Respondent, v. Robert H. Kelley, Defendant, and Ruth Kelley, Appellant.
    Argued April 16, 1945;
    decided May 24, 1945.

      William L. Shumate for appellant.
    I. The evidence was, as matter of law, insufficient to support the verdict in favor of plaintiff. The evidence was insufficient to show or permit the inference that the car was caused to go out of control by reason of any act or omission on the part of the driver amounting even to ordinary negligence. (Richter v. Seawell, 32 S. E. 2d 62; Galbraith v. Busch, 267 N. Y. 230; Tontona v. State of New York, 269 N. Y. 167.) II. In any event, the evidence was insufficient to show or permit the inference that the driver was guilty of gross negligence. (Boggs v. Plybon, 157 Va. 30; Masaletti v. Fitzroy, 228 Mass. 487; Young v. Dyer, 161 Va. 434; Wright v. Osborne, 175 Va. 442; Hale v. Hale, 219 N. C. 191.)

      David Kashman and Jacob Rassner for respondent.
    There was ample evidence to sustain the jury’s findings. (Poole v. Kelley, 162 Va. 279; Margiotta v. Aycock, 162 Va. 557.)
   Thacher, J.

The defendant Ruth Kelley appeals from a nonunanimous judgment of the Appellate Division, first department, affirming a judgment entered upon the verdict of a jury in favor of plaintiff in an action for causing the wrongful death of Mrs. Madeline Meredith Kerfoot, a guest passenger in an automobile owned by the defendant Robert H. Kelley and driven by the defendant Ruth Kelley. The accident happened in Virginia.

The only testimony as to the happening of the accident was given by a witness who testified that he was walking on the right-hand side of a two-lane asphalt paved road about twenty feet wide, on the right hand of which was. a shoulder and a bank sloping down and on the left hand another shoulder, a ditch and an embankment sloping down from the road. The left shoulder was possibly four feet wide and the ditch about eighteen inches deep and two feet wide. The witness first saw the car coming around a curve at approximately fifty miles an hour in the same direction that he was walking. As the car rounded the bend the rear right wheel came off the edge of the pavement and the car swung across the road to the left, its wheels going into the ditch on the left-hand side of the road, where it ran for approximately thirty feet, came out of the ditch, crossed to the right side of the road, turned over at least three times and rolled down the bank into the park, possibly fifteen feet away from the roadway. Mrs. Kerfoot was thrown out of the ear and suffered severe injuries from which she died.

No evidence was adduced to explain what caused the car to leave the highway. The defendant Ruth Kelley, who was driving the car, was not called as a witness.

Plaintiff sues as the administrator of Mrs. Kerfoot, deceased, and predicates his right to sue upon sections 5786 and 5787 of the Virginia Code, which at the time of the accident occurred and when the action was brought read as follows: “ § 5786. Whenever the death of a person shall be caused by the wrongful act, neglect, or default of any person or corporation, * * * and the act, neglect, or default is such as would (if death had not ensued) have entitled the party injured to maintain an action, * * * and to recover damages in respect thereof, then, and in every such case, the person who, * * * would have been liable, if death had not ensued, shall be liable to an action for damages, * * " * notwithstanding the death of the person injured, * * * . § 5787. Every such action shall be brought by and in the name of the personal representative of such deceased person * * * . The jury in any such action may award such damages as to it may seem fair and just, not exceeding ten thousand dollars, and may direct in what proportion they shall be distributed to the surviving widow or husband arid children and grandchildren of the deceased, or if there be none such, then to the parents, brothers and sisters of the deceased. Nothing shall be apportioned to the deferred class until the preferred class has been exhausted, but between members of the same class the jury shall have absolute discretion as to who shall receive the whole or any part of the recovery. But nothing in this section shall be construed to deprive the court of the power to grant new trials as in other cases.”

