text:
    The People of the State of New York, Respondent, v. Howard B. Reese, Appellant.

      (Submitted November 23, 1931;
    decided January 5, 1932.)

      Caesar B. F. Barra and Ralph J. Barra for appellant.
    The trial court erred in holding that the hearing or the information was not a criminal proceeding supplemental to the original criminal action upon the indictment filed against the defendant. (People v. Gowasky, 244 N. Y. 451; People v. Rosen, 208 N. Y. 169; People v. Sickles, 156 N. Y. 541; People v. Raymond, 96 N. Y. 38; Johnson v. People, 55 N. Y. 512; People v. Brennan, 229 App. Div. 378; People v. Schaller, 224 App. Div. 3; People v. Rocco, 229 App. Div. 847.) The trial court erred in holding that the defendant was not entitled to any peremptory challenges. (People v. Schaller, 224 App. Div. 3; People v. Youngs, 1 Caines, 37; People v. Rosen, 208 N. Y. 169; People ex rel. Bretton v. Schleth, 68 Misc. Rep. 307; Penal Law, §§ 2188, 2189; Graham v. West Virginia, 224 U. S. 616; McDonald v. Massachusetts, 180 U. S. 311; Phelps v. People, 72 N. Y. 334; State v. Thomas, 2 McCord, 527; People v. Sickles, 156 N. Y. 541.) The trial court erred in admitting in evidence the fingerprint records of the defendant taken in New York as violative of defendant’s constitutional right not to be compelled to be a witness against himself. (People v. Sallow, 100 Misc. Rep. 447; 3 Wigmore on Evidence, § 2263; Brown v. Walker, 161 U. S. 591; People v. Gardner, 144 N. Y. 119; People v. Van Wormer, 175 N. Y. 188; Counselman v. Hitchcock, 142 U. S. 547.) The trial court erred in admitting in evidence the fingerprint records of the defendant taken in and sent from other States. (Civil Rights Law, § 12; Code Crim. Pro. § 8; People v.
      Bromwich, 200 N. Y. 385.) The trial court erred in charging the jury that the identity of the defendant under the information filed must not be proven beyond a reasonable doubt and in refusing to charge that it must be proven beyond a reasonable doubt. (People v. Brennan, 229 App. Div. 378; People v. Levalie, 6 App. Div. 230; People v. Taylor, 92 App. Div. 29.)

      Thomas C. T. Crain, District Attorney (Felix C. Benvenga and A. A. De Vito of counsel), for respondent.
    The defendant was not entitled to peremptory challenges. (People v. Schaller, 224 App. Div. 3; People v. Hughes, 137 N. Y. 29; People v. Bodine, 1 Den. 381; People v. McQuade, 110 N. Y. 284; Waggoner v. Dodson, 68 S. W. Rep. 813; Rex v. Okey, 1 Lev. 61; Rex v. Radcliffe, 1 W. Bl. 3; Johnson’s Case, Foster’s Crown Law, 46; Brooks v. Commonwealth, 41 Va. 845; People v. Youngs, 1 Caines, 37; Freeman v. People, 4 Den. 9; People v. Lawson, 178 Cal. 722.) The admission of the fingerprint records did not violate the defendant’s right of confrontation. (People v. Dow, 64 Mich. 717; Heike v. United States, 192 Fed. Rep. 83; 227 U. S. 131; Commonwealth v. Slavski, 245 Mass. 405; Commonwealth v. Dorr, 216 Mass. 314; State v. Torello, 103 Conn. 511; Stacy v. State, 292 Pac. Rep. 885; People v. Sallow, 100 Misc. Rep. 447; State v. Bolen, 254 Pac. Rep. 445; State v. Guidry, 169 La. 215; State v. Bullis, 196 Iowa, 480; State v. Payne, 223 Mo. 112; State v. Austin, 113 Mo. 538.) The admission of the fingerprint records did not violate the defendant’s privilege against self-incrimination. (Moon v. State, 22 Ariz. 418; State v. Cerciello, 86 N. J. L. 309; People v. Sallow, 100 Misc. Rep. 447; People v. Strallo, 191 N. Y. 42; People v. Ales, 247 N. Y. 351; People v. Defore, 242 N. Y. 13; People v. Hunter, 139 Misc. Rep. 270; Holt v. United States, 218 U. S. 245; People v. Gardner, 144 N. Y. 119; People v. Van Wormer, 175 N. Y. 186; McGarry v. State, 82 Tex. Cr. Rep. 597; State v. Griffin, 129 S. C. 200.) Section 482-b of the Code of Criminal Procedure warrants the admission of fingerprint records of other jurisdictions. (Smith v. People, 47 N. Y. 330; People ex rel. Doscher v. Sisson, 228 N. Y. 387; Mullaly v. Mayor, 3 Hun, 661; 62 N. Y. 636; People v. Gowasky, 244 N. Y. 451; People v. Bergman, 176 N. Y. 318; Jackson v. King, 5 Cow. 237; Nolan v. Nolan, 35 App. Div. 337; Evanston v. Gunn, 99 U. S. 600; White v. United States, 164 U. S. 100; Richards v. Robins, 178 App. Div. 535; Russell v. Brooklyn Eagle, 168 App. Div. 121; Saranac L. & T. Co. v. Roberts, 208 N. Y. 288; People v. Gray, 25 Wend. 465; State v. Bullis, 196 Iowa, 480; State v. Dowden, 137 Iowa, 573; State v. Roberts, 275 Pac. Rep. 60.) A proceeding under section 1943 of the Penal Law is collateral to the original trial and as the averment of prior convictions merely affects the question of punishment, and not the question of guilt or innocence, the doctrine of reasonable doubt is wholly inapplicable. (People v. Schaller, 224 App. Div. 31; People v. Rocco, 229 App. Div. 847; Brunson v. State, 4 Okla. Cr. Rep. 467; State v. Jackson, 142 La. 540; Commonwealth v. Ford, 111 Mass. 394; State v. Smith, 102 Iowa, 656; Jacobs v. United States, 24 Fed. Rep. [2d] 891; State v. West, 175 Minn. 516; State v. Bizer, 113 Kan. 731; Files v. State, 182 Pac. Rep. 911; State v. Court, 225 Mo. 609; State v. Lashus, 79 Me. 504; Kane v. Commonwealth, 109 Penn. St. 541; Colbert v. State, 125 Wis. 423; Hatcher v. Rocheleau, 18 N. Y. 86; People v. Snyder, 41 N. Y. 397; People ex rel. Haines v. Smith, 45 N. Y. 772; Layton v. Kraft, 111 App. Div. 842; Bayha v. Montford, 59 Kan. 445; State v. Smith, 129 Iowa, 709.)
   Cardozo, Ch. J.

Upon a plea of guilty the defendant was convicted in the Court of General Sessions, county of New York, of attempted forgery in the third degree. Thereafter, before sentence was imposed, the District Attorney filed an information, in accordance with Penal Law, section 1943, accusing him of having been convicted of three crimes which would have been felonies if committed in New York. He was accused of having been convicted of forgery under the name of E. F. Lathrop in Spokane county, Washington, of having been convicted of the crime of false pretenses under the name of E. E. Lewiston in Larimer county, Colorado, and of having been convicted of forgery under the name of Ea:i Freeman Lathrop in Multnomah county, Oregon.

Arraigned in response to this information, and cautioned as to his rights, the defendant stood mute. A jury, which was thereupon impaneled to determine his identity, found him to be the same person previously convicted. He was sentenced as a fourth offender to imprisonment for life.

(1) The defendant makes the claim that the evidence offered by the People to establish his identity is insufficient and incompetent.

The form of proof was the same as to each of the three felonies. The conviction of forgery in Oregon will illustrate them all. A police officer who had taken the defendant’s fingerprints after bis conviction in the Court of General Sessions in this State, produced the prints then made. There was then produced an exemplified copy of an indictment of Earl Freeman Lathrop for forgery, and of the conviction and sentence thereunder in a court of competent jurisdiction in Multnomah county, Oregon, with the warrant of commitment. Next there was received a certificate signed or purporting to be signed by the custodian of fingerprint records in the Oregon State Penitentiary, certifying that the records in his custody show “ a previous conviction of a person whose fingerprints are identical with those hereto attached,” adding a description of the crime and the sentence. Two sets of fingerprints were attached: one a set of fingerprints displayed upon a sheet of paper with the printed heading of the Bureau of Criminal Identification of the city of New York; the other a set of prints purporting to have been made at the State Penitentiary in Oregon. On the production of this certificate, a member of the police force of the city of New York, who qualified as an expert, testified that the defendant’s fingerprints taken in this State and the fingerprints attached to the certificate from Oregon were those of the same person.

