text:
    Hannah Sullivan, as Receiver of the Estate of Timothy D. Sullivan, Deceased, Appellant, v. Mount Carmel Cemetery Association, Respondent.
    Cemetery associations —■ certificates of indebtedness issued under section 74 of Membership Corporations Law payable from proceeds of sales of lots — action at law to recover balance due not maintainable — action for an accounting only remedy — definite date in certificate for payment of balance — obligation may be enforced by courts but payment is restricted to method prescribed by statute.
    1. Certificates of indebtedness issued by a cemetery association pursuant to section 74 (now 97) of the Membership Corporations Law (Cons. Laws, eh. 35) are to be paid “ from the proceeds of sales of the use of lots and plats.” An action at law, therefore, to recover a balance due on such a certificate cannot be maintained. An action in equity for an accounting and for the pro rata application of moneys received from the sale of lots to payment of the amount unpaid is the only remedy.
    2. Nor is this changed by the fact that in a certificate sued upon a definite date is fixed for payment of the balance unpaid. The certificate must be read in accordance with the authority which the corporation had to issue it. The fixing of a definite date for payment of the balance may be construed as a time up to which the directors may exercise a discretion in the application of the proceeds without interference from the courts. After that date the balance becomes due and may be enforced as an obligation but its payment is restricted to the methods prescribed by the statute.

      Sullivan v. Mount Carmel Cemetery Association, 217 App. Div. 309, affirmed.
    (Argued January 11, 1927;
    decided February 23, 1927.)

      Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the second judicial department, entered June 25, 1926, which affirmed an order of Special Term denying a motion, by plaintiff, for judgment on the pleadings.

      Abraham Benedict, Gustavus A. Rogers and Edith H. Kunen for appellant.
    The defendant had power to make its certificates of indebtedness payable at a fixed date. (American Exchange Natl. Bank v. Woodlawn Cemetery, 194 N. Y. 116; Real Prop. Law, § 450, amd. by L. 1918, ch. 404; Matter of Chauncey, 191 App. Div. 359; Matter of Norton, 97 Misc. Rep. 289; Bade v. Ferncliff Cemetery Assn., 91 Misc. Rep. 26; Whittemore v. Woodlawn Cemetery, 71 App. Div. 257; Thacher v. Hope Cemetery Assn., 79 Hun, 222; 126 N. Y. 507; Tyndall v. Pinelawn Cemetery, 198 N. Y. 217; Calif. Packing Corp. v. Kelly Storage, etc., Co., 228 N. Y. 49; McGovern v. City of New York, 234 N. Y. 377.) The view taken by the Appellate Division defeats the statutory plan and imposes terms neither authorized nor contemplated by the Legislature. (Empire Engineering Co. v. Mack, 217 N. Y. 83; Warnock Uniform Co. v. Garifalos, 224 N. Y. 522; North Carolina R. Co. v. Story, 268 U. S. 288; Tyndall v. Pinelawn Cemetery, 198 N. Y. 217.)

      Clinton T. Roe for respondent.
    The respondent cemetery association had not the power to provide in its land purchase certificates a fixed date upon which the balance then remaining unpaid of the principal sums thereof should become due and payable. (Matter of Chauncey, 191 App. Div. 359; Thacher v. Hope Cemetery Assn., 126 N. Y. 507; Matter of Norton, 97 Misc. Rep. 289.) The plaintiff may not pursue any course of action that would work adversely to the interests of the other holders of land purchase certificates. (Whittemore v. Woodland Cemetery, 71 App. Div. 257; Guffanti v. National Surety

      Co., 196 N. Y. 452; Bauer v. Platt, 72 Hun, 327; Pfohl v. Simpson, 74 N. Y. 137; Illinois Surety Co. v. Mattone, 138 App. Div. 173; Board of Supervisors v. Deyo, 77 N. Y. 219.)
   Crane, J.

The plaintiff is the holder of the following certificate of indebtedness issued by the Mount Carmel Cemetery Association on the 16th day of October, 1918:

“ Number 393 Amount $200,000

CERTIFICATE OF INDEBTEDNESS

“ of the

“ MOUNT CARMEL CEMETERY ASSOCIATION

“ Incorporated under the Laws of the State of New York

“ This is to Certify that the Mount Carmel Cemetery Association, a corporation duly organized under and by virtue of the Laws of the State of New York, is indebted to Hannah Sullivan, as Receiver of the Estate of Timothy D. Sullivan, deceased, or assigns, in the sum of Two Hundred Thousand 00/000 Dollars, for value received, which sum the said Mount Carmel Cemetery Association hereby promises to pay on the first Monday in June, in the year nineteen hundred and twenty-five, at its office in the City of New York, on the presentation and surrender of this Certificate.

“ This Certificate is one of a series of Certificates amounting in the aggregate to Three Million, one hundred and fifty-six thousand, eight hundred ($3,156,800) Dollars, all of like tenor and effect. The Mount Carmel Cemetery Association shall and will apply at least one-half, or fifty (50%) per cent of the proceeds of the sale and use of lots and plots semi-annually, or oftener at the option of the said Mount Carmel Cemetery Association, to the payment pro rata of all outstanding Certificates of Indebtedness, aggregating said amount of Three Million, one hundred and fifty-six thousand, eight hundred ($3,156,800) Dollars, until the whole amount of said indebtedness is paid; the unpaid balance of this Certificate of indebtedness to be paid on the said first Monday of June, 1925, at the office of said Mount Carmel Cemetery Association, in the City of New York.

“ The said Mount Carmel Cemetery Association may apply as much more than one-half, or fifty per cent of the proceeds of the sale and use of its lots and plots to the payment of its Certificates of Indebtedness as it may deem advisable and proper after the payment of the incidental expenses and liabilities of the said Mount Carmel Cemetery Association, and the amount necessary for the preservation, improvement and embellishment of the Cemetery grounds and the avenues and roads leading thereto.

This Certificate of Indebtedness is transferable only on the books of the Mount Carmel Cemetery Association in person or by Attorney on surrender of this Certificate.

“ This Certificate shall not become obligatory until it shall have been authenticated by the signature of the Registrar selected by the Mount Carmel Cemetery Association.

“ In Witness Whereof, the said Mount Carmel Cemetery Association has caused this Certificate of Indebtedness to be signed by its President and its Secretary, and its corporate seal to be hereto affixed at the City of New York on this 16th day of October A. D. 1918.

“ MOUNT CARMEL CEMETERY ASSOCIATION

“ By Ben Blumenthal

“ [corporate seal] President.

Maurice B. Blumenthal

“Secretary.”

On June 15, 1925, the due date, only $69,500 had been paid, and there was due $130,500 for which this plaintiff has brought an action at law. There is included in the complaint a second cause of action upon another like certificate, but for the purposes of this opinion, only one need be mentioned.

The defendant answered setting up that the certificates held by the plaintiff represented part of land purchase certificates, and are for the unpaid balance of the purchase price of land acquired and to be used for cemetery purposes; that pursuant to the laws and statutes of the State of New York, the proceeds received from the sale of cemetery lots are to be applied to the payment and reduction of such certificates; and that the defendant was unauthorized by law to obligate itself to pay said amounts at a fixed date.

The plaintiff having moved for judgment on the pleadings, the motion was denied and the order of the Special Term has been affirmed by the Appellate Division. This not being a final order, the Appellate Division granted leave to appeal to this court, certifying the following question: “ Is the plaintiff entitled to judgment in her favor upon the pleadings? We may put this question in another form. Can the plaintiff maintain an action at law on this certificate, obtain a money judgment, and issue execution to collect it; or must she resort to an action in equity for an accounting and for the pro rata application of moneys received from the sale of lots to her certificates?

After a review of all our statutes applicable to cemetery corporations, I am of the opinion that an action in equity for an accounting and its incidental reliefs is the only remedy. Chapter 133 of the Laws of 1847 is the first act of the Legislature which we need refer to. It provided for the incorporation of cemetery associations, and gave them power to purchase land to be used exclusively for the burial of the dead, not to exceed two hundred acres. Authority was also given to hold personal property not exceeding five thousand dollars. Section 7 provided:

“All lots or plats of ground designated on the maps filed as aforesaid, and numbered as separate lots by the incorporation, shall be indivisible, but may be held and owned in undivided shares. One-half at least of the proceeds of all sales of lots or plats shall be first appropriated to the payment of the purchase money of the lands acquired by the association, until the whole purchase money shall be paid, and the residue thereof to preserving, improving and embellishing the said cemetery grounds and the avenues, or roads leading thereto, and to defraying the incidental expenses of the cemetery establishment. And after the payment of the purchase money and the debts contracted therefor, and for surveying and laying out the land, the proceeds of all future sales shall be applied to the improvement, embellishment and preservation of such cemetery, and for incidental expenses and to no other purpose or object.”

Section 10 reads:

“ The cemetery lands and property of any association, formed pursuant to this act, shall be exempt from all public taxes, rates, and assessments; and shall not be hable to be sold on execution, or be applied in payment of debts, due from any individual proprietors.”

