text:
    The People of the State of New York, Respondent, v. Maurice Malkin, Leo Franklin, Samuel Mencher, Jack Schneider, Philip Lenhart, Martin Rosenberg, Oscar Mileaf, Joe Katz and George Weiss, Appellants.

      (Argued November 26, 1928;
    decided December 31, 1928.)

      George Z. Medalie, George Sylvester and Jacob J. Rosenblum for appellants.
    The court erred in permitting prejudicial cross-examination of defendants. (People v. Davey, 179 N. Y. 345; People v. Sobieskoda, 235 N. Y. 411; People v. De Garmo, 179 N. Y. 130; People v. Follette, 164 App. Div. 272; People v. Nelson, 145 App. Div. 680; People v. Slover, 232 N. Y. 264.) The conduct of the prosecutor was prejudicial to defendants. (People v. Fielding, 158 N. Y. 542; People v. Esposito, 224 N. Y. 370; People v. Wolf, 183 N. Y. 464; People v. Buzzi, 238 N. Y. 390; People v. Davey, 179 N. Y. 345; People v. Becker, 210 N. Y. 274; People v. Moran, 246 N. Y. 100.)

      Elvin N. Edwards, District Attorney (Charles I. Wood of counsel), for respondent.
    No error prejudicial to the defendants requiring reversal arose from the cross-examination of the defendants as to other crimes and assaults. (People v. Molineux, 168 N. Y. 264; People v. Zucker, 20 App. Div. 363; 154 N. Y. 770; People v. Dolan, 186 N. Y. 4; People v. Marrin, 205 N. Y. 283; People v. Katz, 209 N. Y. 311; People v. Grutz, 212 N. Y. 72; People v. Duffy, 212 N. Y. 57; People v. Thau, 219 N. Y. 39; People v. Ryan, 232 N. Y. 234; Altman v. Ozdoba, 237 N. Y. 218.)
   Lehman, J.

In April, 1926, at a time when the Joint Board Furriers’ Union ” was conducting a strike in the fur industry of New York city, a band of ten or twelve men raided a fur shop belonging to two brothers named Barnett in the village of Rockville Centre, assaulted the proprietors and destroyed property. Until that time, the fur shop had not been involved in the strike in any way. No pickets had visited, or paraded in front of the shop. The only employees of the Barnetts were two girls. One escaped from, the shop and called for the police. The raiders ran off. The Barnetts and their employees had recognized one of them, Barnet Basoff. He was an intimate friend of one of the proprietors. They had been schoolmates in England. Their friendship had been renewed here. They had dined together in amity the day before the raid.

Within a few minutes of the raid the police arrested two of the defendants, Malkin and Franklin. The Barnett brothers and their two employees positively and immediately identified them as part of the raiding party. Both admitted that they were members of the strikers’ union. They said that they had been picketing on the street in front of the Barnett shop. They had seen the raiding party enter the shop, but had taken no part in the raid. Indeed — so they said — they did not know many of the raiders and had joined in the calls for the police. At the time of their arrest, they claimed that they were looking for the railroad station, to return to New York.

Basoff, Malkin and Franklin were jointly indicted. The Barnetts and their employees did not know the others who were in the raiding party — though one of the girls testified that she had previously seen some of them in the fur “ market ” or district of New York city. Basoff confessed to the police that he had taken part in the raid. He implicated Malkin and Franklin. They were tried together. At the trial Basoff recanted his confession and claimed that it was extorted by the police by threats and violence.

The striking union gave bail for the three accused, furnished a lawyer for the trial, and paid the expenses of an appeal from their conviction. The Appellate Division gave judgment reversing the conviction of Franklin and Malkin. The conviction of Basoff was affirmed.

After his conviction and while the appeal was pending, Basoff visited the District Attorney, and again confessed his guilt. Then for the first time he stated that Benjamin Gold, the head of the Joint Board of the International Fur Workers’ Union, ordered the raid upon the little fur shop and arranged the details though he took no active part in it. This time he named as active participants in the raid not only Franklin and Malkin but also Isidore Shapiro, a member of the strike committee assigned to duty as chairman of the law committee of the union, Samuel Mencher, the chairman of the picket committee of the union, and the other defendants who were subsequently jointly indicted for assault. Wisenbloom, a former employee of the Barnett brothers, who like Basoff had been friendly with them as a school boy in England, was also named by Basoff as a party to the raid, though it is said that he remained downstairs and did not enter the fur shop. He was at some time indicted and pleaded guilty to the charge of assault. At the time of the trial he was awaiting sentence.

At the trial Basoff, the intimate friend of the Barnett brothers, and Wisenbloom, their former friend and employee, testified against the accused. They are confessed participants in the crime. Their testimony is not free from reasonable grounds of suspicion. All the accused except Gold were identified by Mary Farkas, one of the girls employed by the Barnett brothers; but her identification, made many months after the event, of men whom she had previously not known or at most had known only by sight, is not entirely convincing. Finally, detectives testified that all the defendants when arrested individually and voluntarily made admissions to them which undoubtedly tend, if true, to connect them with the crime, but no signed admissions were obtained from any, and the captain of police who was present when some of the admissions were said to have been made did not hear them.

The accused all denied guilt and denied making any admissions. With the exception of Franklin and Malkin, who undoubtedly were in Rockville Centre at the time of the raid, all claimed that on the afternoon of April 19th, 1926, when the crime was committed, they were in New York city, and produced witnesses who supported their testimony. Undoubtedly at that time an important meeting of the shop chairmen ” of the union was being conducted, and Mencher and three others produced evidence to show that they were present at that meeting. Testimony was also produced which, if true, would tend to show that the raid was arranged by Basoff and Wisenbloom to satisfy a private grudge, and that Basoff's story to the District Attorney implicating the union leaders was concocted by him in a spirit of revenge because these leaders refused to submit to blackmail.

The jury acquitted Gold, in spite of the testimony against him given by Basoff and Wisenbloom, and in spite of the evidence that he had made damaging admissions to the police, or that, indeed, he had avowed, and attempted to justify, participation in the crime charged. The jury acquitted Shapiro, in spite of the fact that the testimony of Basoff and Wisenbloom against him, the identification by Mary Farkas, and the proof of alleged admissions made to the police were just as positive and in every way as strong as the testimony and proof against any of the other defendants except Malkin and Franklin, and the same witnesses testified against all. In his case the jury rejected all that testimony. They could not reasonably do otherwise, for he was able .to produce as a witness a general in the National Guard who testified that twice on the afternoon of the raid, when, according to the claim of the People, Shapiro was assaulting the complaining witness in Rockville Centre, Shapiro had visited him for the purpose of. hiring an armory in which to hold a great meeting of the members of the striking union. Certainly no friendship or bias could have colored the testimony of that witness and he gave details which almost completely exclude possibility of mistake. The other defendants who could not produce in their behalf witnesses of the same evident credibility were all convicted, though the testimony against most of them was no stronger.

It is unnecessary to analyse the testimony further at this point. We may not consider the weight of evidence, and there can be no doubt that there is evidence which in law is sufficient to sustain a finding of guilt against all the defendants, even though' it might not be difficult to point out reasons for distrusting much of that evidence. Against Malkin and Franklin, who admit being near the place of the assault and who were identified the same afternoon as participants in it, the evidence is, indeed, convincing. The issue of the guilt of the other defendants depends on sharply disputed questions of fact, and we must examine the rulings of the trial judge to determine whether the defendants have been deprived by such rulings of the opportunity to present their case fairly for the impartial consideration of the jury.

It is urged that the court erred in excluding a writing signed by officers of the American Federation of Labor and embodying terms of an agreement intended to settle differences which had arisen between the American Federation of Labor and its subsidiary union, the Joint Board.” Undoubtedly such an agreement had been tentatively arranged between the leaders of the Joint Board of the local unions conducting the strike and the leaders of the parent body. Undoubtedly a meeting of the “ shop chairmen ” of the Joint Board was held on April 19th to consider the tentative agreement. The writing, embodying the written agreement, was excluded, not because such evidence was incompetent but because those facts upon which the writing might have probative value had already been abundantly proven. The proffered evidence, even if competent, was merely cumulative. The jury already knew, in a general way, the contents of the writing. The trial judge, we think, made sufficiently plain to the jury that there could not be any substantial controversy in regard to the fact that a meeting was held and the purpose of the meeting. The defendants would not have obtained any substantial advantage by admission of the writing and its exclusion did not constitute reversible error.

More serious is the claim that erroneous rulings of the trial judge gave license to the District Attorney to influence the jury in its consideration of the guilt of the accused by introducing into the record at least suggestions of matters which were irrelevant and unproven, and which were calculated to prejudice the jury. The trial judge stated, in effect, while the People’s case was being presented, that the People might not aflormatively prove that the defendants or some of them had on other occasions been guilty of violence. No exception was taken to this statement and the question is not before us whether the People might otherwise have offered evidence of assaults committed on other occasions which would have been competent under the rule formulated in People v. Molineux (168 N. Y. 264). Then the defendants would have had the right to controvert such evidence. ’ Here no such evidence was received, yet, it is urged, the District Attorney was permitted to cross-examine the defendants in a manner intended to suggest to the jury that the defendants, in spite of denial, were, in fact, guilty of habitual acts of violence and should be convicted and punished for the protection of society.

