author:
Desmond, J.
      Van Voobhis, J.

text:
    Reinforce, Inc., et al., Appellants, v. Hugh Birney, as President of Local No. 46 N. Y. of the Wood, Wire & Metal Lathers’ International Union, et al., Respondents.
    Argued October 4, 1954;
    decided December 31, 1954.

      Albert A. DuPont, Thomas D. Austin and Stephen J. Masse for appellants.
    I. Defendant union is not immune from liability for the intentional destruction of plaintiffs’ business from motives of revenge unrelated to any lawful labor objective. (Dorchy v. Kansas, 272 U. S. 306; Auburn Draying Co. v. Wardell, 178 App. Div. 270, 227 N. Y. 1; Curran v. Galen, 152 N. Y. 33; National Protective Assn. v. Cumming, 170 N. Y. 315; Falciglia v. Gallagher, 164 Misc. 838; People v. Gassman, 295 N. Y. 254; Opera on Tour, Inc., v. Weber, 285 N. Y. 348; Ameri

      can Guild of Musical Artists v. Petrillo, 286 N. Y. 226; Nash v. Mennan, 279 App. Div. 609, 303 N. Y. 956; Rochette & Parzini Corp. v. Campo, 301 N. Y. 228; Hunt v. Crumboch, 325 U. S. 821.) II. The damages awarded by the jury are in conformance with the proof and represent only fair compensation for the injury sustained. (Alexander’s Dept. Stores v. Ohrbach, 269 App. Div. 321.)

      Harold Stern and George Rosling for respondents.
    I. Defendant union, a bona fide labor organization, is not liable for refusal of its members to work for plaintiffs. (National Protective Assn. v. Cumming, 170 N. Y. 315; Rochette & Parzini Corp. v. Campo, 301 N. Y. 228; Opera on Tour, Inc., v. Weber, 285 N. Y. 348; Nash v. Mennan, 279 App. Div. 609, 303 N. Y. 956; Hunt v. Crumboch, 325 U. S. 821.) II. Inasmuch as defendant union is an unincorporated association sued through its president, this action is not maintainable unless the individual liability of every member is established. (Schouten v. Alpine, 215 N. Y. 225; Browne v. Hibbets, 290 N. Y. 459; Glauber v. Patof, 294 N. Y. 583.) III. No actionable wrong has been established with respect to the defendants Dillon and Spillane. (Greyhound Corp. v. Commercial Cas. Ins. Co., 259 App. Div. 317; Downtown Harvard Lunch Club v. Racso, 199 Misc. 618; Nathanson v. Brown & Williamson Tobacco Corp., 189 Misc. 1024.) IV. The damages awarded are excessive and not sustained by the proof. (Cramer v. Grand Rapids Show Case Co., 223 N. Y. 63; Witherbee v. Meyer, 155 N. Y. 446; Broadway Photoplay Co. v. World Film Corp., 225 N. Y. 104; Dunkel v. McDonald, 272 App. Div. 267, 298 N. Y. 586; Gombert v. New York Central & H. R. R. R. Co., 195 N. Y. 273.)
   Desmond, J.

Plaintiffs (Reinforce, Inc., a corporation organized to carry on a lathing business, and Foley, its principal officer and owner) were awarded money damages by a jury, on their complaint that defendant union and its members had maliciously conspired to prevent plaintiffs from carrying on their business and had put an end to such business operations by causing some of the union members to quit their employment with plaintiffs, and by causing all the union’s members to refuse to work for plaintiffs. The Appellate Division reversed plaintiffs’ judgment on the law, and dismissed the complaint for failure of proof. The members of that court were not, however, in full agreement as to the applicable law. The Trial Justice had charged the jury that its task was to determine whether defendants’ acts had been motivated by malice, or by a desire to improve employment conditions, and had instructed the jurors that, if the motivation was malicious, plaintiffs would be'entitled to their damages. The majority Justices in the Appellate Division took the view that since the union members had the absolute right to refuse to work for the plaintiffs, for any reason or for no reason at all ”, malice was immaterial. The Presiding Justice, however, coming to the same result (reversal and dismissal) by a different route, did not agree that the element of malice was immaterial. Defendants’ acts, he pointed out, were concerted and so, if prompted by malice alone, would cast defendants in damages. But the evidence here, as he saw it, was insufficient to show that malice was the only spur to the union’s activity, or that damage to plaintiffs was the union’s sole purpose. We agree with the Presiding Justice’s analysis of the proof and with his statement of the law.

Plaintiff Foley was for many years a construction worker and member of the operating engineers union. After attending law school and being admitted to the Bar, he again took up construction work and in 1937 became president of one of the locals of his union. While so acting as a union representative, he, in 1940,1945 and 1946, had three serious disagreements with the representatives of defendant union. The first of those controversies had to do with a complaint by defendants’ officers that plaintiff Foley was siding with a contractor who, according to defendants, was violating a certain building contract, to defendants’ disadvantage, by installing fewer steel rods than were called for in the specifications. In the second, or 1945, dispute, Foley lined up on the side of certain contractors and against defendant union, which was resisting efforts of the contractors to eliminate double pay for Saturday work. The third difference of opinion came in 1946, when, after a Federal board had authorized a seven-hour day in the construction industry, defendant union tried to obtain an agreement whereby its members would get eight hours pay for seven hours work, but the contractors (and Foley) insisted that the regular workday remain at eight hours.

. Later in 1946, Foley resigned as his union’s president and became a labor relations consultant. Again, trouble broke out between Foley and defendants’ officers, who blamed him for grievances which defendant union had suffered at the hands of a contractors ’ organization with which Foley was associated.

In 1948, Foley organized the plaintiff corporation to go into the lathing business as a so-called * lumper ’ ’, that is, one whose contracts require it .to supply labor only on construction work, the general contractor furnishing the materials. Foley had never done lathing work, or operated osa“ lumper ” previously. On behalf of plaintiff Reinforce, he consulted one of defendants’ principal officers, Matthews, who recommended one of the union members for the job of Reinforce’s superintendent. Foley, for Reinforce, then signed a lathing contract on an apartment house job, and got some workers for it (between ten and thirty men, at various times) from defendant union. No contract, however, was ever made by the union, with either plaintiff. Late in 1948, Reinforce obtained several more lathing jobs. However, after a union hearing at which Foley appeared and at which there was some discussion of the old grievances, defendant union notified plaintiffs that Reinfoce had been denied approval as a contractor to which defendant union would supply men, and that, after the next payroll date, no members of the union would work for plaintiff Reinforce. None of the members ever did work for Reinforce thereafter, and so, since defendants’ members included all the metal lathers in the vicinity, Reinforce was out of business. The union sent to Reinforce’s general contractors some letters informing them of the union action, and we will mention those letters again, at another place in this opinion. All the above facts, including the recurring difficulties between Foley and the union, were undisputed at the trial.

The Trial Justice submitted to the jury questions of fact as to whether Foley was “ anti-union ” or “ guilty of anti-union acts ”. In another part of his instructions he told the jurors that it was for them to decide whether defendants’ purpose was to further the proper aims of union labor or whether their motive was vengeful and spiteful. Finally, he told them that if they should conclude that defendants had acted maliciously and without cause or justification, damages might be awarded to plaintiff. The charge does not say in so many words (although perhaps it is sufficiently suggested) that if the motives were found to be mixed — good and bad — defendants must win the case, provided their acts had some reasonable relation to wages, hours of employment, collective bargaining or some other valid union objective. But, whether or not the charge was adequate, the complaint was, in our opinion, properly dismissed by the Appellate Division, because plaintiffs did not carry their burden of showing that defendants’ acts were solely “ malicious ”, that is, that they were done "without legal or social justification ” (Campbell v. Gates, 236 N. Y. 457, 460).

Just as (when there is no binding contract) an employer may hire, or refuse to hire, at will, so may a worker or a group of workers refuse, or quit, employment for any reason or no reason (Opera on Tour, Inc., v. Weber, 285 N. Y. 348, 353; Hunt v. Cromboch, 325 U. S. 821, 825). But when men quit work in concert, they offend against the law if their sole and unmixed motive or purpose is to injure an employer (Exchange Bakery & Restaurant, Inc., v. Rifkin, 245 N. Y. 260, 262; see Gray, J., in National Protective Assn. v. Cumming, 170 N. Y. 315, 334; Bossert v. Dhuy, 221 N. Y. 342, 359; Williams v. Quill, 277 N. Y. 1; see Dorchy v. Kansas, 272 U. S. 306, 311). But, if the acts of unions " have any reasonable connection with wages, hours of employment, health, safety, the right of collective bargaining, or any other condition of employment or for the protection from labor abuses, then the acts are justified ” (Opera on Tour, Inc., v. Weber, supra, p. 355). The result is not changed by the fact that the work stoppage or refusal injures an employer. Such harm, although intentionally done, is actionable only if not justified (Lough v. Outerbridge, 143 N. Y. 271, 283; Grombach Productions, Inc., v. Waring, 293 N. Y. 609, and cases cited; Aikens v. Wisconsin, 195 U. S. 194, 204). If the doers, by means not in themselves unlawful, of acts not in themselves unlawful, have any proper purpose to serve, they are not liable for the damage they cause (Peabody, Jr., & Co., v. Travelers Ins. Co., 240 N. Y. 511, 519; Al Raschid v. News Syndicate Co., 265 N. Y. 1). Unions, as well as everyone else, may claim the benefit of the settled rule that " the genesis which will make a lawful act unlawful must be a malicious one unmixed with any other and exclusively directed to injury and damage of another ’ ’ (Beardsley v. Kilmer, 236 N. Y. 80, 90, citing American Bank & Trust Co. v. Federal Reserve Bank, 256 U. S. 350, 358, for the epigrammatic phrase: “ disinterested malevolence ”; and see Park & Sons Co. v. National Wholesale Druggists’ Assn., 175 N. Y. 1; Rosenau v. Empire Circuit Co., 131 App. Div. 429, 436). The Beardsley decision rejects the idea that the motive is immaterial if the act be lawful, since a concurring opinion to that effect, in Beardsley, represented the view of one Judge only.

The modern application, to controversies between unions and employers, of these rules, is illustrated by Rochette & Parzini Corp. v. Campo (301 N. Y. 228). There, the defendant union, whose members were the only ones available in the metropolitan New York area for certain kinds of stone work, decided not to supply labor to any subcontractors, and so put plaintiff, a subcontractor for such work, out of business. Just as in the present case, the question in Rochette was not as to the fairness, propriety or necessity of such a determination by the union. In the absence of proof that the motivation was entirely malicious, plaintiff had no remedy at law. In the Rochette situation, the union withdrew its members from an employment because the union thought it to its interest so to do. In each case it was impossible, on the record, to find that the sole motivation was “ malicious ”, hence, there was no basis for a judgment against the union.