This was followed by chapter 122 of the Laws of 1853, by adding to the act of 1847 the following section:

“Associations formed under this act may also agree, with the person or persons from whom cemetery lands shall be purchased, to pay for such lands, as the purchase price thereof, any specified share or portion, not exceeding one-half, the proceeds of all sales of lots or plots made from such lands; in which case the share or portion of such proceeds so agreed upon, not exceeding one-half thereof, shall be first appropriated and applied to the payment of the purchase money of the lands so acquired, and the residue thereof shall be appropriated to preserving, improving and embellishing the said cemetery grounds and the avenues or roads leading thereto, and to defraying the incidental expenses of the cemetery establishment. In all cases where cemetery lands shall be purchased and agreed to be paid for in the manner hereinbefore last provided, the prices for lots or plots, specified in the by-laws, rules and regulations first adopted by any such association, shall not be changed without the written consent of a majority in interest of the persons from whom the cemetery lands were purchased, their heirs, representatives or assigns.”

Then came chapter 163 of the Laws of 1860, giving authority to the cemetery associations to issue certificates of indebtedness. This was also by amendment of the act of 1847. It shall be lawful,” says section 1, for the trustees * * * to fund any outstanding indebtedness, for lands purchased for cemetery purposes, or for moneys actually expended in preserving, improving and embellishing the cemetery grounds, and to provide for the payment of such funded debt, in the manner hereinafter provided.”

Then follows:

§ 2. Whenever the trustees, by a vote of two-thirds of all the trustees elected, shall desire to fund such indebtedness, it shall be their duty to ascertain the amount of obligations outstanding for the purchase money of the lands acquired by the association, and the amount of obligations outstanding for preserving, improving and embellishing the cemetery grounds, and thereupon, with the consent of any creditor to whom such indebtedness, or any part thereof, may be due and owing, the said trustees shall have power to issue certificates for the amount thereof, in sums of one hundred dollars each, payable at such time, and drawing such interest as may be agreed upon, in satisfaction and discharge of such indebtedness, or such part thereof, but no certificate shall be issued for any fractional part of one hundred dollars, nor drawing any higher rate of interest than seven per cent per annum. The said certificates shall be sealed with the corporate seal of the association, and signed by the president and treasurer thereof. They shall be deemed personal property, and shall be transferable by delivery, unless otherwise provided on the face thereof, and an exact and true account of the number and amount of the said certificates, the persons to whom issued, the time of maturity and the rate of interest, shall be accurately entered on the books of the association. * * *

“ § 4. Nothing in this act contained shall be construed to create a lien upon lots or plats belonging to individual proprietors, within the cemetery limits, nor any other or greater liability against the association or trustees issuing said certificates, than may be necessary to enforce the faithful application of the proceeds of sales, in the redemption thereof, in the manner aforesaid.”

I have copied the pertinent portions of these statutes in full, as they have been embodied and continued almost in the same phraseology in all subsequent enactments down to and including sections 70 and 74 of our present Membership Corporations Law (Cons. Laws, ch. 35). (In the revision of 1926, chapter 722, sections 70 and 74, became sections 87 and 97. My subsequent references will be to sections 70 and 74.) The only portion which has been dropped out has been that portion of section No. 4, which reads: any other or greater liability against the association or trustees issuing said certificates, than may be necessary to enforce the faithful application of the proceeds of sales, in the redemption thereof, in the manner aforesaid.” This clause, made applicable to stock by chapter 107, Laws of 1879, section 4, is continued in section 75 of our Membership Corporations Law, also applying only to stock.

The act of 1847 was again amended by chapter 245 of the Laws of 1874 in an immaterial part; and again by chapters 107 and 108 of the Laws of 1879. Chapter 107 authorized the change of certificates of indebtedness into certificates of stock, giving dividends on the stock payable out of surplus income instead of interest on the certificates of indebtedness. Section 4, above quoted from the Laws of 1860, was continued in substance as applicable to said certificates of stock. Chapter 108 combined in one section section 7 of chapter 133 of the Laws of 1847 and section 1 of chapter 122 of the Laws of 1853. This combination still continues in almost the identical words as section 70 of the Membership Corporations Law. This provision, therefore, is not new. It is the same as the act of 1847 with the provisions of 1853 added. It is still the law governing the disposition of proceeds received by cemetery associations from the sale of lots.

After the acts of 1879 came the General Laws of 1895, chapter 559, relating to membership corporations, including cemetery associations. Sections 50 and 54 made no changes in the parts we are considering, and were later continued in the Membership Corporations Law, as sections 70 and 74. However, in section 54, we find that the words any other or greater liability against the association,” etc., of section 4, chapter 163 of the Laws of 1860, have been dropped, so far as applicable to certificates, continuing, however, the provision that the certificates shall not be a lien upon any lot belonging to a lot owner.

The Consolidated Laws of 1909, chapter 40, sections 70 and 74, re-enact these provisions regarding the application of proceeds from the sale of lots, the agreement with purchasers and the certificates of indebtedness as they before existed, and as I have above quoted them from the earlier laws.

Under these statutes, how have the courts dealt with the indebtedness of cemetery associations? That the Legislature has not attempted to make any general revision or change in the cemetery law may be gathered from the fact that section 65, chapter 40 of the Laws of 1909 (Consolidated Laws) still continues the right of cemetery corporations to acquire land by condemnation, although it was decided as early as 1876 in Matter of Deansville Cemetery Assn. (66 N. Y. 569) that such provision was unconstitutional and void.

Thacher v. Hope Cemetery Association (126 N. Y. 507) related to the Statute of Limitations as applicable to certificates of indebtedness issued by the cemetery association. The certificate in that case contained an agreement on the part of the association that one-half of the receipts from the sale of lots should be applied exclusively to the payment of the $2,500. This court, however, had something to say regarding these certificates. The sole obligation was contained in the certificate, for the breach of which an action would he at law if it were not for the statutes. Judge Earl says:

It was obliged to apply the money so received semiannually, and the instrument must be treated as to its legal effect as if it had been payable in semi-annual installments; and for default in the payment of any installment an action could at once have been brought to recover the amount due for such installment; and when all the installments became due, as they did more than ten years before the commencement of this action, then the entire amount specified in the certificate was due, and an action could then have been brought against the defendant to recover the whole amount thereof; and an ordinary action at law is the proper remedy in such a case. * * * We have thus far considered this certificate without reference to the statutes governing the defendant.”

Referring to the laws up to and including chapter 163 of the Laws of 1860, it was there said that the certificate did not create a general obligation to pay, but only an obligation to. pay out of the proceeds of the moneys received from the sales of lots. “ If it never received any money from the sales of lots it could not be compelled to pay any upon the certificates.”

Seymour v. Spring Forest Cemetery Assn. (144 N. Y. 333) related to bonds issued for the purchase price of cemetery lands. These also contained a provision for their payment out of the proceeds from the sale of lots. This was held to be in conformity with the statutes, and binding on the corporation.

American Exchange National Bank v. Woodlawn Cemetery (194 N. Y. 116) related to certificates of stock, treated as certificates of indebtedness. Spurious certificates of stock had been negotiated for a loan, and the action was to make these an obligation of the association, or rather to recover damages for the loss occasioned by their issuance. This court said, after referring to the statutes:

It is evident that the legislative scheme was twofold. It enabled such associations to acquire land and to provide for a future and conditional payment of the price, and it secured to the owners of burial plots the creation and the application of a fund for the perpetual preservation, improvement and embellishment of the grounds. In : legal effect, the certificates issued by the defendant were promises to pay money; differing, essentially, from certificates of stock, which a stock corporation issues. * * * It was not within the corporate powers of such associations to obligate themselves absolutely with respect to the proceeds of sales, or otherwise than by the certificates of indebtedness of the statute. * * * They were under restrictions, which entered into the fundamental law of their being. * * * The powers of the corporation could not rise beyond the legislative source and the wise scheme of the legislature, for a restriction of the corporate liability, by limiting what the corporation might do, and for the maintenance of a fund for the benefit of lot owners, could not be defeated by acts in excess of powers conferred. * * * The question of the liabilities, which such associations may incur, is a very serious one and concerns the body of lot owners, for whose protection the legislative scheme was devised,” etc.

It is true that the opinion referred to section 4 of chapter 163 of the Laws of 1860, containing the words that “ nothing in this act contained shall be construed to create * * * any other or greater liability against the association or trustees issuing said certificates, than may be necessary to enforce the faithful application of the proceeds.”

Although these words, as applicable to certificates, have not been in the laws since 1895, I do not think they furnish the sole basis for the limitation upon the obligations created by these certificates of indebtedness. In view of our statements regarding the purpose of these cemetery corporations, the protection of lot owners and the continuance in the various acts of these provisions regarding the means of payment for lands purchased, it seems to me that these words were unnecessary to limit the liability; that the law has not been changed in this particular, and was not intended to be changed by reason of their omission after 1895.'

In Tyndall v. Pinelawn Cemetery (198 N. Y. 217) it was decided that an action for an accounting upon the certificates of indebtedness there in suit was the proper remedy.

Reading section 70 and section 74 of the Membership Corporations Law in the light of their history, of the decisions and of the practice pertaining to the use of certificates of indebtedness by cemetery associations, I am forced to the conclusion that it was never intended that they should create an obligation for the payment of money absolutely at a definite date, upon which an action at law could be maintained and execution issued. Cemetery associations may be sued at law for their indebted- , ness, properly created. Contracts may be made for work, labor and services, or even for property, which may create a present indebtedness for which the corporation would be liable. Such was the case of Johnson v. Ocean View Cemetery (198 App. Div. 854). A judgment recovered on such claims may be collected by execution since section 450 of the Real Property Law (Cons. Laws, ch. 50) was amended by the Laws of 1918, chapter 404. Where, however, certificates are issued pursuant to section 74 “ with the consent of the creditor to whom any such indebtedness is owing,” the certificates are to be paid “ from the proceeds of sales of the use of lots and plats.” That the certificates of indebtedness are something more than mere obligations to pay money absolutely and at a given time, and are of a different nature, appears also from those provisions which give the certificate holder the rights of a share holder, a right to vote at the meetings of the corporation. (Sect. 63; sect. 74.)