All the defendants testified in denial of the charges against them. They were, of course, like other witnesses, subject to cross-examination. They might be questioned as to their participation in acts of violence on other occasions. Admission of guilt of crimes, other than that charged in the indictment, might affect their credibility. Denial of guilt was conclusive upon the People. The People might neither suggest nor prove facts contradicting the denial. The defendants had no opportunity to controvert what the People might not prove. Samuel Mencher, chairman of the picketing committee, was the first defendant to take the witness stand. He claimed that on the afternoon of the assault he was present at the meeting held to enable the shop chairmen ” of the striking union to ratify the tentative agreement intended to settle the disputes and differences which had arisen between the striking local unions, its parent body, the International Fur Workers’ Union, and the American Federation of Labor. Other witnesses, including reporters of three news journals, corroborated his testimony. That differences existed between the local unions, of which Mencher was one of the leaders, and the American Federation of Labor, was brought to the attention of the jury. It may be that the American Federation of Labor has earned such an enviable reputation for honesty of purpose and act that the general public assumes, even without evidence, that any dispute which the Federation may have with another labor organization must be due to some unworthy conduct on the part of its adversary. Perhaps some prejudice against the defendants was created by the evidence, properly admitted, of the existence of a dispute between their union and the American Federation. Of such prejudice the defendants may not complain in this court. It has not been caused by any erroneous ruling of the trial judge. The People might not, however, create or intensify such prejudice, if it existed, by suggestion to the jury that the American Federation of Labor had already adjudged the defendants guilty of a concerted plan to enforce economic demands by force and violence or to subvert our government. The People might not suggest to the jury, in spite of denials by the defendants in the course of their cross-examination, that they had participated in other acts of violence. The People might certainly not ask the jury to base a finding of guilt upon circumstances not relevant to the issues, which were not proven by competent evidence and which the defendants had no opportunity to controvert.

Nevertheless the District Attorney was permitted to cross-examine Mencher in a manner which violated all these rules. Mencher denied that he had ever been in any raid with any of his men prior to April 19th. Then, over objection and exception, the District Attorney was permitted to call upon seven persons in succession to stand up and confront the defendant Mencher, while questions were put to him as to his alleged participation in assaults upon these persons and while he denied such participation. Many of these questions were phrased in such manner as to suggest that a denial would be false. The limits which must be placed upon the length of a judicial opinion prevent the inclusion, verbatim, of the parts of Meneher’s examination which are open to such criticism. They cover many pages of the printed .record. They must have been intended to bring home to the jury the impression that the persons confronting the defendant on the stand were silently accusing him and that his denials were false and perjured.

The District Attorney was not satisfied merely with the silent accusation of the persons produced to confront Mencher. He was permitted to ask questions intended to show that the American Federation of Labor had already decided that Mencher and his associates in the striking union were guilty of other acts like those with which the defendants were charged. Over objection and exception Mencher was asked: Is it not a fact that the Joint Board Furriers’ Union had been suspended or expelled from the American Federation of Labor? ” To this question the defendant answered, “ Yes.”

There can be no doubt that the admission of that question constituted legal error. However excellent the reputation of a private association of citizens may be, the law does not give to its accusation or fiat of punishment the conclusive quality of a conviction by a court of justice. Actual guilt of charges preferred against a member may at times be relevant. If so, that guilt must be shown by competent evidence and not by a finding of an extra-judicial tribunal. Nevertheless the District Attorney was permitted to follow up this question by another: “ Is it not a fact that the American Federation of Labor expelled the Joint Board, headed by Ben Gold, and you and associates, because of these people cutting up people and methods of breaking up of machinery? ” The answer, “It is not true,” was followed by a number of other questions of similar nature, all intended to suggest that the denial was false.

The impression that the answers were false must have been heightened by questions as to articles in the New York Times and other papers, the contents of which, of course, could not be admitted in evidence. We shall refer only cursorily to other rulings of the trial judge which are challenged and which may have influenced the jury in its consideration of the case. Some of the defendants had been convicted of disorderly conduct. The District Attorney was permitted to show, in addition, that the charges against them had originally included more serious offenses. He even argued to the jury that they might infer that in the “ little police courts ” of New York city the defendants by the use of political influence had been able to have the charges reduced. Mencher was asked whether he was convicted of felonious assault. He answered that he had received a sentence of sixty days but his conviction was reversed. It is not disputed that his conviction was reversed, yet the court over objection insisted that he must nevertheless answer directly the question, “ Were you convicted? ” thus suggesting that even a conviction which has been reversed by a higher court affects the credibility of the witness. Finally, the defendants were cross-examined as to whether they were communists; whether their union was not a “left wing” organization, and even whether they read newspapers which are said to have communist leanings. Some of the defendants denied that they held views in favor of communism; others frankly avowed them. We do not stress any single error which may he in these rulings. The trial judge in his charge removed so far as he could the prejudice which might arise from the suggestion that any of the defendants were communists. Other errors are perhaps not serious, when considered separately, and some of these rulings may involve only the exercise of discretion; yet cumulatively the effect of the questions, which were permitted, tended to intensify, at least to some degree, the impression, which the District Attorney was endeavoring to create, that these defendants were undesirable citizens.

We review in the calm atmosphere of an appellate court the rulings made by another judge in the tense atmosphere of a criminal trial. No impossible standards of perfection may be applied. We recognize that, however great the learning of the trial judge may be, and however calm and judicial his temperament, it is impossible for him to rule on all questions in the excitement and speed of a criminal trial as he himself would rule-after opportunity for careful consideration. His function is to guide the trial in such manner that the jury may pass fairly and intelligently upon the guilt of the accused and base its determination upon all the competent evidence offered by both sides, and upon nothing else. In the conduct of the trial there is a large field for the exercise of judicial discretion. Upon rulings which come within the limits of the field of discretion we do not pass. Even though the judge be learned and fair — and in this case counsel for the defendants expressly disavowed criticism of the trial judge — he may yet make erroneous rulings on questions of law which may affect substantially the fairness of the trial.

The manner and extent of the cross-examination lies largely within the discretion of the trial judge. The law, however, does impose some limits, and rulings which permit the prosecuting attorney to put questions on cross-examination which lie outside such limits constitute errors of law. A witness may be cross-examined as to matters which tend to discredit him. Prior conviction of crime is undoubtedly a proper subject of cross-examination. A mere charge, though embodied in an indictment, does not itself show guilt, and a ruling which overrules an objection to such a question constitutes an error of law. (People v. Irving, 95 N. Y. 541; People v. Crapo, 76 N. Y. 288.) So, too, it is error of law to admit questions as to whether a witness has been expelled from a private or semi-public organization, ( Nolan v. Brooklyn City & Newtown R. R. Co., 87 N. Y. 63, 68.) True, it has been held in many cases that the error may be rendered immaterial by the nature of the answer. A denial interposed to such question may be, as matter of law, conclusive. Where, however, by innuendo or suggestion, attempt is made to lead the jury to believe that the denial is not conclusive; where questions are permitted which are calculated by suggestion of misconduct to prejudice the jury regardless of the answer given, then it may hardly be said that the error in permitting the questions is harmless. The rule that an answer elicited on cross-examination is conclusive affords little protection to an accused if the jury is induced to believe that it should act upon the assumption that the answer is untrue. The court may not close its eyes to results which are intended to flow and do flow from the question itself. We will not say that denial, made by a defendant on cross-examination, of misconduct in a collateral matter renders harmless a question which is “ asked for the improper purpose of planting in the minds of the jury suspicion and distruct by insinuations that the defendant has falsely denied his guilt as to collateral matters.” (People v. Slover, 232 N. Y. 264.) The error in this case in permitting the District Attorney to question Mencher about "the suspension or expulsion of the local union, in which the defendants were associated, from the American Federation of Labor was intensified by the admission of subsequent questions phrased in manner to suggest, in spite of denial, that disciplinary action was taken because of habitual use of violence.

It is not easy to define the limits of the field of judicial discretion in cross-examination. “ One of these limits should be that a district attorney shall not deliberately, by questions really containing no element of misconduct and by parading witnesses as a challenge to the defendant, create false impressions that he has been guilty of misdeeds when the evidence does not sustain any such conclusion.” (People v. Freeman, 203 N. Y. 267.)

Here it may well be that the District Attorney did not deliberately ” attempt to create prejudice against the defendants in the mind of the jury. They were charged with a serious offense, and if guilty, they should not go unpunished. They were defended by practiced lawyers, alert to seize any legitimate advantage for the defendants. Zeal in the public interest, which the District Attorney was under duty to protect, may well have led him to errors which he would not have made if there had been opportunity for deliberation. Nevertheless the District Attorney did, in the heat of the trial, ask questions which were calculated to prejudice the jury. By repeated questions put over proper objection and exception, he brought to -the jury the suggestion that some or all of them habitually used, or sanctioned the use of, violence in a labor dispute. He confronted Mencher with seven persons in manner evidently intended to lead the jury to regard them as silent witnesses in contradiction of Mencher’s denial that he had assaulted them. Certainly the form of the questions and the production of these persons must at least have tended to produce the impression that even if Mencher’s denial was true, yet they had actually been assaulted by some organized strikers. There are,. of course, times when it is proper to question a witness about alleged transactions with persons who are pointed out to the witness in court, instead of being merely named. Ordinarily difference in the manner in which a person referred to is identified is immaterial, indeed at times there may be legitimate purpose in bringing the person to court and there pointing him out to the witness. Then choice of manner of questioning may be well within the field of judicial discretion. Not so, when the purpose and effect of the questions and the confrontation of the witness by persons the witness is accused of wronging, is to create the impression that, in spite of denial the defendant has been guilty of misconduct in a collateral matter which the jury should take into consideration when determining his guilt. Then a ruling made over objection and exception may constitute error of law and not merely an error of judgment. (People v. Freeman, supra. See, also, People v. Lewis, 313 Ill. 312; People v. Derbert, 138 Cal. 467; State v. Goodwin, 271 Mo. 73; State v. Taylor, 144 Minn. 377; Perkins v. Commonwealth, 199 Ky. 128.)