In Rochette & Parzini Corp. v. Campo (supra), there was another question, too, and some support was found there for a finding of illegal union activity by the union in sending, to other unions, letters coercing those unions not to work for plaintiff, and in sending letters to contractors describing plaintiff as “ non-union ”, etc. However, the letters sent by the defendant union in the present case were in no way unlawful since they merely gave simple notification that “ Reinforce, Inc. has not peen approved by Local Union 46 as one of the lathing contractors to whom it will furnish union members ”, and that, Effective as of the next payroll date no members of Local Union 46 will accept employment with, or continue in the employ of, Reinforce, Inc.”

The judgment should be affirmed, with costs.

Van Voobhis, J.

(dissenting). Plaintiff Reinforce, Inc., is engaged in the building trades, organized to conduct a lathing business. This is a branch of industry in which closed or union shop conditions prevail. This entrepreneur must hire its employees from among the members of defendant’s union or cease to do business. It is willing to sign a labor contract with defendant union, providing for ivages, hours and working conditions on a parity with other contractors in the same industry. Nevertheless defendant union refuses to enter into such a contract, or to permit its members to work for this contractor due to the circumstance that plaintiff, Thomas Foley, president and owner of Reinforce, Inc., was formerly president of one of the union locals, but fell into disfavor for the reason that he afterwards became a labor relations consultant, and took the employers’ side in negotiations with unions for various clients in labor disputes. Now, as above stated, Foley has become a contractor himself, owning and managing Reinforce, Inc.

It is true that individual workers, whether union members or not, have the right to refrain from working for this contractor or for any employer for any reason. They may do so in combination where the purpose serves some legitimate labor objective (National Protective Assn. v. Cumming, 170 N. Y. 315; Opera on Tour, Inc., v. Weber, 285 N. Y. 348). The law recognizes a difference between quitting work or refusing to work as individuals and doing so by concerted action (Opera on Tour, Inc., v. Weber, supra). What may lawfully be done by an individual separately cannot always be done through acting in combination with others. Here, as it seems to me, defendant unions have no more right to enter into a combination to destroy the business of plaintiff for the reason that they disapprove his having become a contractor, or that as a labor consultant he favored contractors in collective bargaining negotiations, than the union in Opera on Tour, Inc., v. Weber had to combine to destroy an enterprise for the reason that it produced music by machinery instead of through live musicians. This court pointed out (p. 353) that the vice in Opera on Tour, Inc., v. Weber was that this was done even though the members of the Stagehands’ Union were not dissatisfied with respect to wages, hours or terms and conditions of their employment, and no controversy existed or exists between them and plaintiff.”

Where closed or union shop conditions prevail in an industry, such a concentration of power in the union management carries with it responsibilities which the union owes to the industry and to society. This is made very clear in the opinion in Jacobs v. Cohen (183 N. Y. 207, 212-214) which established the legality of labor contracts providing for the closed shop, where it discusses Curran v. Galen (152 N. Y. 33) pointing out that National Protective Assn. v. Cumming (170 N. Y. 315, supra) “ in nowise overruled Currant. Galen ”, and that the latter decision “ stands unaffected as an authority.” Unless this power is employed to further some lawful labor union purpose, the union loses its status as exempt from the laws against monopoly or combination in restraint of trade. Thus section 20 of the Clayton Act (U. S. Code, tit. 29, § 52) protects against injunction in Federal cases “ involving, or growing out of a dispute concerning terms or conditions of employment ”. A corresponding protection is contained or implied in subdivisions 3 and 4 of section 340 of the New York State General Business Law and section 580 of the Penal Law, and the limitation to legitimate labor purposes is upheld and well understood under the Federal Norris-LaGuardia Act (U. S. Code, tit. 29, §§ Í01-115) and its New York State counterpart, section 876-a of the Civil Practice Act. (Opera on Tour, Inc., v. Weber, 285 N. Y. 348, supra; American Guild of Musical Artists v. Petrillo, 286 N. Y. 226; Nash v. Mennan, 279 App. Div. 609, affd. 303 N. Y. 956; Falciglia v. Gallagher, 164 Misc. 838; cf. People v. Gassman, 295 N. Y. 254, 259). It may be doubted that Hunt v. Crumboch (325 U. S. 821) any longer represents Federal public policy, in view of its having been overruled by section 303 (subd. [a], par. [1]) of the Labor Management Relations Act of 1947 (U. S. Code, tit. 29, § 187, subd. [a], par. [1]) which provides that it shall be an unlawful labor objective to engage in concerted action where an object thereof is to force or require any employer to cease doing business with any other person. Moreover, as the United States Supreme Court pointed out in Hunt v. Crumboch at page 826, whether such conduct amounted to an actionable wrong under State law was not within the scope of that decision. As was shown in Mayer Bros. Poultry Farms v. Meltzer (274 App. Div. 169, 175-178), the construction placed by the Supreme Court upon the Federal antitrust laws is not binding on the State courts in the interpretation of their own common or statute law against monopolies. It was expressly so held respecting our section 340 of the General Business Law in Marsich v. Eastman Kodak Co. (244 App. Div. 295, affd. 269 N. Y. 621). The trial court correctly instructed the jury that, in applying section 340 of the General Business Law, they must bear in mind that due to an exception therein, “ There can be monopolies in the labor union movement. It is not illegal to have a monopoly there, providing that the monopoly, in what it does, does only those things, of course, which have relation to legitimate labor aims. ’ ’ The jury found that this monopoly was not being exerted to further " legitimate labor aims ”, a finding which was well supported by the evidence, and the jury’s verdict should have been allowed to stand.

The following quotation from the dissenting opinion by Mr. Justice Jackson in Hunt v. Crumboch (supra, p. 829) is, as it seems to me, in accord with the law of this State as reflected in the trial court’s charge to the jury: Those statutes which restricted the application of the Sherman Act against unions were intended only to shield the legitimate objectives of such organizations, not to give them a sword to use with unlimited immunity. The social interest in allowing workers to better their condition by their combined bargaining power was thought to outweigh the otherwise undesirable restriction on competition which all successful union activity necessarily entails. But there is no social interest served by union activities which are directed not to the advantage of union members but merely to capricious and retaliatory misuse of the power which unions have simply to impose their will on an employer.”

Where a union departs from its proper sphere of activity, and engages in concerted action that is unrelated to its reason for existence, it loses the protection of laws enacted to safeguard its legitimate status. This is by the same token whereby a public officer, who abuses his office by employing it as a pretext to accomplish unlawful aims, becomes a law breaker when he transgresses the objects and purposes for which the office exists.

The formula of “ disinterested malevolence ” as applied in Beardsley v. Kilmer (236 N. Y. 80, 90) is not adapted to this sort of situation. Rather, we are confronted by an unlawful combination in restraint of trade which does not enjoy the exemptian from liability of a labor union when it is exercising its proper functions. This is an action for damages for conspiracy, in ruining plaintiff’s business by concerted action that has no relation to any lawful labor union objective. If these defendant unions in a closed or union shop industry may by concerted action prevent any union member from working for plaintiff under any terms of employment, it will be possible for any union similarly situated to drive out of business any employer whom the officers of the union dislike, or to accomplish any kind of ulterior purpose (Auburn Draying Co. v. Wardell, 178 App. Div. 270, affd. 227 N. Y. 1), although the employer is willing to deal with the union on the basis of prevailing wages, hours and working conditions, and by signing the customary labor contract. There is no justification in law for the use of the enormous power of unions in closed or union shop industries in such fashion. The action is arbitrary and without legal justification if it transcends lawful labor objectives, and confers a right of action under the established principle that business is property and that property may not intentionally he injured without justification in law (Dorchy v. Kansas, 272 U. S. 306; Opera on Tour, Inc., v. Weber, supra; American Guild of Musical Artists v. Petrillo, supra).

The judgment entered on the order of the Appellate Division should be reversed and that of the Trial Term entered upon the verdict of the jury should be reinstated.

Dye, Fuld and Fboessel, JJ., concur with Desmond, J.; Van Voobhis, J., dissents in an opinion in which Lewis, Oh. J., and Conway, J., concur.

Judgment affirmed.


source: Caselaw Access Project

author:
Fuld, J.
      Van Voorhis, J.

license: Public Domain

text:
    In the Matter of Guardian Life Insurance Company of America, Appellant, against Alfred J. Bohlinger, as Superintendent of Insurance of the State of New York, Respondent.
    Argued October 12, 1954;
    decided December 31, 1954.

      James B. Donovan, MacNeil Mitchell, Daniel J. Beidy and Clarke 8. Ryan for appellant.
    I. The statutory duty of the Superintendent under paragraph (b) of subdivision 7 of section 81 of the Insurance Law was to enforce that statute, i.e., to review the determination of Guardian’s management that the property is ‘ ‘ requisite for its convenient accommodation in the transaction of its business.” (Matter of Barry v. O’Connell, 303 N. Y. 46; Matter of Rochester Gas & Elec. Corp. v. Maltbie, 298 N. Y. 867; Matter of Northwestern Nat. Ins. Co. v. Pink, 288 N. Y. 359; Matter of Small v. Moss, 279 N. Y. 288; Matter of Picone v. Commissioner of Licenses, 241 N. Y. 157; People ex rel. Metropolitan Life Ins. Co. v. Hotchkiss, 136 App. Div. 150; Metropolitan Life Ins. Co. v. Durkin, 301 N. Y. 376; Van Schaick v. Carr, 170 Misc. 539.) The instant acquisition by Guardian clearly conforms to the standard in paragraph (b) of subdivision 7 of section 81 of the Insurance Law, and the Superintendent’s decision of disapproval is contrary to law and unsupported by the evidence. (Matter of Ralph v. Board of Estimate of City of N. Y., 306 N. Y. 447.) III. The determination of the Superintendent is subject to judicial review. That determination should be annulled as contrary to law and fact. The order of the Appellate Division upholding that determination should be reversed. (Matter of General Reinsurance Corp. v. Pink, 243 App. Div. 153, 269 N. Y. 347; Matter of Calvary Presbyt. Church v. State Liq. Auth., 249 App. Div. 288, 275 N. Y. 552; Securities Comm. v. Chenery Corp., 332 U. S. 194.)