Code Criminal Procedure, section 482-b, enacted in 1927, provides as follows: “The report of a person charged with the custody of fingerprint records of persons convicted of crime, who shall certify in writing that the records in his custody show certain previous convictions of persons whose fingerprints are identical with those of a defendant shall be presumptive evidence of the fact of such previous convictions of such defendant.”

The defendant argues, and we think correctly, that this statute does not apply to a certificate by a custodian of fingerprints in a State other than our own. No doubt a foreign custodian, annexing fingerprints to his certificate, would be competent to certify without the aid of any statute that they were prints or copies of prints kept upon his files in conformity with law and to state, after comparison with the warrant of commitment, the name of the prisoner whose prints were so recorded (3 Wigmore on Evidence, § 1677, p. 552). There would be a presumption in such circumstances that the prisoner fingerprinted was the prisoner committed, the presumption being merely an instance of the more general presumption of official regularity (3 Wigmore on Evidence, § 1635, p. 401; § 1636, pp. 402, 403; Chesapeake & Delaware Canal Co. v. United States, 240 Fed. Rep. 903, 907; Gaines v. Relf, 12 How. [U. S.] 472, 570; Evanston v. Gunn, 99 U. S. 660; Commonwealth v. Slavski, 245 Mass. 405, 415, and cases there cited). People v. Bromwich (200 N. Y. 385) is not a decision to the contrary. It rests upon the ground that the so-called rule of confrontation forbids the introduction of a certificate by a foreign officer that a record does not exist, a certificate wholly negative (cf. 3 Wigmore on Evidence, § 1678, p. 560). The decision goes to an extreme limit of strictness, but it does not touch the admissibility of a certificate, affirmative in tenor, annexing copies of the records and attesting their correctness. The rule of confrontation which in this State is purely statutory (Civil Rights Law [Cons. Laws, ch. 6], § 12; Code Crim. Pro. § 8), has never been deemed to require the exclusion of certificates or records made by a public officer in the course of his official duty (3 Wigmore on Evidence, § 1398, p. 109; Commonwealth v. Slavski, 245 Mass. 405, 414, 415, 417; Heike v. United States, 192 Fed. Rep. 83). If the certificate under the Code were merely one attesting the identity of records in the custody of the certifying officer, there would be little difficulty in applying the Code provisions to officers in other States. Upon proof that a person bearing the same name (5 Wigmore on Evidence, § 2529, p. 531; Rex v. Levy, 8 Cox Cr. C. 73; Bayha, Barber & List v. Mumford, 58 Kan. 445; Ayers v. Ratshesky, 213 Mass. 589) had been convicted by a court of competent jurisdiction, a certificate, so framed, would be admissible in evidence, if properly authenticated. Identity of name is not always sufficient in a criminal prosecution to show identity of person (Ayers v. Ratshesky, supra), but it may be accepted as sufficient if fortified by circumstances, as, for example, by reasonable coincidence of time between the conviction and the prints, and by the duty of the officer, presumably discharged, to ascertain that the person fingerprinted is the one described in the commitment. The certificate being received, comparison of the prints annexed with the prints of the defendant on file in this State, could then be made in open court by a witness qualified to testify (People v. Roach, 215 N. Y. 592, 604).

The difficulty in this case has its origin chiefly in the fact that Section 482-b of the Criminal Code does not limit the custodian to a certificate as to the genuineness of the prints and a statement from the warrant of commitment of the name of the prisoner whose prints have been recorded. He is to certify to much besides. .He is to certify to his opinion that the prints which he attaches to his certificate are identical with those of the defendant, and the opinion is to be taken as presumptively correct. Plainly a custodian of foreign records is in no position to make the comparison or to venture the opinion which the statute has in view. The data necessary to the formation of a judgment are not in his possession. If the certificate sanctioned by the Code is confined to fingerprints taken in this State, the statute becomes workable. The domestic custodian has upon the files of his bureau the prints of defendants convicted in our courts, prints presumably taken in conformity with law (cf. Code Crim. Pro. §§ 940-949, as amended by Laws of 1928, ch. 875). He is thus in a position to make the comparison permitted by the statute and to express an opinion that the prints are the same. If the defendant challenges the opinion, the maker of the certificate is here, and can be produced and cross-examined. None of these tests is available in the case of a custodian absent from the State. Such a custodian when he expresses an opinion that two sets of prints are those of the defendant is making a comparison without knowledge of one of the two things which he is expected to compare. He knows something about the prints of a convict imprisoned in his State. He knows nothing about any others except that a group of prints, bearing a heading which indicates that they have been transmitted to him by the Police Department of New York, but not otherwise authenticated, are in his hands for comparison. He does not know when or where or by whom they were made or whether they are genuine or fictitious. • How is it possible for him to certify in the language of the statute that the records in his custody show certain previous convictions of persons whose fingerprints are identical with those of a, defendant ” ?

The argument may be made that so much of the foreign certificate as expresses a comparison between the foreign prints and others may be rejected as surplusage, and the certificate accepted as identifying the foreign ones only. In that view the effective comparison would be the one made upon the witness stand. At this point, however, another difficulty confronts us. The foreign certificate is not so authenticated as to be evidence of anything. All that is given us is a document signed by a person who describes himself as the custodian of the fingerprint records of persons convicted of crime. Neither the official character of the , signer nor the genuineness of his seal and signature nor the regularity of his certificate is vouched for or attested by any one. We take judicial notice of the authority, and at times even of the signatures, of public officers acting in this State in accordance with our laws. The boundaries of judicial notice are narrower when the officer who certifies is acting under the laws of another State or country (3 Wigmore on Evidence, § 1679, p. 563). We assume that a custodian of a record has authority, by implication of his office, to certify a copy (3 Wigmore on Evidence, § 1677, p. 552; United States v. Percheman, 7 Pet. [U. S.] 51, 86). Whether there is such a custodian is, however, the pivotal fact upon which implication is dependent (3 Wigmore on Evidence, § 1677, p. 553). There is nothing in this record to inform us whether any such office as that of custodian of fingerprints exists in the State where the certificate was given. There is nothing to inform us whether the person whose name is affixed to the certificate is the incumbent of such an office. There is nothing to inform us (if he is the incumbent) whether his signature is genuine. Authentication is not merely defective. It is lacking altogether (3 Wigmore on Evidence, § 1679, pp. 561, 563; cf. United States Code, tit. 28, § 688; Civ. Prac. Act, § 344).

Other objections to the judgment are made by the defendant, and should be considered at this time, for they are certain to recur.

(2) The defendant assigns as error a ruling of the trial court that the case for the People did not require proof beyond a reasonable doubt, but would be sufficiently made out by a preponderance of evidence, and also a ruling that in determining the defendant’s identity the jury might properly consider the defendant’s failure to take the stand as a circumstance against him.

The procedure upon an inquiry such as the one before us is regulated by section 1943 of the Penal Law as follows: “If at any time, either after sentence or conviction, it shall appear that a person convicted of a felony has previously been convicted of crimes as set forth either in section nineteen hundred and forty-one or nineteen hundred and forty-two, it shall be the duty of the district attorney of the county in which such conviction was had to file an information accusing the said person of such previous convictions. Whereupon, the court in which such conviction was had shall cause the said person, whether confined in prison or otherwise, to be brought before it and shall inform him of the allegations contained in such information and of his right to be tried as to the truth thereof according to law, and shall require such offender to say whether he is the same person as charged in such information or not. If he says he is not the same person or refuses to answer, or remains silent, his plea, or the fact of his silence, shall be entered of record and a jury shall be empanelled to inquire whether the offender is the same person mentioned in the' several records as set forth in such information. If the jury finds that he is the same person or if he acknowledges or confesses in open court, after being duly cautioned as to his rights, that he is the same person, the court shall sentence him to the punishment prescribed in said sections nineteen hundred and forty-one and nineteen hundred and forty-two, as the case may be, and shall vacate the previous sentence, deducting from the new sentence all time actually served on the sentence so vacated. Whenever it shall become known to any warden or prison, probation, parole, or police officer or other peace officer that any person charged with or convicted of a felony has been previously convicted within the meaning of said sections nineteen hundred and forty-one or nineteen hundred and forty-two, it shall become his duty forthwith to report the facts to the district attorney of the county.”

To justify a verdict that the defendant charged in the information is the person previously convicted, the jury should be satisfied of his identity beyond a reasonable doubt.