The certificate here in question on its face also indicates that it was intended to be paid out of the proceeds of the sale of lots. The fact that it has fixed a definite date for the payment of the balance due as of June 1, 1925, has created all the trouble. Such a statement is apparently inconsistent with the postponed payment from subsequent sales. However, the certificate must be read in accordance with the authority which the corporation had to issue it. Corporate acts or words cannot create an obligation contrary to the direct provision of a statute governing its operations. The certificate refers to the purchase of the land for cemetery purposes, and to the amount due as part of the purchase price. It obligates the Mount Carmel Cemetery Association to apply at least one-half of the proceeds of the sale and use of lots to the payment pro rata of all outstanding certificates of indebtedness until the whole amount is paid. The fixing of a definite date for the payment of the balance due may be construed as a time up to which the directors may exercise a discretion in the application of the proceeds without interference from the courts. After that date, the balance does become due; it may be enforced as an obligation by the courts; but its payment is restricted to the methods prescribed by the statute, which is the application of the proceeds of the sales of lots to the indebtedness. The courts can interfere after the due date; enforce the obligation, enter judgment; but it will be a judgment for an accounting, or for the application of the proceeds in some appropriate manner.

For the reasons here expressed, the order below should be affirmed, with costs, and the question certified answered in the negative.

Cardozo, Ch. J., Pound, Andrews and Lehman, JJ., concur; Kellogg, J., absent.

Ordered accordingly.


source: Caselaw Access Project

author: Crane, J.

license: Public Domain

text:
    The People of the State of New York, Respondent, v. James Fitzgerald, Appellant.
    Appeal — crimes — delinquent child — trial — evidence — appeal direct to Court of Appeals from judgment of County Court affirming judgment of Children’s Court of Buffalo proper upon certification by Appellate Division justice — child charged in Children’s Court of offense which would be felony in adult may be convicted of delinquency only upon proof by competent evidence — improper conviction upon uncorroborated testimony of accomplice and confession procured by threats.
    1. Am appeal from a judgment of the Erie County "Court affirming a judgment of the Children’s Court of Buffalo, convicting the defendant of being a delinquent child, is properly taken direct to the Court of Appeals upon certification by a justice of the Appellate Division of questions of law for review. (Code Grim. Pro. §§ 520, 749; L. 1925, ’ ch. 385.)
    2. Under the provisions of the statute creating the Children’s Court of Buffalo (L. 1925, ch. 385) a child over seven and under sixteen years of age, who commits any act which, if committed by an adult, would be an offense punishable otherwise than by death or by life imprisonment, may be tried in the Children’s Court, convicted and sentenced. The act, however, must be proved and it must be proved by competent evidence.
    3. A boy under the age of sixteen years, charged with being a delinquent child in that he had committed burglary and larceny, is improperly convicted, where the only evidence against him is that of an alleged accomplice, uncorroborated as required by section 399 of the Code of Criminal Procedure, and an alleged confession procured by threats of a police officer and so inadmissible under section 395 of the Code of Criminal Procedure. (People ex rel. Van Riper v. N. Y. C. Protectory, 106 N. Y. 604, 609, approved and followed.)
    (Argued January 13, 1927;
    decided February 23, 1927.)
    Appeal, by permission, pursuant to section 520 of the Code of Criminal Procedure, from a judgment of the Erie County Court entered June 28, 1926, which affirmed a judgment of the Children’s Court of the city of Buffalo convicting defendant of juvenile delinquency.

      Thomas J. McKenna for appellant.
    An infant cannot be adjudged a juvenile delinquent on a confession made by him to the police under the influence of fear produced by threats. (Code Crim. Pro. § 395; People ex rel. Van Riper v. N. Y. C. Protectory, 106 N. Y. 609; People v. Fowler, 148 N. Y. Supp. 744.) There- must be corroboration of the testimony of an accomplice to adjudge an infant a juvenile delinquent. (Code Crim. Pro. § 399.)

      Guy B. Moore, District Attorney, for respondent.
    It is only in criminal cases that an appeal can be taken directly from the County Court to the Court of Appeals. (Code Crim. Pro. § 520.) Juvenile delinquency is not a crime. (L. 1925, ch. 385, §§ 344-n, 344-x; L. 1911, ch. 651, § 521.) The adjudication of a child as a juvenile delinquent is not a criminal action or proceeding. It is simply an equity proceeding for the best interests of the child and for the welfare of the State. Therefore, the rules of evidence in criminal actions do not apply. (Wellesley v. Wellesley, 2 Bligh [N. S.]; 124; DeManneville v. DeManneville, 10 Ves. Ch. 51; Johnstone v. Beattie, 10 Cl. & Fin. 42; People ex rel. Riesner v. N. Y. N. & C. Hospital, 230 N. Y. 119; Matter of Knowach, 158 N. Y. 482; People v. Angie, 71 App. Div. 539; Matter of Antonopulos, 171 App, Div. 659; Matter of Donohue. 1 Abb. N. C. 1; People ex rel. Bolt v. Society, 48 Misc. Rep. 175; People ex rel. Zeese v. Masten, 79 Hun, 580; People v. Degnen, 54 Barb. 105; Reynolds v. Howe, 51 Conn. 472; Roth v. House of Refuge, 31 Md. 329; Matter of Ferrier, 103 Ill. 367; Scott v. Flowers, 60 Neb. 675.)
   Crane, J.

James Fitzgerald, appellant, a boy under sixteen years of age, was arrested and tried on an information charging him with being a delinquent child within the provisions of chapter 385 of the Laws of 1925, in that on the tenth day of January, 1926, in the city of Buffalo, he committed burglary and larceny by entering the home of one Edward Hammersmith, and taking money therefrom. He was tried in the Children’s Court of the city of Buffalo, convicted and committed to the State Agricultural and Industrial School at Industry, Monroe county, N. Y., until discharged in manner prescribed by law, not to exceed the period of his minority. An appeal was taken to the County Court which on June 28, 1926, affirmed the conviction in these words: Adjudged that the judgment of conviction herein be and the same is hereby affirmed.”

Having obtained a certificate from a justice of the Appellate Division that questions had arisen which ought to be reviewed by the Court of Appeals, the case has been brought here without passing through the Appellate Division. This procedure is new and is the result of amendments to the Code of Criminal Procedure by chapter 465 of the Laws of 1926. Section 520 now provides:

Every person convicted in a criminal action or proceeding shall have the right to have such judgment of conviction or order reviewed on appeal by an appellate tribunal as herein provided, but there shall be only one such appeal and the decision of the appellate court shall be final, and no appeal shall he from that court to any other court except as hereinafter provided.”

Subdivision 2 reads:

“ Elsewhere than in the city of New York, such appeals shall be taken as follows: From a conviction by a court of special sessions, police court, police magistrate, or justice of the peace to the county court of the county in which the conviction was had.”

Appeals, therefore, to the County Court are final unless an appeal is allowed as provided in subdivision 3, in which case further review is in the Court of Appeals. Subdivision 3 reads:

Where an appeal has been taken and has been decided by any of the appellate tribunals hereinabove referred to [which includes the county court as an appellate tribunal], a further right of appeal to the cotut of appeals shall lie as hereinafter prescribed, but not otherwise. If a judge of the court of appeals or a justice of the appellate division of the supreme court of the department in which such conviction was had certifies that a question of law is involved which ought to be reviewed by the court of appeals, then a further appeal on such question of law may be taken to he court of appeals.”

That appeals may be taken from the Children’s Court or Court of Special Sessions, denominated minor courts, to the County Court is further provided by section 749 of the Code of Criminal Procedure, which reads:

A judgment upon conviction, rendered by a court of special sessions, police court, police magistrate, or justice of the peace, in any criminal action or proceedings or special proceeding of a criminal nature, including a judgment of commitment made under section four hundred and eighty-six of the Penal Law, may be reviewed by the county court of the county, upon an appeal as prescribed by this title.”

Commitments under section 486 of the Penal Law are those made of neglected and delinquent children as therein defined, which provisions are almost identical with those defining delinquency contained in chapter 385 of the Laws of 1925 creating the Children’s Court of Buffalo. This latter act also provides in section 344-bb: A judgment upon conviction rendered by the judge of this court sitting as a court of special sessions, children’s court or magistrate may be reviewed by the county court of the county as prescribed in title three, part five of the code of criminal procedure.” (This refers to section 749 of the Code of Criminal Procedure and the following sections.)

This appeal, therefore, was properly taken to this court under the procedure as it now exists, a justice of the Appellate Division of the fourth department having certified questions of law for our review.

The next point which arises is whether the defendant has been legally convicted. The district attorney concedes that the defendant has not been convicted according to the rules of evidence applicable to criminal trials, but he insists that the defendant has not been charged with crime, and that the rules of evidence are not applicable to proceedings against children under sixteen years of age for the offense of delinquency.

The charge against this boy was that of burglary for having entered the house of Edward Hammersmith on the tenth of January, 1926, and stolen money therefrom. The boy was tried for this offense, whatever we may call it, and was convicted on the testimony of an alleged accomplice, twelve years of age, uncorroborated, and on bis own confession produced by threats. The confession was given by a police officer who testified that after taking the boy to the police station he was questioned in the sergeant’s room, as follows:

Q. Did you make any threats to him? A. I think I possibly did, I said, ' You ought to get a good licking right here ’ and one time he didn’t answer me just right and I said, ‘ I would like to punch you in the nose myself ’ but I didn’t mean anything like that.