      Robert M. Benjamin for Life Insurance Association of America, amicus curice, in support of appellant’s position.
    I. The determination of the Superintendent of Insurance is subject to judicial review. (Matter of Schwab v. McElligott, 282 N. Y. 182; People ex rel. Metropolitan Life Ins. Co. v. Hotchkiss, 136 App. Div. 150; Matter of Kelly & Romano v. Van Schaick, 156 Misc. 521; Matter of Calvary Presbyt. Church v. State Liq. Auth., 249 App. Div. 288, 275 N. Y. 552; Matter of Chapin v. Board of Educ. of City of Buffalo, 291 N. Y. 241.) II. The courts below erred as to respondent’s power of withholding approval. (Matter of Picone v. Commissioner of Licenses, 241 N. Y. 157; People ex rel. Empire City Trotting Club v. State Racing Comm., 190 N. Y. 31; People ex rel. Delaware & Hudson Co. v. Stevens, 197 N. Y. 1.)

      Nathaniel L. Goldstein, Attorney-General (Samuel A. Hirshowitz and Wendell P. Brown of counsel), for respondent.
    I. The particular action of the Superintendent was not subject to review in an article 78 proceeding. (Matter of Millman v. O’Connell, 300 N. Y. 539; Switchmen’s Union v. Board, 320 U. S. 297; Labor Bd. v. Cheney Lbr. Co., 327 U. S. 385; Federal Communication Comm. v. R. C. A. Communications, 346 U. S. 86; Matter of Schwab v. McElligott, 282 N. Y. 182; People ex rel. Smith v. Hoffman, 166 N. Y. 462; Matter of Calvary Presbyt. Church v. State Liq. Auth., 249 App. Div. 288, 275 N. Y. 552; Reckler v. Quinn, 255 App. Div. 873; Matter of Roden v. New York State Liq. Auth., 258 App. Div. 1076; Matter of Sheridan v. McElligott, 278 N. Y. 59.) II. The action of the Superintendent was not arbitrary but was in accordance with the discretion reposed in him. (People ex rel. Hartford Life & Annuity Ins. Co. v. Fairman, 12 Abb. N. C. 252, 91 N. Y. 385; Matter of Glenram Wine & Liq. Corp. v. O’Connell, 295 N. Y. 336; Matter of Standard Bitulithic Co., 212 N. Y. 179; People ex rel. Kennedy v. Brady, 166 N. Y. 44; Matter of Sacharoff v. Corsi, 294 N. Y. 305; Matter of Brenner v. Bruckman, 253 App. Div. 607, 278 N. Y. 503; Matter of Stachura v. O’Connell, 271 App. Div. 162; Jordan v. American Eagle Fire Ins. Co., 169 F. 2d 281; Interstate Commerce Comm. v. Parker, 326 U. S. 60; Pincourt v. Palmer, 190 F. 2d 390.) III. The Superintendent is not merely a “ reviewing officer.” He is authorized to exercise his independent judgment and discretion. (People ex rel. Schau v. McWilliams, 185 N. Y. 92; Matter of General Reinsurance Corp. v. Pink, 269 N. Y. 347; Swan v. Mutual Reserve Fund Life Assn., 155 N. Y. 9; Russell v. Pittsburgh Life & Trust Co., 132 App. Div. 217; Stern v. Metropolitan Life Ins. Co., 169 App. Div. 217; Matter of People [International Workers Order], 199 Misc. 941, 280 App. Div. 517, 305 N. Y. 258, 54 Col. L. Rev. 648; President & Directors of Manhattan Co. v. Kaldenberg, 165 N. Y. 1; Washington Life Ins. Co. v. Clason, 162 N. Y. 305; McClure v. Levy, 79 Hun 235; Matter of Cook v. Burton, 276 App. Div. 808; Matter of Buck v. Hurd, 281 App. Div. 115, 307 N. Y. 730.) IV. No formality was required in the notice of disapproval. The decision constituting such notice conforms with statutory requirements. (Matter of Barry v. O’Connell, 303 N. Y. 46, 305 N. Y. 633; Matter of Elite Dairy Products v. Ten Eyck, 271 N. Y. 488; Matter of Savoy Associates v. Valentine, 266 App. Div. 63; Securities Comm. v. Chenery Corp., 318 U. S. 80; Helvering v. Gowran, 302 U. S. 238.)
   Fuld, J.

In this Article 78 proceeding, we are called upon to decide whether certain action taken by the Superintendent of Insurance is subject to judicial review.

To purchase real estate as an investment (Insurance Law, § 81, subd. 7, par. [h]), a domestic insurance company does not require the Superintendent’s approval, while, to acquire real estate for use in its own business, such approval is essential (Insurance Law, § 81, subd. 7, pars, [a], [b]). In the case before us, the Superintendent denied an application made to him by Guardian Life Insurance Company for approval to purchase real property in White Plains, Westchester County, which it proposed to occupy under paragraph (b) of subdivision 7 of section 81.

Guardian is at present housed in a twenty-story home office building on Union Square in New York City, in which it occupies about 60% of the space, renting out the remainder to various tenants. It has spent over $400,000, since 1946, in modernizing that office, and, in addition, owns two adjoining properties, which it had acquired, some years before, for “ expansion ” purposes.

In 1950, Guardian decided to explore the possibility of moving its principal office to Westchester County. As a temporary measure, and until a site could be found, the company resolved to obtain space for the use of some of its departments by renting or building in the Westchester area. It could not find, and has not yet (four years later) found, a plot appropriate for a new home office. However, in the course of its search, the company located property which it considered an “ ideal site for an investment in an office building ”, but not suitable for a principal office. It was decided that the property be purchased for “ rental ”, but with the thought in mind of designing the building so that it could be used for its accounting activities and for temporary storage of its records. In line with that thinking, Guardian’s executive committee authorized the purchase, under the provisions of Section 81, subsection 7(h) ”, expressly noting that it was proposed to erect a building ‘ ‘ which would be suitable for company occupancy in whole or in part.”

When the chief of the Life Bureau of the Insurance Department learned of this action, he notified Guardian that it was not possible to handle the transaction in the manner contemplated, that the company would have to decide whether the property was being acquired for the “ convenient accommodation * • * of its business ” — under subdivision 7(b) — or as an investment — under subdivision 7(h). Despite that monition, Guardian persisted in acting under both subdivisions. Characterizing the acquisition as “ essentially an investment plan,” it sought “ consideration of the Superintendent for our using such facilities under * * * Subsection 7(b).” However, without seeking or waiting for official approval, Guardian proceeded to purchase the property in October of 1951; it was not until January, 1952, that the company made a formal application under subdivision 7 (b).

Some time later, after the Superintendent had indicated that he did not “ look with favor ” upon the application, Guardian was offered a hearing. At that hearing — which the company urged was statutory, but which the hearing commissioner ruled was not— there was testimony indicating that Guardian’s plans were most uncertain and indefinite and that its home office building and the adjoining properties — in which the possibilities for expansion had not even been considered — provided adequate space and facilities.

At the conclusion of the hearing, the Superintendent refused to approve the purchase. Noting Guardian’s indecision and uncertainty, as well as the “ interim ” character of its project, which would, nevertheless, cost upwards of $1,300,000 ”, the Superintendent disapproved the company’s petition, concluding, and we use the language of the statute, that the property was not “ requisite for its convenient accommodation in the transaction of its business” (Insurance Law, § 81, subd. 7, par. [b]).

The court at Special Term, declining to pass upon the Superintendent’s contention that his action was not subject to judicial review, upheld the determination upon the ground that it was adequately supported by the record. The Appellate Division affirmed by a divided court. Two of the three majority justices expressed the opinion that the Superintendent’s action was not “ subject to more than a threshold judicial review ”, while the third justice, following Special Term’s lead, simply concluded that there was no basis for disturbing the determination.

Although the courts will be exceeding slow to rule that the discretion of an administrative officer or board ‘‘ may be exercised unhampered by judicial review ” (Matter of Schwab v. McElligott, 282 N. Y. 182, 186), it is settled that the legislature may, if it sees fit, provide that certain action “ is not a matter open to [such] review ” (Matter of Millman v. O’Connell, 300 N. Y. 539, 540; see, also, Matter of Schwab v. McElligott, supra, 282 N. Y. 182, 186; Reckler v. Quinn, 280 N. Y. 768; Matter of Calvary Presbyt. Church v. State Liq. Auth., 275 N. Y. 552; Switchmen’s Union v. Board, 320 U. S. 297, 300; cf. F. C. C. v. RCA Communications, Inc., 346 U. S. 86, 90). In our view, the legislature has so provided here. Carefully and deliberately, it has selected those actions of the Superintendent which are to be subject to judicial review, and those which are not, unequivocally indicating which action is appealable and which is not. Thus, section 34 of the Insurance Law announces that

“ Whenever by the provisions of this chapter any order or other act of the superintendent is declared to be subject to judicial review at the suit of any person, such person may maintain a proceeding under article seventy-eight of the civil practice act.”

And, thereafter, throughout the statute, the legislature granted the right of appeal of this or that action of the Superintendent, by specifically declaring that it “ shall be subject to judicial review ” (see, e.g., § 40, subd. 7; § 51, subd. 5; § 117, subd. 2). In many instances — including the section here under consideration (§81) —there is no such declaration, plainly establishing that such action on the part of the Superintendent was not intended to be subject to review.

Section 34 does not, it is true, in so many words prohibit judicial review where not expressly prescribed, but that is the necessary and plain meaning of the provision, particularly when considered in context, along with the other sections to which we have adverted. Any other construction would, as Judge Botein wrote below, stamp section 34 “ as a meaningless and unnecessary reaffirmation of the rights of an aggrieved party to pursue his remedies pursuant to article 78 of the Civil Practice Act; and the implication naturally follows that when the right is not specifically granted, article 78 may not be invoked ” (284 App. Div. 110, 114). And, when we study the history of section 34 — the original statute, the amendatory proposal offered by various groups, the law as it finally read as the result of suggestions and countersuggestions, arguments and counterarguments — it becomes even more manifest that it was the legislative design that the Superintendent’s actions be reviewable only where the statute expressly so provided.

The predecessor to section 34 — section 61 — had simply provided for a stay of the Superintendent’s determination while certiorari proceedings were pending (L. 1936, ch. 625). When the Insurance Law was being revised in 1939 — under the auspices of the Joint Legislative Committee on Revision of Insurance Laws — the legislature received constant suggestions and advice from various insurance groups as well as from the Committee on Insurance Law Bevision of the State Insurance Department. With respect to the old section 61, the Association of Life Insurance Companies filed a memorandum with the legislature under date of July 15, 1938, asking that it “ Strike this entire section ’ ’ and enact a statute granting broad judicial review, indeed, a review of any and every act and order of the Superintendent. More particularly, the Association recommended enactment of a section which would ‘ give insurers and their representatives a general right of appeal or review.” The Superintendent, as well as the Committee on Insurance Law Bevision, vigorously opposed the effort; it was their judgment that the proposal would permit review of ‘ ‘ many acts for which judicial review is not appropriate.” (See, e.g., Memorandum in Beply, Submitted by Committee on Insurance Law Bevision, p. 4.) The legislature, rejecting the suggestions of the insurance groups, followed the Superintendent’s recommendations and struck from the proposed new section the language granting a general right of appeal. The end result was enactment of section 34 as it reads today (supra, p. 181.)