Perhaps we cannot say with certainty that the jury was influenced in its consideration of the guilt of the defendants by any suggestion that they were guilty of other acts of violence or that the American Federation of Labor had already found them guilty and had suspended or expelled their union. Doubtless the jurors intended to judge the accused fairly, and their judgment was not so completely blinded by any prejudice, wrongfully created, that they failed to see the force of the evidence which Gold and Shapiro produced in their own behalf. The jury acquitted them; it convicted other defendants against whom almost the same evidence was produced. The question before us is not whether the jury was induced to convict without weighing the evidence, solely because of prejudice. Seldom, if ever, do juries in this State so act. They did not do so in this case. The real question before us is whether erroneous rulings on questions of law; prejudiced the right of the accused to an impartial consideration of the competent evidence.

The summing up of the District Attorney shows, at least, that he urged that the jurors, in their consideration of the defendants’ guilt, should assume that the defendants were men who sought to overthrow our social structure; men who were guilty of other acts of violence and who were part of a group which, in the opinion of the leaders of the American Federation of Labor, conducted labor disputes in an improper manner.

In determining the effect of the rulings which made such appeals possible, we may well assume that judge, District Attorney and jury intended to act fairly towards the accused. Nevertheless the fact that the District Attorney was permitted over objection and exception to conduct the examination in a manner to suggest to the jury that the defendants habitually sanctioned or participated in violence, and the fact that the District Attorney asked the jury to give serious consideration to that suggestion in determining the guilt of the defendants, may not be disregarded as unimportant. A considerable part of the trial was devoted to the attempt to bring home to the jury the impression that these defendants were dangerous citizens and that the assault upon Barnett, with which the defendants are charged, was a part of their tactics of warfare against the peace and order of the community. .We cannot say that the District Attorney failed to create the impression he intended.

The law draws a distinction between the effect which may be given to a charge of misconduct and to proof of misconduct; between the effect of admission of misconduct elicited upon the cross-examination of a defendant to impeach his credibility as a witness, and affirmative proof of misconduct on other occasions as a relevant factor in the determination of the guilt of a defendant of the crime for which he is being tried. Experience and common sense alike must lead to the conclusion that juries often disregard such distinctions. (See 2 Wigmore on Evidence, § 981.)

The record of the trial may lead to suspicion that the defendants or some of them are enemies of society as organized in this country, but that suspicion rests upon innuendo rather than upon proof. Society must protect itself against the violence of its enemies. Attack must be followed by punishment of the guilty, but punishment must be "based upon determination of guilt by a jury after a fair trial. Society may be endangered as much by the violence of its friends as of its enemies, and an appeal to prejudice as a factor in determination of guilt is, in the final analysis, an appeal to violence. The majesty of the law must remain unchallenged. It is threatened by each trial where there is a justified doubt of fairness and impartiality.

Such doubt exists here as to all the defendants, except Malkin and Franklin. They were entitled to a trial in which conviction might be based solely upon competent evidence. They have been charged, without proof, with the habitual use of violence to advance the interests of their union. They have been pilloried as men who have been outlawed, because of their habitual appeal to violence, by the reputable leaders in the labor movement. May we now say that these circumstances did not affect the jury in its consideration of their guilt?

There is a sound foundation for the inference that the determination of the guilt of Malkin and Franklin rests solely upon competent evidence. Concededly they were present in Rockville Centre and in the immediate vicinity of the assault at] the time it took place. They were promptly identified by four persons. There is small, if any, ground for belief that the identification was mistaken. Their own explanation of their presence in Rockville Centre is unconvincing. As to them the jury was called upon to decide only the narrow question: did they remain on the sidewalk picketing the fur shop when the shop was being raided by others? To the overwhelming evidence against the two defendants upon this narrow issue, the suggestion that these defendants habitually used violence would add no appreciable force. It is inconceivable that as to them the jury would consider suggestions or innuendo of violence on other occasions, when proof was almost conclusive that they were present upon the occasion when violence was actually used, as charged in the indictment. Their conviction must be affirmed.

There is no sound foundation for any inference that the determination of the guilt of the other defendants rests solely on competent evidence. We have shown that the evidence against these defendants is almost identical with the evidence against Shapiro, whom the jury acquitted. The evidence in favor of Shapiro was, however, entirely different. He produced as a witness in his behalf a leader of the militia, sworn to preserve the public peace; a man in no wise connected with the union, and not a personal friend of any of its members. His testimony the jury properly believed. The witnesses in favor of the other defendants were men with whom the defendants customarily associated. The jury might .scrutinize their testimony carefully, because they were friendly to the defendants; though to me, personally, the evidence in favor of Mencher, at least, seems convincing. Most of them were members of the same group in the union, charged by innuendo with the habitual use of violence and pictured as engaged in a warfare against society. The jury chose to disbelieve them. In such circumstances it may hardly be said that the erroneous rulings at the trial did not affect the jury’s consideration of the competent evidence. For these reasons the judgments of conviction of the defendants Malkin and Franklin should be affirmed and the judgment of the Appellate Division and that of the County Court as to the other defendants should be reversed and a new trial ordered.

Cardozo, Ch. J., Pound, Andrews and Kellogg, JJ., concur; Crane and O’Brien, JJ., vote to affirm as to all defendants.

Judgment accordingly.


source: Caselaw Access Project

author: Lehman, J.

license: Public Domain

text:
    Compania Mexicana Refinadora Island, Appellant, v. Compania Metropolitana de Oleoductos et al., Respondents.

      (Argued December 3, 1928;
    decided December 31, 1928.)

      Leavitt J. Hunt and Robert McLeod Jackson for appellant.
    The defendants were doing business in the State of New York at the time of service of process in March, 1927, so as to be amenable to the process of the courts within the State. (Pennsylvania Steel Co. v. New York

      Railway Co., 198 Fed. Rep. 735; United States Trust Co. v. Wabash & Western Railway Co., 150 U. S. 287; Birmingham Trust & Savings Co. v. Atlanta, B. & A. Ry. Co., 271 Fed. Rep. 731; American Brake Shoe & Foundry Co. v. New York Rys. Co., 282 Fed. Rep. 293; Bartlett v. Keim, 50 N. J. L. 260; Grant v. Cananea Consolidated Copper Co., 189 N. Y. 241; Tauza v. Susquehanna Coal Co., 220 N. Y. 259; International Harvester Co. of America v. Commonwealth of Kentucky, 234 U. S. 579; Stockton v. Goodyear Tire & Rubber Co., 124 Misc. Rep. 213; National Furniture Co. v. Spiegelman & Co., 198 App. Div. 672.)

      William M. Chadbourne, Clinton De Witt Van Siclen and Alfred H. Phillips for respondents.
    Defendants were not “ doing business ” within the State of New York at the time of the attempted service of process. (Bank of America v. Whitney Bank, 261 U. S. 171; Grant v. Cananea Con. Copper Co., 189 N. Y. 241; Stockton v. Goodyear Tire & Rubber Co., 124 Misc. Rep. 213; Bagdon v. Phil. & Reading C. & I. Co., 217 N. Y. 432; Butler Bros. Shoe Co. v. U. S. Rubber Co., 156 Fed. Rep. 1; Brookford Mills, Inc., v. Baldwin, 154 App. Div. 553; Hamlin Bros. v. Barrett & Co., Inc., 220 App. Div. 763; 246 N. Y. 554; Lillibridge, Inc., v. Johnson Bronze Co., 220 App. Div. 573; 247 N. Y. 548; Tauza v. Susquehanna Coal Co., 220 N. Y. 259.)
   Lehman, J.

Attempted service of the summons in this action upon the defendant corporations has been set aside. Both corporations are organized under the laws of Mexico. In that country they produce and transport oil. In this State the oil is sold. It is said that the corporations are present in this State and are transacting business here. The Appellate Division has made contrary finding.

We set forth briefly our conclusions, based on statements of fact contained in the voluminous affidavits submitted upon the motion. The defendant corporations have never had any office or bank account in this State. No officer, director or employee has ever habitually conducted any corporate business here. The Island Oil and Transport Company, hereinafter called the “ Transport Corporation,” prior to the year 1919 owned all the stock of the defendant corporations. In June, 1919, it organized under the laws of the State of Delaware the Island Oil Marketing Corporation. It used that corporation for the purpose of selling the oil of all its subsidiary corporations. It controlled these corporations through its stock ownership; it alone could ultimately enjoy the profits made by these corporations. It alone must eventually suffer from losses sustained by them.

From its offices here the parent corporation directed the corporate officers of the defendant corporations in the transaction of their corporate business in Mexico. In like manner it directed the officers of the Marketing Corporation in the transaction of its corporate business of selling oil here. Contracts were drawn up between the producing corporations and the Marketing Corporation. By their terms the Marketing Corporation was constituted the agent of the producing corporations for the sale of their products. The agent was to receive compensation for its services and to be subject to the directions of the principals. Expenses of the sales were to be paid by the principals, the net proceeds were to belong to them.

In practice the parent company treated all the subsidiary corporations as if they were merely departments of its own business. It made use of the corporate structure it had created, to the extent that such structure served the purposes of its own business. Otherwise it disregarded the elaborate corporate structure and the separate corporate entity of the subsidiary corporations. Through the Marketing Corporation it sold the products of the other subsidiaries. They received credit for the proceeds of the sale on the books of the Marketing Corporation. Drafts drawn by the subsidiary corporations for the expenses of their operations in Mexico were paid. Such payments were charged against the subsidiary corporations’ credit on the books of the Marketing Corporation. Other payments and expenses were charged in like manner. The net balance, however large, was never paid to the subsidiary corporations. No compensation was ever paid to the Marketing Corporation.

