text:
    Flushing National Bank in New York, Respondent, v. Leonard Abrams et al., Defendants, and Nathan Boslow, Appellant.
    Submitted April 7, 1947;
    decided April 18, 1947.

      M. Edward Katz for appellant.

      Earold R. Zeamans and Milton Eaas for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Loughban, Ch. J., Lewis, Conway, Desmond, Thaoheb, Dye and Fuld, JJ.


source: Caselaw Access Project

license: Public Domain

text:
    The People of the State of New York, Respondent, v. Louis Mignogna, Appellant.
    Argued April 8, 1947;
    decided April 18, 1947.

      Joseph Lonardo for appellant.

      Charles P. Sidlivan, District Attorney (Henry W. Schober of counsel), for respondent.
   Judgment affirmed; no opinion.

Concur: Loughran, Ch. J., Lewis, Conway, Desmond, Thacher, Dye and Fuld, JJ.


text:
    Muriel H. Tyne, Appellant, v. Edmund F. Tyne, Respondent.
    Submitted April 14, 1947;
    decided April 18, 1947.

      Michael Goldberg for appellant.
   No one opposed.

Motion dismissed, without costs, upon the ground that the order does not finally determine the action within the meaning' of the Constitution.


text:
    Berger Service Cleaning and Dyeing Corporation, Appellant, v. Berger Cleaners Inc., Respondents, et al., Defendants.
    Submitted April 14, 1947;
    decided April 18, 1947.

      Abraham Grenthal for motion.

      Julius M. Arnstem and Z. Jonas Speciner opposed.
   • Motion granted and appeal dismissed, with costs and $10 costs of motion, upon the ground that the order does not finally determine the action within the meaning of the Constitution.


text:
    The People of the State of New York, Respondent, v. Webster Daniel, Appellant.
    Submitted May 12, 1947;
    decided May 14, 1947.
   Motion for amendment of the record on appeal denied; the original papers submitted on the motion by the People for a special jury may be referred to upon the argument of the appeal.


text:
    George A. Langan, as Trustee of Onondaga Litholite Company, Bankrupt, Respondent, v. First Trust & Deposit Company et al., Appellants, et al., Defendants.
    Argued April 15, 1947;
    decided May 15, 1947.

      H. Duane Bruce and Lawson Barnes for appellants.

      Victor Levine for respondent.
   . Order affirmed, with costs; no opinion.. Question certified answered in the negative.

Concur: Lottohkan, Ch. J., Conway, Desmond, Thaober, Dye and Fund, JJ. Taking no part: Lewis, J.


text:
    In the Matter of the City of New York, Appellant, Relative to Acquiring Title to Water Mains, and Appurtenances of the New York Water Service Corporation, Respondent.
    Argued April 16, 1947;
    decided May 15, 1947.

      Charles E. Murphy, Corporation Counsel (Andrew Bellanca, Stanley Buchshaum and William A. Marks of counsel), for appellant.

      C. 0. Donahue, George B. Boochever, Russel H. Neilson and Franklin S. Wood for respondent.
   Order affirmed, with costs; no opinion.

Concur: Lotjghkan, Ch. J., Lewis, Conway, Desmond, Thacheb, Dye and Ftjld, JJ.


text:
    The People of the State of New York, Respondent, v. William J. Thomas, Appellant.
    Argued April 17, 1947;
    decided May 15, 1947.

      Myron J. Greene, Abraham, J. Gellinoff and William B. Sandler for appellant.

      Frank S. Hogan, District Attorney (Whitman Knapp and Richard G. Denser of counsel), for respondent.
   Judgment of conviction affirmed; no opinion.

Concur: Loughran, Ch. J., Lewis, Conway, Desmond, Teacher, Dye and Fuld, JJ.


text:
    Bertha G. Levine, on Behalf of Herself and All Other Creditors of the Estate of Louis L. Grey, Deceased, Appellant and Respondent, v. Harold N. Grey, Respondent and Appellant.
    Argued April 10, 1947;
    decided May 15, 1947.

      Meyer Kraushaar and David I. Kraushaar for plaintiff, appellant and respondent.

      Edward E. Hoenig for defendant, respondent and appellant.
   Order affirmed, without costs; no opinion. Question certified answered in the affirmative.

Concur: Loughban, Ch. J., Lewis, Conway, Desmond, Thacheb, Dye and Fuld, JJ.


text:
    Addie Secor, Appellant, v. Samuel Levine, Defendant, and Julius Watsky, Respondent.
    Argued April 14, 1947;
    decided May 15, 1947.

      Frank H. Connelly, Jr., for appellant.

      Albert N. Proujansky and Joel G. Watsky for respondent.
   Upon appeal from order of Appellate Division: Appeal dismissed and question certified not answered. Upon appeal from the judgment entered upon the order of the Appellate Division: Judgment affirmed with costs. No opinion.

Concur: Loughban, Ch. J., Lewis, Conway, Desmond, Thacheb, Dye and Fuld, JJ.


text:
    In the Matter of the Construction of the Will of Mary A. Bowers, Deceased. Stanley E. Bowers, Respondent; Leo Craine et al., Appellants.
    Argued April 15, 1947;
    decided May 15, 1947.

      Edward H. O’Connor, Jr., for appellants.

      David F. Lee, Jr., for respondent.
   Appeal by trustee dismissed upon the ground that it does not appear that he is a party aggrieved (Civ. Prac. Act, § 557; Matter of Chapal, 278 N. Y. 495, 496) or that on this appeal he represents the interests of remaindermen. (Matter of Thompson, 279 N. Y. 131, 136-137.) Otherwise, order of Appellate Division affirmed, without costs.

Concur: Loughban, Ch. . J,, Lewis, Conway, Desmond, Thacher, Dye and Fuld, JJ. -


text:
    Anne Dignam, Respondent, v. Great Atlantic & Pacific Tea Company et al., Appellants.
    Argued April 16, 1947;
    decided May 15, 1947.

      Abraham Shapiro, Murray C. Spett and Lester Samuels for appellants.

      Leon Wagman for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Loughran, Ch. J., Lewis, Conway, Desmond, Thachee, Dye and Fuld, JJ.


text:
    Consolidated Companies, Inc., Respondent, v. Metropolitan Life Insurance Company, Appellant.
    Argued April 10, 1947;
    decided May 15, 1947.

      Rowland H. Long and Harry Cole Bates for appellant.

      Frederick M. Schlater and Nicholas 8. Massas for respondent.
   Judgment affirmed, without costs; no opinion.

Concur: Loughean, Ch. J., Lewis, Conway, Desmond, Thacheb, Dye and Fuld, JJ.


text:
    In the Matter of William I. Jablon, Appellant, against Board of Regents of the University of the State of New York, Respondent.
    Argued April 14, 1947;
    decided May 15, 1947.

      James A. Leary and Walter A. Fullerton for appellant.

      Nathaniel L. Goldstein, Attorney-General (Henry 8. Manley and Wendell P. Brown of counsel), for respondent.
   Order affirmed, with costs; no opinion.

Concur: Lotjghran, Ch. J., Lewis, Conway, Desmond, Thacher, Dye and Fuld, JJ.


text:
    The People of the State of New York, Respondent, v. Morty Brous, Appellant.
    Argued April 16, 1947;
    decided May 15, 1947.

      Thomas B. Fay and David B. Siegel for appellant.