In the light of this history, the conclusion seems inescapable that the legislature accorded “ the right of review to such orders or other acts of the superintendent as are declared to be subject to judicial review by the provisions of the act, and then the procedure is directed to be under Article 78 of the Civil Practice Act ’ ’. (Thacher, The New York Insurance Law and its Beview, American Bar Assn., Section on Insurance Law [1939-1940], p. 95.)

We deem it clear, as already noted, that, in expressly providing for review in some sections of the Insurance Law and making no provision for such review in other sections, the legislature followed a consistent and purposeful pattern. Provisions for licensing and revocation of licenses, as well as for consolidation and conversion of insurers, carry authorizations for review (e.g., Insurance Law, § 40, subd. 7; § 51, subd. 5; § 117, subd. 2; §§ 486, 487), while, on the other hand, provisions to protect policyholders against unwise, improvident or illegal expenditures of company moneys generally do not provide for judicial re-examination (e.g., Insurance Law, §§ 70-75, 81, 85, 101-103, 195). The legislature thus reflected its design that decisions of the Superintendent involving investments and finances — in which field flagrant abuses had been uncovered in the investigation by the Armstrong Committee — should be final and that he should not be subjected to judicial review to justify the action taken by him.

That is not to say, however, that there is to be no judicial scrutiny whatsoever. Even where judicial review is proscribed by statute, the courts have the power and the duty to make certain that the administrative official has not acted in excess of the grant of authority given him by statute or in disregard of the standard prescribed by the legislature. (Cf. Matter of Barry v. O’Connell, 303 N. Y. 46, 52; People ex rel. Metropolitan Life Ins. Co. v. Hotchkiss, 136 App. Div. 150.) So, here, for instance, the courts will decide whether or not the Superintendent, in reaching his conclusion, employed the standard fixed by the statute, namely, whether the property purchased by Guardian was or was not “ requisite for its convenient accommodation in the transaction of its business.” There can be no doubt here that the Superintendent did make his determination solely with that standard in mind. Not only did he explicitly state that Guardian’s present New York City quarters “ are [not] inadequate for the convenient transaction of its business/’ but he made findings necessarily leading to the conclusion that the purchase was not required for the convenient accommodation of the company’s business.

The fear has been expressed that absence of judicial review may encourage abuse of administrative power by the Superintendent of Insurance. If there is any basis for that fear, it is a consideration to be addressed to the legislature whence came the provision proscribing appeal in this sort of case.

The order of the Appellate Division should be affirmed, with costs.

Van Voorhis, J.

(concurring). I concur in the result upon the ground that although jurisdiction exists to review the determination of the Superintendent of Insurance, there is no showing that his refusal to consent to the purchase of this real property in White Plains for plaintiff’s own use was arbitrary, in view of plaintiff’s failure to show how this parcel fitted into any comprehensive and coherent plan for the removal of plaintiff’s home office to White Plains.

Lewis, Ch. J., Conway, Desmond, Dye and Froessel, JJ., concur with Fuld, J.; Van Voorhis, J., concurs in result in a separate memorandum.

Order affirmed.

      . Insofar as here relevant, section 81 of the Insurance Law provides:
      “ The reserve investments of a domestic insurer shall consist of the following:
      * • •
      “ 7. Real estate. Real estate only if acquired or used for the following purposes and in the following manner:
      “ (a) The land and the building thereon in which it has its principal office.

        “ (b) Such as shall be requisite for its convenient accommodation in the transaction of its business.
      * ** *

        “ (h) Such real property * * * as may be acquired, as an investment for the production of income, or as may be acquired to be improved or developed for such investment purpose pursuant to an existing program therefor * * *.

        “ No real property shall be acquired by any domestic insurer pursuant to paragraphs (a), (b), (d), or (e) of this subsection seven, except with the approval of the superintendent.”

      . The hearing commissioner was unquestionably correct since the statute does not provide for a hearing and the exercise of the Superintendent’s power did not adversely affect “ property rights ”. (Cf. Matter of Hecht v. Monaghan, 307 N. Y. 461, 468; Matter of Glenram Wine & Liq. Corp. v. O’Connell, 295 N. Y. 336, 342; see, also, 1 Benjamin on Administrative Adjudication [1942], pp. 89-90, 94.)

      . Had the recommendation, been accepted, section 34 would have added the bracketed matter: “Judicial Beview of Acts of Superintendent. Whenever by the provisions of this chapter any order or other act of the superintendent is declared to be subject to judicial review, [or whenever any insurer or person subject to the provisions of this chapter is aggrieved by any order or other act of the superintendent] such insurer or person may maintain a proceeding under article seventy-eight of the civil practice act * *


author: Frobssel, J. Dye, J.

text:
    In the Matter of Donald D. Voorhees, Appellant, against Spencer E. Bates et al., Constituting the State Tax Commission, Respondents.
    Argued November 17, 1954;
    decided December 31, 1954.

      Paul D. O’Brien and Arthur F. Driscoll for appellant.
    I. The statute not the State Tax Commission must determine the tax. (Matter of Good Humor Corp. v. McGoldrick, 289 N. Y. 452;
      Matter of Brooklyn Union Gas Co. v. McGoldrick, 270 App. Div. 186; Howitt v. Street & Smith Publications, 276 N. Y. 345; Matter of United Parcel Service v. Joseph, 272 App. Div. 194, 297 N. Y. 1004; Matter of Holmes Elec. Protective Co. v. McGoldrick, 262 App. Div. 514; Dun & Bradstreet v. City of New York, 276 N. Y. 198; Matter of Vassar, 127 N. Y. 1; Saltser & Weinsier v. McGoldrick, 295 N. Y. 499; People ex rel. New York Mail & Newspaper Transp. Co. v. Gaus, 198 N. Y. 250.) II. Petitioner is not a taxpayer under the provisions of article 16-A. (Matter of Geiffert v. Mealey, 293 N. Y. 583; Matter of Teague v. Graves, 261 App. Div. 652; United States v. Laws, 163 U. S. 258; United States v. Commissioner of Immigration, 298 F. 449; Matter of Palmer v. Spaulding, 299 N. Y. 368.) III. Petitioner is a member of a recognized group of practitioners objectively identified by fixed qualifications and disciplined by established principles attainable by diligent study known as conductors or musical directors of symphony orchestras. (Matter of Delpriore v. Ball, 281 App. Div. 214, 306 N. Y. 775.) IV. In addition to practicing a profession, petitioner is also an employee and on this ground not properly taxable. (Matter of Velie [Collins Corp.-Murphy], 267 App. Div. 1022; Matter of Morton, 284 N. Y. 167.) V. The power to tax is a question of law, not one of fact. (Matter of Delpriore v. Ball, 281 App. Div. 214; Matter of Calder v. Graves, 261 App. Div. 90, 286 N. Y. 643.)

      Eugene Victor for American Federation of Musicians, Local 802, A. F. of L., amicus curiae, in support of appellant’s position.
    The authorities uniformly hold that he who exercises control over musicians or reserves the power to do is the employer of the musicians. (Bartels v. Birmingham, 332 U. S. 126; Matter of Roseland Amusement Co. [Corsi], 295 N. Y. 913; Matter of Camgros, 290 N. Y. 838; Matter of Hotels Statler Co. [Corsi], 279 App. Div. 814.)

      Nathaniel L. Goldstein, Attorney-General (Lawrence H. Wagner, Wendell P. Brown, John C. Crary, Jr., and Robert W. Bush of counsel), for respondents.
    I. Petitioner was an independent contractor. (Matter of Morton, 284 N. Y. 167; Matter of Sullivan Co., 289 N. Y. 110; Irwin v. Klein, 271 N. Y. 477; Matter of Fidel Assn. of N. Y., 259 App. Div. 486, 287 N. Y. 626; People ex rel. Wittich v. Browne, 270 App. Div. 774, 296 N. Y. 720; People ex rel. Luther v. State Tax Comm., 265 App. Div. 976, 291 N. Y. 691; Matter of Connell v. State Tax Comm., 267 App. Div. 923, 293 N. Y. 934; People ex rel. Feinberg v. Chapman, 274 App. Div. 715; Matter of Trowbridge, 266 N. Y. 283; Matter of Stork Restaurant v. Boland, 282 N. Y. 256; People ex rel. Kohlman & Co. v. Law, 239 N. Y. 346; Matter of Calder v. Graves, 261 App. Div. 90, 286 N. Y. 643; People ex rel. Hull v. Graves, 289 N. Y. 173; People ex rel. Freeborn & Co. v. Graves, 257 App. Div. 587.) II. Petitioner’s activities did not constitute the practice of a profession. (People ex rel. Tower v. State Tax Comm., 282 N. Y. 407; Matter of Geiffert v. Mealey, 293 N. Y. 583; Matter of De Vries v. Graves, 266 App. Div. 1030, 292 N. Y. 529; Matter of Hewitt v. Bates, 297 N. Y. 239; United States v. Commissioner of Immigration, 298 F. 449; Matter of Delpriore v. Ball, 281 App. Div. 214, 306 N. Y. 775; Matter of Geiffert v. Mealey, 293 N. Y. 583; Matter of Teague v. Graves, 261 App. Div. 652, 287 N. Y. 549; People ex rel. Moffett v. Bates, 276 App. Div. 38, 301 N. Y. 597; Matter of Adelsberg v. Bates, 278 App. Div. 606; Matter of Backman v. Bates, 279 App. Div. 1115, 305 N. Y. 839; Matter of Engelhardt v. Bates, 281 App. Div. 1053; Matter of Schmidt v. Bates, 282 App. Div. 980; Matter of Wilson v. Bates, 282 App. Div. 1099; Matter of Calder v. Graves, 261 App. Div. 90, 286 N. Y. 643.) III. Petitioner derived less than 80% of his gross income from personal services actually rendered by him.
   Frobssel, J.