The parent corporation fell into financial difficulties. The stock of its subsidiary corporations had been pledged with the New York Trust Company under a trust indenture as security for loans or advances. Under the terms of the indenture, the New York Trust Company as trustee acquired the sole voting rights and rights to dividends upon the stock of the subsidiary corporations, upon default in payment by the parent company in 1924. In 1924, receivers of the Transport Corporation and of the Marketing Corporation were appointed by the United States District Court. The receivers continued the business of these corporations. Disputes had arisen as to the ownership of the proceeds of oil produced by the Mexican corporations. At the request of the New York Trust Company, the receivers were directed to keep such proceeds segregated until conflicting rights to the proceeds were adjudicated. The receivers were directed to carry on' the business of the defendant corporations, though these corporations were not parties to the receivership proceedings.

Since that time the receivers of the Transport Corporation and the Marketing Corporation have continued to conduct business and to sell the oil of the defendant corporations in the same manner as this business had been conducted before the receivership. With the consent and co-operation of the New York Trust Company they have also exercised control over the defendants’ corporate affairs in Mexico. Grace, an employee of the Island Corporation, held a general power of attorney for the defendant corporations. He did not exercise that power except upon sporadic and rather unimportant occasions. His acts are not significant; they lack the continuity and permanence which are essential elements of corporate presence and corporate transaction of business within the State. ( Ultramar Co., Ltd., v. Minerals Separation, Ltd., 236 N. Y. 647.) The real question presented in this case is whether the receivers of the Transport Corporation and the Island Corporation are transacting the defendants’ business in this State and are their managing agents.

The courts of this State have acquired jurisdiction of the defendant corporations only if the corporations were actually present in the State and transacting their business here at the time of the attempted service of the summons. Doubtless the sale of the defendants’ products might, under some circumstances, constitute part of the defendants’ business. The defendant corporations might come into the State to transact this business. If so, they could be served with process here. On the other hand, they might abandon this business or leave others carry it on. Unless they come into the State and here transact the business themslves, they are not subject to the jurisdiction of our courts. That is the sole test we may apply. (Bank of America v. Whitney Central National Bank, 261 U. S. 171.) The defendant corporations cannot be said to have come into the State merely because the parent company, exercising domination derived from its stock ownership, gave directions as to the manner in which the defendants’ officers in Mexico should conduct the defendants’ affairs. Such directions constitute no part of the corporate business. In giving those directions, the parent company did not act as agent for the subsidiary corporation. It acted only for itself. In the case of Grant v. Cananea Consolidated Copper Company (189 N. Y. 241) the president of the defendant corporation directed its affairs as president. He acted under authority conferred by the corporation. Such directions may perhaps constitute corporate acts and conceivably, if habitually given, might constitute the transaction of corporate business. Not so, where the directions are given only by a controlling stockholder who has no authority to represent the corporation or to act for it. (Cannon Manufacturing Co. v. Cudahy Packing Co., 267 U. S. 333.)

The question of whether the sale of the oil produced by the defendant corporations constituted transaction of their business by the defendant corporations themselves presents greater difficulty. In no two cases are the facts exactly alike. No case has been found where analogy to the problem we must decide is complete. Other decisions are guide posts rather than direct authorities in the solution of our problem. .

If the sales contracts made by the defendant corporations had been carried out fully, then it might be argued that the Marketing Corporation was merely the agent for the defendant corporations in the transaction of their business. These contracts have not been abrogated; perhaps, for some purposes, they are in effect; yet in the transaction of business they have been ignored. Except for bookkeeping purposes the parent company has disregarded the separate ownership of corporate property by its subsidiary corporations. It has sold the oil of the defendant corporations and has retained the proceeds of the sales as if the business of the subsidiary corporations in Mexico had been merely departments of its own business. Indeed, even the book entries might be the same if the business of the defendant corporations in Mexico had been conducted by separate departments of the parent company without separate corporate identity. The Marketing Corporation was treated rather as if it were the agent of the parent company than the agent of the defendant corporations. The Marketing Corporation sold the products of the defendant corporations and retained the proceeds, not so much because a formal sales agency contract was drawn up, as because the parent company chose ° to compel the defendant corporations, through its domination of their officers, to confine their corporate activities to the production or transportation of oil in Mexico. In other matters the parent company disregarded the separate corporate entities of its subsidiaries. It transacted the business of selling oil through another subsidiary as if it were its own business. Its transaction of that business did not bring the defendants into this State. Rather it resulted in excluding them from the State.

The receivers continued to conduct the same business in the same way. Indeed, the fact that the receivers were authorized by the Federal court to transact the business of the defendant corporations, though these corporations were not parties to the receivership proceedings, shows that the business here of the defendant corporations was regarded as part of the business of the corporations whose affairs were being administered by the courts. We are not concerned with question of the ownership of the proceeds of that business. The decisive factor in this case is that the business here was not transacted by officers, agents or employees of the defendants, chosen and controlled by them. It was transacted by the officers, employees or receivers of other corporations transacting the business of the corporations they represented rather than the business of the defendant corporations. At no time was there present in this State any representative of the defendants who regularly conducted their business. From such evidence, the Appellate Division might properly decide that the defendant corporations did not transact their business here.

The orders should be affirmed, with costs, and the first question certified answered No.”

Cardozo, Ch. J., Pound, Crane, Andrews, Kellogg and O'Brien, JJ., concur.

Orders affirmed, etc.


text:
    Adolph Licht, Respondent, v. New York Indemnity Company, Appellant.
    (Argued December 6, 1928;
    decided December 31, 1928.)

      Sidney J. Loeb and Leon M. Prince for appellant.
    The policy provisions were violated in that books and accounts were not kept by the plaintiff in such manner that the exact amount of the loss could be accurately determined therefrom by the defendant. (Wolowitch v. National Surety Co., 152 App. Div. 14; Pearlman v. Metropolitan Surety Co., 127 App. Div. 539; Harris v. General Accident, Fire & Life Assurance Corp., 187 N. Y. Supp. 291; Rosenberg v. People’s Surety Co., 140 App. Div. 436; Danerhirsch v. Travelers Indemnity Co., 202 App. Div. 207; Mord v. New York Indemnity Co., 216 App. Div. 252; 244 N. Y. 589; Zeltner v. Fidelity & Deposit Co., 220 App. Div. 21.)

      Alfred B. Nathan and Emil Weitzner for respondent.
    Plaintiff complied with the provision of the policy with reference to the keeping of books and accounts. (Zeltner v. Fidelity & Deposit Co., 220 App. Div. 21; Slocovich v. Orient Mutual Ins. Co., 108 N. Y. 56; Appel v. Insurance Co., 86 App. Div. 83; 180 N. Y. 514; Sutter v. Vanderveer, 122 N. Y. 652; Kirtz v. Peck, 113 N. Y. 222; Mord v. New York Indemnity Co., 216 App. Div. 252; 244 N. Y. 589; Garten v. General Acc. F. L. Ins. Co., 206 App. Div. 154; Royal Silk Co. v. Ins. Co., 244 N. Y. 547; Lenzner v. National Surety Co., 209 App. Div. 464; Leiman v. Metropolitan Surety Co., 111 N. Y. Supp. 536.)
   Lehman, J.

The plaintiff, a dealer in furs, procured from the defendant a $10,000 policy upon the furs, insuring the plaintiff against- a loss thereof through burglary. He asserts that about six months later his shop was entered by burglars and furs of a value exceeding $17,000 were removed therefrom.

The policy provided “ that the company shall not be liable * * * unless books and accounts are kept by the assured and are kept in such manner so that the exact amount of the loss can be accurately determined therefrom by the company.” The defendant asserted that the provisions of the policy in reference to the keeping of books were not observed by the plaintiff.

The case for the plaintiff was largely made through a stock book which had been kept by him. This contained an inventory of stock taken by the plaintiff when the books were first opened. It showed (1) garments purchased by the plaintiff for resale, (2) skins purchased by the plaintiff to be used for manufacturing and repairs, and (3) garments manufactured by the plaintiff. Concededly the items of garments purchased by the plaintiff showed valuations above the actual cost of the garments; indeed above the sales price of garments which were sold. The purpose of the exaggeration was to enable the plaintiff to assert to customers that he was selling the garments below costs. The items of skins purchased by the plaintiff showed the actual cost of the skins which Were used in garments made up by the plaintiff. These items were not intended to be shown to customers, for customers would not know, unless informed by the plaintiff, what particular skins were used in the manufacture of a particular garment. Without such information and information as to the cost of manufacture, a customer could not determine the cost of any garment manufactured by the plaintiff. Neither could an accountant examining the books of the plaintiff.

The plaintiff asserts that the cost of the garments manufactured by him was correctly estimated by him and entered into the inventory or stock book correctly. He supplied by oral testimony the items which he says entered into the estimated cost of the garments manufactured by him. The plaintiff further showed invoices for finished garments which he had bought. He claimed that these invoices represented the actual cost of garments which were entered at a fictitious valuation.

The jury chose to believe the plaintiff’s testimony that he had honestly entered the estimated cost of the garments he manufactured in his book, though he concedes that the price of finished garments was fictitious. It chose to believe that the plaintiff showed the correct invoices for the finished garments. Indeed, apparently it chose to believe anything the plaintiff asserted, even that burglarious entry into and exit from his premises had been made through a hole fourteen inches high and eight inches wide. Perhaps we may not say that the plaintiff’s testimony is so evidently false that as a matter of law it constitutes no evidence.

We may assume that all this evidence is true. The parties have, however, stipulated that the assured must furnish other evidence than his own testimony as to the amount of his loss. He agreed to keep books and accounts in such manner that the exact amount of the loss can be accurately determined by the company.” If he failed to keep such books the jury might not estimate the loss from oral testimony.