We are not required to hold that the persuasiveness of proof essential at such a time is governed by section 389 of the Code of Criminal Procedure, whereby a defendant in a criminal action is presumed to be innocent, until the contrary be proved; and in case of reasonable doubt whether his guilt is satisfactorily shown, he is entitled to an acquittal.” That section is part of title VII of part IV of the Criminal Code, which has to do with the trial of indictments. An inquiry as to identity after guilt has been established is not the trial of an indictment (People v. Gowasky, 244 N. Y. 451). To say this is not equivalent, however, to solving the whole problem. The necessity of proof beyond a reasonable doubt is not limited to cases within the letter of section 389. If it were, there would be no such requirement in prosecutions begun by an information, and triable, as many misdemeanors are triable, by a court without a jury. The necessity for a higher degree of persuasiveness than a mere preponderance of evidence exists at common law in criminal cases generally (5 Wigmore on Evidence, § 2497), and would supply the governing rule even though section 389 of the Criminal Code had never been enacted. Unquestionably this inquiry is a criminal case, and not a civil one. Unquestionably it was so conceived of by the lawmakers, for by the terms of the statute it is made the duty of the District Attorney to file an information accusing ” the defendant of the previous convictions. The section from beginning to end speaks the language of the criminal law. Not only is the proceeding punitive in form, it is punitive also in effect. The answer made to the accusation ” by the verdict of the jury may mean that the defendant will be a free man after a brief term of confinement, or may mean, on the other hand, that he will be a prisoner for fife. If the previous convictions had been charged in an indictment, there is no doubt that they must have been proved beyond a reasonable doubt, for they would then have been elements affecting the grade of the offense (People v. Gowasky, supra; People v. Sickles, 156 N. Y. 541). We find no token of a purpose to abate the measure of the proof upon an inquiry as to the same elements after guilt has been adjudged. The genius of our criminal law is violated when punishment is enhanced in the face of a reasonable doubt as to the facts leading to enhancement. If that genius is to be expelled, there should be a clear announcement of the purpose to drive it forth from the dwelling it has inhabited so long.

There are conflicting decisions on the subject in the courts below. The Appellate Division for the first department has held in a case decided without opinion that a preponderance of evidence suffices (People v. Rocco, 229 App. Div. 847); the Appellate Division for the fourth department in an opinion by Sears, P. J., has held the opposite (People v. Brennan, 229 App. Div. 378).

Error, we think, there also was in the instructions to the jury that upon the trial of an information under Penal Law, section 1943, the failure of the defendant to take the stand may be considered by the jury to be a circumstance against him.

We have no thought in thus holding to intimate a belief that a statute permitting adverse comment in such circumstances would impair the constitutional privilege against self-incrimination (cf. Hiscock, Criminal Law and Procedure in New York, 26 Columbia Law Rev. 259, 260). In our view of the case, no such question is before us. We deal with the question solely in the aspect of statutory construction, and so viewing it, we are satisfied that the comment is forbidden. By the express terms of section 1943 of the Penal Law, the defendant against whom the information is presented must be “ cautioned as to bis rights.” This can only mean that he may speak or be silent as he prefers, and that silence, if preferred, will not tend to his prejudice. “ The defendant in all cases may testify as a witness in his own behalf, but his neglect or refusal to testify does not create any presumption against him ” (Code Crim. Pro. § 393). It is far too narrow a reading of this section to limit it by force of its position in title VII, part IV, of the Code to a privilege arising upon the trial of an “indictment” (cf. Code Crim. Pro. § 2). If that were its full meaning, a failure to take the stand might give rise to a presumption against a defendant whenever an information was the basis of a charge against him. Even the privilege to testify, which is conferred by the same section, would be subject in that view to a like restriction. The common understanding of the bench and bar is a sufficient answer to an attempt so to circumscribe the field of these procedural reforms. Irrespective of its place in the divisions of the Code, section 393 applies by its very terms, “ in all cases,” i. e., in all criminal cases, without reference to the manner in which the prosecution was begun. We have seen that an inquiry to ascertain the previous convictions of one found guilty of a felony is to be treated as a criminal case. The whole structure of section 1943 of the Penal Law shows that this was its dominant quality in the thought of the framers of the statute. If so it is to be viewed, the incidents of a criminal case must be held to go along with it, including both the privilege to testify and the exemption from adverse presumption in the event of unwillingness to testify. If the Legislature desires to abrogate that exemption, it must speak with a clearer voice.

(3) The defendant assigns as error a ruling of the trial court that there were to be no peremptory challenges, and that any challenges to be allowed must be made for cause. .

The provisions of the Criminal Code regulating peremptory challenges must be viewed upon the background furnished by the history of the criminal law. For centuries the privilege of such a challenge has been denied whenever the proceeding, though triable by a jury, has been collateral to the general issue of the defendant’s guilt or innocence (Rex v. Okey, [1674] 1 Lev. 61; Johnson’s Case, [1728] Foster’s Crown Law, 46; Rex v. Radcliffe, 1 W. Bl. 3; Brooks v. Commonwealth, 41 Va. 845; People v. Youngs, 1 Caines, 37; Freeman v. People, 4 Den. 9; People v. Schaller, 224 App. Div. 3). The present inquiry, though a criminal proceeding rather than a civil one, is collateral or supplementary within the meaning of the ancient rule (People v. Gowasky, supra).

If the sections as to peremptory challenges are read "with literal strictness, they do not touch this case. They have been placed in the part and title of the Code governing proceedings after indictment and before trial (Code Grim. Pro. § 2; Code Crim. Pro., part IV, tit. VI, ch. Ill, §§ 359, 370, 373). This position might not be controlling if an intention to extend the privilege to other criminal proceedings were otherwise revealed. It is significant, if not wholly decisive, where such evidence is lacking.

We are unable to discover in the statute an indication of a purpose to reverse the course of history, and clothe the defendant with a privilege so consistently denied.

The court did not err in its limitation of the right of challenge.

The judgment of the Appellate Division and that of the Court of General Sessions should be reversed and a new trial ordered.

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

Judgments reversed, etc.


source: Caselaw Access Project

author: Pound, J.

license: Public Domain

text:
    In the Matter of the Estate of Jane E. Suter, Deceased. Jane E. Strail, Appellant; Sarah J. Sprague, as Administratrix, Respondent.
    (Argued November 23, 1931;
    decided January 5, 1932.)

      Charles B. O’Connell for appellant.
    The withdrawal of the moneys from the joint bank account and the appropriation of the same to her own use by the decedent, in the manner established by the uncontroverted testimony, did not defeat the rights of survivorship therein of the appellant as surviving joint tenant. (Banking Law, § 198; Marrow v. Moskowitz, 255 N. Y. 219; Moskowitz v. Marrow, 251 N. Y. 380; Clary v. Fitzgerald, 155 App, Div. 659; 213 N. Y. 696.) During the lifetime of both, one joint tenant cannot lawfully withdraw from a joint bank account any part or the whole of a moiety and dispose of it as he may see fit, without the consent of his cotenant and without an agreement express or implied. (Marrow v. Moskowitz, 255 N. Y. 219; Schouler on Personal Property [5th ed.], 236; Clary v. Fitzgerald, 155 App. Div. 659; 213 N. Y. 696; Matter of Tilley, 169 App. Div. 240; 215 N. Y. 702; O’Connor v. Dunnigan, 158 App. Div. 334; 213 N. Y. 676; Matter of Klenk, 165 App. Div. 917; 214 N. Y. 715; Moskowitz v. Marrow, 251 N. Y. 380; Matter of Porianda, 256 N. Y. 423.)

      Jay A. Smith and Peter G. Smith for respondent.
    The decedent was within her rights in making the withdrawals. (Loker v. Edmans, 204 App. Div. 223; Moskowitz v. Marrow, 251 N. Y. 380; Matter of McKelway, 221 N. Y. 15.)
   Pound, J.

On October 16, 1924, the decedent Jane E. Suter had on deposit to her credit in the Security Trust Company of Rochester $2,142.96. She transferred this deposit to an account in the name of herself and Jane E. Strail, the claimant, with the words “ either or survivor may draw stamped on the bank book at the head of the account. Decedent drew from the account $469.65 on February 24, 1927, and $445.13 on February 18, 1928. She died February 19, 1928. Claimant has drawn the balance of the deposit and no question is raised as to her right to do so. She claims, however, a share in the amount of the withdrawals and the accumulations thereon, which the courts below have denied to her.