      James N. Gehrig, District Attorney {Philip Huntington of counsel), for respondent.
   Judgment affirmed; no opinion.

Concur: Loughran, Ch. J., Lewis, Conway, Desmond, Thacher, Dye and Fuld, JJ.


text:
    Mildred Loeb, Individually and as Trustee for Carol Loeb and William Loeb, and Harry Rubenstein, Copartners under the Firm Name of Starlet Underwear Company, Respondents, v. Friedman’s Express, Inc., et al., Appellants.
    Argued April 10, 1947;
    decided May 15, 1947.

      Joseph Eashell and Emmet L. Eolbrooh for appellants.

      Simon Greenhill and Joseph Greenhill for respondents.
   Judgment affirmed, with costs; no opinion.

Concur: Loughran, Ch. J., Lewis, Conway, Desmond* Thachbr, Dye and Fuld, JJ.


text:
    Frederick E. Breithut, Appellant and Respondent, v. Teachers’ Retirement Board of the City of New York, Respondent and Appellant.
    Argued April 14, 1947;
    decided May 15, 1947.

      Charles E. Murphy, Corporation Counsel (Michael A. Castaldi, Seymour B. Quel and Morris Weissberg of counsel), for. appellant.

      Edward L. Justin and Charles A. Cohen for respondent.
   Judgment affirmed, with costs to the plaintiff; no opinion.

Concur: Loughkan, Ch. J., Lewis, Conway, Desmond, Thachek, Dye and Fuld, JJ.


text:
    George Macy Companies, Inc., Respondent, v. New York Post Corporation et al., Appellants.
    Argued April 15, 1947;
    decided May 15, 1947.

      Jonas J. Shapiro and Milton Ross for appellants.

      William Macy for respondent.
   Order affirmed, with costs. Question certified answered in the affirmative. No opinion.

Concur: Loughban, Ch. J., Lewis, Conway, Desmond, Thacheb, Dye and Fuld, JJ.


text:
    The People of the State of New York, Respondent, v. Ward B. Caraway, Appellant.
    Argued April 8, 1947;
    decided May 15, 1947.

      James D. G. Murray, Daniel Kirchman and James J. McDonough for appellant.

      James N. Gehrig, District Attorney (Philip Huntington of counsel), for respondent.
   Judgment of conviction affirmed; no opinion.

Concur: Loughban, Ch. J., Lewis, Conway, Desmond, Thacheb, Dye and Fuld, JJ.


text:
    Sol Schildkraut, Appellant, v. Alma D. Light et al., Respondents, et al., Defendants.
    Submitted April 10, 1947;
    decided May 15, 1947.

      Henry Vollmer, Jr., and John G. Osborne for appellant.

      Edward O’Gorman and Harry M. Smith for respondents.
   Judgment affirmed, with costs; no opinion.

Concur: Lougheak, Ch. J., Lewis, Con way, Desmond, Thacheb, Dyb and Fuld, JJ.


text:
    Harry G. Eckert, Respondent, v. City of New York, Appellant. (Action No. 1.) Ira E. Terry, Respondent, v. City of New York, Appellant. (Action No. 2.)
    Argued April 14, 1947;
    decided May 15, 1947.

      Charles E. Murphy, Corporation Counsel (Herman E. Gottfried, Seymour B. Quel and Francis T. Murray of counsel), for appellant.

      Harry H. Fleming for respondents.
   Action No. 1. Judgment affirmed, with costs; no opinion. Action No. 2. Order affirmed and judgment absolute ordered against appellant on the stipulation, with costs in all courts; no opinion.

Concur: Lewis, Conway, Desmond, Thacher, Dye and Fuld, JJ. Taldng no part: Loughran, Ch. J.


text:
    In the Matter of Pure Oil Company, Appellant, against Lazarus Joseph, Successor to Joseph D. McGoldrick, as Comptroller of the City of New York, Respondent.
    Argued April 15, 1947;
    decided May 15, 1947.

      Charles Pratt Redly for appellant.

      Charles E. Murphy, Corporation Counsel (Francis I. Rowley, Isaac C. Bonner and Gertrude Rerschler of counsel), for respondent.
   Order affirmed, with costs; no opinion.

Concur: Loughran, Ch. J., Lewis, Conway, Desmond, Thagher, Dye and Fuld, JJ.


text:
    Vanneck Realty Corporation, Respondent, v. City of New York, Appellant.
    Argued April 16, 1947;
    decided May 15, 1947.

      Charles E. Murphy, Corporation Counsel (Reuben Levy and Harry E. O’Donnell of counsel), for appellant.

      Alfred T. Davison and Orrin G. Judd for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Loughran, Ch. J., Lewis, Conway, Desmond, Thacher, Dye and Fuld, JJ.


text:
    Delaware, Lackawanna and Western Coal Company, Respondent, v. City of New York, Appellant.
    Argued April 16, 1947;
    decided May 15, 1947.

      Charles E. Murphy, Corporation Counsel (Reuben Levy and Harry E. O’Donnell of counsel), for appellant.-

      I. T. Flatto for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Loughran, Ch. J., Lewis, Conway, Desmond, Thacher, Dye and Fuld, JJ.


text:
    Sidney R. Klar et al., Respondents, v. H. & M. Parcel Room, Inc., Appellant.
    Submitted April 9, 1947;
    decided May 15, 1947.

      Travers E. Devlin and John E. Buck for appellant.

      Horace G. Marks and George Landesman for respondents.
   Judgment affirmed, with costs; no opinion.

Concur: Loughran, Ch. J., Lewis, Conway, Desmond, Thacher, Dye and Fuld, JJ.


text:
    In the Matter of Minnie Nagourney, as Administratrix of the Estate of Isaac Nagourney, Deceased, Appellant. Leon Nagourney, Respondent.
    Submitted April 10, 1947;
    decided May 15, 1947.

      Philip 8charf and Julius Brandes for appellant.

      Harry Scheer for respondent.
   Order affirmed, with costs payable out of the estate; no opinion.

Concur: Loughran, Ch. J., Lewis, Conway, Desmond Thacher, Dye and Fuld, JJ.


text:
    Emma Wieland, as Administratrix of the Estate of August Wieland, Deceased, Appellant, v. Third Avenue Transit Corporation, Respondent.
    Argued April 15, 1947;
    decided May 15, 1947.

      John Braun, Adolph S. Ziegler, Barry B. Lipsig and Louis Greenfield for appellant.

      Addison B. Scoville and A. C. Mayo for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Lottghran, Ch. J., Lewis, Conway, Desmond Thacher, Dye and Fuld, JJ.


text:
    In the Matter of Frank E. Xavier, Appellant, against Alger B. Chapman et al., Constituting the State Tax Commission, Respondents.
    Argued April 17, 1947;
    decided May 15, 1947.

      Charles J. Tobin, Jr., and Charles J. Tobin for appellant.

      Nathaniel L. Goldstein, Attorney-General (John C. Crary, Jr., and Wendell P. Brown of counsel), for respondents.
   Order affirmed, with costs; no opinion.

Concur: Loughran, Ch. J., Lewis, Conway, Desmond Thacher, Dye and Fuld, JJ.


text:
    Ambrose J. McNamara, Appellant and Respondent, v. Herbert S. Powell et al., Respondents and Appellants.
    Argued January 16, 1947;
    decided May 15, 1947.

      Ambrose J. McNamara, in person, and Howard F. Mahon, Frank Keiper and Albert Averbach for plaintiff, appellant and respondent.