It has been said that the “ courts should not take a narrow and restricted view of the clause relative to the keeping of books and accounts to defeat a claim otherwise unassailable.” (Mord v. New York Indemnity Co., 216 App. Div. 252; affd., 244 N. Y. 589, and cases there cited.) We accept that policy as a guiding principle. Within the meaning of the contract of insurance, honest books and vouchers, though the entries be made in a crude, unscientific manner and require explanation and even supplement by oral statement, may yet supply the basis for an accurate estimate of the loss. At least, however, the books must be intended to reflect truly the cost or value of the goods insured. Books intended to deceive are not in any true sense books of account.

From the inventory or stock book, the company might determine what garments were unsold and in stock at the time of the burglary. That book would not disclose the true price of garments bought by the plaintiff. It is said that the invoices show the true price, but a comparison of invoices and book price shows that the invoice price does not match the book price of any garment. Only when we obtain the clue to the discrepancy through the testimony that the book price is fictitious, are we in a position to use the invoices to determine the value of the garments which have been stolen. Then we must begin determination of the loss by discarding the book value.

Perhaps in some instances the description of the garments in the invoices and the description in the books is so similar as to justify finding oí identity. Not in all. The plaintiff’s testimony shows that in some instances there is no basis for identification of items except the word of the plaintiff that the garment represented by a book entry is covered by a particular invoice. Nor are we in better position in regard to the cost or value of garments manufactured by the plaintiff. There the book value is in the main merely the estimate of the plaintiff, and rests upon his own word as to the items of that cost or value. If the plaintiff’s book had been honestly kept, the book entry might be sufficient as a basis for computation of loss. Books which are intended to represent the true condition of a business in themselves contain some guaranty of accuracy. Even though some items are defectively entered or computed, the books at least give some guaranty of good faith and honesty. Not so, where the books are not intended to reflect the condition of the business, and the business man who kept them is compelled to concede that at least some of the items were entered to deceive. Then there is no substantial probative force in any entries of value in the books. Loss in such case cannot be computed from the books and accounts, but only from the testimony of the claimant.

The plaintiff agreed to keep books and accounts from which the loss might be computed. He chose to keep his books dishonestly, to deceive his customers. Books so kept constitute no basis for computation of any loss. The same policy which requires the courts to hold that the terms of the contract of insurance are complied with by a reasonable and honest effort to keep accurate books and accounts, requires also a decision that dishonest books intended to deceive customers or creditors are insufficient for that purpose.

The judgment of the Appellate Division and that of the Trial Term should be reversed and the complaint dismissed, with costs in all courts.

Cardozo,. Ch. J., Pound, Crane, Andrews, Kellogg and O’Brien, JJ., concur.

Judgments reversed, etc.


author: Crane, J.

text:
    Helen V. Carey, Appellant, v. Minor C. Keith, Inc., et al., Respondents.
    (Argued January 9, 1929;
    decided January 15, 1929.)

      Clarence G. Bachrach for appellant.
    The franchise tax becomes a hen by force of the statute. (Cons. Laws, ch. 60, § 209, 211; Engelhardt v. Alvino Realty Co., Inc., 248 N. Y. 374.) The lien of the franchise tax attaches at the beginning of the tax year. (Engelhardt v. Alvino Realty Co., Inc., 248 N. Y. 374; Midurban Realty Corp. v. F. Dee & L. Realty Corp., 247 N. Y. 307.) The franchise tax of Minor C. Keith, Inc., for the tax year beginning November 1, 1925, constituted an incumbrance upon the property in question not provided for in the contract of sale, and gave the plaintiff the right to reject title and to recover the amount paid on the purchase price with the incidental expenses. (Midurban Realty Corp. v. F. Dee & L. Realty Corp., 247 N. Y. 307; Rodgers v. Bertha Development Co., Inc., 242 N. Y. 503.) The plaintiff’s rights were not impaired by the defendants’ offer to deposit a sum of money. (Fossume v. Requa, 218 N. Y. 339; Zorn v. McParland, 11 Misc. Rep. 555; 155 N. Y. 684; Berger v. Crist, 121 App. Div. 483.)

      John Ingle, Jr., and Thomas P. De Graffenried for respondents.
    The plaintiff failed to prove any franchise tax was due or that any such tax for the year 1925 was ever assessable. (Maser v. Cochrane, 107 N. Y. 35; Higgins v. Eagleton, 155 N. Y. 466.) The objection of a possible franchise is a trivial one, and did not justify the arbitrary rejection of the title. (Green v. Barrett Nephews, 238 N. Y. 207; Urbis Realty Co. v. Globe Realty Co., 201 App. Div. 533; Zreber v. Smith, 148 N. Y. 558; H. & H. Corp. v. Broad Holding Corp., 204 App. Div. 569.)
   Crane, J.

The plaintiff sues to recover her purchase price together with cost of title search. The contract of real estate purchase was executed December 11, 1925, title to be closed on June 10, 1926. After five adjournments closing was fixed for August 3, 1926. On that date title was rejected for various reasons, among them being the lien of the unpaid franchise tax for 1925. The defendant, seller, is a foreign (Delaware) corporation. Pursuant to article IX-A of the Tax Law (Cons. Laws, ch. 60), every foreign corporation doing business in this State “ shall annually pay in advance for the year beginning November first * * * an annual franchise tax, to be computed by the tax commission upon the basis of its entire net income * * * for its fiscal or the calendar year next preceding.”

Every corporation shall annually on or before July first transmit to the Tax Commission a report in the form and manner specified in section 211 of the article. Section 214 states how the tax shall be computed.

The tax fixed and imposed shall be paid to the State Tax Commission on or before the first day of January of each year. “ Each such tax * * * shall be a lien and binding upon the real and personal property of the corporation liable to pay the same until the same is paid in full.” (Sec. 219-c.)

This vendor corporation made a return or report pursuant to section 211 on or before July 1, 1925. No tax had been fixed or computed on the report but nevertheless a tax was due for the year beginning November 1, 1925, and was payable on or before January 1, 1926. It was to be paid in advance for the year beginning November first, 1925,” and was made a hen until paid.

The tax became a lien, therefore, November first, 1925, although the amount was subject to future computation. This method of collecting a tax due the State is not unlike that provided for collecting the tax on transfers under article X of the Tax Law. Section 222 provides that unless otherwise provided such taxes shall be due and payable at the time of the transfer and section 224 makes them a lien upon the property transferred until paid. The lien attaches at the time of transfer which, if by will or intestate laws, is the date of the death of the person seized or possessed of the property. (Midurban Realty Corporation v. F. D. & L. R. Corporation, 247 N. Y. 307.) The amount of such a tax, however, cannot be ascertained until the estate is appraised and the rate and the amount determined as specified in the act.

We held in Engelhardt v. Alvino Realty Company, Inc. (248 N. Y. 374), decided after the trial of this case, that such taxes were a lien upon the corporate property although no reports had been made and no tax computed. The tax by law was to be paid as of a certain date and the property of the corporation was burdened with this charge, the exact amount of which might be subsequently fixed by the Tax Commission. It was the duty of the corporation to have it fixed and to make the payment. We said that the tax became a lien upon the real estate of the corporation upon the fifteenth day of January in each year. The statute applicable in that case read somewhat differently from the present section. The tax was to be a lien “ from the time when it is payable,” and it was payable on or before January fifteenth. The quoted words have been omitted from the present Tax Law, the wording being: “ Each such tax * * * shall be a lien and binding upon the real and personal property of the corporation liable to pay the same until the same is paid in full.” This conforms the language of section 219-c applicable to corporations to the wording of section 224 covering the lien of transfer taxes. Both provisions should, in consequence, have similar construction. The earliest date is chosen for the attachment of the lien, the date of death or transfer in the one case, and the first of November in the other.

When, therefore, on the third of August, 1926, the defendants attempted to close title the property was incumbered by the franchise tax hen for the year 1925 which they had not paid. The amount could easily have been ascertained from the corporation’s July report and the tax computed paid. They asked no adjournment of closing for this purpose but offered to make an allowance to cover the uncertainty. This was decidedly unsatisfactory to the purchaser. This property was acreage, available for development purposes in a rapidly growing suburban district. The purchaser could not very well divide the property and apportion the lien of the tax or make a money allowance out of his allowance to cover the amount which might finally be determined as the proper tax. This would be an added obstacle to small sales. Besides the duty of making certain the amount of the lien was on the defendants; not the purchaser — the latter was not obliged to assume any of the obligations under the Tax Law, even if she could have done so. The tax might have remained open for an indefinite period owing to disagreements or antagonisms between the corporation and the Commission. The law will not thus thrust trouble upon a person contracting for a clear title to real estate. It is difficult enough nowadays to pay one’s own taxes without being compelled to ascertain the tax due by others.

The judgment of the Appellate Division and that of the Trial Term should be reversed and judgment directed in favor of the plaintiff for the sum demanded in the complaint, with costs in all courts.

Cardozo, Ch. J., Pound, Lehman, Kellogg, O’Brien and Hubbs, JJ., concur.

Judgments reversed, etc.


author: Pound, J.

text:
    300 West End Avenue Corporation, Appellant, v. Harry M. Warner, Respondent.
    (Argued January 7, 1929;
    decided February 13, 1929.)

      David L. Podell and Leonard Kommel for appellant.
    Although the statute says that oral contracts to lease for more than one year are void, nevertheless the construction placed on the statute by the courts is that such contracts are merely voidable. (Ford Motor Co. v. Hotel Woodward Co., 271 Fed. Rep. 625.) Section 259 of the Real Property Law was designed for the benefit and protection of owners and lessors of real property, thereby differing from the original Statute of Frauds in England. (Roskam-Scott Co. v. Thomas, 175 App. Div. 84; Brune v. Vom Lehn, 112 Misc. Rep. 342; 196 App. Div. 907.) The defense that the lessor has not signed any note or memorandum of the contract to lease is not available to the defendant lessee and he cannot plead the same as an affirmative defense in his answer. (Brune v. Vom Lehn, 112 Misc. Rep. 342.)