Appellant, Donald D. Voorhees, is an orchestral conductor or musical director who, during 1941, the year in question, rehearsed' and conducted the orchestras used on the weekly broadcasts of American Telephone and Telegraph’s radio program The Telephone Hour ” and of DuPont’s “ Cavalcade of America ”. The State Tax Commission has determined that, in performing his services for these two broadcasts, Voorhees was “ carrying on * * * an unincorporated business for purposes of the Unincorporated Business Tax imposed by Article 16-A of the Tax Law ”. In reaching this determination, the commission necessarily held that Voorhees was not within those provisions of section 386 of the Tax Law, which exclude from the definition of unincorporated business ” the practice of law, medicine, dentistry, architecture which under existing law cannot be conducted under corporate structure, and any other case in which more than eighty per centum of the gross income is derived from the personal services actually rendered by the individual or the members of the partnership or other entity in the practice of any other profession and in which capital is not a material income producing factor.”

Whether the Legislature included Voorhees’ occupation among those subjected to taxation under section 386 is a question of law proper for our review. As we stated in Matter of Good Humor Corp. v. McGoldrick (289 N. Y. 452, 455):

“ The determination of what articles or transactions are taxable is a legislative function. It is not the function of an administrative officer to determine where the line shall he drawn which divides the field subject to taxation from the field where no tax has been imposed. That line must be drawn by statute or ordinance. The tax authorities have power only to determine whether an article comes within the field selected in the ordinance for taxation. Where the facts are not disputed, the question whether a particular article falls within that field is a question of law.

“ This court has said that ‘ A statute which levies a tax is to be construed most strongly against the government and in favor of the citizen. The government takes nothing except what is given by the clear import of the words used, and a well-founded doubt as to the meaning of the act defeats the tax.’ [Citations.] ” (See, also, Matter of Delpriore v. Ball, 281 App. Div. 214, affd. 306 N. Y. 775.)

Voorhees insists that under the statutory definition he is not required to pay the assessed tax.. It will be noted that to fall within the quoted general exception Voorhees must: (1) practice a profession (2) derive more than 80% of his gross income from services rendered by himself personally, and (3) not have capital as a material income-producing factor. The third point — capital — we may disregard, because the commission does not even suggest that capital was such a factor in Voorhees’ income. We turn then to the other two points.

Whether a certain vocation constitutes a “ profession ” within the meaning of section 386 of the Tax Law is a question not unfamiliar to this court. We have held that the term “ profession ” included a landscape architect (Matter of Geiffert v. Mealey, 293 N. Y. 583) and an industrial designer (Matter of Teague v. Graves, 261 App. Div. 652, affd. 287 N. Y. 549), but excluded such vocations as customhouse broker (People ex rel. Tower v. State Tax Comm., 282 N. Y. 407; People ex rel. Robinson v. Graves, 259 App. Div. 956, motion for leave to appeal denied 284 N. Y. 821), economist (Matter of Backman v. Bates, 279 App. Div. 1115, affd. 305 N. Y. 839), life insurance agent (Matter of Recht v. Graves, 257 App. Div. 889, motion for leave to appeal denied 281 N. Y. 886), specialist in corporate reorganization and finance (People ex rel. Moffett v. Bates, 276 App. Div. 38, affd. 301 N. Y. 597, certiorari denied 340 U. S. 865), and furniture designer (Matter of De Vries v. Graves, 266 App. Div. 1030, affd. 292 N. Y. 529).

It will be noted that we have not yet had a case under this statute involving one of “ the arts ”— painting, sculpture, music, drama, dancing, writing, etc. However, in People v. Kelly (255 N. Y. 396), a zoning law case, we observed (p. 400):

“ The teaching of singing or of music is a profession and is not a business, trade or industry as these words are used in the law, zoning regulation or common parlance.

“ The arguments of counsel apparently concede that the exclusions would not reach out to the doctor, the dentist, or the lawyer consulting clients at home; but no distinction can be drawn for the purposes here involved between these professions and those of the musician, artist or teacher.” (Italics supplied.)

In any event, it seems to us that Voorhees’ occupation as a musician and orchestral conductor fulfills the requirements of a profession set forth in the language of Lewis, J.: We find nothing in the record to prove that the service rendered by a customhouse broker requires knowledge of an advanced type in a given field of science or learning gained by a prolonged course of specialized instruction and study. Such a requirement we regard as implicit in the term ‘ professional ’ when given its legal application and it is read in its context in the statute here involved.” (People ex rel. Tower v. State Tax Comm., 282 N. Y. 407, 412, supra.)

The record here clearly demonstrates that Voorhees’ occupation as an orchestral conductor requires knowledge of an advanced type in the field of music which can be gained only by a prolonged course of specialized instruction and study. Although advanced formal education does not appear to he an essential element in the background of the more famous conductors, probably because institutions of higher learning did not generally make such courses with degrees available a generation or more ago, music in general is a field of study now well recognized by some of our most respected colleges and universities.

Yoorhees testified at some length as to his own background in musical education, which commenced when he was five years of age. By the time he was in high school, he was already engaged in occasional professional appearances. In his second year there, he was playing in the orchestra at the Lyric Theatre in Allentown, Pennsylvania. Subsequently he conducted the orchestra at the New York Winter Garden, and in a series of Broadway musical shows. He has two honorary degrees in music from Bates and Muhlenberg colleges. When his attorney stated that he was seeking to establish by this testimony ‘ ‘ the advanced skill and training that is necessary in order to qualify as an orchestral conductor ”, the assistant director of the State Tax Commission stated: “ I don’t think there is any question but what he was qualified for what he was doing.” It would appear that a musical director comes nearer to practicing a profession than one pursuing many of the following occupations which the State Tax Commission has determined were professions: accounting; certified shorthand reporting; chiropody; dental hygiene; engineering; optometry; osteopathy; pharmacy; physiotherapy; teaching; veterinary medicine and surgery (N. Y. State Tax Comm., Income Tax Bureau, Manual 51, p. 225).

The second point in the statute — that to be exempt from the tax more than 80% of Yoorhees’ gross income must be derived from his personal services — does not entail the same far-reaching implications as the first point just discussed; rather, it poses a question more or less unique to this case.

At the hearing, the commission introduced in evidence Yoorhees’ 1941 New York State personal income tax return. On that return under Income ”, Yoorhees had reported receipt of $101,142.60 from “ E. I. DuPont — Cavalcade of America ”. Under “ Expenses ” he had listed three items which are pertinent here: $54,741.00 for B. I. DuPont — Musician Payroll ”, $11,035.50 for E. I. DuPont — Arrangers ”, and $2,907.24 for Payroll taxes ”. Upon analyzing these items, the Tax Commission might have determined that some $65,000 or more than one third of the total “ Income ” listed by Voorhees, was derived not from his own personal services, but from the services of musicians and arrangers who, at least on the face of this return, appeared to have been hired and paid by Voorhees. While such a conclusion may reasonably follow from a consideration of the tax return alone, other uncontradicted evidence presented at the hearing established beyond any doubt that the return does not accurately reflect the reality of the transactions reported therein.

It is not necessary here to examine the details of Voorhees’ arrangement with DuPont. From a study of the whole record we are satisfied that, just as he said, Voorhees acted as the musicians’ and arrangers’ employer “ in name only ”; that he did so only for the convenience of DuPont (because of their pension system); that union law prevented him from being an actual employer; that the house contractor — a union man — engaged the musicians for the broadcasts, and that the remuneration was determined by the musicians’ union. The money in question was never his own. He received it from DuPont and immediately paid it out for musicians, arrangers and payroll taxes in a wash transaction. Under this arrangement he ran no risk, he made no profit, he incurred no loss, and there was no fraud. Consequently, that money did not actually constitute a part of his own gross income, which was made up solely of fixed guest fees paid to him for his services as an orchestral conductor.

If there were evidence to support contrary conclusions, the Tax Commission’s determination in this respect would of course be unassailable. However, the only “ evidence ” to support that determination consists of the aforesaid four entries on the 1941 return, standing alone. Voorhees’ uncontradicted explanation of those entries, which was corroborated by the testimony of Pryor and Keane, the only other witnesses at the hearing, and by the various documents, removed any doubt as to their true meaning, which meaning is definitely adverse to the commission’s position. To permit the Tax Commission to find, in the face of this uncontroverted and convincing evidence, that the money which passed through Voorhees’ bank account in this wash transaction was part of his true “ income ” merely because erroneously it was so reported on his income tax return, would exalt form over substance and ignore the manifest realities underlying the method of his accounting.

Under all the circumstances, we are of the opinion that appellant was not taxable under article 16-A of the Tax Law. In reaching this conclusion we deem it unnecessary to determine whether he was an “ employee ” of the advertising agencies which, acted for his two sponsors.

The order of the Appellate Division should be reversed and the determination of the State Tax Commission annulled, with costs in all courts.

Dye, J.

(dissenting). I dissent and vote to affirm. We all agree that the petitioner Voorhees is a distinguished musician with an extensive educational background and experience and, as such, is recognized as one of our nation’s leading orchestra conductors and musical directors. If that was all that is involved there would be little difficulty in qualifying his vocation as a profession within the commonly accepted definition as * one skilled in the art or science of music, a conductor or performer ” (see Webster’s and Century Dictionaries, Collier’s Encyclopedia). However, the State Tax Commission, in dealing with the petitioner’s claim of exemption for liability for payment of an unincorporated business tax, was not limited to a consideration of his education and experience, but could look into the nature and character of his activities. This is what the Tax Commission did here. They accorded the petitioner, at his request, a full dress hearing. Evidence was submitted, viz., ■ the personal income tax return filed by the petitioner for the year 1941 which, by the way, did not state the nature of petitioner’s occupation or his business or profession, oral testimony by the petitioner, his auditor and a representative of an advertising agency. The State Tax Commission, in the exercise of their administrative functions, determined as a fact that the petitioner was carrying on an unincorporated business for the purposes of the unincorporated business tax imposed by article 16-A of the Tax Law, and that the moneys received from the broadcast of the American Telephone and Telegraph Company known as the “ Telephone Hour ” and of DuPont’s “ Cavalcade of America ’ ’ constituted receipts in the course of business. The Appellate Division unanimously confirmed such determination (282 App. Div. 988) on the ground that from this record we may not say as a matter of law that the determination of the Tax Commission was without substantial evidence to support it ’ ’. In such a setting the determination is subject to our review only within the scope of the substantial evidence rule and may not be disturbed unless shown to be “ clearly erroneous ” and so lacking in support in the evidence as to be “ arbitrary and capricious ’ ’ (Matter of Calder v. Graves, 261 App. Div. 90, 95, affd. 286 N. Y. 643; Matter of Stork Restaurant v. Boland, 282 N. Y. 256).