Q. You threatened to punch him in the nose unless he told you about the burglary? A. I said that, yes.

“ Q. He became frightened and started to cry? A. Yes.

Q. After that he told you about being connected with the burglaries? A. Yes.”

It seems rather queer that the protection which is given to adults by section 395 of the Code of Criminal Procedure, excluding from evidence their confessions produced by threats, should be withdrawn from young children more easily frightened than adults, and that such confessions should be considered of any weight. However this may be, the record in this case shows that the defendant was not properly convicted of the charge. There was no legal or proper evidence introduced against him. The alleged accomplice was not corroborated as required by section 399 of the Code of Criminal Procedure, and the alleged confession was procured by threats of a police officer. This is all there is to the case. What was there, therefore, of proof of any kind warranting the magistrate to hold this boy?

No doubt both under section 486 of the Penal Law and under chapter 385 of the Laws of 1925 there are many occasions for disposing of children under the so-called neglect and delinquency provisions which do not involve any crime or acts of a criminal nature. (Gerak v. State, 153 N. E. Rep. 902.) In such cases the formal proceeding of proof according to a trial cannot always be followed. For instance, a neglected child is one under sixteen years' of age without proper guardianship, or who has been abandoned, or deserted by both parents, or who is in such a condition of want or suffering as to injure his health. Such a child can be sent by the judge to a private home or public institution to be cared for. So, too, an incorrigible and ungovernable child, one habitually disobedient and beyond the control of his parents can be properly disciplined; or one who is habitually a truant from school, or who without the consent of his parents deserts his home, may be brought before the judge and submitted to proper control. None of these charges against the child involve a crime or are of. a criminal nature, and the proceedings must be and always have been more or less informal. While proper records must be kept (People ex rel. Van Riper v. N. Y. C. Protectory, 106 N. Y. 604), yet we cannot expect from the very nature of such cases that the strict rules of evidence shall be applied as they would and should be in cases dependent entirely upon a charge involving an act of a criminal nature.

The act creating the Children’s Court of Buffalo recognizes this practical and important distinction, important both for the welfare of the child and for the safety of society. Under subdivision 2 of section 344-m of the act, a delinquent child may mean a child over seven and under sixteen years of age, who commits any act which if committed by an adult would be an offense punishable otherwise than by death or by life imprisonment. A child, therefore, between those ages who commits an act which would be burglary or larceny in an adult may be tried in the Children’s Court and convicted and sent away for not longer than its minority. The act, however, must be proved, and it must be proved by some kind of evidence. There must be a trial; the charge against the child cannot be sustained upon mere hearsay or surmise; the child must first have committed the act of burglary or of larceny before it can be convicted • of being a delinquent child. The act remains the same and the proof of the act is equally necessary whether we call it burglary, larceny or delinquency. The name may change the result; it cannot change the facts.

Where, therefore, a child is arrested and charged with being a delinquent child because it has committed , an offense which would be a crime in an adult, that offense must be proved, and proved by competent evidence. If our own good sense and judgment did not tell us this, the act itself creating the Children’s Court of Buffalo would remind us of it. Section 344-x of the act notes the difference between a trial for an offense requiring competent proof before conviction and the other informal hearings whereby children may be provided with homes or proper guardianship. This section says:

“ Upon the return of the summons * * * after any child has been taken into custody, and at the time set for the hearing, the court shall proceed to hear and determine the case. The court from time to time may adjourn the hearing and inquire into the habits, surroundings, conditions and tendencies of the child.”

Then follows a provision giving the judge the right before proceeding with the trial of a child for the offense charged ” at the request of the child or parent to inquire into all the facts and circumstances surrounding the case, and “ in lieu of proceeding with the trial,” find the child in need of the care and protection of the State, and furnish it with proper guardianship as provided in section 486 of the Penal Law. However, the judge may proceed with the trial of the offense charged, for the act goes on to say: Or the court, if satisfied by competent evidence, may adjudicate the child to be delinquent or neglected, and shall render judgment as follows: * * * (c) commit the child to the care and custody of a suitable institution maintained by the state; * * * (d) impose a fine in a sum not to exceed fifty dollars * *

We have, therefore, in this act two methods of procedure. One is the inquiry by the judge into all the facts and circumstances relative to proper guardianship and care of the child; the other is a trial for a specific charge upon competent evidence resulting possibly in a judgment of conviction and the imposition of a fine of fifty dollars. In the interests of the child such a proceeding is not called a criminal trial or a criminal proceeding; it is called a hearing on a charge of delinquency, but the change is in name only, for the act requires competent evidence, an adjudication, and permits a commitment to a State institution or a fine following an adjudication of guilt. The proceeding at least is one of a criminal nature. The Penal Law, section 2, defines: “ A ‘crime’ is an act or omission forbidden by law, and punishable upon conviction by (1) death; or, (2) imprisonment; or, (3) fine.”

The judge of the Children’s Court in his commitment found James Fitzgerald “ guilty ” of juvenile delinquency, and committed him to a State institution for a period not beyond his minority, unless sooner discharged. The judgment of the County Court affirmed the “ conviction,” and the judge of the Children’s Court, in certifying the record, submits all the evidence taken on the “conviction in the Children’s Court” of James Fitzgerald.

What are the facts in this case? The defendant, a boy fifteen years of age, was charged by a police officer with having committed burglary and larceny, in that he broke and entered the home of one Edward Hammersmith on the tenth day of January, 1926, and stole money therefrom. He was brought into the Children’s Court of Buffalo for trial. He was put on trial, and the fact — and the only fact ■ — which-justified his conviction was proved by incompetent evidence, the uncorroborated testimony of an alleged accomplice, and a confession procured by threats of violence. The proceeding resulted in a conviction and a sentence — call it what we will — which deprived the boy of his liberty. The Children’s Court Act in the interest of the child called such a proceeding a hearing, and the offense committed, if proved, delinquency, not burglary or larceny. This is the only change in substance that this law of the Children’s Court has made regarding such a charge. The facts, however, of the charge must be proved against the child in the same way as if the charge were made against an adult, that is, by competent evidence. This was not done. The evidence taken in this case was not competent, or sufficient to convict an adult; therefore, it was insufficient to convict this boy.

The forty years which have elapsed since Judge Andrews wrote in People ex rel. Van Riper v. N. Y. C. Protectory (106 N. Y. 604, 609) have not rendered his Words inapplicable to our present day conditions. I repeat them here as a fitting statement regarding the procedure which should be followed in the Children’s Courts of to-day. Our activities in behalf of the child may have been awakened, but the fundamental ideas of criminal procedure have not changed. These require a definite charge, a hearing, competent proof and a judgment. Anything less is arbitrary power.

“ It must appear [said Judge Andrews] that the child was abandoned and neglected, by the fault of its parents or custodians, to justify taking it from their custody, on the ground of abandonment, or improper exposure or neglect. The information in these cases of summary conviction ought to be precise and show a case clearly within the statute. It is the foundation of the jurisdiction of the justice, and when it omits an essential ingredient or circumstance to bring the case under the statute, and the defect is not supplied by the evidence, the conviction is bad. It is not consistent with the proper security of personal liberty to indulge, in cases of summary convictions, in latitude or liberality of intendment to support the proceedings. They are conducted contrary to the course of the common law, without the intervention of a jury, usually before magistrates of limited experience, and are often attended with the gravest consequences. This summary jurisdiction is, doubtless, most necessary to be maintained in the public interest^ but at the same time the proceedings should be carefully scrutinized to see whether they are fully warranted by the statute.” (See, also, State v. Ray, 63 N. H. 406.). .

The judgment of the County Court and that of the Children’s Court of Buffalo should be reversed, and a rehearing ordered.

Cardozo, Ch. J., Pound, Andrews and Lehman, JJ., concur; Kellogg, J., absent.

Judgment accordingly.


author: Cardozo, Ch. J.

text:
    Jasper A. Campbell, Appellant, v. The City of New York et al., Respondents. Same, Appellant, v. Same, Respondents. Frank H. Morse, Appellant, v. John H. Delaney et al., Constituting the Board of Transportation of the City of New York, et al., Respondents.
    Constitutional law — Labor Law — -New York city — taxpayer’s action — provision of Labor Law for payment of prevailing rate of wages on public works not unconstitutional because unintelligible — -complaints in taxpayer’s actions to restrain awarding of contracts for public work on ground they contain labor provisions in accordance with statute properly dismissed — added definitions do not constitute cause of action where it does not appear that their insertion in contracts will cause loss to municipality — expediency of insertion of provision for arbitration determined by officers to whom regulation of form of contracts is confided.
    1. Section 220 of the Labor Law (Cons. Laws, ch. 31) is not unconstitutional in so far as it requires the insertion in every State or municipal contract for public works of a provision for an eight-hour day for labor and payment of wages “ not less than the prevailing rate for a day’s work in the same trade or occupation in the locality within the State where such public work ” is performed. There is no constitutional immunity against contractual obligations that are ambiguous or doubtful. The contractor takes the contract as the State tenders it, or leaves it altogether. (Connally v. General Construction Co., 269 U. S. 385, distinguished.)
    2. Complaints, therefore, are properly dismissed in taxpayers’ actions, brought under section 51 of the General Municipal Law (Cons. Laws, eh. 24), to restrain the city of New York, its board of estimate and apportionment and the board of transportation from perfecting or awarding proposed contracts for construction of sections of a subway, on the ground that they contain provisions, as required by section 220 of the Labor Law, regulating the wages to be paid by contractors, subcontractors and others, and that the requirements of such provisions are uncertain, indefinite and unintelligible. Plaintiffs to maintain their action must show an illegal act or waste of public money (General Municipal Law, § 51) and there can be no illegal act nor waste of public moneys in the mere adherence to the commands of a constitutional enactment.
    3. Nor may the actions be maintained on the ground that the proposed contracts contain “ added definitions ” the effect of which a.re to supplement the statutory requirements by setting bounds to the " locality ” and by stating rules for the ascertainment of the “ prevailing rate ” of wages, where nothing in the complaints supplies a basis for a holding that loss otherwise to be averted will ensue to the municipality as the result of the “ added definitions,” but their whole theory is, that without reference thereto, the statutory form of promise is so unworkable and meaningless as to destroy the possibility of intelligent competition by bidders for the job.
    4. The contract is not illegal in providing for the arbitration of any controversy thereunder. The expediency of such a settlement of differences is to be determined by the public officers to whom the regulation of the form of contracts is confided by the statute.