      Joseph H. Hazen for respondent.
    Where the lessor’s or grantor’s cause of action is founded upon an oral contract the defendant-lessee or grantee may plead the Statute of Frauds. (Coles v. Brown, 10 Paige’s Ch. 526; Champlin v. Parish, 11 Paige’s Ch. 405; Vielie v. Osgood, 17 Barb, 130; Reynolds v. D. & S. L. Railroad Co., 17 Barb. 613; De Beerski v. Paige, 36 N. Y. 537; Cagger v. Lansing, 43 N. Y. 550; Loughran v. Smith, 75 N. Y. 205; Jewett v. Griesheimer, 100 App. Div. 210.) An oral agreement to enter into an agreement of lease is within the Statute of Frauds. (2 Reed Statute of Frauds, § 682; McLachlin v. Village of Whitehall, 114 App. Div. 315; Westwitt Realty Corp. v. Burger, 212 App. Div. 622.) The Statute of Frauds was designed to prevent litigation over oral agreements. (Hagedorn v. Lang, 34 App. Div. 117.)
   Pound, J.

This is an action to recover damages for breach of a contract to lease whereby plaintiff promised to make and defendant promised to take a lease of real property in the city of New York for a term of three years at a yearly rental of $7,000. The answer sets up as a defense the Statute of Frauds (Real Property Law, § 259; Cons. Laws, ch. 50) and alleges:

“Second. That neither the said alleged lease or contract or any note or memorandum thereof was in writing subscribed by the alleged lessor, the plaintiff in this action, or by any person by him lawfully authorized.’

The Special Term granted a motion to strike out this defense. The Appellate Division reversed, denied the motion and certified a question to be reviewed by this court as follows:

“ Is the separate and complete defense in the amended answer to the complaint herein sufficient in law upon the face thereof? ”

Real Property Law, § 259, reads as follows:

“A contract for the leasing for a longer period than one year, or for the sale, of any real property, or an interest therein, is void, unless the contract, or some note or memorandum thereof, expressing the consideration, is in writing, subscribed by the lessor or grantor, or by his lawfully authorized agent.”

It seems passing strange that this provision of the statute, in force for one hundred years, should still require authoritative judicial construction. Its genesis may profitably be traced in the statutes of the State.

Under the former Statute of Frauds (L. 1787, ch. 44, § 11; 1 Kent & Radcliffe Revised Laws, pp. 75-79) it was provided, in the language of 29 Car. II, C. 3. § 4, that no action shall be brought * * * whereby to charge the defendant * * * upon any contract or sale of lands, tenements or hereditaments, or any interest in or concerning them, * * * unless the agreement upon which such action shall be brought, or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him or her lawfully authorized.”

The Commissioners appointed to revise the statute laws of the State made a report to the Senate in 1827, proposing a material change in the statute. They recommended the following:

“ § 8. Every contract for the leasing for a longer period than three years, or for the sale of any lands, or any interest in lands, shall be void, unless the contract and the consideration thereof shall be reduced to writing, and be subscribed by the party by whom the lease or sale is to be made, and unless the person to whom the lease or sale is to be made, shall subscribe such contract or a counterpart thereof, or at the time the same is executed, pay, or give security for the payment of, the purchase money.” (Vol. 3, ch. VII, title I, page 12, § 8.)

They said (Revisers’ notes, Vol. 3, p. 12): “ Under that section (§11, supra) it has been held, among other things,

“1. That a letter or other writing, though written subsequently to the mating of the agreement, is sufficient to take the case out of the statute. This has led to many refinements and distinctions. By omitting the words, ‘ note or memorandum thereof,’ and requiring the contract to be reduced to writing, the language is made more precise, and the door closed to the introduction of similar exceptions.

“ 2. That the literal act of signing is not necessary, although the statute speaks of ' signing.’ After setting out with this principle, the courts found themselves perfectly at large, as to what should be considered a signing. To prevent difficulties of this sort hereafter, the revisers propose to require that these agreements shall be subscribed.

3. That it is sufficient, as against the party sought to be charged, if the instrument be signed by him; and accordingly the courts of equity will decree a specific performance of an agreement to sell lands, against the person who holds the written engagement of the other party signed by him alone, though ,the latter may be wholly remediless. Many of the ablest judges in England and in this country, have regretted this rule of construction. (See the remarks of Chancellor Kent, in 14 Johns. Rep. 489.) The revisers have proposed in the above section, what seems to them a sound rule.”

When the Revised Statutes were enacted (R. S. ch. VII, title 1, § 8; 2 R. S. [1st ed.] p. 135) a material change was made in the language of the statute which, however, widely departed from the language proposed by the revisers. Research has brought no answer to the question why this change was made. Paige, J., in Worrall v. Munn (5 N. Y. 229, 244) incidentally, but not with entire accuracy, remarks: “ The statute of frauds of 1787 was substantially in the same words as the title of the revised statutes in relation to fraudulent conveyances.!’ The section, not greatly varying from its present form, then read as follows:

“ § 8. Every contract for the leasing for a longer, period than one year, or for the sale of any lands, or any interest in lands, shall be void, unless the contract, or some note or memorandum thereof, expressing the consideration, be in writing, and be subscribed by the party, by whom the lease or sale is to be made.”

Of this section, Chancellor Walwobth said in Champlin v. Parish (11 Paige Chan. 405, 410):

Under these provisions of the revised statutes, the court for the correction of errors has decided that a contract for the sale of lands is not binding upon either party, unless the agreement is in writing, and is subscribed by the party by whom such sale is to be made, or by his agent duly authorized * * *.”

Thereafter it was generally held that the Statute of. Frauds required that a contract for the sale of lands must be in writing and be subscribed by the party by whom the sale is to be made, or by his agent lawfully authorized (Worrall v. Munn, supra), until the magisterial opinion of Gaynor, J., in Pelletreau v. Brennan (113 App. Div. 806), which stated the rather extraordinary view that it is only the seller who can raise the question of no written contract.” This opinion was based on a memorandum opinion of the same learned justice in Torres v. Thompson (29 Misc. Rep. 526), based on two cases (Collier v. Coates, 17 Barb. 471; Galvin v. Prentice, 45 N. Y. 162), which do not decide the point. The case has been followed in Brune v. Von Lehn (112 Misc. Rep. 342 affd., on opinion below, 196 App. Div. 907; Quinto v. Alexander (123 App. Div. 1); Ford Motor Co. v. Hotel Woodward Co. (271 Fed. Rep. 625). (See, also, Roskam-Scott Co. v. Thomas, 175 App. Div. 84,- for the protection then of the owners of the property it is required,” etc.; McTague v. Conroy, 232 N. Y. Supp. 171, 173.)

This abrupt change in the rule which had been recognized for almost a century may perhaps be attributed in part to the influence of a false antithesis between section 259, Real Property Law, and section 85, Personal Property Law (Cons. Laws, ch. 41), which, as to contracts to sell personal property, requires the note or memorandum of the contract of sale to “he signed by the party to he charged,” and in part to the ultimate recognition of the rule that like clauses in the Statute ‘of Frauds state a rule of evidence rather than of substantive law, which is not available as a defense unless pleaded by the party sought to be charged. (Crane v. Powell, 139 N. Y. 379; McKenna v. Meehan, 248 N. Y. 206.)

Law taken for granted or dogmatically asserted is an unsafe guide for future judicial action. That the owner alone needs protection is an assertion made without reason or authority to support it.

Here we are dealing with the special mandate of a statute which’ plainly says that the contract, or some note or memorandum thereof, shall be void unless subscribed by the lessor or grantor and we have the statute pleaded as a defense. The purpose of the statute is to prevent fraud. The owner is not the only possible victim of the fraud made possible by proof of oral contracts. Fraud may seek to compel one either to take or to make transfers of an interest in real estate evidenced only in parol. The change from the original statute is clearly marked. The Legislature deliberately chose the words “ lessor or grantor ” instead of the “ person to be charged thereby.” The old law required the note or memorandum to be signed only by the party who was sued thereon. It had to be signed by him, without regard to the part of the contract which he was to perform. Under the section of the Revised Statutes, the vendor’s signature is necessary without regard to the party who seeks to compel performance.

A brief statement of the proper construction of the section may be helpful in this connection. It has been held, under 2 R. S. 136, § 3, now Personal Property Law, § 85, that a note or memorandum signed by the party to be charged is equally corroborative, whether it passes between the parties themselves or between one of them and a third party. (Peabody v. Speyers, 56 N. Y. 230.) This is the rule which might be reasonably applied where the note or memorandum is subscribed by the lessor or grantor and the lessee or grantee seeks to enforce the contract. (Worrall v. Munn, supra.) It is inept where the lessor or grantor seeks to enforce the contract by his own self-serving declarations. The idea in the minds of the revisers was that the lessor or grantor should subscribe the contract and that the grantee or lessee should either subscribe it or should pay or give security for the payment of the purchase money. This, they said, was the sounder rule as it protected both parties to the contract. The Legislature confused the situation by inserting the words note or memorandum.” Its purpose in doing so is not entirely clear. Still it is adumbrated by the recommendations of the revisers. They suggested a contract, either subscribed or assented to by both parties. The Legislature did not go so far. A note or memorandum thereof subscribed by the vendor was thought sufficient. The requirement is that the writing shall be subscribed. A mere signing is not enough. (James v. Patten, 6 N. Y. 9; Mesibov, Olinert & Levy v. Cohen Bros. Mfg. Co., 245 N. Y. 305, 310.) But it does not follow that the vendor may enforce an oral executory contract against the purchaser merely by writing and subscribing a memorandum of the bargain. The meeting of minds which establishes contractual relations must be shown. The purchaser must indicate his assent to the transaction. The note or memorandum, although subscribed by the lessor or grantor alone, becomes enforcible by him only when the lessee or grantee is shown in some manner to have accepted it as evidence of a valid and operative agreement between the parties. (Worrall v. Munn, supra; Lord v. Cronin, 154 N. Y. 172, 175.)