Under section 2154 (232) of the Virginia Code (Acts of Assembly, 1938, ch. 285) plaintiff was not entitled to recover damages for the wrongful death of Mrs. Kerfoot, a guest passenger, unless her death was caused or resulted from the gross negligence or willful and wanton disregard of the safety ” of her person on the part of Ruth Kelley, the operator of the car.

In considering the sufficiency of the evidence to sustain the plaintiff’s judgment we must follow the decisions of the highest court in the State of Virginia defining gross negligence or willful and wanton disregard of the safety of the deceased.

In Young v. Dyer (161 Va. 434), a verdict for the plaintiff was set aside and final judgment entered for the defendant. In that case plaintiff was a guest of her sister, who was driving a car on a curving road at a speed of fifty miles per hour. In attempting to round a sharp right-hand curve the car overturned and plaintiff was severely injured. The accident occurred before the enactment of section 2154 of the Virginia Code but, in the absence of statute, it was held that the Massachusetts rule, to the effect that before an invited guest can hold his host liable it must be shown that the host was guilty of gross negligence in the operation of the automobile, prevailed in Virginia, citing Boggs v. Plybon (157 Va. 30), and Massaletti v. Fitzroy (228 Mass. 487). Applying the gross negligence rule to the facts recited, the court said: “ In the case at bar, the record fails to disclose any unusual conditions. The highway was not affected by inclement weather, and no circumstances are shown which should have led the defendant to infer that the curve could not be safely negotiated at the indefinite rate of speed at which the car was being driven at the time of the accident. ^ Certainly there was no vehement protest on the part of the plaintiff as to the operation of the car. Such exclamations as ‘ Watch out! ’ and ‘ Look out! ’ do not indicate any real apprehension upon the plaintiff’s part in view of her statement: * We are going fifty miles an hour and it is just like riding down Main Street. ’ That statement clearly indicates complete acquiesence in defendant’s operation of the automobile. A mere failure to skilfully operate an automobile under all conditions* or to be alert and observant, and to act intelligently and operate an automobile at a low rate of speed may, or may not, be a failure to do what an ordinarily prudent person would have done under the circumstances, and thus amount to lack of ordinary care; but such lack of attention and diligence, or mere inadvertence, does not amount to wanton or reckless conduct, or constitute culpable negligence for which defendant would be responsible to an invited guest.”

Section 2154 of the Virginia Code, cited (supra), was subsequently enacted and the gross negligence rule applied in Young v. Dyer (supra), was given the force of statute.

The evidence in this case was clearly insufficient to prove gross negligence as defined in the controlling decisions of the highest court in the State of Virginia. An authoritative and complete review of these decisions will be found in Carroll v. Miller (175 Va. 388). Of course each case depends upon its own peculiar facts, but each of the decisions emphasizes the distinction between mere lack of care, constituting ordinary negligence, and reckless disregard of the safety of others, constituting gross negligence.

In this case, the complaint should have been dismissed, and accordingly, it is unnecessary to consider defenses predicated upon the Virginia Statutes of Limitation applicable to an action to recover damages for wrongful death.

The judgments should be reversed and the complaint dismissed, without costs.

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

Judgments reversed, etc.


text:
    In the Matter of the Probate of the Will of Flora M. Whipple, Deceased. Arthur Dunks et al., Appellants; Elizabeth DeLapp, Respondent.
    Argued April 12, 1945;
    decided May 24, 1945.