The presumption of joint tenancy arising out of the original deposit (Banking Law; Cons. Laws, ch. 2, § 198), rebuttable during the life of either joint owner, has not been affected by the evidence. Decedent and claimant became joint owners of the entire deposit. The incident of the right of survivorship is a characteristic of joint tenancy but a joint tenancy may be terminated or severed before such right accrues by the act of either joint tenant. A joint tenant, as an incident to his tenure, may always terminate the' joint tenancy by transfer or conveyance of his interest. (Attorney General v. Clark, 222 Mass. 291.) Decedent and claimant each had the right as a joint owner of the bank deposit to withdraw a moiety or less than a moiety for her own use and thus destroy the joint tenancy as to such withdrawals. Joint ownership of a bank deposit does not differ from any other joint ownership. Nothing in the Banking Law prevents one joint owner from destroying the joint ownership in the entire deposit to the extent of his withdrawals of no more than his equal share for his own use, although if the entire account had been withdrawn the result might have been otherwise. The cases seem clear on this point. (Matter of McKelway, 221 N. Y. 15; Moskowitz v. Marrow, 251 N. Y. 380; Marrow v. Moskowitz, 255 N. Y. 219; Matter of Porianda, 256 N. Y. 423; cf. Hanigan v. Wright, 233 App. Div. 82, 84; affd., 257 N. Y. 602.) Yet confusion continues as to the rules which apply.

The order should be affirmed, with costs.

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

Order affirmed.


author: O’Brien, J.

text:
    Christian Sautter, Jr., Respondent, v. John C. Fulmer et al., as Executors of and Trustees under the Will of Jacob Ange, Deceased, Appellants. W. Strong Cloher et al., as Executors of William H. Cloher, Deceased, Respondents, v. John C. Fulmer et al., as Executors of and Trustees under the Will of Jacob Ange, Deceased, Appellants. William I. Taber, Respondent, v. John C. Fulmer et al., as Executors of and Trustees under the Will of Jacob Ange, Deceased, Appellants. T. Harvey Ferris, Respondent, v. John C. Fulmer et al., as Executors of and Trustees under the Will of Jacob Ange, Deceased, Appellants. George W. Gammel, Respondent, v. John C. Fulmer et al., as Executors of and Trustees under the Will of Jacob Ange, Deceased, Appellants. First Bank and Trust Company of Utica, as Executor of John H. Siemers, Deceased, Respondent, v. John C. Fulmer et al., as Executors of and Trustees under the Will of Jacob Ange, Deceased, Appellants. Carrie B. Sherman, Respondent, v. John C. Fulmer et al., as Executors of and Trustees under the Will of Jacob Ange, Deceased, Appellants.

      (Argued November 24, 1931;
    decided January 5, 1932.)

      Frank H. Hiscock and Arthur J. Foley for appellants.
    There was no fiduciary relation between defendant Fulmer and the plaintiffs; therefore, no duty on the part of said defendant or the other defendants to disclose the negotiations between the purchasers and the defendants. (Carpenter v. Danforth, 52 Barb. 581; Terry v. Green, 185 App. Div. 517; Board of Commissioners v. Reynolds, 44 Ind. 509; Waller v. Hodge, 215 Ky. 705; Bawden v. Taylor, 254 Ill. 464; Seitz v. Frey, 188 N. W. Rep. 266; Stout v. Cunningham, 33 Ida. 464; White v. Texas Co., 202 Pac. Rep. 826.)

      Thayer Burgess and Sherrill Babcock for respondents.
    The defendant Fulmer occupied a fiduciary relationship toward the plaintiffs and was under a duty to disclose to them the negotiations between the purchasers and the defendants. (Stappenbeck v. Fulmer, 210 App. Div. 611; 223 App. Div. 810; 249 N. Y. 594; Falk v. Hoffman, 233 N. Y. 199; McManus v. Durant, 168 App. Div. 643; Von Au v. Magenheimer, 126 App. Div. 257; Farmers L. & T. Co. v. N. Y. & N. R. Co., 150 N. Y. 410; Wheeler v. Abeline Nat. Bank Building Co., 159 Fed. Rep. 391; Strong v. Repide, 213 U. S. 419.) The trial court properly excluded evidence as to value of any agreements of defendants to keep out of the newspaper business and to indemnify the corporation against suits. (Stappenbeck v. Fulmer, 210 App. Div. 611; 223 App. Div. 810; 249 N. Y. 594.)
   O’Brien, J.

The Utica Sunday Tribune Company had an authorized capital of $60,000 divided into six hundred shares. These seven plaintiffs together with one other stockholder owned a minority interest of two hundred and ninety-three shares. Defendants owned the majority interest consisting of three hundred and seven shares. All the capital stock was purchased by Erwin R. Davenport, Frank E. Gannett and Woodford J. Copeland. The complaint in each action alleges that defendant Fulmer, prior to the sale, dominated the management of the corporation, that, as the principal negotiator of the sale, he fraudulently represented to plaintiffs that an opportunity was present to sell the stock at $300 a share and that in rebanee upon that fraudulent representation they sold their holdings at that price, whereas defendant Fulmer sold his own stock and that of his majority associates for $1,098 a share. All the essential allegations^ the complaints were found as facts and the interlocutory judgments order that defendants account, in the ratio of each plaintiff’s holdings to the entire stock, for the property received by defendants from the proceeds of the sale of the entire stock. The judgments also direct a referee to take and state the accounts.

We have carefully considered all the evidence in the case and without reciting it in detail, we find ample support for the essential findings and hold that such findings against one occupying a fiduciary position sustain the judgments. (Falk v. Hoffman, 233 N. Y. 199; Meinhard v. Salmon, 249 N. Y. 458; Stappenbeck v. Fulmer, 223 App. Div. 810; affd., 249 N. Y. 594.)

The principal issue arises from the first question certified. We are asked to decide whether defendants are entitled to exclude from the sums, for which they are hable, the value of certain special contracts into which they entered with the purchasers at the time they sold their majority stock and subsequent to the time of the sale of the minority interest. Prior to the sale of the majority stock, Fulmer and his attorney by payment made with the attorney’s personal check from funds procured by a loan to the attorney which was secured by collateral supplied by Fulmer, purchased the two hundred and ninety-three shares of the minority stock for $87,900, or $300 per share, delivered it to the purchasers and received from them the sum of $87,900. Subsequently, on April 6, 1922, the purchasers in writing agreed with the majority stockholders to buy their three hundred and seven shares of the capital stock of said corporation for the sum of $337,100.” This purchase, standing by itself, would be at the rate of $1,098 per share. The agreement, however, recites that the consideration for the purchase at this price is the sellers’ covenants thereinbefore stated. Those covenants are as follows: The sale and delivery, without mention of price, of three hundred and seven shares of the capital stock, indemnification of the corporation from any libel suits growing out of any act committed by the corporation during the time that it was under Fulmer’s control, indemnification against claims not appearing on its books and records with two exceptions, indemnification from any additional assessment for income tax or franchise tax for any period ending prior to January 1, 1922, abstention for ten years from engaging in the newspaper business in this State, acceptance of the purchasers’ bonds in substitution for their note and a warranty as to the truth of the financial statements which accompanied the agreement. The facts are found that prior to the consummation of the sale the purchasers had offered defendants the sum of $280,000 for their controlling stock and the covenants later included within the contract of April 6, 1922; that at the same time Fulmer had placed a price on the controlling stock and such covenants of $350,000, but that the purchasers and the majority stockholders finally reached the figure of $425,000 for the whole plant, represented by all the stock. The finding is silent whether the proposed sale at $425,000 was to include the covenants, which were later incorporated in the agreement of April 6th, but the evidence of one of the purchasers is to the effect that they were not only buying the stock but were also exacting certain things from Mr. Fulmer. His testimony on that subject, however, is casual and parenthetical. Some warrant for a conclusion that Fulmer’s covenant to refrain from engaging in the newspaper business for ten years may be regarded as negligible in value, as far as he is concerned, might appear when it is contrasted with his statements to the plaintiffs that he was tired of the business and his health was worth more than the paper.

We may not hold, as matter of law, that these covenants are entirely devoid of value but they are so intermingled and confused with the sale of the stock at $1,098 a share that the two transactions cannot be severed. The value of the covenants is so vague and their connection with the selling price of the stock so indistinct that to. discover the point at which one begins and the other ends is impossible. Even if one could be disentangled from the other, no fairly accurate value could be assigned to the covenants. The main purpose of the agreement unquestionably was a sale of three hundred and seven shares of stock for $337,100. That is the price which the purchasers contracted to pay for that number of shares. When the consideration for the purchase at that price is stated to be the covenants set forth, any process by which some shadowy value might conceivably be attached to them would become too complicated and artificial to lead to any practical result. The tangle, by analogy, resembles confusion of goods. (Underhill v. Schenck, 238 N. Y. 7, 18; Hamilton Shoe Co. v. Wolf Bros., 240 U. S. 251, 262.) Assuming that the covenants possess some value, that value must be regarded as in the nature of a profit or an attempted profit. That defendant violated his fiduciary relations with his associates who trusted him has been found on sufficient evidence. His written assurance to the plaintiff Ferris that “ an offer has been made of $300 a share for the stock ” may lead to the proper inference that he clearly intimated that all stockholders were to be treated the same. Plaintiff Sautter’s testimony, when credited by the finders of fact, shows that defendant informed that plaintiff that the purchasers had offered to pay $300 a share “ for all of the stockholders, share and share alike.” Defendant saw to it that they were not treated alike. We must assume that he received or expected to receive some benefit growing out of his assent to the collateral covenants. Otherwise he would not have consented to them. His arrangements for the sale of his own stock were essentially different from those which he negotiated for his associates and were kept secret from them. Under such circumstances, even if the things which he exchanged for such benefit as accrued or as he expected to accrue to him are not entirely worthless, they are unavailable to diminish his obligations. (Murray v. Beard, 102 N. Y. 505.)