      Campbell v. City of New York (2 cases), 218 App. Div. 826, affirmed.

      Morse v. Delaney, 218 App. Div. 826, affirmed.
    (Argued January 12, 1927;
    decided February 23, 1927.)
    Appeal, in each of the above-entitled actions, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered December 15, 1926, affirming a judgment in favor of defendants entered upon an order of Special Term granting a motion for a dismissal of the complaint.

      Isidor J. Kresel for Jasper A. Campbell, appellant.
    The “ prevailing rate of wage ” provisions of section 220 of the Labor Law, particularly as applied to the subway construction work to be performed under the proposed contracts, are unconstitutional and void because in conflict with the due process clauses of the State and Federal Constitutions. (People ex rel. Rodgers v. Coler, 166 N. Y. 1; Connally v. General Construction Co., 269 U. S. 385; People v. Briggs, 193 N. Y. 457; Matter of Di Torio, 8 Fed. Rep. [2d] 279, 281; People ex rel. Title Guarantee & Trust Co. v. McQuade, 118 Misc. Rep. 785; People ex rel. Williams Engineering & Contracting Co. v. Metz, 193 N. Y. 148; Wright v. State of New York, 223 N. Y. 44; McGovern v. City of New York, 234 N. Y. 377; McNulty v. City of New York, 238 N. Y. 29; Schwartz v. Board of Education of the City of New York, 239 N. Y. 566.) The “ prevailing rate of wage ” provisions contained in the proposed contracts are wholly inconsistent with each other, are in conflict with paragraph 3 of section 220 of the Labor Law and with other statutory provisions and are altogether unworkable. (Matter of Fletcher, 237 N. Y. 440.) The actions are properly brought by the plaintiff as a taxpayer under section 51 of the General Municipal Law to prevent waste and injury to the property, funds or estate of the city of New York. (Altschul v. Ludwig, 216 N. Y. 459; Fraser v. City of Buffalo, 125 Misc. Rep. 83; 215 App. Div. 861; 243 N. Y. 554; Gage v. City of New York, 110 App. Div. 403; Grace v. Forbes, 64 Misc. Rep. 130; Kuhn v. City of Buffalo, 84 Misc. Rep. 157; Hart v. City of New York, 201 N. Y. 45; Meyers v. City of New York, 58 App. Div. 543; Meyers v. Pennsylvania Steel Co., 77 App. Div. 307; Knowles v. City of New York, 176 N. Y. 430.)

      John F. Collins, Franklin Nevins, Harry S. Bandler and Alfred C. Pette for Frank H. Morse, appellant.
    Section 220 of the Labor Law (Consol. Laws, art. VIII, chap. 31), in so far as it provides for the payment of the “ prevailing rate of wages ” in the “ locality within the State ” where the work is to be performed, is in violation of article I, section 6, of the Constitution of the State of New York and of the Fourteenth Amendment to the Federal Constitution, and the provisions of article LXYII requiring compliance therewith are unauthorized and illegal. (Connally v. General Construction Co., 269 U. S. 385; Village of Medina v. Dingledine, 211 N. Y. 24; McGovern v. City, 234 N. Y. 377; People v. Crane, 214 N. Y. 154; Lees v. U. S., 150 U. S. 476; Standard C. & M. Corp. v. Waugh C. Corp., 231 N. Y. 51; Small Co. v. American Sugar Refining Co., 267 U. S. 233.) Assuming that the prevailing rate provisions of section 220 of the Labor Law are constitutional, the “ added provisions ” in article LXYII of the proposed contracts are in conflict with the statute and inconsistent with it and their insertion is unauthorized and illegal. (Schumer v. Caplin, 241 N. Y. 346; People ex rel. Rolf v. Coler, 58 App. Div. 347; Haggart v. Morgan, 5 N. Y. 422; President D. & H. C. Co. v. Penn. Coal Co., 50 N. Y. 250; Seward v. City of Rochester, 109 N. Y. 164; National Cont. Co. v. Hudson River W. P. Co., 170 N. Y. 439; 192 N. Y. 209; Meacham v. Jamestown, F. & C. R. R. Co., 211 N. Y. 346.) There is no power in the board of transportation to insert the “ added provisions ” in the contracts. (Meyers v. City of New York, 58 App. Div. 534.) The plaintiff as a taxpayer, because of the illegal official acts of including in proposed contracts the provisions complained of, has stated a cause of action and is entitled to the relief demanded. (Peck v. Belknap, 130 N. Y. 394; Altschul v. Ludwig, 216 N. Y. 459; Western N. Y. Water Co. v. Buffalo, 242 N. Y. 202; Fraser v. City of Buffalo, 125 Misc. Rep. 83; Shewan v. Mills, 211 App. Div. 687; Meyers v. City of New York, 58 App. Div. 534; Gage v. City of New York, 110 App. Div. 403; Hart v. City, 201 N. Y. 45; Rodgers v. Common Council of Buffalo, 123 N. Y. 173; Rathbone v. Wirth, 150 N. Y. 459; Sun Pub. Co. v. Mayor, 8 App. Div. 230; 152 N. Y. 257; Cahill v. Hogan, 180 N. Y. 304; Wilcox v.
      McClellan, 110 App. Div. 378; 185 N. Y. 9; Admiral Realty Co. v. City of New York, 206 N. Y. 110; Admiral Realty Co. v. Gaynor, 147 App. Div. 719; Hopper v. Wilcox, 155 App. Div. 213.)

      William G. Fullen, Ralph H. Monroe, George E. Coughlin and John F. X. McGohey for Board of Transportation of City of New York et al., respondents.
    This court is without jurisdiction to hear or determine the constitutionality of the Labor Law in a taxpayer’s action. (Schieffelin v. Komfort, 212 N. Y. 520; Marbury v. Madison, 1 Cranch, 137; Matter of Sawyer, 124 U. S. 200; Green v. Mills, 69 Fed. Rep. 852; Muskrat v. U. S., 219 U. S. 346; Doolittle v. Supervisors of Broome County, 18 N. Y. 155; Roosevelt v. Draper, 23 N. Y. 318; Milhau v. Sharp, 27 N. Y. 611; People v. Halsey, 37 N. Y. 344; State v. Ingersoll, 58 N. Y. 1; People v. Fields, 58 N. Y. 491; Demarest v. Wickham, 63 N. Y. 320; Osterhaudt v. Rigney, 98 N. Y. 222; Flynn v. Taylor, 127 N. Y. 596; Wakeman v. Wilbur, 147 N. Y. 657.) The Labor Law in so far as it applies to these proceedings is constitutional. (Sickles v. Sharp, 13 Johns. 497; Hathaway v. Johnson, 55 N. Y. 93; Novotny v. Kosloff, 214 N. Y. 12; People ex rel. Williams Engineering Contracting Co. v. Metz, 194 N. Y. 145; People ex rel. Price v. Sheffield Farms Co., 225 N. Y. 25; People v. Crane, 214 N. Y. 154; Ryan v. City of New York, 177 N. Y. 271; People v. Orange County Road Const. Co., 175 N. Y. 84; People ex rel. Cossey v. Grout, 179 N. Y. 417; People ex rel. W. E. & C. Co. v. Metz, 193 N. Y. 148; Wright v. State of New York, 223 N. Y. 44.)

      George P. Nicholson, Corporation Counsel (Arthur J. W. Hilly, Joseph L. Pascal and J. Joseph Lilly of counsel), for City of New York et al., respondents.
    The court may not interfere with the exercise of discretionary powers vested by law in the board of transportation and the board of estimate and apportionment. (McCabe v. City of New York, 213 N. Y. 468; Admiral Realty Co. v. City of New York, 206 N. Y. 110; Knowles v. City of New York, 176 N. Y. 430; Ryan v. City of New York, 177 N. Y. 271.) The provisions of the proposed contracts objected to by the plaintiff herein are not illegal. (Coulter v. Board of Education, 63 N. Y. 365; Matter of N. Y., L. & W. R. R. Co., 98 N. Y. 445.)
   Cardozo, Ch. J.