      M. William Bray, Clarence E. Williams, Bartle Gorman and George H. Kenny for defendants, respondents and appellants.
   Judgment modified by reducing the amount the defendants are directed to pay by the sum of $2,409.71, with interest of $884.73, which was allowed by the courts below as attorneys’ fees and expenses in the patent litigation (Leach Co. v. American Locomotive Co., 278 N. Y. 471; Strelitzer v. Schnaier, 135 App. Div. 384, 139 App. Div. 901, 204 N. Y. 560; see, also, Manko v. City of Buffalo, 296 N. Y. 905), and as so modified affirmed, without costs.

Concur: Loughban, Ch. J., Desmond, Thacheb, Dye and Fuld, JJ. Taking no part: Lewis and Conway, JJ.


text:
    In the Matter of Joseph J. Quinn, Appellant, against Charles W. U. Sneed, Justice of the Supreme Court, et al., Respondents.
    Submitted April 14, 1947;
    decided May 15, 1947.

      Joseph J. Quinn, in person, for motion.
   No one opposed.

Motion denied on the ground that this court is without power to entertain an appeal from the Appellate Division order of March 24,1947.


text:
    Charles W. Newman, as Administrator with the Will Annexed of Edgar B. Newman, Deceased, Appellant, v. Theodore Revillon et al., Respondents.
    Argued May 12, 1947;
    decided May 20, 1947.

      Burgess Osterhout for motion.

      Henry Hoelljes opposed.
   Motion granted and appeal dismissed, with costs and $10 costs of motion.


text:
    In the Matter of the Estate of George K. Davis, Deceased. Arline D. Ireland et al., Appellants. City Bank Farmers Trust Company, as Temporary Administrator and as Executor of George K. Davis, Deceased, et al., Respondents.
    Submitted May 19, 1947;
    decided May 20, 1947.

      Charles P. Grimes and Richard Steel for motion.
   No one opposed.

Motion dismissed, with $10 costs and necessary printing disbursements, unless, within fifteen days, all papers required by rule 21 (subd. b) of the Rules of the Court of Appeals are filed.


text:
    Samuel Levy, as Receiver of 170 Broadway, Borough of Manhattan, Respondent, v. Isaac Forma et al., Appellants.
    Submitted May 19, 1947;
    decided May 20, 1947.

      Abraham Harris for motion.

      Samuel Levy, in person, opposed.
   Motion dismissed, with $10 costs and necessary printing disbursements, unless, within fifteen days, all papers required by rule 21 (subd. b) of the Rules of the Court of Appeals are filed. Stay continued.


author: Loughban, Ch. J.

text:
    Connecticut Mutual Life Insurance Company et al., Appellants, v. Frank C. Moore, as Comptroller of the State of New York, Respondent.
    Argued April 14, 1947;
    decided July 2, 1947.

      Ganson J. Baldwin for appellants.
    I. The Abandoned Property Law is unconstitutional in its application to foreign life insurance companies. (U. S. Const., art. Í, § 10,14th Amendt. ; N. Y. Const., art. I, §§ 6, 7, subd. [a].) II. The statute attempts to annul the conditions of the policies and to create debts which do not exist. (O’Reilly v. Guardian Mutual Life Ins. Co., 60 N. Y. 169; Wachtel v. Equitable Life Assur. Soc., 266 N. Y. 345; People v. Briggs, 193 N. Y. 457; Glennie v. Falls Equipment Co., 238 App. Div. 7.) III. Nothing in the statute justifies its application retroactively to policies previously issued, which would be unconstitutional. (Boswell v. Security Mut. Life Ins. Co., 193 N. Y. 465; United States Mortgage & Trust Co. v. Ruggles, 258 N. Y. 32; Weiler v. Dry Dock Sav. Inst., 258 App. Div. 581, 284 N. Y. 630.) IV. If the statute is retroactive it illegally attempts to revive claims barred by Statutes of Limitation. (Robinson v. Robbins Dry Dock & Repair Co., 238 N. Y. 271; County of Erie v. Lowenstein, 235 N. Y. 458; Campbell v. Holt, 115 U. S. 620; Hopkins v. Lincoln Trust Co., 233 N. Y. 213; Mason v. Henry, 152 N. Y. 529; Baldwin v. Martin, 14 Abb. Prac. [N. S.] 9; Munn v. Masonic Life Assn., 189 N. Y. 486; Brust v. Barrett, 16 Hun 409, 82 N. Y. 400.) V. Assuming (contrary to the facts and the law) that these policies represent debts, the situs and jurisdiction to escheat must be in the state of incorporation of the insurance company, which is the only known factor. (Sevenoe Securities v. L. & L. Ins. Co., 255 N. Y. 120; Anderson Nat. Bank v. Luckett, 321 U. S. 233; Security Bank v. California, 263 U. S. 282; United States v. Klein, 303 U. S. 276; Furey v. Town of Gravesend, 104 N. Y. 405; Addison v. Holly Hill Co., 322 U. S. 607; Mutual Life Ins. Co. v. Cohen, 179 U. S. 262; Comey v. United Surety Co., 217 N. Y. 268.)

      Nathaniel L. Goldstein, Attorney-General (Abe Wagman and Wendell P. Brown of counsel), for respondent.
    I. The constitutionality of custodial statutes such as the one in quéstion is no longer open to question. (Anderson Nat. Bank v. Luckett, 321 U. S. 233; Security Sav. Bank v. State of California, 263 U. S. 282; Provident Institution for Savings v. Malone, 221 U. S. 660; Brooklyn Borough Gas Co. v. Bennett, 154 Misc. 106; Philadelphia Electric Company Case, 352 Pa. 457; United States v. Klein, 303 U. S. 276, 106 F. 2d 213, 308 U. S. 618.) II. The unclaimed funds covered by section 700 of the Abandoned Property Law are not the property of the insurance companies, but rather unclaimed liquidated debts due and owing from the companies to those insured or their beneficiaries. (Reed v. Provident Society, 190 N. Y. 111; Anderberg v. Metropolitan Life Ins. Co., 269 App. Div. 640; McDonnell v. Mutual Life Ins. Co., 131 App. Div. 643; Van Saun v. Metropolitan Life Ins. Co., 135 Misc. 855; Philadelphia Electric Company Case, 352 Pa. 457; Carolene Products Co. v. United States, 323 U. S. 18; Keck v. Metropolitan Life Ins. Co., 238 App. Div. 538, 264 N. Y. 422; Van Valkenburgh v. American Popular Life Ins. Co., 70 N. Y. 605; Goell v. United States Life Ins. Co., 265 App. Div. 735; Hirsch v. New York Life Ins. Co., 267 App. Div. 404; Buffalo L. T. Safe Deposit Co. v. Knights T. & M. Mut. Aid Assn., 126 N. Y. 450.) III. The domestic agencies of the foreign plaintiff corporations are in the eyes of the law complete and separate organizations which are to be treated as domestic corporations; the situs of the debt or claim is in this State. (Comey v. United Surety Co., 217 N. Y. 268; Morgan v. Mutual Benefit Life Ins. Co., 189 N. Y. 447; Martine v. International Life Ins. Soc. of London, 53 N. Y. 339; Moscow Fire Ins. Co. v. Bank of New York & Trust Co., 280 N. Y. 286; United States v. Moscow Fire Ins. Co., 309 U. S. 624; Matter of Vanderbilt, 281 N. Y. 297; United States Mortgage & Trust Co. v. Ruggles, 258 N. Y. 32; Mutual Life Ins. Co. v. Cohen, 179 U. S. 262; Headley v. City of Rochester, 272 N. Y. 197; Tileston v. Ullman, 318 U. S. 44; Voeller v. Neilston Co., 311 U. S. 531; Pratt v. La Guardia, 182 Misc. 468, 268 App. Div. 973, 294 N. Y. 842.) IV. The statute in no way violates appellants’ constitutional rights as to due process and the contract clause generally. (Anderson Nat. Bank v. Luckett, 321 U. S. 233; Security Bank v. State of California, 263 U. S. 282.) V. Nor as to the Statute of Limitations. (State v. Marshall & Illsey Bank of Milwaukee, 234 Wis. 375; Commonwealth ex rel. Margiotti v. Cunningham, 337 Pa. 289; Matter of Pennsylvania Indemnity Corp., 37 Pa. D. & C. 208; Matter of City of New York [Elm Street], 239 N. Y. 220; Campbell v. Haverhill, 155 U. S. 611; Gardner v. Northwestern Mut. Life Ins. Co., 246 App. Div. 868, 272, N. Y. 592.) VI. Nor is the statute violative of section 19 of article III of the State Constitution.
   Loughban, Ch. J.