      Richard T. Anderson and Donald V. Carr for appellants.
    I. The evidence created a clear question of fact as to the proper execution of the alleged will. (Matter of Keeffe, 155 App. Div. 575, 209 N. Y. 535; Matter of Redway, 238 App. Div. 653; Woolley v. Woolley et al., 95 N. Y. 231; Matter of Turell, 166 N. Y. 330; Matter of Cogan, 184 App. Div. 198, 226 N. Y. 694; Gilbert v. Knox et al., 52 N. Y. 125.) II. The trial court’s refusal to direct a verdict or to set aside the verdict was proper and the Appellate Division’s action in both instances was improper. (Matter of Strong, 179 App. Div. 539; Matter of Lamerdin, 250 App. Div. 133; Ruthizer v. Bass Dress Corp., 264 App. Div. 372; McNally et al. v. P. Ins. Co., 137 N. Y. 389; Touris v. Fairmont Creamery Co., 228 App. Div. 569; Matter of Lawler, 195 App. Div. 27; Matter of Kindberg, 207 N. Y. 220; Matter of Rapp, 194 App. Div. 88; Matter of Redway, 238 App. Div. 653; Hagan v. Sone, 174 N. Y. 317; Matter of Burnham, 234 N. Y. 475; Getty v. Williams Silver Co., 221 N. Y. 34; Blum v. Fresh Grown Preserve Corp., 292 N. Y. 241; Imbrey v. Prudential Insurance Co., 286 N. Y. 434.) III. The reversals “ on the law ” were clearly erroneous. (Matter of Delmar, 243 N. Y. 7; Matter of Roberts, 246 App. Div. 87; Matter of Lamerdin, 250 App. Div. 133.)

      Sidney H. Singer and Morris Garber for respondent.
    I. The evidence established beyond any reasonable doubt that the will was duly executed and therefore the Appellate Division properly ordered that it be admitted to probate. (Rees v. Rees [1873], [L. R.], 3 Pr. & Div. 84; Matter of Sizer, 129 App. Div. 7, 195 N. Y. 528; Matter of Nelson, 141 N. Y. 152; Matter of Hunt, 110 N. Y. 278; Lane v. Lane, 95 N. Y. 494; Matter of Will of Cottrell, 95 N. Y. 329; Matter of Bernsee, 141 N. Y. 389; Matter of Katz, 277 N. Y. 470; Wyman v. Wyman, 118 App. Div. 109, 197 N. Y. 524.) II. The Appellate Division properly exercised its power to grant the motion for a directed verdict in proponent’s favor. (Matter of Case, 214 N. Y. 199; Matter of Ruef, 180 App. Div. 203, 223 N. Y. 582; Matter of Bennett, 207 App. Div. 388, 238 N. Y. 583; Matter of Burke, 250 App. Div. 855, 276 N. Y. 497; Matter of Sweeny, 178 App. Div. 780, 222 N. Y. 658; Heskell v. Auburn L., H. & P. Co., 209 N. Y. 86; Matter of Price, 254 App. Div. 477, 279 N. Y. 700; Matter of Case, 214 K Y. 199.)
   Per Curiam.

It was within the power of the Appellate Division, in the exercise of its discretion, to reverse the decree of the Surrogate upon the ground that, in its opinion, the verdict was contrary to and against the clear weight of the evidence. The Appellate Division was without power, however, to direct a contrary verdict in view of the fact that the evidence was not wholly insufficient in point of law to sustain the jury’s verdict. (See Blum v. Fresh Grown Preserve Cory., 292 N. Y. 241, 245-246.)

The order of the Appellate Division and the decree of the Surrogate’s Court should be reversed and a new trial granted, with costs in this court to abide the event.

Lehman, Ch. J., Loughran, Lewis, Conway, Desmond, Thacher and Dye, JJ., concur.

Ordered accordingly.


author: Lewis, J.

text:
    International Spangles Corporation, Respondent, v. Marrow Manufacturing Corporation, Appellant.
    Argued April 3, 1945;
    decided May 24, 1945.