These are taxpayers’ actions under General Municipa" Law, § 51 (Consol. Laws, ch. 24) to restrain the city of New York, its board of estimate and apportionment, and the board of transportation, from perfecting or awarding proposed contracts for the construction of sections of a subway. The wages to be paid by contractors, subcontractors or others to laborers, workmen or mechanics engaged upon the work are regulated in the contracts by provisions which are assailed as wasteful and illegal. The question is whether the complaints state the essentials of a cause of action.

By the Labor Law of the State (Consol. Laws, ch. 31, § 220) every contract to which the State or a municipal corporation or a commission appointed pursuant to law is a party and which may involve the employment of laborers, workmen or mechanics shall contain a provision for an eight-hour day of labor except in cases of extraordinary emergency.

By the same section, The wages to be paid for a legal day’s work, as hereinbefore defined, to laborers, workmen or mechanics upon such public works, or upon any material to be used upon or in connection therewith, shall be not less than the prevailing rate for a day’s work in the same trade or occupation in the locality within the State where' such public work on, about or in connection with which such labor is performed in its final or completed form is to be situated, erected or used and shall be paid in cash. Such contracts shall contain a provision that each laborer, workman or mechanic, employed by such contractor, subcontractor or other person about or upon such public work, shall be paid the wages herein provided.”

Violation of any provision of the section is a crime, punishable by fine or imprisonment, or both, and in addition forfeiting the contract illegally performed, and, in case of a second offense, the payments earned thereunder (§ 220, subd. 5).

Following the requirements of this section, the proposed contracts provide “ that the wages to be paid for a legal day’s work as hereinbefore defined to all classes of such laborers, workmen or mechanics upon the work contemplated by this contract or upon any material to be used upon or in connection therewith, shall be not less than the prevailing rate for a day’s work in the same trade or occupation in the locality within the State where the work hereby contemplated about or in connection with which such labor is performed in its final or completed form is to be situated, erected or used, and shall be paid in cash; and that each such laborer, workman or mechanic employed by the contractor or by any sub-contractor or other person on, about or upon the work contemplated by this contract, shall receive such wages herein provided for.”

The framers of the contracts did not confine themselves, however, to the foregoing provisions which are substantially a repetition of the language of the statute. They added other provisions with a view to greater certainty. “ Locality within the State ” was to be understood as signifying the city of New York. The prevailing rate ” of wage was to be the “ rate paid to a majority of the laborers, workmen or mechanics engaged in the same trade or occupation in the City of New York.” If there was not a majority paid at the same rate, then the rate paid to the greater number of such trade or occupation in the City of New York ” was to be accepted as the prevailing rate, “ provided that such greater number constitute at least 40 per centum of the laborers, workmen or mechanics engaged in such trade or occupation in the City of New York.” If less than 40 per centum were, paid at the same rate, then the prevailing rate was to be the average rate paid to such laborers, workmen or mechanics in the same trade or occupation. Those employed under the proposed contracts were to be included with others in reckoning the total number.

The complaints allege in substance that the prevailing rate ” of wages under Labor Law (§ 220) is a variable quantity, uncertain, indefinite, and not susceptible of ascertainment; that the statute, in so far as it prescribes the payment of such wages, is unconstitutional, for the reason that its command is unintelligible; that the contracts made thereunder, in so far as they repeat the same command, are invalid for the same reason and to the same extent; that the added definitions illegally depart from the form established by the statute, and, even if otherwise permissible, do not correct the uncertainty; and finally that bidders for the proposed contracts will be unable to bid with understanding, and will be driven to increase their bids as a protection against obligations .unknown and unknowable, with resulting waste and injury to the city and its taxpayers.

The public policy of the State declared by successive Legislatures during a period of thirty years (L. 1897, ch. 415; L. 1899, ch. 567; L. 1900, ch. 298; L. 1906, ch. 506; L. 1909, ch. 292; L. 1913, ch. 494; L. 1916, ch. 152; L. 1921, ch. 642) exacts the payment of the rate of wages prevailing in the vicinage to laborers and mechanics employed upon the public works. We tracé in judicial decision and constitutional amendment the tides of thought and sentiment. People ex rel. Rodgers v. Coler (1901, 166 N. Y. 1) held an early statute void. A majority of the court discerned an invasion of the constitutional rights of the municipality itself. The same majority discerned an invasion of the liberty of the contractors and a denial of due process of law when the privilege of hiring labor on any terms obtainable was obstructed or withdrawn. Atkin v. Kansas (1903, 191 U. S. 207) undermined this last position so effectually that there has been little attempt since then to occupy the weakened ground. A sentence states the argument. “ It cannot be deemed a part of the liberty of any contractor that he be allowed to do public work in any mode he may choose to adopt, without regard to the wishes of the State ” (191 U. S. at p. 222). Following that decision came limitation and distinctions. Ryan v. City of New York (1904, 177 N. Y. 271) drew a dividing line between the regulation of wages to be paid to the servants of contractors and the regulation of wages to be paid to servants of municipality or State. People ex rel. Cossey v. Grout (1904, 179 N. Y. 417. 423) gave over the objection that the contractors had suffered in their liberty. No man has a right * * * to a contract for work except on just such terms and conditions as the other contracting party prescribes ” (179 N. Y. at p. 428). Nothing was then left except some immunity supposed to be inherent in the municipality itself. Whatever vestige there was of this disappeared with the constitutional amendment of, 1905. “ The legislature may regulate and fix the wages or salaries, the hours of work or labor, and make provision for the protection, welfare and safety of persons employed by the State or by any county, city,- town, village or other civil division of the State, or by any contractor or subcontractor performing work, labor or services for the State, or for any county, city, town, village or other civil division thereof” (Constitution, art. XII, § 1; People ex rel. Williams Eng. & Cont. Co. v. Metz, 1908,193 N. Y. 148).

The plaintiffs would have us hold that from the throes of this long struggle there emerged a statute without meaning, a futile and deceptive gesture. Connally v. General Construction Co. (269 U. S. 385), decided by the Supreme Court of the United States in January, 1926, is said to point to that conclusion. An injunction was there sought to restrain the law officers of Oldahoma from the enforcement of a penal statute. The wages paid by the employer were $3.20 per day. The commissioner of labor complained that $3.60 should be accepted as the current rate.” His own investigation showed, however, that wages varied in the locality from $3 at one extreme to $4.05 at the other. These were conceded facts, for the case was heard upon demurrer to the bill. In such circumstances, the decision was merely this, that in its application to that employer, the statute, which is very similar to our own, was too obscure and indefinite to sustain a charge of crime. Obscurity was thought to be inherent in the standard of “ a current wage,” with a multitude of gradations between minimum and maximum. Obscurity was thought to be inherent also in the “ locality ” of the work. There was thus, in the view of the court, a double uncertainty,” fatal to the validity of “ a criminal statute.” “ Penal statutes prohibiting the doing of certain things, and providing a punishment for their violation, should not admit of such a double meaning that the citizen may agt upon the one conception of its requirements and the courts upon another.” (quoting U. S. v. Capital Traction Co., 34 App. D. C. 592; cf. U. S. v. Cohen Grocery Co., 255 U. S. 81).

We are met in the case at hand by a problem of a different order. There is no question before us now of punishment for crime. There is merely a question of the regulation of a form of contract. The Legislature has said that contractors working for the State or for its civil subdivisions shall bind themselves by a promise which is criticised as indefinite and meaningless. Plainly the Constitution of the United States • has nothing to say about regulations of that kind. The Fourteenth Amendment does not embody a provision that municipal contracts shall be perspicuous and definite. If a promise is meaningless, the promisor may not be punished for the omission to observe it. By the very terms of the hypothesis, the fact of the omission is incapable of proof. For the same reason, he may not be charged in such circumstances with civil liability. A prohibition so indefinite as to be unintelligible is not a prohibition by which conduct can be governed. It is not a rule at all; it is merely exhortation and entreaty” (Standard Chemical Corp. v. Waugh Chemical Corp., 231 N. Y. 51, 54; Small Co. v. Am. Sugar Ref . Co., 267 U. S. 233, 240). This is very far from saying that every indefinite provision in a contract between city and contractor, if placed in the instrument under the direction of a statute, is an invasion by the State of a constitutional immunity. The presence of the promise does not add anything to the risk of criminal prosecution. The crime, if any, would consist, not in violation of the promise, however certain its obligation, but in violation of the statute. Civil remedies and no others can be affected through the reinforcement of the statute by the obligation of a contract. The Legislature must determine whether the promise has value or significance sufficient to justify an insistence that it be embodied in the instrument. If it is mere balderdash or jargon, the contractor will be in the same position as if no promise had been made. If it is uncertain or indefinite, and yet susceptible of construction, it will carry with it an obligation that will be at least civilly enforcible. The contractor takes the contract as the •State tenders it, or leaves it altogether. He is not injured in his constitutional rights by being put to the election (People ex rel. Cossey v. Grout, supra, at p. 428; Atkin v. Kansas, supra). He may think the risk too great. He will then decline to enter into relations with a municipality so exacting. He may survey the risk and take it. He will then be bound by the promise according to its meaning, if meaning it is found to have. For more than twenty years every contractor with State or municipality has been put to the same choice. It is novel doctrine that there is a constitutional immunity against contractual obligations that are ambiguous or doubtful.