This case presents questions as to the validity of the New York Abandoned Property Law in its application to unclaimed life insurance funds.

The gist of the relevant operative sections of the statute is as follows: Abandoned property includes any moneys, held or owing by any life insurance company which have remained unclaimed for seven years by the person or persons entitled thereto under (1) matured life insurance policies on the endowment plan issued on the lives of residents of this State; (2) other kinds of life insurance policies issued on the lives of residents of this State, where the insured, if living, would have attained the limiting age under the mortality table on which the reserves are based; (3) life insurance policies issued on the lives of residents of this State who have died (§ 700). On or before April 1st, in each year, every life insurance corporation shall make a verified written report to the State Comptroller of all such abandoned property held or owing by it (§ 701). Within thirty days thereafter such corporation shall publish a newspaper notice to the persons appearing to be entitled to any of such unclaimed moneys together with a statement (1) that a list of the names of such persons is on file and open to public inspection at the principal office of the corporation; (2) that payment of such unclaimed moneys will be made on or before the succeeding August 31st, to persons establishing their right thereto; and (3) that in the succeeding September such unclaimed moneys still remaining will be paid to the State Comptroller, after which the insurance corporation shall cease to be liable therefor (§ 702). Such payment shall be made to the State Comptroller at the time so fixed (§ 703). Thereupon the care and custody of such property shall pass to the State, the State shall be responsible for all claims established thereto pursuant to law less any lawful deductions, and the insurance corporation shall be relieved of liability for any such claim (§ 1404), The State Comptroller shall publish annual statements of abandoned property received by him and not paid to claimants (§ 1402). Claims may be filed with him for such property and his determination thereof shall be subject to review in the courts (§ 1406). The statute shall be enforced notwithstanding the bar of any statute of limitations (§ 1400).

Whether these parts of the statute should be declared unconstitutional is the question to be determined. The plaintiffs are a number of foreign life -insurance companies that are licensed to do business in this State. The State Comptroller is the defendant. Upon motions made by all parties for a decision on the pleadings, Special Term annulled the statute insofar as it pertains to policies of life insurance issued for delivery outside the State of New York, but upheld the challenged provisions in all other respects, except that the court put aside an issue as to the asserted unlawful operation thereof upon defenses that life insurance companies may have to claims upon their insurance contracts. From so much of the judgment of Special Term as denied relief prayed for by them, the plaintiff companies appealed to the Appellate Division, and, when a unanimous affirmance followed, they brought the case to this court as of right on the basis of the constitutional questions that are directly involved. Since the defendant State Comptroller has at all times been content with the decision of Special Term, we are here concerned only with the effect of the statute upon presumptively abandoned proceeds of insurance policies issued upon the lives of residents of this State and delivered within its borders by companies doing business here, and what follows has reference to policies so issued and delivered and to no others.

Each of the plaintiff companies concededly has its home office outside this State and, by his motion for judgment on the pleadings, the defendant State Comptroller admits the following allegations of the complaint. “ The business of the plaintiffs, and other life insurance companies, is conducted from their Home Offices, where their officers, records, and securities are situated. Applications for policies are obtained by agents throughout the United States, and are sent to the Home Offices for consideration, and, if approved, the policies are written at the Home Offices and are sent to the agents for delivery to the applicants. Premiums are payable at the Home Offices, or, if paid to an agent, are forwarded to the Home Offices. * * * Claims under policies must be made at the Home Offices, under the terms of the policies, which provide that upon receipt at the Home Office of due proof ’ of death, or other event, the company will pay, etc., and all claims are considered at the Home Offices, and, if allowed pursuant to the terms of the policies, are paid by checks drawn at the Home Offices.” On the strength of the above circumstances, the plaintiff companies insist that their debtor obligations under the contracts in question are beyond the territorial reach of the power of the New York Legislature.

Other defects imputed to the statute by the, companies may be summarized in this manner: it cancels provisions of insurance contracts whereby the proceeds become payable only upon filing of due proof of specified events, e.g., death, age, survival, and upon surrender of the policy; it takes away defenses to policies, e.g., misrepresentation and breach of conditions; if given retrospective effect, it will operate to revive claims which at the time of its enactment were barred by the Statute of Limitations. In the foregoing aspects, the statute, as the plaintiff companies see it, is not only repugnant to the due process clauses, but also impairs the obligation of contracts, takes private property for public use without making just compensation therefor and runs foul of the fundamental demand for the equal protection of equal laws. (U. S; Const., art. I, § 10; 14th Amendt.; N. Y. Const., art. I, §§ 6,7, subd. [a].)

The reason of the statute is plain enough. Section 102 says: It is hereby declared to be the policy of the state, while protecting the interest of the owners thereof, to utilize escheated lands and unclaimed property for the benefit of all the people of the state, and this chapter shall be liberally construed to accomplish such purpose.” (See Moufang v. State of New York, 295 N. Y. 121, 127-128.) In accordance with the object first so stated, the Legislature has substituted the State for the plaintiff companies as debtor upon the policies in question and at the same time has secured to the policy-creditors appropriate notice thereof with an opportunity to be heard and with the further right to resort to the courts should payment by the State be refused. Such a statutory scheme fulfills the procedural requirements of due process (Anderson Nat. Bank v. Luckett, 321 U. S. 233).