To become entitled to an exemption, the petitioner is required to show that he was practicing his profession and derived more than 80% of his gross income from personal services and that capital was not a material income-producing factor. In this case the latter element may be disregarded, as it is conceded that capital is not a material income-producing factor.

In making his income tax return for the year in question, the petitioner reported gross amount received $101,142.60 and then

listed as deductions:

Musicians’ payroll .......................$54,741.00

Arrangers ................................11,035.50

Payroll tax............................... 2,907.24

or a total of..................................$68,683.74

leaving an admitted gross income of $85,099.85 concerning which more will be said later.

While the musicians’ expense was an entirely legitimate deduction for purposes of computing net income tax due, its significance as an indication of the scope and character of his activities for determining the legal relationship and liability for an unincorporated business tax may not be overlooked when the record is viewed as a whole.

The income tax return as filed also listed other deductions in the amount of $44,213.82 which were allowed in the amount of $39,213.82. This expense included such items as $13,450 for agents’ commissions, $17,279.85 for entertaining, promotion etc., $4,350 for professional fees, $2,335.41 for office rent, electricity and telephones, and $2,551.64 for advertising, publicity, etc.

The petitioner says that his individual tax return as filed should not be relied on for anything except his own net personal fees per broadcast, viz.: $1,000 for the Telephone Hour and $500 for the DuPont hour; that while the return, on its face, may be susceptible of the interpretation placed on it by the commission, the proof demonstrates that in actual practice and, as a matter of fact, petitioner was not an independent contractor engaged in an unincorporated business but was simply practicing his profession as an employee. He points to the circumstance that his fee was in each instance fixed at a stated amount; that he was not the actual employer of the musicians making up the respective orchestras, as he could not be, under the union rules; that their wages were fixed by the union and the moneys received by him were for their account and were forthwith paid out in a wash transaction on which he made no profit. He asserts that the inference to be drawn from the face of the return must yield to the proof of what actually occurred.

The Tax Commission rejected this contention and refused to grant an exemption. There is basis in the record for such a conclusion. While the money received over and above the fixed fee in each instance was for expense incurred in producing the program, it is quite apparent that the fee paid was for something more than the direction of the orchestra; it was, in fact — or at least the board could reasonably so find — payment in part for use of his name as a conduit to avoid the consequences that might accrue to the sponsors for a direct hiring of the musicians and arrangers.

Tax cases, generally speaking, depend on their own set of facts and to that extent are sui generis; hence, the difficulty of laying down a broad general rule of universal application. The Legislature provided a standard for exemptions and named the long-recognized learned professions, but left it open to the Tax Commission to also exempt any other cases in which more than eighty per centum of the gross income is derived from the personal services actually rendered by the individual * * * in the practice of any other profession and in which capital is not a material income producing factor.” (Tax Law, § 386.) It thus charged the Tax Commission in the first instance with discretionary power to determine the petitioner’s professional status. In the exercise of such discretion it is now no longer open to doubt that if there is basis in the record or justification for the administrative body’s determination, it will be accepted and will not be set aside unless clearly shown to be erroneous (Matter of Mounting & Finishing Co. v. McGoldrick, 294 N. Y. 104). This principle was applied in the affirmance of the negative ruling in Matter of Backman v. Bates (279 App. Div. 1115, affd. 305 N. Y. 839) to hold the petitioner’s vocation as an " economist ’ ’ was not entitled to professional status for purposes of an exemption from liability for payment of an unincorporated business tax. In Matter of De Vries v. Graves (266 App. Div. 1030, affd. 292 N. Y. 529) (furniture designer), the equities in favor of the petitioner were indeed strong — much more so than here —- but nonetheless we affirmed the decision of the Appellate Division which had confirmed the adverse determination of the Tax Commission as a matter of administrative discretion.

This case on its facts may not be removed from the operation of the general rule and on this record it may not be said that the negative determination was so unreasonable, arbitrary and capricious as to be erroneous as a matter of law. The petitioner and his accountant both testified that the fee-plus method used in paying for these programs through the petitioner’s account was because these matters (the incidents flowing from a direct employment) “ were so complicated and had so many different interferences ” and Arthur Pryor, testifying for the petitioner, referred to it as ‘ ‘ a serious problem and someone in the Company conceived the idea that Mr. Voorhees could assume the responsibility if the DuPont Company reimbursed him for whatever the costs amounted to Such an arrangement might well be regarded by reasonable men as a subterfuge in avoidance of a responsibility the sponsors did not care to assume. For all practical purposes, the sponsors were limiting their liability for radio broadcasts, except to the extent of paying the agreed price, by using a device designed to absolve them from any responsibility to the performers and arrangers for all purposes. Such an arrangement, as the Appellate Division well said ‘ ‘ involved many elements beyond his services as conductor ” (282 App. Div. 988).

The order appealed from should be affirmed, with costs.

Conway, Desmond and Van Voobhis, JJ., concur with Fboessel, J.; Dye, J., dissents in an opinion in which Lewis, Ch. J., and Fuld, J., concur.

Order reversed, etc.

       The commission’s findings do not state whether the basis of decision was that Voorhees’ occupation was not a “profession” or that less than 80% of his gross income came from personal services.


author: Fboessel, J.

text:
    Thomas Cadicamo, as Administrator of the Estate of Maria E. Cadicamo, Deceased, Appellant, v. Long Island College Hospital, Respondent.
    Argued December 3, 1954;
    decided December 31, 1954.

      Benjamin H. Biff and Harold J. Levy for appellant.
    I. The act of the nurse in replacing an ordinary floor lamp that had been placed over a healthy, normal baby requiring no special medical attention or care, for the purpose of providing additional warmth, was an administrative act. The hospital is liable for the nurse’s negligence in that regard. (Roche v. St. John’s Riverside Hosp., 96 Misc. 289, 176 App. Div. 885; Lederman v. Boulevard Sanitarium, 263 App. Div. 727, 287 N. Y. 852; Volk v. City of New York, 284 N. Y. 279; Iacono v. New York Polyclinic Med. School & Hosp., 269 App. Div. 955, 296 N. Y. 502; Bickford v. Peck Memorial Hosp., 266 App. Div. 875; Phillips v. Buffalo Gen. Hosp., 239 N. Y. 188.) II. The careless use of equipment which requires for its proper use no special skill or judgment but only ordinary lay common sense is administrative negligence even though the activity involved may have a medical goal. (Bickford v. Peck Memorial Hosp., 266 App. Div. 875; Santos v. Unity Hosp., 301 N. Y. 153; Sheehan v. North Country Community Hosp., 273 N. Y. 580; Volk v. City of New York, 284 N. Y. 279; Howe v. Medical Arts Center Hosp., 287 N. Y. 698; Peck v. Towns Hosp., 275 App. Div. 302; Dillon v. Rockaway Beach Hosp. & Dispensary, 284 N. Y. 176; Iacono v. New York Polyclinic Med. School & Hosp., 296 N. Y. 502.) III. There was administrative negligence by the hospital in assigning one student nurse to take care of fifteen children; in permitting a student nurse to use a dangerous method of warming the baby, and in the nurse’s leaving the baby unattended for an unreasonable length of time. (Martindale v. State of New York, 269 N. Y. 554; Luke v. State of New York, 253 App. Div. 783; White v. Prospect Heights Hosp., 278 App. Div. 789; Howe v. Medical Arts Center Hosp., 261 App. Div. 1088, 287 N. Y. 698; Santos v. Unity Hosp., 301 N. Y. 153; Petry v. Nassau Hosp., 267 App. Div. 996.) IV. The immunity rule is harsh, unjust and based on a public policy no longer obtaining. It should be abandoned. (Schloendorff v. Society of N. Y. Hosp., 211 N. Y. 125; President & Director of Georgetown Coll. v. Hughes, 130 F. 2d 810; Wendt v. Servite Fathers, 332 Ill. App. 618; O’Connor v. Boulder Assn., 105 Col. 259; Vanderbilt Univ. v. Henderson, 23 Tenn. App. 135; Erie R. R. Co. v. Tompkins, 304 U. S. 64; Woods v. Lancet, 303 N. Y. 349; Bernardine v. City of New York, 294 N. Y. 361; Post v. Crown Heights Hosp., 173 Misc. 250; Liubowsky v. State of New York, 285 N. Y. 701; Robison v. State of New York, 292 N. Y. 631; Kaplan v. State of New York, 277 App. Div. 1065.)

      Harold Schaffner, Beginald V. Spell and Joseph L. Schilling for respondent.
    I. The act of the nurse in applying a lamp to increase the body temperature of the infant was a professional act for which defendant is not liable. (Schloendorff v. Society of N. Y. Hosp., 211 N. Y. 125; Sutherland v. New York Polyclinic Med. School & Hosp., 273 App. Div. 29, 298 N. Y. 682; Phillips v. Buffalo Gen. Hosp., 239 N. Y. 188; Steinert v. Brunswick Home, 172 Misc. 787; Wisner v. Syracuse Memorial Hosp., 274 App. Div. 1087; McGuinn v. Knickerbocker Hosp., 276 App. Div. 1079, 302 N. Y. 633; Lee v. Glens Falls Hosp., 265 App. Div. 607, 291 N. Y. 526; Bakal v. University Heights Sanitarium, 277 App. Div. 572, 302 N. Y. 870.). II. The facts being uncontroverted, there was no question of fact to submit to the jury and the professional or administrative negligence was a question of law. III. There was no administrative negligence by the hospital in assigning one student nurse to the nursery, or by the nurse in her actions while assigned to the nursery. (Bryant v. Presbyterian Hosp. in City of N. Y., 304 N. Y. 538.) IV. The immunity rule is a long-established one based upon a sound public policy and is neither harsh nor unjust. (Schloendorff v. Society of N. Y. Hosp., 211 N. Y. 125; Sheehan v. North Country Community Hosp., 273 N. Y. 163; Phillips v. Buffalo Gen. Hosp., 239 N. Y. 188; Sutherland v. New York Polyclinic Med. School & Hosp., 298 N. Y. 682.)
   Fboessel, J.

Plaintiff’s intestate, a baby less than one day old, was burned to death in her bassinet in the nursery ward of defendant’s hospital under circumstances hereinafter related.. Her father sues here, as administrator, for her conscious pain and suffering and for wrongful death.

The baby was born in the hospital at about 11:25 p.m. on February 21, 1948. The obstetrician gave no special instructions of any kind concerning her postnatal care. She was a normal baby in excellent condition ” and “ excellent health ”, and was therefore placed in the custody of the pediatrics department of the hospital for routine care, her mother also remaining in the hospital. At that time the nursery room, containing fifteen or sixteen infants, was in the care of a student nurse. At two o ’clock the following morning, another student nurse, Miss G-iminez, who had completed but half her training course, began her tour of duty and took charge of the nursery. She learned that the Cadicamo baby’s temperature was below normal, and that the nurse preceding her had placed a lamp over the baby to give her warmth and thus attempt to raise her temperature to normal.