A lease for a term exceeding one year must, as a rule of substantive law, be in writing subscribed by the lessor or his agent. (Real Property Law, § 242.) So, also, subject to the conditions herein stated, the agreement to make such a lease, or a note or memorandum thereof, must, as a rule of evidence, be in writing subscribed by the lessor or his agent.

The order should be affirmed, with costs and the question certified answered in the affirmative.

Cardozo, Ch. J., Crane, Lehman, Kellogg, O’Brien and Hubbs, JJ., concur.

Order affirmed, etc.


author: Hubbs, J.

text:
    Rose Bovin, Respondent, v. Samuel Galitzka et al., Defendants, and Philip Schorr, Appellant.

      (Submitted January 7, 1929;
    decided February 13, 1929.)

      J. Irwin Shapiro for appellant.
    Restrictions are to be strictly construed, and if inferences are necessary to sustain them their existence will be negatived. (Clark v. Jammes, 87 Hun, 215; Bristol Hotel Co. v. Pegram, 49 Misc. Rep. 535; Conncaut Lake Ice Co. v. Quigley, 225 Penn. St. 605.) Equity will not raise an implied covenant in restraint of the beneficial use of property. (De Forest v. Byrne, 1 Hilt. 43; Sullivan v. Monohan, 123 Ill. App. 467; Kraft v. Welch, 112 Iowa, 695; Spalding Hotel Co. v. Emerson, 69 Minn. 292; Wertheimer v. Circuit Judge, 83 Mich. 56; Hyatt v. Grand Rapids Brewing Co., 168 Mich. 360; San Antonio Brewing Assn. v. Brents, 39 Tex. Civ. App. 443; Hayton v. Seattle Brewing & Malting Co., 66 Wash. 248; Boozer v. Bank, 78 S. C. 5; Stangap Colliery, etc., v. Kelly, 115 Va. 390; White v. Kane, 53 Mo. App. 300.)

      Jesse S. Raphael for respondent.
    The language of the lease providing that the premises are “to be used and occupied Real Estate Office ” necessarily implies a restrictive covenant. (De Forest v. Byrne, 1 Hilt. 43; Sullivan v. Monohan, 123 Ill. App. 467; Spalding Hotel Co. v. Emerson, 69 Minn. 292; Wertheimer v. Circuit Judge, 83 Mich. 56; Bray v. Fogarty, Ir. R. 4 Eq. 544; Matter of Emerson, 58 Minn. 450; De Forest v. Byrne, 1 Hilt. 43; Kraft v. Welch, 112 Iowa, 695; Kaiser v. Zeigler, 115 Misc. Rep. 281; Weil v. Abrahams, 53 App. Div. 313.) Restrictive covenants in contracts are to be given an ordinary construction with a view to ascertaining the actual intent of the parties thereto. (Berry, Restrictions on Use of Real Property, 58, § 38; Deeves v. Constable, 87 App. Div. 352; Brockmeyer v. Sanitary District, 118 Ill. App. 49.)
   Hubbs, J.

This action was commenced by the owner and lessor of real property to procure an injunction restraining the defendants, her lessee and sublessees, from using “ the corner store and part of the cellar in the premises and building known as and by the street number 3001 Avenue N, in the Borough of Brooklyn for any business other than a real estate office.

The lease in question was for a term of five years at an annual rental of twelve hundred dollars. It described the premises leased as “ the corner store and part of cellar in building known as No. 3001 Avenue N * * * to be used and occupied Real Estate Office.” The complaint alleges that the lessee has sublet the said premises to the other defendants and that they are using said premises for a grocery and dairy store, and demands judgment that the sublease be declared void and that the sublessees be enjoined and restrained from using or occupying said demised premises or any portion thereof for any purpose other than as a real estate office.”

The question for our determination is whether the words “to be used and occupied Real Estate Office,” constitute a restrictive covenant which prevents the lessee or his sublessees from using said corner store and part of cellar ” for any purpose other than a real estate office.

The plaintiff had the absolute right, by appropriate provisions in the lease, to specify that the leased premises could be used for a particular purpose only. (Round Lake Association v. Kellogg, 141 N. Y. 348.)

If the words in question have that effect, a court of equity may, by injunction, prevent the tenant and sub-lessee from using the premises for any other purpose. (Round Lake Association v. Kellogg, supra.)

In the absence, however, of restrictions contained in a lease, a tenant may occupy and use the premises leased in any lawful way which he desires, not materially different from that in which they are usually employed, to which they are adapted and for which they were constructed. (U. S. v. Bostwick, 94 U. S. 53; Presby v. Benjamin, 169 N. Y. 377.)

It is not alleged in the complaint that the defendants have in any way violated any implied obligations resting on a tenant. It is not charged that the defendants have used the premises in an improper or untenant-like manner, or put them to a use different from that for which they had usually been used, or for which they were adapted and constructed. In view of the description of the premises contained in the lease — “ the comer store and part of the cellar ”— it could hardly be urged that their use as a grocery and dairy store constituted a violation of any implied obligation on the part of the tenant and his sublessees.

There is no express covenant in the lease restraining the defendants from using the premises for a store. It is urged, however, by the landlord that the words in the lease “to be used and occupied Real Estate Office ” have the effect of a restrictive covenant and prevent the use of the premises by the tenant and his sublessees for any other purpose.

The general rule for construing restrictive covenants or conditions contained in a lease is to so construe them as to carry out the intent of the parties. The intent of the parties must be ascertained from an examination of the whole lease, and not from the particular clause alone. When the lease is examined as a whole, it seems reasonably clear that the words in question were used to express the intended purpose of the lessee in regard to the use of the premises and not as a restriction upon the use of the premises to the one purpose stated. The premises consisted of a store and cellar. The lessee was given the right to sublet the premises without the consent of the owner. The lease provided: “ That the Tenant shall not occupy, or permit or suffer the same to be occupied for any business or purpose deemed disreputable or extra-hazardous on account of fire * * * nor use the demised premises or any part thereof, nor suffer or permit their use for any business or purpose which would cause an increase in the rate of fire insurance on said building, and the Tenant agrees to pay on demand any such increase.” The nature of the premises — a store and cellar — the fact that the premises could be sublet, and the above quoted provisions of the lease, all indicate that the words in question were not intended by the parties to constitute a restriction upon the use of the premises by the lessee or his sublessees. (Brugman v. Noyes, 6 Wis. 1; Barnett v. Clark, 225 Mass. 185.)

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

The first question certified is answered “ No.” The second question is answered “ Yes.”

Cardozo, Ch. J., Pound, Crane, Lehman, Kellogg and O’Brien, JJ., concur.

Ordered accordingly.


author: Cardozo, Ch. J.

text:
    Florida Gaboury, as Ancillary Administrator of the Estate of Aime Gaboury, Deceased, Respondent, v. Central Vermont Railway Company, Appellant.

      (Argued January 8, 1929;
    decided February 13, 1929.)

      Paxton Blair and Charles G. Fryer for appellant.
    After the appointment of receivers, the defendant was no longer doing business in the State of New York. (St. Clair v. Cox, 106 U. S. 350; People's Tobacco Co. v. American Tobacco Co., 246 U. S. 79; Continental Wall Paper Co. v. Voight & Sons Co., 106 Fed. Rep. 550; Golden, Belknap & Swartz v. Connersville Wheel Co., 252 Fed. Rep. 903; Ervin v. Oregon Steam Navigation Co., 22 Hun, 598; Eureka Mercantile Co. v. California Ins. Co., 130 Cal. 153; Dickey v. Dayton Globe Iron Works, 19 Ohio N. P. [N. S.] 492; Metz v. Buffalo, Corry & Pittsburg R. Co., 58 N. Y. 61; Eckels v. Farley, 131 Ill. App. 557; Huguenot Nat. Bank v. Studwell, 74 N. Y. 621.) The service of the summons was void because the director served lost his power to represent the corporation upon the receivership. (City of Rochester v. Bronson, 41 How. Pr. 78; Kain v. Smith, 80 N. Y. 458; Grasselli Chemical Co. v. Ætna Explosives Co., 252 Fed. Rep. 456; Matter of Allen-Foster-Willett Co., 227 Mass. 551; Matter of Hudson River Electric Power Co., 173 Fed. Rep. 934; Barker v. Southern Building & Loan Assn., 181 Fed. Rep. 636.)

      Walter A. Fullerton and Edward W. Barrett for respondent.
    The appointment of a receiver does not work a dissolution of the corporation and, except as to its authority over its property, the corporation retains its corporate functions and is clothed with its franchises. (Decker v. Gardner, 124 N. Y. 334; Peirce v. Van Dusen, 78 Fed. Rep. 693; Fidelity Ins., etc., Co. v. Norfolk Co., 114 Fed. Rep. 389; 127 Fed. Rep. 662; Sigua Iron Co. v. Brown, 171 N. Y. 488; Woodworth v. Brooklyn Elevated R. R. Co., 29 App. Div. 1; City of New York v. Illinois Surety Co., 180 App. Div. 513.) To hold that this defendant was not doing business in this State at the time of the commencement of the action would be highly technical and would be contrary to the spirit of the Federal Employers’ Liability Act, section 6, and section 47 of the General Corporation Law of New York. (Jacobs v. Blair, 157 App. Div. 601.)
   Cardozo, Ch. J.