If the Constitution does not make it illegal to place this promise in the contract, the plaintiffs may not be heard to insist that the promise shall come out. Their right of action as taxpayers is measured by the statute (General Municipal Law, § 51). They must show an illegal act or waste of public property. Here the act to be restrained is one commanded by the statute. The public officers before us are directed by the statute to insert in the contract the very provision that the plaintiffs are seeking to remove. There can be no illegal act nor waste of public moneys in the mere adherence to the commands of a constitutional enactment (cf. Meyers v. City of N. Y., 32 Misc. Rep. 522; affd., on op. below, 54 App. Div. 631; Talcott v. City of Buffalo, 125 N. Y. 280). Another form of contract might be more expedient or cheaper. The courts do not sit in judgment upon questions of legislative policy or administrative discretion. The taxpayer must point to illegality or fraud (Smith v. Hedges, 223 N. Y. 176).

The form of contract being lawful to the extent that it repeats the provisions of the statute, there is no occasion fco determine the remedies, criminal or civil, that will be available to the municipality if the claim shall be made hereafter that those provisions have been violated. Questions of that order, suggested in the briefs of counsel, are mentioned only to reserve them. We do not now determine whether Connally v. General Construction Co. (supra) stands in the way of criminal prosecution. Distinctions of place and circumstance may conceivably exist. If so, the time to draw them is not now. We put aside for the same reason the determination of the bounds of civil liability. Criteria of conduct, too indefinite and elastic to expose to punishment for crime, may yet be fixed and definite in such degree that they are not to be disregarded as wholly unintelligible when the question is one of the violation of a promise. This is not the time to attempt a definition of the prevailing rate of wages ” with its background of legislative history and twenty years or more of practical construction. One finds it hard to believe that a cliché so inveterate is devoid of meaning altogether. Learned judges have said (e. g., Haight, J., in People ex rel. Rodgers v. Coler, supra, at p. 42) that it is synonymous with market rate. This might not exclude altogether the possibility of fluctuations and diversities at a given day and place. There can be little doubt that it would furnish us with criteria of conduct adequate for civil, if not for criminal, liability (Sloan v. Baird, 162 N. Y. 327, 330; Muser v. Magone, 155 U. S. 240, 249; Wigmore, Evidence, § 719; cf. Nash v. U. S., 229 U. S. 373, 377). Other judges have believed that the range of variation is wider and less certain than any that is consistent with the standards of a market value. Even so, a customary minimum might co-exist with a customary, maximum, however varying the number of intermediate gradations. A standard so indefinite, if effective for nothing else, would prevent the fall of wages below the customary minimum. A level would be established below which the rate could not descend and still be characterized as “ prevailing.” The Legislature may have thought that the statutory promise would not be wholly without value if it availed for this and nothing more. There would be no merciless exploitation of the indigent or idle.

A word must be said of the so-called “ added definitions.” The effect of these definitions is to supplement the statutory promise by setting bounds to the locality ” and by stating rules for the ascertainment of the rate of wage prevailing at any time or place. The statutory promise is either workable, or unworkable, with meaning or without. If unworkable and meaningless, point and power may be given it by gloss and explanation, (cf. Public Service Comm. Law, § 134; Rapid Transit Act, § 26). If intelligible and workable, there may still be amplifying provisions when amplification is consistent with the statutory scheme. The plaintiffs take the ground that in framing the definitions, the defendants have made an illegitimate departure from the meaning of a statute which was already without meaning. If a feat so extraordinary were taken to be possible, it would not serve to establish an actionable wrong. We do not go into the question whether statute and definitions can stand together at every point. The plaintiffs would not be helped though inconsistency were found. Their cause of action as taxpayers requires something more than proof of an illegal act. The illegality must tend to the detriment of the city either by the dissipation of its funds or by the threat of other injury so imminent and substantial as to make it proper that the taxpayers be protected by injunction (Western N. Y. Water Co. v. City of Buffalo, 242 N. Y. 202; Southern Leasing Co. v. Ludwig, 217 N. Y. 100). Nothing in the complaint supplies a basis for a holding that loss otherwise to be averted will ensue to the municipality as the result of the added definitions, whether they be lawful or unlawful. The theory of the whole complaint is that without reference to the definitions, the statutory form of promise is so unworkable and meaningless as to destroy the possibility of intelligent competition by bidders for the job. The plaintiffs do not say that bidding would become intelligent or competition be established if the definitions were omitted. They tell us, on the contrary, that bidding would be confused in any event, and competition stifled, by the very form of contract made mandatory by law. The menace to the taxpayers by force of anything that has been added is illusory and fanciful.

We see no force in the contention that the contract is illegal in providing for the arbitration of any controversy thereunder (Matter of Berkovitz v. Arbib & Houlberg, 230 N. Y. 261). The expediency of such a settlement of differences is to be determined by the public officers to whom the regulation of the form of contracts is confided by the statute.

We have considered other questions and find them unsubstantial.

The judgment in each action should be affirmed with costs.

Pound, Crane, Andrews and Lehman, JJ., concur; Kellogg, J., absent.

Judgments affirmed.


author: Andrews, J.

text:
    International Products Company, Respondent, v. Erie Railroad Company, Appellant.
    Negligence — warehousemen — carriers — railroads — liability for loss arising from wrong information negligently given — erroneous information as to place of storage given by carrier which had agreed to receive goods from steamer and store them pending shipping orders — insurance placed by owner on such information — destruction of goods by fire and loss of insurance for misdescription — carrier may be held liable for loss on theory of negligence — immaterial that information was not given by carrier to serve its own purposes — contributory negligence a question of fact.
    1. Liability for loss arising from wrong information, negligently given, arises only where there is a duty, if one speaks at all, to give the correct information. In addition there must be knowledge or its equivalent that the information is desired for a serious purpose; that he to whom it is given intends to rely and act upon it; that if false or erroneous he will because of it be injured in person or property. Finally the relationship of the parties, arising out of contract or otherwise, must be such that in morals and good conscience the one has the right to rely upon the other for information, and the other giving the information owes a duty to give it with care.
    2. Where plaintiff, an importer, expecting a consignment of goods by steamer, arranged with defendant, a common carrier, to receive them on its lighters, transfer them to its warehouse docks and then ship them upon order and, after arrival of the steamer, inquired of defendant where the goods were to be stored, stating that it desired the information for the purpose of obtaining insurance, and was informed that they were at a certain dock, whereupon it obtained its. insurance giving the same information to the insurer, but as matter of fact the goods had not yet been received by defendant and when received one-half thereof were stored at another dock, which, thereafter, with -the goods thereon was destroyed by fire, whereby plaintiff lost its insurance for misdescription, it may maintain an action against defendant to recover its loss on the theory of negligence. (Bush Terminal Co. v. G. & B. Fire Ins. Co., 182 App. Div. 748; 228 N. Y. 575; Glanzer v. Shepard, 233 N. Y. 236, followed.)
    3. The fact that the answer was not given to serve the purposes of the defendant itself is immaterial and whether or not plaintiff should have discovered the error by an inspection of the bill of lading when it received it was a question of fact.

      International Products Co. v. Erie R. R. Co., 216 App. Div. 702, affirmed.
    (Argued January 13, 1927;
    decided February 23, 1927.)
    Appeal, by permission, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered February 10, 1926, unanimously affirming a judgment in favor of plaintiff entered upon a verdict directed by the court.

      William C. Cannon, Theodore Kiendl and Russel S. Coutant for appellant.
    Defendant was under no duty of care. (Railroad Co.v. Stout, 17 Wall. 657; United Zinc Co. v. Britt, 258 U. S. 288; New York, New Haven & Hartford R. R. Co. v. Fruchler, 260 U. S. 141; Walsh v. Railroad, 145 N. Y. 301; Flaherty v. Metro Station, Inc., 202 App. Div. 583; Hall v. International Railway, 184 App. Div. 925; 227 N. Y. 619; Elefante v. Pitzitz, 182 App. Div. 819; 230 N. Y. 567; Chrystal v. Troy & Boston R. R. Co., 105 N. Y. 164; Albrecht v. Rochester, etc., R. R. Co., 205 N. Y. 230; McPherson v. Buick Motor Co., 217 N. Y. 382.) The defendant was not negligent. (Laurence v. Congregational Church, 164 N. Y. 115; Second Nat.

      Bank v. Weston, 172 N. Y. 250.) Plaintiff was guilty of contributory negligence as a matter of law. (American Travel, etc., v. Van Blerkom, 214 N. Y. Supp. 753.)

      David Paine for respondent.
    A cause of action on contract was made out. (Mortimer v. Otto, 206 N. Y. 89; Bush Terminal Co. v. Globe, etc., Co., 182 App. Div. 748; 228 N. Y. 575.) Defendant is liable for its negligent and false representation to the plaintiff as to the location of the goods. (Bush Terminal Co. v. Globe & Rutgers Fire Ins. Co., 182 App. Div. 748; 228 N. Y. 575; Canadian Agency, Limited, v. Assets Realization Co., 165 App. Div. 96; Morris v. Brown, 111 N. Y. 318.) Contributory negligence was an issue for the jury. (Kettle v. Turl, 162 N. Y. 255.)
   Andrews, J.

Ear y in August, 1921, the plaintiff was expecting a valuable shipment consigned to it to arrive in New York on the steamer Plutarch. It was an importer selling the goods received to other customers. Consequently it was necessary that such goods should be stored until resold, either in ordinary warehouses or in one maintained by some carrier, who might in turn send them over its lines to the ultimate consumer.

The plaintiff had adopted the first method, but now it seems to have thought that the second might be preferable. Therefore it inquired of the defendant what its prices would be and arranged, while no definite contract was executed, that the goods when they arrived should be stored at the railroad company’s warehouse docks.