In the case just cited — where approval was given to a like scheme for State administration of abandoned bank deposits remaining in a national bank within the State — the court said: “ The deposits are debtor obligations of the bank, incurred and to be performed in the state where the bank is located, and hence are subject to the state’s dominion ” (321 U. S. at p. 241). Here the circumstances relied upon as a justification for the exercise of State power are not essentially different. True, the policies in question were committed to writing at the home offices of the plaintiff companies in foreign States and were to be paid by checks mailed therefrom. But the policies were issued upon the lives of residents of this State and were delivered within its borders by corporations doing business therein. “ Effectiveness of a policy [as” the complaint says] usually depends, upon its being ‘ delivered and the first premium paid during the lifetime and good health of the insured a provision which is usually contained in the policies or in the applications for insurance, copies of which are attached to policies when issued and made a part thereof.” Thus the State of New York — where the policies were delivered and where presumably the first premiums were paid — was the place where the contracts in question were made. (Northwestern Mutual Life Ins. Co. v. McCue, 223 U. S. 234; U. S. Mortgage & Trust Co. v. Ruggles, 258 N. Y. 32, 38; Restatement, Conflict of Laws, § 318.) On the whole, then, it makes no difference where the policies were signed or where payment thereof was to be initiated. For the core of the debtor obligations of the plaintiff companies was created through acts done in this State under the protection of its laws, and the ties thereby established between the companies and the State were without more sufficient to validate the jurisdiction here asserted by the Legislature. (See Curry v. McCanless, 307 U. S. 357; Hoopeston Canning Co. v. Cullen, 318 U. S. 313; International Shoe Co. v. State of Washington, 326 U. S. 310. Cf. Prudential Ins. Co. v. Benjamin, 328 U. S. 408; Harris v. Balk, 198 U. S. 215; Morris Plan Ind. Bank of N. Y. v. Gunning, 295 N. Y. 324; Feinman v. Marks, 294 N. Y. 367.)

The contention that the statute unwarrantably rescinds contractual conditions precedent such as the requirements of surrender of policies and filing of due proof of death or other specified events was rejected by the Special Term on the authority of Provident Institution for Savings v. Malone (221 U. S. 660) — a case which sustained a statute whereby banks were commanded to pay over unclaimed deposits to a State without production of passbooks as required by agreements of deposit. The cited case is quite in point. Besides, the present statute calls upon the plaintiff companies to surrender moneys to this State only after maturity of the policy obligations and at a time when the State, as the then legal representative of the parties entitled to such payment, may be regarded as making demand therefor in their behalf.

“ If the statute is retroactive ”, say the plaintiff companies, “ it illegally attempts to revive claims barred by the statute of limitation.” On its face, the statute appears to have been meant for retrospective application, seeing that it became law on April 23,1943, but did not take effect until June 1,1944 (L. 1943, ch. 697 [Vol. 1, pp. 1383 and 1415]), and that the reports of abandoned property called for by section 701 must be made' on or before the first day of April “ in each year ”. Furthermore, the clearly procedural character of the statute is reason enough for giving it a retrospective application (Shielcrawt v. Moffett, 294 N. Y. 181, 188); and if outlawed claims are to be revived thereby, this will be no offense against the Federal Constitution or the Constitution of this State. (Chase Securities Corp. v. Donaldson, 325 U. S. 304, 316; Matter of New York University [Moore], 296 N. Y. 913.)

As has already been indicated, the court at Special Term did not decide whether or not the statute illegally deprives the plaintiff companies of defenses to claims upon their insurance contracts. We see no reason why that issue should go undetermined (cf. Quaker Oats Co. v. City of New York, 295 N. Y. 527, 538). The plaintiff companies, as we have said, cannot resist payment to the defendant comptroller because of (1) the Statute of Limitations or (2) noncompliance with policy provisions calling for due proof of death or of other designated contingency or (3) failure to surrender a policy. Except for these restrictions, however, the statute (§ 700) leaves any of the plaintiff companies wholly free to set np any complete or partial defense whereby it may establish that no moneys are “ held or owing ” by it on a particular policy, or that only some fraction of the face amount of the contract is payable thereon. Maybe, as the companies say, they cannot effectually prepare possible defenses without a proof of claim, but inconvenience of that kind does- not compel us to nullify the statute. Accordingly paragraph 3 of the judgment of Special Term — which reserved decision on the question whether the statute wrongfully does away with defenses to policies — should be struck out.

The judgments should be modified in accordance with this opinion and, as so modified, affirmed, with costs to the defendant State Comptroller.

Lewis, Conway, Desmond, Thacheb, Dye ahd Fuld, JJ., concur.

Judgment accordingly.

       Section 707, added by chapter 452 of the Laws of 1946, provides: “Any life insurance corporation which has paid to the state comptroller moneys deemed abandoned property pursuant to the provisions of this article may make payment to any person entitled to all or any part thereof and shall thereby acquire all of the rights of such person to payment by the state comptroller.”


author: Fuld, J.

text:
    Guerlain, Inc., Respondent, v. F. W. Woolworth Co. et al., Appellants.
    Argued May 19, 1947;
    decided July 2, 1947.

      Martin A, Schenck and Margaret D. Merli for F. W. Woolworth Co., appellant.
    I. The Fair Trade Act (L. 1935, ch. 976, as amd.), as applied below, denies legal effect to the approved rebottling label on which the industry is based. II. Resale of perfume under a label which states the rebottler and the rebottling and mentions the perfumer’s name and brand in a true statement of fact, has been generally recognized not to infringe or involve the perfumer’s trade-mark, name or brand or to constitute unfair competition. (Farina v. Silverlock, 6 De G. M. & G. 214; Hennessy v. White, 6 Wyatt, Webb & A’Beckett Eq. 216; Canal Co. v. Clark, 13 Wall. 311; Krauss v. Jos. R. Peebles’ Sons Co., 58 F. 585; Russia Cement Co. v. Katzenstein, 109 F. 314; Russia Cement Co. v. Frauenhar, 133 F. 518; Champion Spark Plug Co. v. Sanders, 15 Law Week 4467; Thaddeus Davids Co. v. Davids, 233 U. S. 461; Coty v. Prestonettes, Inc., 285 F. 501; Coty v. Prestonettes, 3 F. 2d 984; Old Dearborn Distributing Co. v. Seagram-Distillers Corp., 299 U. S. 183.) III. The Fair Trade Act did not destroy, or give the perfumer the right to fix resale prices in, the rebottling industry conducted under approved labels with merely a collateral reference to the perfumer’s trade-mark, name and brand. In economics rebottling is opposite to “ loss leader ” and “ cut price ”. (F. S. De Voin v. W. T. Grant, 13 Cal. S. B. J. No. 3, 3 C.C.H. Trade Reg. Serv. P25Í06.) IV. The terms' of the Fair Trade Act exclude rebottling from the scope of the act. (Prestonettes, Inc., v. Coty, 264 U. S. 359.) V. Authoritative construction has excluded rebottling from the scope of the Fair Trade Act. (Old Dearborn Distributing Co. v. Seagram-

      Distillers Corp., 299 U. S. 183; Seagram Corp. v. Old Dearborn Corp., 363 Ill. 610; Triner Corp. v. McNeil, 363 Ill. 559; Pep Boys v. Pyroil Sales Co., 299 U. S. 198; Max Factor & Co. v. Kunsman, 5 Cal. 2d 446; R. B. Semler, Inc., v. Kirk, 27 F. Supp. 630.) VI. Canons of construction are against construing the Fair Trade Act as extending resale price control to the rebottling industry. (Straus v. Victor Talking Mach. Co., 243 U. S. 490; Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373; John D. Park & Sons Co. v. Hartman, 153 F. 24; United States v. Socony-Vacuum Oil Co., 310 U. S. 150; United States v. Frankfort Distilleries, 324 U. S. 293; Sola Electric Co. v. Jefferson Co., 317 U. S. 173; Mallinson Fabrics Corp. v. Macy & Co., Inc., 171 Misc. 875; United States v. Univis Lens Co., 41 F. Supp. 258, 316 U. S. 241; United States v. Bausch & Lomb Co., 321 U. S. 707.) VII. Section 2 of the Fair Trade _Act, as applied below, impairs this defendant’s rights under section 6 of article I of the State. Constitution and under the Fourteenth Amendment of the Federal Constitution in that it allows, beyond plaintiff’s trade-mark monopoly, control of resale prices in defendant’s business and destroys defendant’s business in rebottled perfumes long established and conducted under judicially approved labels. (Darweger v. Staats, 267 N. Y. 290; Liggett Co. v. Baldridge, 278 U. S. 105; Old Dearborn Distributing Co. v. Seagram-Distillers Corp., 299 U. S. 183; Bourjois & Co. v. Katzel, 260 U. S. 689; Hanover Milling v. Metcalf, 240 U. S. 403.)