      Sydney A. Hellenbrand and Harold W. Hastings for appellant.
    The contract of sale being in violation of the Emergency Price Control Act and ¡Regulations, is unenforcible and plaintiff may not recover thereon. (Carmine v. Murphy, 285 N. Y. 413; Segal v. Chemical Importing and Manufacturing Co., 205 App. Div. 220; Matter of Kramer & Uchitelle, Inc., 288 N. Y. 467; Sanders v. Lowenstein & Sons, Inc., 264 App. Div. 367; Matter of Mendelson [Auburn Fabrics, Inc.], 108 N. Y. L. J., p. 147, col. 4; Export Syndicate of Steel Producers, Inc., v. Dilsizan, 107 N. Y. L. J., p. 2732, col. 1; S. Reubens & Bros., v. Samdperil, 181 Misc. 713, 47 N. Y. S. 2d 407.)

      Karl E. Lachmann, Paul L. Ross, John D. Masterton, Thomas I. Emerson and Fleming James, Jr., for Chester Bowles, as Administrator of the Office of Price Administration, amicus curiæ in support of appellant’s position.
    I. Plaintiff violated the regulation and the act. II. Plaintiff’s violations of the act makes its sales contracts unenforcible. (Carmine v. Murphy, 285 N. Y. 413; Miller v. Ammon, 145 U. S. 421.) III. Plaintiff cannot recover until it meets its' burden of proof showing that the price claimed was legal. (Rossi v. United States, 289 U. S. 89; Morrison v. California, 291 U. S. 82 ; F. L. & T. Co. v. Siefke. 144 N. Y. 354; Murray v. Narwood, 192 N. Y. 172; Breuchaud v. Bank of New York & Trust Company, 283 N. Y. S. 812; Cohen v. Gurman, 28 N. Y. S. 2d, 917; In re Sitkin’s Will, 271 N. Y. S. 688; Seufert v. Commercial Travelers’ Mut. Acc. Ass’n. of America, 266 N. Y. S. 6; Battah v. Prudential Ins. Co. of America, 267 N. Y. S. 683; Genesee Valley National Bank and Trust Co. of Genesee v. Bolton, 290 N. Y. S. 913; Perine v. Elmira C. & W. Ry. Co., 172 N. Y. S. 396.)

      Henry Laufbahn for respondent.
    I. Defendant had the burden of proving the illegality of the contract. (Murray v. Narwood,
      192 N. Y. 172.) II. The contract is enforcible, because the Office of Price Administration Eegulation does not expressly provide that its violation will deprive the parties of the right to sue on the contract, and the denial of relief would be wholly out of proportion with the requirements of public policy as embodied in the regulation. (Rosasco Creameries Inc., v. Cohen, 276 N. Y. 274.)
   Lewis, J.

One of the measures adopted by the Congress to prevent disorganization of our national economy by wartime inflation was the enactment of the Emergency Price Control Act of 1942. (56 U. S. Stat. 23, U. S. Code, tit. 50, Appendix, Supp. II, §§ 901 et seq., as amd. by the Inflation Control Act, 56 U. S. Stat. 765, U. S. Code, tit. 50, Appendix, Supp. II, § 961 et seq.) That law — to which reference will be made as the Price Control Act — was enacted ‘ in the interest of the national defense and security and necessary to the effective prosecution of the present war.” Its declared purposes were, among others, “ to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices and rents; to eliminate and prevent profiteering * * * and other disruptive practices resulting from abnormal market conditions or scarcities caused by or contributing to the national emergency; [and] * * * to prevent a post emergency collapse of values * * * .” Provision is made for the establishment of the Office of Price Administration under the direction of a Price Administrator whose duties include the promulgation of regulations governing administrative procedure and the fixing of such maximum prices and rents as will effectuate the purposes of the Act. Standards are prescribed to guide the administrative determination of both the occasions for the exercise of the price-fixing power, and the particular prices to be established.” (Yakus v. United States, 321 U. S. 414, 423.)