The judgment in each action should be affirmed, with costs, and the certified questions answered as follows: No. 1, “no;” No. 2, “yes;” No. 3, “yes;” No. 4, “ no.”

Carduzo, Ch. J., Pound, Crane, Lehman and Kellogg, JJ., concur; Hubbs, J., not sitting.

Judgments affirmed, etc.


author: Cardozo, Ch. J.

text:
    Frank E. Austin, Appellant, v. The City of New York, Respondent.

      (Argued November 24, 1931;
    decided January 5, 1932.)

      Joseph J. Schwartz and John M. Wilson for appellant.
    The difference between the prevailing rate and the amount received may be recovered under the statute. (Campbell v. City of New York, 127 Misc. Rep. 307; 128 Misc. Rep. 382; 220 App. Div. 834; Wright v. State, 223 N. Y. 44.) The courts below erred in holding that plaintiff’s occupation is not included within the statute. (Matter of Stryker, 158 N. Y. 526; Palmer v. Van Santvoord, 153 N. Y. 612.)

      Arthur J. W. Hilly, Corporation Counsel (J. Joseph Lilly, Henry J. Shields and George H. Cowie of counsel), for respondent.
    The plaintiff is not a laborer, workman or mechanic within the meaning of section 220 of the Labor Law. (Matter of Stryker, 73 Hun, 327; 158 N. Y. 526; Dair v. N. Y. & P. R. S. S. Co., 204 N. Y. 341; Dobson v. Bay Ridge Operating Co., 210 App. Div. 693; Wakefield v. Fargo, 90 N. Y. 213; People ex rel. Rodgers v. Coler, 166 N. Y. 1; Matter of Merritt, 180 N. Y. Supp. 877; Campbell v. City of New York, 244 N. Y. 317; Coler v. Corn Exchange Bank, 250 N. Y. 136.)
   Cardozo, Ch. J.

The plaintiff served the city of New York at times during the years 1926 to 1929 as a foreman of bridgemen and riveters. The uncontradicted evidence is that the prevailing rate of wages for bridge-men and riveters was $12 a day in the first half of 1926, and $14 a day thereafter. The uncontradicted evidence also is that the prevailing rate of wages for foremen was $3 a day additional. This additional wage the plaintiff never got.

Section 220 of the Labor Law (Cons. Laws, ch. 31) provides that each contract to which * * * a municipal corporation * * * is a party and which may involve the employment of laborers, workmen or mechanics shall contain a stipulation that no laborer, workman or mechanic * * * shall be permitted or required to work more than eight hours in any one calendar day,” except in cases of extraordinary emergency involving danger to life or property; and that the wages to be paid for a legal day’s work * * * to laborers, workmen or mechanics upon such public works * * ' * shall be not less than the prevailing rate for a day’s work in the same trade or occupation in the locality within the state ” where such public work is situated.

The question is whether the plaintiff is a laborer, workman or mechanic ” within the meaning of this statute. If he is, he has been underpaid, and the judgment which was rendered in his favor for a balance conceded to be due must be increased accordingly.

The plaintiff was a bridgeman and riveter, and a member of the Iron Workers’ Union. He did not cease to be a bridgeman or riveter, or to be employed in that trade, when assigned to act as foreman. He was one of a gang of workmen, though he was charged with special duties. He held the men to their job, and when necessary, jumped in and helped them.” He was exposed to nearly all the risks that cause the occupation of a bridge-man or a riveter to be attended with exceeding hazard. He did not take himself out of his calling by becoming an overseer too.

We think a man so employed must be held to be a workman if we take words in their plain popular meaning, as they should be taken here ” (Holmes, J., in United States v. Kirby Lumber Co., 284 U. S. 1, 3.) His duties, though they put him in a grade above his fellows, were so close akin to theirs, so predominantly physical in content and attendant risks, that he was still in the same genus, the broadly inclusive class of workmen,” though, perhaps, in a different species. The trade or occupation of a bridgeman or riveter is plainly the sort of service that the statute was designed to help. If the plaintiff, while serving as a foreman, was still within the trade, he was still within the statute.

The defendant lays the stress of its argument on the decision of this court in Matter of Stryker (158 N. Y. 526), construing a provision whereby a preference was granted to claims for wages due by an insolvent corporation to “ employees, operatives and laborers.” In the construction of that statute the court denied a preference to a superintendent of a factory and to foremen of departments (p. 527). There is no magic in the word foreman. Whether it stands for a workman or for something else cannot be known in advance as a matter of dictionary definition, without knowledge or heed of the conditions of the job (Surace v. Danna, 248 N. Y. 18, 21). The foremen in the Stryker case had charge of departments in a factory, and were paid a monthly salary. The foreman in this case was a member of a union of workers, assigned to a gang, and sharing its activities and perils. We said in the Stryker case that the dominant word in that statute was wages.” The question we put to ourselves was this: Did the claimant get a salary, or was he paid at a rate and in an amount that would be characterized as a wage? If what he got was a wage, he was within the equity of the preference; if what he got was a Salary, he would be held to be without it. It was wages that the legislature intended to prefer in the distribution of the assets of the insolvent corporation, not salaries, nor earnings, nor compensation ” (158 N. Y. at p. 528). “ It was not, we think, the purpose of the statute to secure a preference for claims due to the clerical force engaged in transacting the business, nor to the superintendent, foremen or officers of the corporation who are compensated by a fixed yearly salary ” (p. 529).

The present statute is an attempt by the State to hold its territorial Subdivisions to a standard of social justice in their dealings with laborers, workmen and mechanics. It is to be interpreted with the degree of liberality essential to the attainment of the end in view. If the plaintiff was not a workman within the meaning of the requirement of the statute for the payment of the prevailing wage, he was not a workman within the meaning of the requirement of an eight-hour day. The aim of the statute would surely be thwarted if that construction should prevail.

The judgment of the Appellate Division should be reversed and that of the Trial Term modified by increasing the plaintiff’s recovery to the sum of $4,148.50, with interest from August 9, 1929, and costs in all the courts.

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

Judgment accordingly.


author: Crane, J.

text:
    Joseph Lewis, Appellant, v. The Board of Education of the City of New York, Respondent.

      (Argued November 24, 1931;
    decided January 5, 1932.)

      Arthur Garfield Hays, Joseph Wheless and Stephen B. Vreeland for appellant.
    Action properly lies by a taxpayer to enjoin the purchase of the Bible and other religious books or the use thereof in the public schools. (Hirshfield v. Cook, 227 N. Y. 297; Warnock v. Wray, 194 N. Y. Supp. 396; Rees v. Teachers’ Retirement Board, 130 Misc. Rep. 442; 247 N. Y. 372; Caldwell v. Board of Education, 127 Misc. Rep. 492; Gunnison v. Board of Education, 176 N. Y. 11; Stein v. Brown, 125 Misc. Rep. 692; Smith v. Donahue, 202 App. Div. 656.)

      Arthur J. W. Hilly, Corporation Counsel (William E. C. Mayer and Thomas W. A. Crowe of counsel), for respondent.
    A taxpayer’s action, brought under section 51 of the General Municipal Law, will not he against the Board of Education, as the Board is a branch of the State government and is the corporate agency of the State for the conduct of the State’s educational system in the city of New York. (Titusville Iron Co. v. City of New York, 207 N. Y. 203; Schieffelin v. Komfort, 212 N. Y. 520; Matter of Hirshfield v. Cook, 227 N. Y. 297; Ackley v. Board of Education, 174 App. Div. 44; Ford v. O’Shea, 136 Misc. Rep. 921; 228 App. Div. 772; People ex rel. Wells & Newton Co. v. Craig, 232 N. Y. 125; Matter of Brennan v. Board of Education, 245 N. Y. 8; Bullock v. Cooley, 225 N. Y. 566; Campbell v. City of New York, 244 N. Y. 317.)
   Crane, J.