      John S. Bussell for Nips, Inc., appellant.
    I. The sale of Nips by appellants does not violate the Fair Trade Act. The commodities sold by the parties are different. There is no competition and the statute is inapplicable. (United States v. Univis Lens Co., 316 U. S. 241; United States v. Bausch & Lomb Co., 321 U. S. 707; Mallinson Fabrics Corp. v. Macy & Co., Inc., 171 Misc. 875; Calvert Distillers Corp. v. Nussbaum Liquor Store, Inc., 166 Misc. 342.) II. Plaintiff is attempting by this action to use the Fair Trade Act for a purpose not contemplated by the Legislature.' It is attempting to destroy the rebottling business of this appellant and to control the seller, not the price. (Coty, Inc., v. Hearn Dept. Stores, Inc., 158 Misc. 516; De Voin, Exclusive California Distributor for Guerlain Products v. W. T. Grant Co., 106 C.C.H. Trade Beg. Serv., pars. 25, 106.) I'll. The interpretation of section 2 of the Fair Trade Act applied by the Appellate Division in this ease violates defendants’ rights under the Constitutions of the United States and of the State of New York. (United States v. Bausch & Lomb Co., 321 U. S. 707; Superior Oil Co. v. Mississippi, 280 U. S. 390.)

      Lewis G. Bernstein and Samuel Stephen Baker for respondent.
    I. The rationale of the decisions upholding the Fair Trade Act is that its purpose is to protect the name and good will of the manufacturer. (Old Dearborn Distributing Co. v. Seagram-Distillers Corp., 299 U. S. 183; Bourjois Sales Corp. v. Dorfman, 273 N. Y. 167; Lentheric, Inc., v. W. T. Grant Co., 257 App. Div. 348, 282 N. Y. 638; De Voin, Exclusive California Distributor for Guerlain Products v. W. T. Grant Co., 3 C.C.H. Trade Beg. Serv., pars. 25, 106.) II. Defendants’ right to rebottle plaintiff’s perfume does not entitle it to ignore plaintiff’s price schedule. (Guerlain, Inc., v. Woolworth Co., 170 Misc. 150; Bourjois, Inc., v. Hermida Laboratories, Inc., 106 F. 2d 174; Prestonettes, Inc., v. Coty, 264 U. S. 359; International News Service v. Associated Press, 248 U. S. 215; Hanover Milling Co. v. Metcalf, 240 U. S. 403; Martha Washington Candies Co. v. Goldstein, 23 F. Supp. 861; People v. Utica Ins. Co., 15 Johns. 358; Spenser v. Myers, 150 N. Y. 269.) III. If defendants have actually produced a new commodity, they may mot designate it as Guerlain’s Shalimar. IV. The Fair Trade Act is applicable to defendants’ sales of rebottled perfumes because use of plaintiff’s trade-mark is use of its good will. (Old Dearborn Distributing Co. v. Seagram-Distillers Corp., 299 U. S. 183.) V. Plaintiff has suffered damage and is confronted with further.damage as a result of defendants’ activities. (Yale Electric Corp. v. Robertson, 26 F. 2d 972.)
   Fuld, J.

Plaintiff manufactures and distributes high-grade perfumes and cosmetics which are sold in fair and open competition with other similar products. Among the registered trade-marks owned and used by it are the words Guerlain ” and “ Shalimar ”. Pursuant to the Feld-Crawford Act (L. 1935, ch. 976, as amd.; now General Business Law, art. XXTV-A), plaintiff and certain of its retailers entered into so-called “ fair trade contracts ” which set, inter alla, a minimum resale price of $1.60, plus retail sales tax, for plaintiff’s “ Shalimar ” perfume in quantities of “ one dram or less

Defendant Nips, Inc., whose entire business consists of rebottling perfumes, buys plaintiff’s perfumes in the retail market and rebottles them in small glass ampules holding 1/70 of a dram. The ampules of “ Shalimar ” are individually packed in little paper containers.bearing, the label:

“ NIPS

Perfumes

Genuine French Extracts

Guerlain’s Shalimar

■ Rebottled by Nips, Inc., N. Y.

Wholly Independent of

Guerlain ”.

The perfume thus rebottled is sold to a number of variety and chain stores, among them defendant Woolworth Co., which resells to the ultimate consumer for ten cents a package.

In 1938, plaintiff advised both defendants of its fair trade contracts and requested defendant Woolworth to stop selling its products at less than the established minimum resale price. Woolworth refused, and the sales at ten cents a package continued. Consequently, plaintiff seeks injunctive relief under the Fair Trade Act.

Section 1 of that statute (now General Business.Law, § 369-a) recognizes and affirms the legality of contracts fixing the prices at which the immediate buyer and all subsequent vendees may sell or resell a commodity “which bears, or the label or content [sic] of which bears, the trade mark, brand, or name of the producer or owner of such commodity * * Section 2 (now General Business Law, § 369-b) provides that the willful and knowing advertisement, offer or sale.— regardless of whether or not it be by a party to such contract — of “ any commodity at less than the price [so] stipulated # * * is unfair competition and is actionable at the suit of any . person damaged thereby.”

Defendants seek to escape the effect of the statute by urging that in distributing and selling the ampules they are dealing with a commodity other than and different from the product covered by plaintiff’s fair trade contracts. That claim, lacking substance, ignores reality and the dictates of common sense. The ampule contains perfume — of that there can be no possible doubt — and the label explicitly announces that it is Guerlain’s Shalimar ”. It is a less quantity than "that contained in the original bottle, but still it is perfume — plaintiff’s perfume — and it is the perfume itself which the purchaser desires and buys, not just the “ patented applicator ” in which the perfume is rebottled by defendant. Were it otherwise, there would, of course, be no need to identify on the label the specific kind or brand of perfume contained in the ampule. The present case is far removed from those involving dresses made from trade-marked cloth (Mallinson Fabrics Corp. v. Macy & Co., Inc., 171 Misc. 875) or lenses ground from trade-marked “ blanks ”. (United States v. Bausch & Lomb Optical Co., 321 U. S. 707; United States v. Univis Lens Co., 316 U. S. 241.) There, the very form and character of the basic product is altered; a new article, possessing a completely different function, is created. There is, in fact and in effect, a new and different commodity. Here, the original commodity — Guerlain’s Shalimar perfume — undergoes not the slightest change in form, content, quality or character; the difference is purely quantitative, the product remains the same, identical save in amount.