In the case at bar, which involves an action for goods sold and delivered, we are to consider the legal effect of a seller’s nonconformance with the General Maximum Price Regulation — hereinafter referred to as the Eegulation — issued by the Price Administrator on April 28, 1942. (General Maximum Price Regulation, §§ 1499.2, 1499.3.) That Eegulation, based upon “ findings ” by the Price Administrator that commodity prices had risen in a manner inconsistent with the purposes of the Act, provides that the “ seller’s maximum price ” for any commodity shall be: (1) The highest price charged by the seller for the same commodity during the base period which is designated as March, 1942; or (2) If the seller made no sale of the same commodity during March, 1942, his highest offering price in that month for the same commodity; or (3) If the seller made no sale or offer of sale of the same commodity during March, 1942, then the, highest price charged during that month for the same commodity by a most closely competitive seller ” of the same class; or (4) If the seller cannot determine the maximum price by any of the above methods, a price determined by the seller after specific authorization.from the Office of Price Administration given in the form of an order prescribing a method of determining the maximum price and submitted to the Office of Price Administration within ten days in accordance with the Regulation. By sections 1499.11 and 1499.12 of the Regulation a seller is required to keep base-period records ” of prescribed types to enable the Office of Price Administration to check' the legality of sale prices demanded by the seller and the method used by him in determining his maximum price.

In the case before us the plaintiff’s pleading and proof went no further than to establish the sale and delivery to the defendant in October, 1942, of 230*4 pounds of a commodity described as perforated acetate strips at $3.50 per pound and that the defendant had refused to make payment therefor in response to the plaintiff’s demand. The defendant’s position was that the commodity price of $3.50 per pound demanded by the plaintiff violated the provisions of the Price Control Act and the Regulation promulgated thereunder. In support of that position the defendant by its answer pleaded as an, affirmative defense, and by its evidence established, at least prima facie, that plaintiff had made no sale or offer of sale of perforated acetate strips during the month of March, 1942, at a price of $3.50 per pound or more; that no sale 'of such commodity had been made at competitive-sale during March, 1942, at $3.50 per pound or more; and that plaintiff had not applied to -the Office of Price Administration for a determination of a maximum price to be charged for such commodity and had not filed or kept the' “ base period records ” as required by the Regulation.

The challenge comprised within the defendant’s pleading and supported by evidence cast upon the plaintiff the burden of proving that the price demanded by the plaintiff for the commodity delivered was not in excess of the maximum price fixed in conformity with the requirements of the Price Control Act and the Regulation thereunder. The Regulation, section 1 (§ 1499.1) provides that, regardless of any contract * * * no person shall sell or deliver any commodity * * * at a price higher than the maximum price permitted by this General Maximum Price Regulation.” The Price Control Act, section 4, subdivision (a), declares it to be unlawful for any person to sell or deliver any commodity in violation of any regulation promulgated under the act. In the absence of proof by the plaintiff that it had established a maximum price for its acetate strips in accord with any one of the alternative methods defined in the Regulation, the plaintiff’s demand in this action for the price of the commodity delivered to the defendant is legally unenforcible. (Matter of Kramer & Uchitelle, Inc., 288 N. Y. 467, 470-472; Sanders v. Lowenstein & Sons, Inc., 264 App. Div. 367, affd. 289 N. Y. 702; Carmine v. Murphy, 285 N. Y. 413, 415.)

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

Lehman, Ch. J., Loughran, Conway, Desmond, Thacher and Dye, JJ., concur.

Judgments reversed, etc.


text:
    In the Matter of John Tiernan, Appellant, against Patrick Walsh, as Commissioner of the Fire Department of the City of New York, Respondent.
    Argued February 21, 1945;
    decided May 24, 1945.