The General Municipal Law (Cons. Laws, ch. 24), section 51, reads: “ All officers, agents, commissioners and other persons acting, * * * for and on behalf of any county, town, village or municipal corporation in this state, and each and every one of them, may be prosecuted, and an action may be maintained against them to prevent any illegal official act on the part of any such officers, agents, commissioners or other persons, or to prevent waste or injury to, or to restore and make good, any property, funds or estate of such county, town, village or municipal corporation by any person or corporation whose assessment, * * * shall amount to one thousand dollars, and who shall be hable to pay taxes on such assessment in the county, town, village or municipal corporation to prevent the waste or injury of whose property the action is brought.”

Although the Board of Education of the city of New York is a separate and distinct corporation from the municipality itself and is in effect a State agency for carrying out and enforcing our educational system (People ex rel. Wells & Newton Co. v. Craig, 232 N. Y. 125), and in this respect its officers and agents are performing State as distinguished from city functions (Schieffelin v. Komfort, 212 N. Y. 520), yet the Board expends the city’s money raised by taxation, and within certain limitations its expenditures may be limited, investigated and controlled by the- city authorities. (Matter of Hirshfield v. Cook, 227 N. Y. 297.) The administration of public education in the city is somewhat of a dual character. Appointments to the Board are made by the city officials; its funds are held in custody by the City Comptroller who, under section 880 of the Education Law (Cons. Laws, ch. 16), is prohibited from permitting the use of such funds for any purpose other than that for which they are lawfully authorized. (Matter of McNutt Co. v. Eckert, 257 N. Y. 100.) The city authorities also have some supervision over the amount of the yearly appropriations. (Matter of Hirshfield v. Cook, supra; Matter of Fleischmann v. Graves, 235 N. Y. 84.) We think, therefore, that section 51 of the General Municipal Law applies to the Board of Education of the city of New York in so far at least as to authorize an action by a taxpayer to prevent waste of the city’s money. In effect we have so held in affirming Rees v. Teachers’ Retirement Board (130 Misc. Rep. 442; 247 N. Y. 372).

This action has been commenced under this section 51 of the General Municipal Law to prevent waste of the city’s money in the purchase of books entitled, Bible Readings,” and certain hymn books alleged to be used at the opening exercises in some of the public schools in New York city.

By the Laws of 1851, chapter 386, section 18, now section 1151 of the Greater New York Charter (Laws of 1901, ch. 466), all denominational teaching and dogmatic books are excluded from the public schools of the city of New York, with this proviso: But nothing herein contained shall authorize the board of education or the school board of any borough to exclude the Holy Scriptures, without note or comment, or any selections therefrom, from any of the schools provided for by this chapter; but it shall not be competent for the said board of education to decide what version, if any, of the Holy Scriptures, without note or comment, shall be used in any of the schools; provided that nothing herein contained shall be so construed as to violate the rights of conscience, as secured by the constitution of this state and of the United States.” The taxpayer claims that this provision is unconstitutional, as in violation of section 3 of article I and section 4 of article IX of the State Constitution. The former reads as follows:

§ 3. The free exercise and enjoyment of religious profession and worship, without discrimination or preference, shall forever be allowed in this State to aE mankind; and no person shaE be rendered incompetent to be a witness on account of his opinions on matters of religious belief; but the liberty of conscience hereby secured shall not be so construed as to excuse acts of licentiousness, or justify practices inconsistent with the peace or safety of this State.”

And the latter:

“ § 4. Neither the State nor any subdivision thereof, shall use its property or credit or any public money, or authorize or permit either to be used, directly or indirectly, in aid or maintenance, other than for examination or inspection, of any school or institution of learning wholly or in part under the control or direction of any religious denomination, or in which any denominational tenet or doctrine is taught.”

The complaint which states the grievance is based upon the waste of the city’s money in purchasing the books above referred to. It alleges that the plaintiff is a taxpayer and that the Board of Education has purchased these books out of the public moneys raised for educational purposes in the city of New York by taxation, and that in doing so the Board committed an unlawful waste of the public moneys devoted to purposes of secular education. The relief asked for is a judgment restraining the Board of Education from making these purchases. The taxpayer’s action permitted by section 51 of the General Municipal Law, above referred to, is to restrain and to prevent the waste of money by the officials or agents of a municipality through expenditure for illegal and unauthorized objects. The complaint fails to allege the necessity for the injunction prayed for. The books, it is said, have already been purchased, and there is no allegation or claim that the Board of Education has contracted for or is about to contract for or purchase any other books of the same or similar nature. Nothing in the papers on which this action is brought indicates or suggests that any further moneys for this purpose are to be expended by the Board of Education and consequently there is no waste to be enjoined even if we should consider the purchase of such books illegal. Should the collection of scriptural readings and hymn books be given to the Board of Education, this action to prevent waste, it is conceded, could not be maintained, as none of the taxpayer’s money would be expended for the purpose. As an action to prevent waste, therefore, this complaint cannot be sustained.

The taxpayer, however, may also bring an action to enjoin or prevent any illegal official act (Altschul v. Ludwig, 216 N. Y. 459), and the plaintiff here is seeking not only to prevent the purchase but the use by authority of the Board of Education of the books in question. The officials to be restrained must be city as distinguished from State officials. (Schieffelin v. Komfort, 212 N. Y. 520, holding the Board of Elections of New York city not municipal officers and not within the provisions of Section 51 of the General Municipal Law; Slavin v. McGuire, 205 N. Y. 84, holding the same as to the Civil Service Commission of New York city.) (See, also, County of Albany v. Hooker, 204 N. Y. 1.) The Board of Education is a corporation created by the State Legislature for the purpose of enforcing a State function, and in so far as the Board acts under the Education Law in establishing school districts, rules and regulations for scholars and teachers, grades and examinations, studies and hours of studies, the Board and its members act as officers of the State. (Titusville Iron Co. v. City of New York, 207 N. Y. 203, 208; Matter of Hirshfield v. Cook, 227 N. Y. 297, 301; People ex rel. Wells & Newton Co. v. Craig, 232 N. Y. 125; Matter of Brennan v. Board of Education, 245 N. Y. 8; Herman v. Board of Education, 234 N. Y. 196; Lessin v. Board of Education, 247 N. Y. 503, p. 510.) Section 51 of the General Municipal Law cannot, in the absence of waste or illegal expenditures, be used to enjoin the educational functions of the State. (Barringer v. Powell, 230 N. Y. 37, p. 43; Matter of Levitch v. Board of Education, 243 N. Y. 373; Matter of Pardee v. Rayfield, 230 N. Y. 543.)

In People ex rel. Lewis v. Graves (245 N. Y. 195) a peremptory order of mandamus was sought to compel the Commissioner of Education to order the school authorities of White Plains to discontinue school regulations whereby public school children at the request of their parents were to be excused one-half hour of each week to enable them to receive religious instruction in church schools. Although we affirmed the lower courts in refusing the order, we did not question the practice.

This court in Southern Leasing Co. v. Ludwig (217 N. Y. 100) held that the equitable remedy of an injunction under the General Municipal Law is to be granted or withheld in accordance with the principles which govern the exercise of equitable jurisdiction, and that the statute was designed to give a remedy where none had been available before. As to the constitutionality of section 1151 of the charter, we express no opinion, as the complaint in this action is insufficient to raise the question.

The judgment should be affirmed, with costs.

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

Judgment affirmed.


author: Hubbs, J.

text:
    Robert F. Ward, Respondent, v. Iroquois Gas Corporation, Appellant, and International Railway Company, Respondent.
    (Argued November 25, 1931;
    decided January 5, 1932.)

      Thomas B. Wheeler for appellant.
    The plaintiff failed to establish any negligence upon the part of the defendant-appellant. (Hammerschmidt v. Municipal Gas Co., 114 App. Div. 290; Mowers v. Municipal Gas Co., 142 App. Div. 169; Hutchinson v. Boston Gas Light Co., 122 Mass. 219; Pernick v. Central Union Gas Co., 183 App. Div. 543; 228 N. Y. 594; Greenberger v. Standard Gas Light Co., 188 N. Y. Supp. 518; Reid v. Westchester Lighting Co., 236 N. Y. 322.) The Appellate Division erred in reversing the judgment of the trial court as against the defendant-respondent. It thus took away from the defendant-appellant its right to claim contribution and such error is reviewable in the Court of Appeals. (Haines v. Bero Engineering Corp., 230 App. Div. 332; Fox v. Western New York Motor Lines, Inc., 232 App. Div. 308; Dee v. Spencer, 251 N. Y. Supp. 311; Deuscher v. Cammerano, 256 N. Y. 328.)