Defendants likewise contend that "the Feld-Crawford Act was aimed solely at price cutting and therefore does not cover such a situation as the present where the aggregate amount charged for the number of ampules necessary to make up one dram of Guerlain’s Shalimar is $7, far more than the minimum price of $1.60 set by plaintiff. While it is true that the statute prevents price cutting, its primary aim ”, the Supreme Court of the United States has observed — in discussing the virtually identical Illinois Fair Trade Act — “ is to protect the property, namely, the good will, of the producer which he still owns. The price restriction is adopted as an appropriate means to that perfectly legitimate end, and not as an end in itself.” (Old Dearborn Distributing Co. v. Seagram-Distillers Corp., 299 U. S. 183, 393.) More than that, however, defendants’ entire argument disregards the fact that, in determining the price stipulated ’ ’, the price set by the contract must always be related to the quantity which the contract ties to that figure. There is nothing in the Feld-Crawford Act about proportioning prices to quantity; plaintiff was within its undoubted legal rights in fixing a price of $1.60 for quantities of “ one dram or less ”, and Woolworth violated that law whenever it sold any fraction of a dram of Guerlain’s Shalimar for less than $1.60. (See Lentheric, Inc., v. W. T. Grant Co., 257 App. Div. 348, affd. 282 N. Y. 638; Lentheric, Inc., v. F. W. Woolworth Co., 338 Pa. 523.)

Finally, defendants urge that the Feld-Crawford Act does not apply to rébottled goods bearing a label of the type approved in the Prestonettes case. (Prestonettes, Inc., v. Coty, 264 U. S. 359; same case sub nom. Coty, Inc., v. Prestonettes, Inc., 3 F. 2d 984.) The gist of their argument is that the words Guerlain’s Shalimar ” are here used to describe the contents of the ampule, not as a trade-mark to identify the source of those contents, and that, consequently, the label does not “ bear ” plaintiff’s “ trade mark, brand, or name ”, within the intendment of section 1 of the Act (now General Business Law, § 369-a). The argument, thus revolving around a nice distinction drawn in the law of trade-mark infringement lacks validity in the present situation.

The statute was manifestly aimed and designed to protect the good will of the owner or producer from injury when his trade-mark or name is employed in the resale of goods originally owned or produced by him. As Mr. Justice Sutherland, speaking for the Supreme Court, wrote in the Old Dearborn case (299 U. S., supra, at p. 195): u Section 2 of the act [enacted in Illinois] does not prevent a purchaser of the commodity bearing the mark from selling the commodity alone at any price he pleases. It interferes only when he sells with the aid of the good will of the vendor; and it interferes then only to protect that good will against injury. It proceeds upon the theory that the sale of identified goods at less than the price fixed by the owner of the mark or brand is an assault upon the good will, and constitutes what the statute denominates * unfair competition. ’ ”

That legislative purpose — to protect the vendor’s good will — frames the issue before us: is the disposition of defendants ’ ampules being accomplished with the aid of plaintiff’s good will? To us, the answer is clear. In employing the words “ G-uerlain’s Shalimar ”, in placing them on the label, defendants are using plaintiff’s good will — as symbolized by those words — to facilitate sales. They are not merely describing the contents of the ampule, but are, in practical effect, identifying the product as plaintiff’s, and to that extent they are violating the plain mandate of the Feld-Crawford Act.

It may well be that the reference by defendant Nips on its Z/ label to plaintiff’s mark and name does not constitute an infringement — as held in the Prestonettes case (264 U. S. 359) — but that fact does not in and of itself remove defendants from the purview of the Fair Trade Act. That statute does not draw any distinction between a use of plaintiff’s mark qua trade-mark and a collateral reference to the mark in describing the product being sold, and we cannot, consonant with the manifest legislative purpose, construe the act as embodying any such distinction. (Cf. e.g., Penal Law, § 2354, subd. 6.) The fact remains that the commodity involved bears the trade-mark and name of the producer of the perfume — the sole condition necessary to render the statute applicable. Defendants are indisputably sharing in plaintiff’s good will in the marketing of their ampules, and, -while they may be privileged to do this under the law of trade-marks, they are not permitted to do so by the Fair Trade Act. What constitutes a trade-mark or name use under the fair trade statute is not necessarily the same as an infringing use under i rade-mark law.

In conclusion, then — defendants are engaged in the distribution, display and sale of a commodity which bears the brand and name of the.producer and owner and which is being resold for less than the minimum price specified in fair trade contracts. Such conduct, constituting as we have said, a violation of the Feld-Crawford Act, is properly restrained by injunctive relief. A similar determination lias been reached in other States, (Lentheric, Inc., v. F. W. Woolworth Co., 338 Pa. 523, supra; De Voin v. W. T. Grant Co., Super. Ct. Cal, Feb. 11, 1938, 3 C. C. H. Trade Reg. Serv., par. 25106 [ not officially reported].)

The judgment should he affirmed, with costs.

Loughran, Cb. J., Lewis, Conway, Desmond, Thaohbb and Dye, JJ., concur.

Judgment affirmed.


author: Conway, J.

text:
    In the Matter of the Claim of Arville A. Davis, Respondent, against Block & Smith, Inc., Respondent, and Metropolitan Casualty Insurance Company of New York, Appellant. Workmen’s Compensation Board, Respondent.
    Submitted April 15, 1947;
    decided July 2, 1947.

      Jeremiah F. Connor for appellant.
    The insurance contract is limited to certain locations and does not include premises owned by the corporate employer’s president at his place of residence. (Matter of Nieder v. Garrett Busch & Son, Inc., 262 N. Y. 656; Matter of Pettit v. Reges, 242 N. Y. 272; Neubeck v. Doscher, 204 App. Div. 617; Astrin v. East New York Woodwork Mfg. Co., 210 App. Div. 720; Levine v. East New York Electric Corp., 210 App. Div. 730; Matter of Simpkins v. Steffen, 255 N. Y. 65; Matter of Lent v. 850 Seventh Ave. Corp., 259 N. Y. 616; Matter of Wedemeier v. Mavis Bottling Co., 261 N. Y. 548.)

      Harry B. Sale for employer, respondent.
    The employee designated the corporation as his employer and continued doing the same type of work at both locations. (Matter of Struppek v. Lundgren, Inc., 246 App. Div. 873; Matter of Van Houte v. Marion Lumber Co., 248 App. Div. 932; Matter of Sponheimer v. Kelly, 259 App. Div. 767; Matter of Collier v. Dangard, 250 N. Y. 561; Matter of Jaabeck v. Crane’s Sons Co., 238 N. Y. 314; Matter of Lind v. Roberts, 261 N. Y. 626; Matter of Gaffney v. Kerslake, 268 App. Div. 841; MacDonald v. Grand Battery & Ignition Service, 229 App. Div. 817; Aross v. Sardo, 233 App. Div. 200.)
   Conway, J.

The question presented for our determination on this" appeal by the insurance carrier only, the employer having failed to appeal, is whether the policy which is a standard New York workmen’s compensation policy covered the work at the location where claimant’s injury occurred.

The claimant was employed by Block & Smith, Inc., as a handy man doing painting, repairing and plumbing work. The insurance policy provided for. the character of the work to be done and the locations at which that work was to be performed. At the time of his injury the claimant was not at any of the locations specified although he was engaged in work similar in character to that which he was hired to do. It was painting, general repairing and cleaning over a four-week period at the home of the president of the employing corporation, at 35-25 233d St., Bayside, L. I. The Workmen’s Compensation Board has found that at the timé of the accident claimant was “ doing work incidental to the employer’s business * * *, and was an employee of Block & Smith Inc., within the meaning of the Workmen’s Compensation Law.” There was evidence to support that finding since the employer filed reports of injury which asserted that fact and did not appeal from the decision of the board.