The Plutarch was to dock in Brooklyn. There the Erie would receive the goods on its own lighters, transfer them to New Jersey and then ship them on upon the order of the plaintiff. Both parties must have understood that at some period a bill of lading was to be issued, but certainly there would be some delay. It could hardly be issued simultaneously with the receipt of the goods on the lighters, and the custom seems to have been that after the goods were stored by the railroad company in its warehouse a notice of their receipt was to be given to the plaintiff who then prepared a bill of lading in the usual form, signed it, sent it to the defendant, who in turn signed it and returned it to the plaintiff.

Here then were the parties both understanding that when the goods arrived in Brooklyn they were to be taken by the defendant to its docks and there stored for a certain price and that thereafter the ordinary bill of lading would be executed.

The Plutarch reached Brooklyn between August 10th and August 15th and was unloaded in three or four days. The goods in question were covered by insurance until they reached the warehouse. Naturally the plaintiff was desirous of protecting itself from that time forward and to protect itself it was essential that the particular warehouse in which they were stored should be made known to the insurer. Therefore on August 17th, giving this reason for its question, it inquired of the defendant where the goods would be stored. The latter, taking time to obtain the required information, replied they were docked at dock F, Weekawken. From this reply the plaintiff had the right to infer that the goods were already received and stored. It immediately thereafter obtained its insurance, giving the same information to the insurer.

The answer was erroneous. In fact the goods were not received from the steamer by the defendant until August 27th and August 31st. The plaintiff's officer, however, having charge of the transaction did not know but what the representation was true, nor did the plaintiff itself know that it was not, unless it is a fact that under no circumstances might the defendant have obtained possession of the goods from the Plutarch without a so-called delivery order ” signed by the plaintiff. The latter did know that such an order was not given until August 26th, but in the hurry of business, dealing with a responsible party, we have no reason to suppose that the Plutarch might not have delivered the goods trusting to receive the “ delivery order if necessary later. Certainly nothing in the testimony negatives this conclusion. We have then the false assurance as to an existing fact, given by one who had arranged to become and who in fact subsequently did become bailee of these goods, to the owner, to enable it to obtain valid insurance thereon and in reliance upon which the owner acted.

One-half of the goods were in fact stored when they arrived not on dock F but on dock D, both docks belonging to the defendant. When the formal bill of lading prepared by the defendant some time later was returned to it early in September a close examination of certain stamps impressed upon it would have revealed the truth. It was not discovered, however. In November dock D with the goods stored thereon was destroyed by fire. The plaintiff could obtain no insurance because of the misdescription in the policy. It, therefore, seeks to recover the insurance it would have been entitled to had it not given the misdescription in reliance on the statement of the defendant. The defendant denies liability on any theory, either of tort or of contract.

In view of the Bush Terminal Case (182 App. Div. 748; affd., 228 N. Y. 575), it concedes its liability had the goods been in its possession on August 17th. As, however, the facts show conclusively they were not, the plaintiff it says may not recover. We hold, however, that the plaintiff shows a cause of action on the theory of negligence, interpreting the conversation of August 17th as we have done.

Confining ourselves to the issues before us we eliminate any theory of fraud or deceit. Had they been present other questions would arise. (Taylor v. Commercial Bank, 174 N. Y. 181.) We come to the vexed question of liability for negligent language. In England the rule is fixed. Generally speaking there is no such thing as liability for negligence in word as distinguished from act.” (Pollock on Torts [12th ed.], p. 565; Fish v. Kelly, 17 C. B. [N. S.] 194.) Dicta to the contrary may be found in earlier cases. (Burrowes v. Lock, 10 Ves. 471; Slim v. Croucher, 1 DeG., F. & J. 518; discussed in Brownlie v. Campbell, L. R. 5 A. C. 925, 935.) But since Peek v. Derry (L. R. 14 A. C. 337), although what was said was not necessary to the decision, the law is clearly to the effect “ that no cause of action is maintainable for a mere statement, although untrue, and although acted upon to the damage of the person to whom the statement is made unless the statement be false to the knowledge of the person making it ” (Dickson v. Reuters Telegram Co., Ltd., L. R. 1877, 3 C. P..Div. 1), or as said elsewhere “we have to take it as settled that there is no general duty to use any care whatever in making statements in the way of business or otherwise, on which other persons are likely to act.” (9 Law Quarterly Review, 292.) And the same principle has been applied in equity (Low v. Bouverie, L. R. 1891, 3 Ch. 82) although it had been supposed that here, at least, there was often a remedy for negligent misrepresentation.

These cases have not been without criticism. The denial, under all circumstances, of relief because of the negligently spoken or written word, is, it is said, a refusal to enforce what conscience, fair dealing and the usages of business require. The tendency of the American courts has been towards a more liberal conclusion. The searcher of a title employed by one, who delivers his abstract to another to induce action on the faith of it, must exercise care. (Dickle v. Abstract Co., 89 Tenn. 431.) So must a physician who assures a wife that she may safely treat the infected wound of her husband (Edwards v. Lamb, 69 N. H. 599), or hired by another, examines a patient and states the result of his diagnosis. (Harriott v. Plimpton, 166 Mass. 585.) So of a telegraph company, stating that a telegram was delivered when in fact it was not. (Laudie v. Telegraph Co., 126 N. C. 431.) And the liability of such a company to the receiver for the erroneous transcription of a telegram has also sometimes been placed on this ground. (Bailey & Co. v. Western Union Tel. Co., 227 Penn. St. 522.)

In New York we are already committed to the American as distinguished from the English rule. In some cases a negligent statement may be the basis for a recovery of damages. A reference is made to the question in Carpenter v. Blake (75 N. Y. 12). We intimated that a physician would be liable for negligent advice given to a patient after his discharge, but this suggestion was not decisive of the point we now consider. In Bush Terminal Co. v. Insurance Co. (cited above), however, we come to the parting of the way. A bailee, negligently misstating to the bailor where his goods are stored, knowing the inquiry is made for insurance purposes, is hable for the resulting loss. Then came Glanzer v. Shepard (233 N. Y. 236). A pubhc weigher, hired by the seller to weigh goods, reahzing that the buyer would rely on his certificate in paying therefor, was held hable for erroneous statements contained therein.

It is true that in both cases the decisive principle was somewhat obscured by other facts that appeared in the record before us. In the first a theory of contract was also referred to in the court below. In the second a like theory was mentioned, but the recovery was placed on the ground of neghgence. The weigher was to weigh and certify. There was so far as appeared no neghgence in the act of weighing. The neghgence was inferred from the issuance of a false certificate. That was the wrong for which a recovery was allowed. “ Diligence was owing, not only to him who ordered, but to him also who relied.”

Obviously, however, the rule we have adopted has its limits. Not every casual response, not every idle word, however damaging the result, gives rise to a cause of action. Chancellor Kent might not be held responsible for an error in one of his Battery opinions,” As he himself said, they cost nothing and bind no one. Liability in such cases arises only where there is a duty, if one speaks at all, to give the correct information. And that involves many considerations. There must be knowledge or its equivalent that the information is desired for a serious purpose; that he to whom it is given intends to rely and act upon it; that if false or erroneous he will because of it be injured in person or property. Finally the relationship of the parties, arising out of contract or otherwise, must be such that in morals and good conscience the one has the right to rely upon the other for information, and the other giving the information owes a duty to give it with care. (Jaillet v. Cashman, 235 N. Y. 511.) An inquiry made of a stranger is one thing; of a person with whom the inquirer has entered or is about to enter into a contract concerning the goods which are or are to be its subject is another. Even here the inquiry must be made as the basis of independent action. We do not touch the doctrine of caveat emptor. But in a proper case we hold that words negligently spoken may justify the recovery of the proximate damages caused by faith in their accuracy.

When such a relationship as we have referred to exists may not be precisely defined. All that may be stated is the general rule. In view of the complexity of modern business each case must be decided on the peculiar facts presented. The same thing is true, however, in the usual action for personal injuries. There whether negligence exists depends upon the relations of the parties, the thing done or neglected, its natural consequences, and many other considerations. No hard and fast line may be drawn.

Here, as we view the facts, the duty to speak with care if ■ it spoke at all, rested on the defendant. We have it about to become the bailee of the plaintiff’s goods; the inquiry made by him with whom it was dealing for the purpose as it knew of obtaining insurance; the realization that the information it gave was to be relied upon and that if false the insurance obtained would be worthless. We have an inquiry such as might be expected in the usual course of business made of one who alone knew the truth. We have a negligent answer, untrue in fact, actual reliance upon it, and resulting proximate loss. True the answer was not given to serve the purposes of the defendant itself. This we regard as immaterial.

If there was negligence justifying a recovery we cannot hold the plaintiff guilty of contributory negligence as' a matter of law. Whether or not it should have discovered the error by an inspection of the bill of lading when it received it was a question of fact.

We have confined our decision to the precise issues before us. We do not consider what might be the result under other conditions or whether a recovery might not be had upon other grounds. If the testimony is to be interpreted as the defendant claims it should be; if the statement as to the dock was a mere expression of present intention, still it might be claimed that under the circumstances due care required notice if such intention was subsequently changed. Or under either interpretation it might be said some principle of estoppel might be applied. Or if we are to take the wider view of contracts sometimes proposed, then that a recovery o» this theory is permissible. All this we pass by. Such questions we will consider when they are .required by the decision we must reach. Until then we express no opinion.

The judgment appealed from should be affirmed, with costs.

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

Judgment affirmed.