      Hamilton Ward for plaintiff-respondent.
    The verdict was fully justified by the evidence as to the negligence of the defendant-appellant. (Sweet v. Perkins, 196 N. Y. 482; Griffen v. Manice, 166 N. Y. 188; Peck v. N. Y. C. R. R. Co., 165 N. Y. 347; Robinson v. Consolidated Gas Co., 194 N. Y. 37; Fish v. Waverly Elec. Lt. Co., 189 N. Y. 343; Scioloro v. Asch, 198 N. Y. 82; Fullerton v. Glens Falls Gas Co., 157 App. Div. 194; Duer v. Consolidated Gas Co., 86 App. Div. 14; Plumb v. Richmond L. & R. R. Co., 233 N. Y. 285; Rosebrock v. General Electric Co., 236 N. Y. 227; Sider v. General Electric Co., 203 App. Div. 443; 238 N. Y. 64; Shamrock v. Niagara Falls Power Co., 236 N. Y. 599; Keston v. Einhorn & Singer Development Co., 232 App. Div. 144.) The right of the plaintiff to collect his judgment from the defendant-appellant, based upon the verdict of a jury and an affirmance by the Appellate Division, should not be delayed or imperiled by any dispute between the defendants relative to contribution. (Price v. Ryan, 255 N. Y. 16; Civ. Prac. Act, § 193, subd. 4; Terpeck v. Sweet, 231 App. Div. 353; Glazier v. Heutte, 232 App. Div. 119; 256 N. Y. 686; Deuscher v. Cammerano, 256 N. Y. 328; Fox v. Western New York Motor Lines, Inc., 257 N. Y. 305.)

      Noel S. Symons and Raymond C. Vaughan for defendant-respondent.
    The appeal should be dismissed as against the defendant-respondent. (Green v. Waite, 33 Hun, 191; Bates v. Rosekrans, 37 N. Y. 409; De Graaf v. Wyckoff, 118 N. Y. 1; People ex rel. McDonald v. Clausen, 50 App. Div. 286; McVey v. Security Mut. Life Ins. Co., 118 App. Div. 466; Page v. St. Lawrence Condensed Milk Corp., 213 App. Div. 336; Whalen v. Strong, 230 App. Div. 617; Ostrander v. Hart, 130 N. Y. 406; Savage v. City of Buffalo, 49 App. Div. 577; Farrell v. Malcolm, 135 Misc. Rep. 101; Balch v. City of Utica, 42 App. Div. 562; New Netherland Bank v. Boucheron Co., 122 Misc. Rep. 690; Edwards v. Woodruff, 90 N. Y. 396; Eysaman v. Nelson, 140 N. Y. Supp. 183; Price v. Ryan, 255 N. Y. 16; Deuscher v. Cammerano, 256 N. Y. 328.)
   Hubbs, J.

An explosion occurred in a manhole with such force that it threw the heavy iron cover into the air several feet. In falling it struck the plaintiff and grievously injured him. This action against the defendants jointly is to recover damages suffered as a result of such injury, upon the theory that the explosion occurred through their joint negligence. At the trial the plaintiff recovered a verdict against both defendants.

The Appellate Division affirmed the judgment against the gas company, and reversed the judgment against the railway company and granted a new trial as to it. The plaintiff did not appeal but the gas company appealed to this court from the judgment of affirmance against it. It served a notice of appeal upon the plaintiff and also upon its co-defendant, the railway company. The evidence presented upon the trial created a clear question of fact as to the negligence of the gas company. The record does not disclose any error committed upon the trial which affected the verdict or requires a reversal as to the gas company. We would be content to affirm the judgment against that company without opinion were it not for an important question of practice involved.

The railway company moved to dismiss the appeal of its co-defendant against it upon the ground that the appellant 'was not a party aggrieved by the judgment of the Appellate Division in favor of the railway company within the meaning of section 557 of the Civil Practice Act.

It is earnestly contended by the learned counsel for the appellant that section 211-a of the Civil Practice Act has given a co-defendant in an action therein described a new property right where a joint judgment has been recovered, and that, in case such a judgment is reversed by an intermediate court as to one or more joint defendants, the defendant or defendants as to whom it is affirmed are parties aggrieved and entitled to appeal as against the defendants who have succeeded in securing a reversal of the judgment as to them. Section 211-a reads in part: “ Action by one joint tort feasor against another. Where a money judgment has been recovered jointly against two or more defendants in an action for a personal injury or for property damage, and such judgment has been paid in part or in full by one or more of such defendants, each defendant who has paid more than his own pro rata share shall be entitled to contribution from the other defendants with respect to the excess so paid over and above the pro rata share of the defendant or defendants making such payment.”

Prior to the enactment of that section, it was the settled law of this State that one of two joint tort feasors, against whom a judgment had been recovered for a tort, could not upon paying the judgment maintain an action eithe*. in law or equity against the other tort feasor for contribution. (Peck v. Ellis, 2 Johns. Ch. 131; Gilbert v. Finch, 173 N. Y. 455, 462.)

The harsh and often unjust and inequitable rule of the common law was subject to criticism and attempts were made by some courts to ameliorate its strictness by permitting an action for contribution in certain cases where the moving party was free from intent to commit a wrong. (1 Cooley on Torts [3d ed.], 258.)

Section 211-a was enacted to change the common-law rule and permit contribution where a money judgment has been recovered jointly against two or more joint tort feasors, and paid in part or in full ” by one or more defendants. We said in the case of Price v. Ryan (255 N. Y. 16, 18): The Civil Practice Act (§ 211-a) in furnishing to one joint tort feasor a remedy for the recovery of contribution from the other, expressly con-' fines the remedy to cases where a money judgment has proceeded against both.” Not only must there be a money judgment ” but there must also be payment in part or in full ” of such a judgment “ by one or more of such defendants ” before the right to contribution arises. Such is the clear wording of the section. It is a principle of the common law that no right to contribution accrues until one party has discharged more than his proportion of the common obligation. (5 Pomeroy’s Eq. Juris, [2d ed.] § 2340; 1 Williston on Contracts, § 345; Aspinwall v. Sacchi, 57 N. Y. 331-337.) The statement in the per curiam opinion in Price v. Ryan that there must be a money judgment before the right to contribution arises, did not state and was not intended to infer that there need not also be payment before such right arises. That decision dealt only with the facts in that case. The question of payment was not involved.

In enacting section 211-a, the Legislature intended only to change the rule of the common law that contribution could not be enforced between joint tort feasors. It did not intend to change the law governing the right to appeal. If it should be decided that the section had the effect of permitting one defendant to appeal from a reversal and the granting of a new trial to another defendant, the result would be to give the plaintiff the benefit of an appeal from the judgment of reversal and the granting of a new trial, without the giving of a stipulation for a judgment absolute as required by section 588, subdivision 2, of the Civil Practice Act; it would also postpone during the pendency of the appeal the right of the plaintiff to proceed with a new trial and recover another judgment. It cannot be presumed that the Legislature intended to make such radical changes. The right to bring in new parties as defendants under section 193, subdivision 2, of the Civil Practice Act (Fox v. Western N. Y. Motor Lines, Inc., 257 N. Y. 305), the right of a joint defendant under the practice outlined in Bopp v. New York Electric Vehicle Transportation Co. (177 N. Y. 33) and the right of a plaintiff to consent to a nonsuit as to one or more joint defendants (Dee v. Spencer, 251 N. Y. Supp. 331) is not affected by section 211-a.

Courts must take the act as they find it and construe it according to the plain meaning of the language employed. If the section is to be given a wider effect, it must be by an act of the Legislature.

On the appeal by the defendant Iroquois Gas Corporation from the order granting a new trial as to its co-defendant International Railway Company, the appeal should be dismissed.

On the appeal by the defendant Iroquois Gas Corporation from the judgment in favor of the plaintiff, the judgment should be affirmed with costs.

Cardozo, Ch. J., Pound, Crane, Kellogg and O’Brien, JJ., concur; Lehman, J., dissents from the affirmance of the judgment against the Iroquois Gas Corporation.

Judgment accordingly.


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    Theodore Haebler, Appellant, v. Gilbert H. Crawford, as Receiver of Roland Steel Company, Inc., Respondent.
    (Argued November 30, 1931,
    decided January 5, 1932.)