This procedure was said to be the usual practice, and the equipment provided by the hospital was the same as it had been for at least four years. Such equipment consisted of an ordinary floor lamp, having a flexible or “ goose neck ” arm at the end of which was a small metal reflector. An ordinary 100-watt naked and unguarded electric bulb was placed in the reflector. These lamps were used throughout the hospital in the general administrative offices. One was specially provided in each nursery, however, for use as a “ heating lamp ” for furnishing ‘ ‘ additional heat ’ ’ when required to raise the temperature of a newborn infant. To do this, the practice was to wrap the baby in its blanket and then place the lamp so that the bulb and reflector are within six inches of the blanket, facing the baby’s feet. It is left there until temperature becomes normal, a period of time which varies with different babies.

Miss Griminez found the lamp over the baby at 2:00 a.m. and left it there until 4:00 a.m., when she picked up the child to feed and change her. Observing that the baby was still cold, she wrapped her in the blanket, returned her to her bassinet and again turned on the lamp, placing it about three inches from the blanket at the baby’s feet. She then went about her other duties until 6:30 a.m., when she “ walked out of the nursery ” into an adjoining room and cleaned bottles. Then, with the nurse from an adjacent nursery room, she took a cart containing said nursery bottles from the third floor, where the nurseries are, down to the basement. Upon their return to the third floor, at about 6:50 a.m., they smelled smoke and discovered that the baby’s bassinet was enveloped in flames two feet high. After they had extinguished the fire, it was observed that the bedding had been almostly completely burned away. The infant was of course then dead and her body was charred by the flames, which had been so hot that the bulb in the lamp was melted and fused.

An assistant fire marshal in the New York City fire department, who investigated the fire, testified that in his opinion it was caused by the heat from the electric light bulb in the lamp igniting the blanket. He added that Miss Giminez told him she thought the movements of the baby brought its blanket into contact with the electric bulb. Defendant has not attempted to dispute this or any other evidence; no defense witnesses were offered at the trial. Indeed, in his motion to dismiss, defendant’s counsel refers to the fire marshal’s testimony “ that the cause of he [sic] fire was the close proximity of the bulb to the blanket, and the explanation given was that maybe the baby in turning had disturbed or put the blanket closer to the bulb ”. Defendant relies upon the legal defense that the death was caused solely by the negligence of Miss Giminez, acting in her professional capacity as nurse. For such negligence, it argues, defendant would not be liable, under familiar authorities beginning with Schloendorff v. Society of N. Y. Hosp. (211 N. Y. 125).

The Trial Judge submitted to the jury as a question of fact, under “ all the evidence ”, whether the act which caused the death was administrative or professional in nature. Subsequently, however, he set aside the verdict in plaintiff’s favor, and directed a verdict for defendant upon the ground that the placing of the lamp in a negligent manner was a medical act for which the hospital could not be held liable. The Appellate Division affirmed, two Justices dissenting in separate memoranda.

In our opinion, both the trial court and the Appellate Division have overlooked facts and circumstances which the jury was entitled to find. The distance between the lamp and the baby’s feet would necessarily be affected by the baby’s movements. There is evidence that Miss Q-iminez thought the movements of the baby brought the blanket into contact with the electric light bulb, and thus caused the fire. In any event, since it is common knowledge that babies are not immobile, the placing of an unguarded, naked 100-watt electric light bulb within three or six inches of an infant but a few hours old required active supervision.

Thus the jury might find that the furnishing of this type of lamp for use in such dangerous proximity to a helpless infant, who could not be expected to remain motionless, together with the withdrawal of supervision and attendance occasioned by the absence of the nurse on the administrative duty of returning feeding bottles to the basement, caused the fire and its fatal consequences.

It follows that this case is controlled by our decision in Santos v. Unity Hosp. (301 N. Y. 153) where a nurse in attendance in the labor room left, as required by her duties, to answer the telephone, fifteen feet away. During her brief absence, her patient was overcome by a mental derangement called intrapartum psychosis, which caused her to open the window and leap to her death. Such psychosis is extremely rare and had not been observed by the physicians testifying in over 300,000 cases; there had previously been no case thereof in over 25,000 births at defendant’s hospital. Nevertheless it was a recognized hazard of childbirth. The court there submitted to the jury, “on all of the evidence ”, the question whether or not the defendant had been negligent in failing to provide bars on the windows of the labor room and in failing to provide constant supervision or uninterrupted attendance of the patient ”. We held, in the words of Chief Judge Loughran (p. 156): Thus there was left to the jury the question whether the defendant hospital was negligent when in the decedent’s exigency it withdrew from her all personal care without securing the window through which she then and there helplessly fell to her death. This submission of the issue was right, in our judgment.”

Not only does this case fall within that principle, but the facts here shown are much stronger for plaintiff than were the facts in that case. They may be summarized thus:

(1) Mrs. Santos’ intestate was an adult woman, apparently of sound mind and body, while decedent here was an utterly helpless newborn infant.

(2) The hazard there present was quite remote and indeed rare; here, the hazard presented by the proximity of a naked, unguarded electric light bulb in a metal reflector to a newborn infant wrapped in an inflammable blanket is plain to everyone.

(3) There, the nurse was absent for a very brief period of time, was not more than fifteen feet from her patient at any time, and had left her patient in no apparent danger; here, the nurse was absent from her nursery duties for twenty minutes, her administrative duties took her down to the basement, four floors away, and, as above noted, she left her patient in a position of obvious danger.

The jury was entitled to find here that the infant’s movements brought her blanket into contact with the hot bulb and kept it there long enough to ignite the blanket, because there was no one present to prevent it by the careful supervision which we may assume Miss Ciminez would have exercised had she not been about her duties in the basement. Neither was there a rescuer present in this darkened nursery room to observe the fire before it got well under way or to heed the child’s screams of pain. Had such a person been present, it is safe to assume that the fire might not have occurred at all; it is almost certain that the holocaust described by the nurses would not have taken place and death could have been avoided.

In brief, defendant was aware of the settled practice to place the heating lamp within a few inches of the infant, yet it provided for this purpose an instrument without protective device or guard other than the constant supervision of the nurse. At the same time it assigned to her administrative duties which took her from her professional post and thus left the infant exposed to an obvious danger. We doubt whether at any time in the development of the law defendant could claim immunity as to an act with which it had thus interfered through the obtrusion of administrative functions into the professional area (see Necolayff v. Genesee Hosp., 296 N. Y. 936, and Iacono v. New York Polyclinic Med. School & Hosp., 296 N. Y. 502; Ranelli v. Society of N. Y. Hosp., 295 N. Y. 850; Dillon v. Rockaway Beach Hosp., 284 N. Y. 176; Volk v. City of New York, 284 N. Y. 279; Sheehan v. North Country Community Hosp., 273 N. Y. 163). In any event, our decision in the Santos case (supra) clearly settles the matter.

A word should be said as to the case of Sutherland v. New York Polyclinic Med. School & Hosp. (298 N. Y. 682) which is stressed in defendant’s brief. There, we held that the decision of a nurse not to remove a hot-water bottle, despite the complaints of the patient, was a professional act for which the hospital could not be held. The distinctions are quite substantial between that case and this. They are very plain when we consider that, here, Miss Griminez made only one professional decision : that, in accordance with the accepted practice, heat should be applied to the infant until normal temperature should be attained. This involved an unpredictable time element, varying with each infant. When she attempted to carry out that professional decision and, also, at the same time, attended to her administrative duties, she was compelled by the latter to leave the child in a position of danger. If it be said that it was her duty to turn off the lamp when she left for the basement, the answer is that such a duty, or failure thereof, would not involve a professional act, dictated by professional judgment, but would constitute an act at odds with her previously exercised professional judgment, required solely for the benefit of defendant hospital so that the administrative duties assigned to her might be expedited.

Again, the Santos case (supra) is pertinent, for there the nurse might have seen that the patient, who was ambulatory, remain within sight while she answered the telephone, but she did not do so. Her professional judgment was undoubtedly that the patient should remain in the labor room, according to the usual practice, just as it was. that of Miss Griminez that the infant should have heat, according to usual practice. In both cases, it was the administrative requirements of the hospital which took from the patient the competent care and supervision to which she was entitled and which constituted the additional factor that generated a tragedy.

The judgment of the Appellate Division and that of the Trial Term should be reversed, with costs in all courts, but, since it appears that the findings of fact were not considered by the Appellate Division, the case should be remitted to that court for determination upon any questions of fact there raised (Civ. Prac. Act, § 606; Loughran v. City of New York, 298 N. Y. 320).

The judgment of the Appellate Division and that of the Trial Term should be reversed and the case remitted to the Appellate Division for determination of any questions of fact there raised, with costs to abide the event.

Lewis, Ch. J., Conway, Desmond, Dye, Fuld and Van Voorhis, JJ., concur.

Judgments reversed, etc.


author: Yan Yoorhis, J. Fboessel, J.

text:
    Alice Chancer, Appellant, v. Louis Chancer, Respondent.
    Argued November 16, 1954;
    decided December 31, 1954.

      Sidney Rothenberg and Charles Rothenberg for appellant.
    I. Money deposited in lieu of bail is deemed the property of defendant so far as plaintiff in the action is concerned. (Standard Elec. Equipment Corp. v. Laszkowski, 305 N. Y. 58; Commercial Warehouse Co. v. Graber, 45 N. Y. 393; Lichter v. Raff, 149 Misc. 53.) II. Defendant’s amenability to process does not defeat plaintiff’s right as judgment creditor to proceed against money which has been deposited by him in lieu of the bail undertaking required to be furnished under the order of civil arrest. (People ex rel. Wolfe v. Johnson, 230 N. Y. 256; Talbot v. New Amsterdam Cas. Co., 237 N. Y. 245; Ducas v. Federal Union Sur. Co., 168 App. Div. 24; Hermann v. Aaronson, 3 Abb. Prac. [N. S.] 389.) III. A proceeding to obtain cash deposited in lieu of a bail undertaking may be maintained prior to the termination of the action where the order of arrest was issued pursuant to section 827 of the Civil Practice Act. IV. Plaintiff is entitled to apply the cash deposit in lieu of bail to the satisfaction of the pre-existing money judgment obtained by her in this action. (Talbot v. New Amsterdam Cas. Co., 237 N. Y. 245; Scofield v. Churchill, 72 N. Y. 565.)