      Paxton Blair and Edward M. Edenbaum for appellant.
    I. The Court of Appeals has jurisdiction to entertain petitioner’s appeal as of right. (Matter of Brenner v. Bruckman, 278 N. Y. 503; Garrison v. Sun Printing & Publishing Assoc., 222 N. Y. 691; Miozzi v. Armstrong Coal Co., 283 N. Y. 567; Markiewicz v. Thompson, 246 N. Y. 235; de Santes v. Mural Transp. Corp., 284 N. Y. 584.) II. Since no intention to disobey orders was proved, and since petitioner was an involuntary victim of incapacitating illness, so diagnosed by a physician of conceded integrity, no justification for the infliction of disciplinary measures was present. The determination of the commissioner should therefore have been annulled. (Matter of Griffin v. Thompson, 202 N. Y. 104; People ex rel. Masterson v. French et al., 110 N. Y. 494; People ex rel. Mitchell v. Martin et al., 143 N. Y. 407; People ex rel. Padian v. McAdoo, 100 App. Div. 516; Matter of Elder v. Bingham, 118 App. Div. 25, 189 N. Y. 509; People ex rel. McGlone v. Roosevelt, 7 App. Div. 610; Matter of Kelly v. Morgan, 241 App. Div. 476; People ex rel. Hogan v. French et al., 119 N. Y. 493; People ex rel. Baran v. Waldo, 162 App. Div. 345; People ex rel. Reardon v. Partridge, 86 App. Div. 310; People ex rel. Rigby v. Anderson, 198 App. Div. 283; People ex rel. Fallon v. Wright, 7 App. Div. 185, 150 N. Y. 444; Matter of Crowley v. Fowler, 217 App. Div. 16; People ex rel. Winspear v. Kreinheder, 197 App. Div. 887.) III. Petitioner being a veteran, the trial accorded him was a matter of right and not grace, and judicial review was secured to him by section 22 of the Civil Service Law. The City could not impair this right by providing otherwise in the Administrative Code. (Matter of O’Kelly v. Hill, 283 N. Y. 78; Matter of Murphy v. Valentine, 284 N. Y. 524; Matter of Spackman v. Valentine, 250 App. Div. 742.)

      Ignatius M. Wilkinson, Corporation Counsel (Morris Shapiro and James Hall Prothero of counsel), for respondent.
    I. Petitioner failed to report for duty in violation of unanimous and uniform determinations of the Medical Board. There was no showing of fraud, accident or mistake on the part of the Medical Board. At most, the evidence presents a mere difference of medical opinion and is therefore insufficient to warrant any interference with the order of the Fire Commissioner.
      (Matter of Potts v. Kaplan, 264 N. Y. 110; Matter of Sheridan v. McElligott, 278 N. Y. 59; Matter of Eichler v. McElligott, 259 App. Div. 151, 283 N. Y. 716; Matter of Thomasson v. Valentine, 263 App. Div. 334.) II. A disciplinary determination will not be reviewed by certiorari if there is evidence which tends legitimately to support the determination. (People ex rel. v. Board Fire Comrs. of N. Y., 82 N. Y. 358; People ex rel. Masterson v. French et al., 110 N. Y. 494; People ex rel. Morrissey v. Waldo, 212 N. Y. 174; People ex rel. Regan v. Enright, 240 N. Y. 194.) III. Neither the Civil Service Law nor the Administrative Code afford petitioner the remedy of review as that remedy is available only to review a removal from office.. (People ex rel. Hayes v. Waldo, 212 N. Y. 156; Matter of Doherty v. McElligott, 258 App. Div. 257; Matter of Greenfield v. Moses, 169 Misc. 389, 257 App. Div. 809; People ex rel. Scheel v. Guilfoyle, 65 App. Div. 498.)
   Lewis, J.

The petitioner, an honorably discharged veteran of World War I, is a uniformed member of the Fire Department of the City of New York. He was found guilty by the Fire Commissioner on five charges which were the subject of a hearing. The disciplinary action ordered on each of four of the charges (absence from duty without leave) consisted of a “ reprimand.” On the remaining charge (disobedience of orders) the petitioner was “ fined five days’ pay.” The determination of the Commissioner further directed The total period of absence without leave for five days and five hours (5-% days), to be without pay.” The cost to the petitioner of his dereliction has been the denial to him of pay for a total period of ten and five-eighths days which, reduced to monetary terms, amounts to $80.31.