      Daniel J. Dugan and Eugene Cohn for appellant.
    The corporation had earned no profits and dividends declared were paid from capital; an appearance of a surplus had been created to hide the truth and these facts were fully established from the books of the corporation. (Stock Corp. Law, § 10; Huntington v. Atwill, 118 N. Y. 365; Sigua Iron Co. v. Brown, 171 N. Y. 488; United Growers Co. v. Eisner, 22 App. Div. 1; Matter of Randall, 90 App. Div. 192; Hartley v. Pioneer Iron Works, 181 N. Y. 73; Furlong v. Johnson, 209 App. Div. 198; Kingston v. Home Ins. Co., 11 Del. Ch. 258; Wall v. London & P. Trust Co., [1920] 1 Ch. 45; Graz v. Red, 4 B. Mon. [Ky.] 178; Roberts v. Wicks Co., 184 N. Y. 257; Jennery v. Olmstead, 36 Hun, 536; 105 N. Y. 654; Hill v. International Products Co., 129 Misc. Rep. 25; People v. Tax Commrs., 128 App. Div. 13; 196 N. Y. 39; Cox v. Leahy, 209 App. Div. 313.) Not only the representations actually made to plaintiff, but the representations implied from the payment of dividends as well, were false. (Ottinger v. Bennett, 203 N. Y. 554; Keeler v. Seaman, 47 Misc. Rep. 292; Hill v. International Products Co., 129 Misc. Rep. 25.) It was not necessary to prove scienter. (Bloomquist v. Farson, 222 N. Y. 375; Hill v. International Products Co., 129 Misc. Rep. 25; 226 App. Div. 730; Hammond v. Pennock, 61 N. Y. 145; Carr v. N. B. & L. Co., 167 N. Y. 375; Canadian Agency v. Assets Realization Co., 165 App. Div. 96; Talmadge v. Sanitary Securities Co., 31 App. Div. 498; Seneca W. & M. Co. v. Leach, 247 N. Y. 1; Ultramares Corp. v. Touche, Niven & Co., 255 N. Y. 170; Wesp v. Muckle, 136 App. Div. 241; 201 N. Y. 527.) It was not error to exclude the public accountants’ report. (Wesp v. Muckle, 136 App. Div. 241; 201 N. Y. 527.)

      Harold E. Lippincott, Albert G. Avery and Richard Steel for respondent.
    The corporation had sufficient earned surplus to pay dividends on its preferred shares. (Hill v. International Products Co., 129 Misc. Rep. 25; Furlong v. Johnson, 209 App. Div. 198; Skillin v. Magnus, 162 Fed. Rep. 687; Otter v. Brevoort Petroleum Co., 50 Barb. 247; Citizens State Bank v. Snelling, 55 Mont. 476.) No representations were made to plaintiff which were false in fact or known to have been false when made. (Kuelling v. Lean Mfg. Co., 183 N. Y. 78; Garrett Co. v. Appleton, 101 App. Div. 507; 184 N. Y. 557; Stock Corp. Law, § 58.) Appellant’s failure to prove the corporation had knowledge of any false representations made to him or that it intended to deceive him, was ground for the reversal of his judgment. (Garrett Co. v. Appleton, 101 App. Div. 507; 184 N. Y. 557; Kuelling v. Lean Mfg. Co., 183 N. Y. 78; Jackson v. Turquand, L. R. 4 H. L. 305; Robinson v. Syracuse Rapid Transit Co., 100 App. Div. 214; Ritzwoller v. Lurie, 176 App. Div. 100; Weaver v. Pacific Improvement Co., 234 N. Y. 418.) The Appellate Division properly ruled that exclusion of the public accountants’ audit was reversible error. (Heimburg v. Manhattan Ry. Co., 162 N. Y. 352.)
   O’Brien, J.

The Roland Steel Company increased its capital and delegated to its treasurer the management of marketing the new shares. Plaintiff subscribed for one hundred of the preferred and paid $2,000 on account. His complaint is based upon the allegation that his subscription contract, executed in November, 1925, resulted from untrue representations by the treasurer to the effect that the corporation was conducting a profitable business and that one plant alone earned sufficient to pay all expenses of the corporation and dividends. In August, 1926, plaintiff wrote to the corporation stating that he had acquired information that dividends had not been earned, as represented, but that they had been paid out of capital and requesting the return of the amount which he had paid on his subscription contract. This action for rescission and for the recovery of his payment was begun in November, 1926, against the corporation. In January, 1927, in another action by a different plaintiff, a temporary receiver was appointed and in December, 1929, the permanent receiver was substituted as defendant in this action. At Special Term the fact was found that the representations made to plaintiff by the treasurer were untrue and that dividends had been paid out of capital instead of earnings. Judgment was given for plaintiff, but the finding was reversed at the Appellate Division, a new one made, the complaint was dismissed and judgment on the counterclaim for the amount remaining unpaid on plaintiff’s subscription contract was awarded defendant. On this state of the record the question of fact relating to the truth of the representations that in November, 1925, the corporation was conducting a profitable business and that dividends were paid out of earnings rather than capital must be examined and decided. (York Mortgage Corp. v. Clotar Const. Corp., 254 N. Y. 128.)

The corporation’s books on January 1, 1925, showed a deficit of $11,484.29. On July 1, 1925, a dividend of $1,591.55 was paid. On November 30,1925, a dividend of $1,900 was paid. Prior to June 30 of that year the corporation credited itself with three items. One is for $22,167.95 entitled “ Engineering and developing expenses charged off in 1924, deferred to future operations.” This sum represents eighty per cent of expenses which were incurred during the year 1924 and which the board of directors by resolution October 2, 1924, resolved to have capitalized as “ deferred engineering and sales development.” A second item is for $2,557.02 and is entitled “ Sundry Adjustments.” By these two credits, the deficit of $11,484.29 as of January 1, 1925, was transformed on the books into an apparent surplus of $13,240.68. A third item was credited as an asset during the year 1925. $10,000 was paid by the corporation in the pinchase of four hundred shares of its own common stock from W. E. Wathen. There is no proof that Wathen or any one else had paid $40,000 into the treasury for this stock. Inasmuch as common shares during 1925 were offered as a bonus with the purchase of preferred stock and there is an attempt by defendant to show that their book value was estimated as $6.27 a share, on the surface of things the corporation suffered a loss by its purchase of this stock for $10,000. Even though perhaps a book deficit might in such manner be transformed into an apparent surplus, no inference is permissible that the corporation actually profited by the purchase or had any actual surplus. In the absence of some explanation by defendant that real increase of corporate property resulted from these various expenditures or some evidence even that such a system of bookkeeping accords with sound accounting practice, courts are not warranted in concluding that the mere incurring of these items of expense tended to swell the corporate assets. No witness attempted to justify acts which on their face appear to invert the normal trend of thought whereby outgo is believed to be the contrary of income and Spending the opposite of thrift. No doubt, prudent outlay may often enlarge income and not infrequently it creates valuable and enduring assets. However, on this record there is no evidence of wise or even fortunate spending or the acquisition of additional value, either permanent or temporary. Since these unusual entries in the corporation’s books remain entirely unexplained, no reasonable inference can be drawn except the one leading to the conclusion that the dividends declared immediately prior to July 1, 1925, and November 30, 1925, were paid out of some fund other than earnings or surplus. On such evidence as the parties have seen fit to place before us we must hold that these dividends were paid out of capital.

Defendant caused a paper described as a report on the Roland Steel Company by a firm of public accountants dated October 22, 1925, to be marked for identification. Plaintiff’s objection to its introduction was sustained. It was offered, as stated by defendant’s counsel, on the question of the representations that were made at the time of the sale of the stock. It was evidently intended to show good faith by the directors in declaring dividends in July and October, 1925. No evidence was advanced tending to prove that this report correctly reflected the transactions of the corporation. It constitutes merely a piece of paper which the directors may be assumed to have seen. If they believed that its contents were true and if proof of their knowledge of the falsity of the representations made to plaintiff were a necessary element in plaintiff’s case, it might have been admissible when properly identified. If, however, the evidence establishes material misrepresentation upon which plaintiff relied, his failure to prove allegations of fraud and deceit is not fatal. (Bloomquist v. Farson, 222 N. Y. 375, 380.) The paper was, therefore, properly rejected.

The essential allegations of the complaint have been sustained by the evidence. Plaintiff relied upon the treasurer’s representation that the Roland Steel Company’s business was profitable and that dividends were earned. The fact that he testified that he attached importance to the representation that the steel company expected to renew valuable contracts with the Thyssen Company and that this particular representation was true, does not detract from the force of the proof that the representation as pleaded was untrue. Conceding that he regarded the proposed Thyssen contract as the most important single element contributing to the motive which induced him to subscribe for stock, the conclusion does not follow that, if he had known that the business, as then conducted, was unprofitable and that dividends were paid out of capital, still he would have bought. An essential representation was false and the allegation and evidence is that plaintiff relied upon that representation.

The judgment of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division. (See 258 N. Y. 607.)

Cardozo, Ch. J., Pound, Crane, Lehman, Kellogg and Hubbs, JJ., concur.

Judgment accordingly.