      Emil K. Ellis for respondent.
    I. The Appellate Division properly decided that there was no justification for the forfeiture of the bail. (Standard Elec. Equipment Corp. v. Laszkowski, 305 N. Y. 58; Subernick v. Subernick, 123 Misc. 174.) II. No final judgment has been rendered against defendant herein as required by section 859 of the Civil Practice Act. (Potter v.
      Rossiter, 109 App. Div. 35.) III. Plaintiff is attempting to have the cash bail forfeited to pay unsatisfied judgment entered prior to the actual arrest of defendant. IY. This action, having been marked “ off ” the calendar, should have been automatically dismissed under rule 302 of the Buies of Civil Practice.
   Yan Yoorhis, J.

This appeal concerns the disposition of $1,000 cash bail posted to lift an order of civil arrest, which Special Term directed to be applied in partial satisfaction of a money judgment obtained by wife against husband for accrued temporary alimony in a separation action. The Appellate Division reversed (282 App. Div. 561), holding that this money had to be paid to defendant, inasmuch as he in no way breached the undertaking upon which the cash in lieu of bail was deposited. The reasoning of the Appellate Division was expressed succinctly in its opinion by Mr. Justice Cohn, which stated (p. 564) that said deposit is not answerable for more than the defendant himself is answerable.”

Appellant contends that Special Term had power to direct this money to be paid to the wife under section 859 of the Civil Practice Act, which provides that, upon discharging a defendant from civil arrest, the disposition of money deposited “ is subject to the direction of the court, as justice requires, before and after the judgment. ’ ’ This language of section 859 is applicable in a case where the order of arrest could be granted only by the court, which was true of the order of arrest in this case. We agree that the language that the disposition of money so deposited is subject to the direction of the court, as justice requires ” does not invest the court with an arbitrary or unlimited discretion concerning what shall be done with such funds.

The questions certified by the Appellate Division call for a determination of this question as one of law, and its order recites that the decision was based on a determination that it was an error of law for Special Term to direct payment of the cash deposit in the manner stated above.

We think that the Appellate Division decided this issue correctly upon the law. Standard Elec. Equipment Corp. v. Laszkowski (305 N. Y. 58) held that it was immaterial whether the money deposited in that case belonged to the defendant or to someone else, and if this had also been a case where the right to arrest depended upon the nature of the action, it may well be that Special Term could have entered its order herein without exceeding its power. In the Standard Electric case (supra) a defendant had misappropriated money belonging to a plaintiff, which the action was commenced to recover. That order of arrest issued under subdivision 7 of section 826 of the Civil Practice Act, where the right to arrest depends upon the nature of the action, and the cash bail had been posted under an order which lifted the arrest upon condition that the bail be used to apply on the judgment if plaintiff succeeded in obtaining one for the recovery of the misappropriated funds after trial. The plaintiff there would have been entitled to a body execution after judgment, the right to which is limited by section 764 of the Civil Practice Act to instances where under section 826 ‘‘ the plaintiff’s right to arrest the defendant depends upon the nature of the action ”. (Graves v. Waite, 59 N. Y. 156, 160-161; Elwood v. Gardner, 45 N. Y. 349.)

That was a different situation from the one which is noAv before the court, where the basis of the arrest was not the nature of the action, nor even extrinsic circumstances such as proof aliunde that the defendant was about to dispose of his property Avith intent to defraud his creditors. This arrest depended entirely upon the circumstance that defendant had become a nonresident of New York, and that unless he were forcibly detained within this jurisdiction he might depart for his home with the consequence that the judgment could not be enforced against his person by contempt, if our courts Avere to decide that he had been guilty of contempt. In other words, this order of arrest was procured under section 827 and not under section 826 of the Civil Practice Act. The functions of the two sections are altogether- different. The justification for the issuance of an order of arrest under section 826 is that a defendant has been guilty of some wrongful act, such as the misappropriation of funds as in Standard Elec. Equipment Corp. v. Laszkowski (supra), or that he is about to engage in some wrongful conduct which would render a judgment ineffectual, whereas the ground of arrest supplied by section 827 is merely that he may not be found Avithin the jurisdiction in order to enforce the judgment upon his person. This latter is the old English writ of ne exeat regno. The power to issue it depends upon no wrongful conduct by a defendant, but upon the mere circumstance that he is a nonresident and only temporarily within the jurisdiction, being likely to depart for home, or that, being a resident, it appears that he is about to leave the jurisdiction. It applies only to an action where the judgment demanded requires the performance of an act the neglect or refusal to perform which would be punishable by the court as a contempt. It is not inherent in the grounds for the granting of this ancient writ now incorporated in section 827 that the departure from the jurisdiction be for any wrongful purpose. The papers before the court at the time of the issuance of this order of arrest might be found to indicate that this defendant was about to leave the State of-New York to avoid payment of accrued temporary alimony, but we need not analyze whether that is so, inasmuch as that would not relate to the question of power to issue an order of arrest under section 827. It might relate to the propriety of an exercise of discretion in granting or withholding such a provisional remedy, but no phase such as that is before this court. At this point we are not to go into whether defendant husband had evaded or intended to evade some just obligation to support his wife, but are confined to a consideration of a limited question of law, viz., what were the contingencies against which this bail was posted or could be posted under section 827 to lift his arrest?

The purpose and scope of the writ of ne exeat regno has been thus described in Bata v. Bata (277 App. Div. 335, 337): Nowadays this provisional remedy is not used frequently. In theory, it applies to equitable actions wherein the chief sanction for the performance of the judgment is punishment by contempt of court. It is to be brought into play if there is likelihood that procedure by contempt would be unavailing on account of inability to secure the person of the defendant within the jurisdiction when the time to enforce the judgment arrives.”

In the present instance, the order of arrest was not obtained to give security to plaintiff for payment of alimony and counsel fees, but to insure the presence of defendant’s person within the jurisdiction in order that a judgment for alimony and counsel fees might be enforced by contempt upon his person.

There could be no violation of condition maturing payment of bail, provided that defendant rendered himself amenable to proceedings to punish him for omission to pay the judgment pursuant to the order of arrest. This is the purpose for which the bail was given, not to secure payment of the judgment for alimony. That is the maximum possible under section 827 of the Civil Practice Act; the greatest authority which that section confers is to issue an order of arrest insuring that a defendant’s person will be kept where he can be punished by contempt for failure to comply with whatever judgment may be rendered in the action. The giving of bail to lift the arrest could not be upon terms which would enable the application of the bail to purposes other than those contemplated by the section, which is limited to authorizing arrests to render certain that the judgment can be enforced against the person of the defendant by his presence within the forum.

The circumstance that this judgment for temporary alimony was entered in 1949, prior to defendant’s arrest in 1951, may not be particularly important under the circumstances of the case. That aspect need not be decided at present.

The reason for resorting to section 827 of the Civil Practice Act appears to have been that it supplies the only basis on which the defendant could have been arrested. Section 1171-b of the Civil Practice Act, under which this judgment for arrears in temporary alimony was entered, directs that it “ may be enforced by execution or in any other manner provided by law for the collection of money judgments.” Plaintiff could not have secured a body execution based on that judgment, inasmuch as executions against the person can only be obtained under section 764 in eases where a plaintiff would have been entitled to an order of arrest depending upon the nature of the action. The right to arrest depending upon the nature of the action can only be exercised in the instances specified in section 826, of Avhich this is not one. It may be assumed that plaintiff would have been entitled to enforce the obligation expressed in that judgment by sequestration or contempt under sections 1171-a and 1172 of the Civil Practice Act, but such procedure would have been abortive if defendant left the jurisdiction, as he might have done after being served with an order to show cause in either of those proceedings. There remained to plaintiff, as her only satisfactory recourse, an application for arrest pursuant to section 827 in the nature of a writ ne exeat regno. There appears to have been no reason on account of which such an order could not have been granted, as was done, but when defendant came to be released on bail, the only condition under which the court was empowered or attempted to direct that the bail would be defaulted, would be the event that the defendant failed to render his person amenable to whatever process in the jurisdiction might be issued to enforce the judgment against him by contempt. In practical terms, the significance of this order of arrest under section 827 was to keep him in New York State long enough to enable contempt proceedings to be started and completed, so that he might be jailed for contempt if the New York Courts decided that he was guilty of it. Contempt proceedings were begun, but were dismissed by an order of the Appellate Division from which no appeal was taken.

What this discussion leads to is the conclusion that Special Term was powerless under section 827 to issue an order of arrest for any other purpose than to insure the presence of the person of the defendant within the jurisdiction in event of punishment by contempt, and that no greater condition could be imposed for the forfeiture of this cash bail. The language in section 859 that money deposited “ is subject to the discretion of the court, as justice requires ” signifies only that the court has discretion in order to direct the manner of application of the money to some purpose prescribed by law. The area of discretion might have been broader in the case of a defendant who had been arrested under section 826. Under the circumstances of this case, if defendant at all times rendered himself amenable to the jurisdiction of the court (as he did) the money has to be paid to defendant or to whoever actually owns it. Under the Standard Elec. Equipment Corp. case (supra), it would be immaterial that this $1,000 might have belonged to some third person, if, as in that case, it had been posted to insure payment of a judgment which the action was brought to obtain, instead of having been given merely to secure his presence in the jurisdiction. The Standard Electric decision is authority for holding that the money should be disposed of within the limits of the undertaking as though it belonged to defendant, but here, assuming that it did belong to defendant, it nevertheless was not subject to disposition summarily by such an order as this in payment of whatever obligations he might owe. That would exceed the scope of the undertaldng. It would require some further legal proceeding to appropriate it to this judgment, which could only be done subject to the rights of adverse claimants after an opportunity to be heard. Here the defendant did render himself amenable to the court, there was no forfeiture of bail by flight as was the case in Talbot v. New Amsterdam Cas. Co. (237 N. Y. 245) and in other cases cited by appellant, and therefore the money was required to be returned to the defendant or to its true owner. The order of arrest in this case was not bottomed on the nature of the action, as the Appellate Division said, and in its words the deposit is not answerable for more than the defendant himself is answerable.

The order appealed from should be affirmed, the first question certified answered in the negative, and the other questions certified not answered.

Fboessel, J.

(dissenting). I dissent and vote to reverse on the dissenting opinion below. I would answer the first and third questions certified in the affirmative, the second in the negative.

Lewis, Ch. J., Conway, Desmond, Dye and Fuld, JJ., concur with Van Voobhis, J.; Fboessel, J., dissents in a memorandum.

Order affirmed, etc.