The charges arose from these circumstances: Following a period of physical disability, the petitioner, upon examination by the Medical Board of the Fire Department, was found physically fit for full duty and was ordered to report to his post. Expressing unwillingness to comply with that direction he consulted his personal physician who advised him to remain in bed. The fact that he chose to follow the advice of his personal physician instead of obeying the order of a departmental medical officer was the basis of the charges of which he was found guilty.

Challenging the right of the Commissioner to discipline him in the circumstances thus disclosed the petitioner instituted the present proceeding in the nature of certiorari under article 78 of the Civil Practice Act.

At the outset we consider the City’s position that certiorari will not lie to review the Fire Commissioner’s determination. The argument is that the Civil Service Law, section 22, and the Administrative Code of the City of New York, section 487a-12.0, grant to the Fire Commissioner the power in his discretion to impose, as a disciplinary measure, the penalty which the petitioner now resists. In opposition the petitioner contends that as a veteran he was entitled to the hearing which was accorded him and that a review in the nature of certiorari of the Fire Commissioner’s determination may be had as provided by Civil Service Law, section 22. The argument is made that although section 22 does not expressly give to a veteran the right of a trial of charges which have not resulted in his removal the statute must be construed as affording such right inasmuch as there must be a trial of charges before a veteran employee may be removed. We need not pass upon that contention in this proceeding to review disciplinary action of the Commissioner acting under authority conferred by section 487a-12.0. Removal of the petitioner was not sought and section 22 of the Civil Service Law has no application here.

We come then to the question whether under section 487a-12.0 of the Administrative Code a fireman’s pay may be forfeited and withheld for any period without a hearing. Unless such hearing was authorized review will not lie ‘under subdivisions 6 and 7 of section 1296 (art. 78) of the Civil Practice Act. Section 487a-12.0 of the Administrative Code provides in part: “ § 487a-12.0 Discipline of members; removal from force. The commissioner shall have power, in his discretion, on conviction of a member of the force of any legal offense or neglect of duty, or violation of rules, or neglect or disobedience of orders, or incapacity, or absence without leave, or any conduct injurious to the public peace or welfare, or immoral conduct, or conduct unbecoming an officer or member, or other breach of discipline, to punish the offending party by reprimand, forfeiture and withholding of pay for a specified time, or dismissal from the force; but not more than ten days’ pay shall be forfeited and withheld for any offense. * * *” (Emphasis supplied.)

We read the Code provision last quoted above as affording a hearing to a member of the Fire Department before a penalty may be imposed. Although the section does not in express terms provide for a hearing, provision is made that the punishment or penalty for any offense may be imposed only “ on conviction ” of a member of the force. The use of the phrase on conviction ”, we think, imports a trial or hearing as a necessary incident to a disciplinary proceeding. In the present case there was a trial by the Commissioner and so far as appears such procedure accords with the usual practice of the department.

For the reasons stated we are of the opinion that the petitioner was entitled to a review under subdivisions 6 and 7 of section 1296 (art. 78) of the Civil Practice Act of the proceedings which led to his conviction.

Upon such review at the Appellate Division — where the proceeding was treated as if the court at Special Term had made an order transferring it to that appellate court in the first instance (Civ. Prac. Act, § 1296) —the court passed upon the merits and concluded that the controversy involved only a difference of opinion on a medical question which did not warrant interference by the courts with the order of the Fire Commissioner. Accordingly the prior order of Special Term which had vacated the determination of the Fire Commissioner was reversed and the determination of the Fire Commissioner was confirmed.

We find in the record substantial evidence to support the determination of the Fire Commissioner and no evidence of abuse of his discretion.

The order should be affirmed, without costs.

Lehman, Ch. J., Loughran, Conway, Desmond, Thacher and Dye, JJ., concur.

Order affirmed.