Aime Gaboury, a resident of Vermont, lost his life in that State in November, 1927, while employed as a trainman by the defendant, Central Vermont Railway Company, a Vermont corporation. His father, Florida Gaboury, also a resident of Vermont, was appointed ancillary administrator of his estate by the Surrogate’s Court of Clinton county, New York. In an action to recover damages for injuries to dependent next of kin, the summons was served on a director residing in this State. The question is whether jurisdiction was acquired.

At Rouses Point, N. Y., there is a terminal yard with equipment, the property of the Central Vermont Railway Company. There is a track, a fraction of a mile long, connecting the terminal with the line of railroad in Vermont. At the city of New York there is a pier leased by the defendant for the use of its steamships sailing between New York and New London, and thence to Portland, Maine. There is also a freight office and an agency for the sale of tickets. The business is wholly interstate. Neither the vessels nor the trains carry passengers or property between places in New York.

The accident occurred near Williston, Vermont, on November 24, 1927. On December 12, 1927, a decree was made by the United States District Court for the District of Vermont whereby receivers were appointed to run the defendant’s railroad and conduct its business generally, and whereby the defendant, its officers, agents and directors were restrained from interfering with the possession of the receivers or the discharge of their official duties. A copy of the decree was filed in the Northern District of New York in accordance with the statute (U. S. Code, title 28, § 117; Judicial Code, § 56). At the time of the service of the summons on March 6, 1928, the business formerly the defendant’s was run by the receivers.

A foreign corporation, to be subject to the service of process in New York, must have so acted as to have subjected itself to the jurisdiction of the State. It does so act when at the time of service it is doing business within our borders under the protection of our laws. Even then, there are nice distinctions as to the extent of its submission when the cause of action is unrelated to the business here transacted (Penn. Fire Ins. Co. v. Gold Issue Mining Co., 243 U. S. 93; Bagdon v. Phila. & R. C. & I. Co., 217 N. Y. 432; distinguishing Old Wayne M. L. Assn. v. McDonough, 204 U. S. 8, and Simon v. Southern Ry. Co., 236 U. S. 115; Tauza v. Susquehanna Coal Co., 220 N. Y. 259; Reynolds v. Miss., K. & T. Ry. Co., 228 Mass. 584; and cf. Barrow S. S. Co. v. Kane, 170 U. S. 100; Phila. & Reading Ry. Co. v. McKibbin, 243 U. S. 264, 268; Mitchell Furniture Co. v. Selden Breck Co., 257 U. S. 213, 215; Davis v. Farmers Co-op. Eq. Co., 262 U. S. 312, 317; Atchison, etc., Ry. Co. v. Wells, 265 U. S. 101). It does not so act when at the time of service it is no longer exercising its corporate powers within the State, or has withdrawn to its domicile. There may be exceptions even to this if the cause of action is so related to business previously done as to make it unjust or unreasonable to counteract the earlier submission by non-user or withdrawal (Mut. Reserve F. L. Assn. v. Phelps, 190 U. S. 147; Woodward v. Mutual Reserve L. Ins. Co., 178 N. Y. 485; Mutual Reserve L. Ins. Co. v. Birch, 200 U. S. 612, affg. 181 N. Y. 583; Hunter v. Mutual Reserve L. Ins. Co., 218 U. S. 573, affg. 184 N. Y. 136; Chipman, Ltd., v. Jeffery Co., 251 U. S. 373). Broadly speaking, we may say, however, that, apart from exceptional conditions, submission to the jurisdiction is dependent upon presence within the State, and presence within the State imports the use of corporate power by corporate representatives. The service of this summons must answer to that test.

At the time of the service, the defendant, though not dissolved, was not acting as a corporation within the limits of this State. The director who received the summons did not represent it in this State in any of its corporate functions, nor was he here in that behalf (Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U. S. 516; Conley v. Mathieson Alkali Works, 190 U. S. 406; Goldey v. Morning News, 156 U. S. 518; Bagdon v. Phila. & R. C. &I. Co., supra, at p. 438). On the contrary, an order had been made whereby he was forbidden to interfere with the receivers who had supplanted him and his associates in the transaction of its business. The possession and control of the receivers constituted * * * an ouster of corporate management and control, with the accompanying advantages and privileges ” (U. S. v. Whitridge, 231 U. S. 144, 149). The director was no longer an embodiment or symbol of the corporate personality, any more than he would have been if shorn of his title as well as of his power (Missouri Pac. R. R. Co. v. Ault, 256 U. S. 554, 559).

After December 12,1927, the receivers, not the corporation, were liable for any wrong thereafter done in the transaction of the business confided to their care (Metz v. Buffalo, etc., R. R. Co., 58 N. Y. 61; Kain v. Smith, 80 N. Y. 458, 469). This in itself must show that they were transacting it as principals, and not in any true sense as agents for the company (Memphis, etc., R. Co. v. Hoechner, 67 Fed. Rep. 456). From that time on there may or may not have been a user of the corporate franchise at the domicile in Vermont, where meetings of the directors may still have been permissible. There was none in New York. Here the situation was the same as if the company had withdrawn from the State or transferred the business to another. We are not required to consider whether even then a director might have authority to represent the corporation in an action by a resident growing out of business already done under the protection of our laws. At least his authority had ended in respect of a cause of action in favor of a non-resident having its origin in business transacted far away.

The conclusion thus reached makes it needless to decide whether within the doctrine of Davis v. Farmers Co-operative Equity Co. (262 U. S. 312), an unreasonable burden upon interstate commerce would result if service of process were sustained in these conditions.

The order of the Appellate Division and that of the Special Term should be reversed and the motion granted, with costs in all courts, and the question certified answered “ No.”

Pound, Crane, Lehman, Kellogg, O’Brien and Hubbs, JJ., concur.

Orders reversed, etc.


author: Per Curiam.

text:
    The People of the State of New York ex rel. William Cecere, Appellant, v. Edgar S. Jennings, as Warden of the State Prison at Auburn, et al., Respondents.
    (Argued January 7, 1929;
    decided February 13, 1929.)

      Frank S. Coburn for appellant.

      Hamilton Ward, Attorney-General (Bernard A. Katz of counsel), for respondent.
   Per Curiam.

Appellant was convicted on July 6, 1917, of the crime of robbery, and sentenced to imprisonment for a minimum term of five years and a maximum of twenty. On December 8, 1919, the term was commuted by the Governor to a minimum of two years, five months and nine days, and the same maximum as before. The commutation was upon the condition that if the prisoner should be thereafter convicted of any felony committed between the date of his discharge and the date of the expiration of the full time thereby commuted, he should be deemed an escaped convict in respect of the commuted term, and in addition to any penalty imposed for the new felony, should be compelled to serve the portion of the commuted term remaining unserved without deduction or commutation for good behavior.

The Governor’s order was not effective in and of itself to require that the appellant be released from custody. The sentence was still an indeterminate one, subject to the action of the Board of Parole for State Prisons, the only change being a reduction of the minimum (People ex rel. Atkins v. Jennings, 248 N. Y. 46, 49, 50). Following that reduction, the Board made an order on December 16, 1919, that he be released upon parole. He went forth from prison walls, but remained even then, until the expiration of the maximum term, in the legal custody and under the control of the warden of the prison (Prison Law, § 214; L. 1909, ch. 47; Consol. Laws, ch. 43; cf. People ex rel. Newton v. Twombly, 228 N. Y. 33). He failed to comply with the conditions upon which this privilege depended. In January, 1921, he was convicted of another felony, grand larceny in the second degree, and for this new offense was sentenced to imprisonment for a term of one year, the latter term not to begin until the expiration of all the terms of imprisonment to which he had been already sentenced (Penal Law, § 2190; People v. Ingber, 248 N. Y. 302, 304; People ex rel. Newton v. Twombly, supra). As a consequence of this new conviction, he forfeited the commutation granted by the Governor and the benefit of his parole. Returned to prison, he made a demand upon the warden in December, 1927, after having remained a prisoner for an additional period of nearly seven years, that his name be certified to the Governor as eligible for parole (Prison Law, L. 1909, ch. 47, §§ 233, 242). The demand having been refused, a petition for a mandamus followed.

We find it unnecessary to determine whether the Board of Parole might be ordered by mandamus to consider the appellant’s case if consideration were to be refused on the ground of want of power. The appellant is little helped though jurisdiction be assumed. Parole is not a right, but a privilege, to be granted or withheld as discretion may impel. The appellant has not made demand upon the Board that it hear his application and exercise its judgment. The Board has never refused to hear him, and has never had his case before it. Not impossibly if it were to give a hearing, there would be a denial on the merits. The Board is not even a party to this proceeding. All that the appellant has done is to make an unnecessary demand upon the warden of the prison to place his name upon a list. The demand is unnecessary, for the fist to be transmitted by the warden to the Governor (Prison Law, § 233) has relation to certain statutory deductions to be allowed for good behavior, which the appellant does not need if he is eligible for parole at all. The petition for a mandamus directed to the warden was properly refused. There is nothing else before us.

To avoid misapprehension, we call attention to the fact that any prisoner sentenced on or after July 1, 1928, will be subject to the amended Prison Law of that year, which expressly withholds from the Board the power to grant a further parole to a prisoner who while at large upon parole has been guilty of a second felony (Prison Law, § 219, as amended by L. 1928, ch. 485). Prisoners sentenced before that time are subject to the earlier law (L. 1928, ch. 485, § 223). What their rights under that law are will be determined when the need arises.

The order should be affirmed with costs.

Cardozo, Ch. J., Pound, Crane, Lehman, Kellogg and O’Brien, JJ., concur; Hubbs, J., not sitting.

Order affirmed.