The policy provided in paragraph 6: “ This agreement shall apply to such injuries so sustained by reason of the business operations described in said Declarations which, for the purpose of this insurance, shall include all operations necessary, incident or appurtenant thereto, or connected therewith, whether such operations are conducted at the work places defined and described in said Declarations or elsewhere in connection with, or in relation to, such work places.”

Condition A ” of the policy provided: “ The premium is based upon the entire remuneration earned, during the Policy Period, by all employees of this Employer engaged in the business operations described in said Declarations together with all operations necessary, incident or appurtenant thereto, or connected therewith whether conducted at such workplaces or elsewhere in connection thereAvith or in relation thereto * *

The declarations of the policy contained the following items:

“ Item 3. Locations of all factories, shops, yards, buildings, premises or other workplaces of this Employer, by Town or City, with Street and Number 94-20 to 94-24 Northern Blvd. B/A 3301 to 3315 Junction Blvd. Corona L. I.

“ All business operations, including the operative management and superintendence thereof, conducted at or from the locations and premises defined above as declared in each instance by a disclosure of estimated remuneration of employees under such of the following Divisions as are undertaken by this Employer. 1 All industrial operations upon the premises. 2 All office i'orces. 3 All repairs or alterations to premises. 4 Specially rated operations on the premises. 5 Operations not on the premises. * * 4

Item 5. This Employer is conducting no other business operations at this or any other location not herein disclosed — except as herein stated: no exceptions ” (italicized in policy).

The classification of operations was stated in the policy in part as: “ Buildings — (1ST. O. C.) — operation by owner or lessee — including care, custody and maintenance of premises * * V’

It is urged upon us that we should depart from ordinary rules of legal construction which necessitate the giving of a meaning to each word and clause in a contract and that we should disregard the designation of the two locations specified as those at which the work was to be done if the insurance contract was to be in force. It may be that the insurance company would have added to the contract the corporation president’s home address as one of the locations at which work might be performed, or, indeed, would have written in generally the words “ various locations ”, if so requested, without change of premium. We cannot, however, employ a special or unique rule of construction for insurance contracts. The employer here knew the classification of operations and the locations which it was seeking to cover by compensation insurance. The board has found that the claimant at the time of injury was the employee of the employer-corporation. He should, therefore, have been properly covered by workmen’s compensation insurance. Since he was not it is unfortunate that the employer may be guilty of a misdemeanor (Workmen’s Compensation Law, § 52) and, had claimant not elected to claim compensation, might have been well-nigh defenseless in an action by the claimant by reason of section 11 of the Workmen’s Compensation Law, since the claimant stepped into a hole in or near the porch of the home where he was working while carrying an extension ladder, but that was the fault of the employer, and he is not in a position to complain. .

We have held in two prior cases, Matter of Pettit v. Reges (242 N. Y. 272) and Matter of Lent v. 850 Seventh Ave. Corp. (259 N. Y. 616) that, under similar circumstances, there was no insurance coverage. In the first of those cases the employer was ‘ ‘ engaged in the business of maintenance and operation, alteration and repair of buildings with an office and place of business located at 505 First Avenue, New York City.’ ” (P. 274.) The classification of operations was stated in the policy as “ Buildings — All employees engaged in care, custody and maintenance of premises * * * The declarations listed five specific addresses in Astoria, N. Y. the last of which was 275 Grand Avenue. Claimant was injured while excavating a cellar under a building at 306 Grand Avenue, Astoria ” which was not listed in the policy. We said (Hisoook, Ch. J.), p. 274: The specific claim is that the policy furnished insurance only against accidents to employees while they were engaged at work upon and in connection with certain premises described in the policy and among which the property in question was not included. We think that this claim is sustained and that the policy did not cover the accident in question.” After referring to those provisions of the policy which are the same as in paragraph 6 and condition A ” of the instant policy, quoted, {supra), we said (p., 275):

“ When in accordance with these provisions we turn to the provisions of the declarations ’ which are made a part of the policy it seems to us that they clearly indicate that the policy was intended to furnish insurance for operations upon and in connection .with certain enumerated premises and was not intended, as claimed by respondent, to' furnish insurance for the general business of altering, removing or repairing buildings wherever they might be situated. * * * There is then the provision which reads as follows: ‘ Locations of all factories, shops, yards, buildings, premises or other work places of this: employer by town or city with street and number, 505 First Avenue, 504 Second Ayanue, 273 Academy Street, 411-413 Webster Avenue and 275 Grand Avenue, Astoria, N. Y.’ And again; This employer is conducting no other business operations at this or any other locations not herein disclosed except as herein stated. No exceptions.’

“ The operations covered by said policy are then stated to be: ‘1. All industrial operations upon the premises. 2. All office forces. 3. All repairs or alterations to premises. 4. Specially rated operations on the premises. 5. Operations not on the premises.’ The first four clauses clearly did not cover this accident. It is argued that the last provision ‘ Operations not on the premises ’ does cover it and insured against an accident which might happen on other premises than those enumerated as hereinbefore mentioned. We do not think, however, that this is its fair interpretation. The provisions which we have quoted indicate an intent to insure against accidents occurring within the boundaries of the different premises which were described and also against those which were incidental to the operation of those premises. It is said that the agreement ‘ shall include all operations necessary, incident or appurtenant thereto or connected therewith whether such operations are conducted at the work places defined and described in said declarations or elsewhere in connection with or in relation to such work places.’ It was appreciated that a workman who was engaged in the operation of these specific pieces of real estate might have occasion in connection therewith to discharge some duty which was not upon the premises but which nevertheless would be connected with and related to his work there being performed and we think that the expression ‘Operations not on the premises’ is to be interpreted in the light of all of these provisions and is to be construed as meaning an operation which although not on .the premises was still connected with the work there being performed.

“It is not claimed that the work which the employee was performing at the time he was injured had any such relation and, therefore, we think that the accident does not come within the coverage of the policy and that the award of the State Industrial Board and the order of the Appellate Division should be reversed and claim dismissed as to appellant the Columbia Casualty Company, with costs against State Industrial Board in this court and in the Appellate Division.” Likewise here there is no evidence or claim that the work which claimant was performing at the Bayside home of the corporate president at the time of his injury had any relation to .or connection with the operation of the buildings in Corona described in the policy.

In the Lent case (supra), claimant was employed as a porter by the 850 Seventh Avenue Corporation which owned and operated an apartment house designated as 848-852 Seventh Avenue. The classification of operations covered by the policy was "Buildings — operation (owner or lessee) all employees engaged in care, custody and maintenance of premises * * * ”. Claimant was injured while - crossing over a wall in order to remove rubbish from the adjoining premises known as 854 Seventh Avenue. The policy covered the premises at 848-852 Seventh Avenue but did not include 854 Seventh Avenue which were not maintained by the employer -corporation. The only connection between the two premises was that the treasurer of the corporation operating 854 Seventh Avenue was the same person who was the treasurer of the employer, 850 Seventh Avenue Corporation. We affirmed a decision holding that the policy did not cover the premises where the accident occurred, rescinding all previous awards made against the indemnity company and directing the appellant-employer, as a non-insurer, to pay claimant compensation for the injury. (See, also, Matter of Nieder v. Garrett Busch & Son, Inc., 262 N. Y. 656.)

Further, the classification of operations covered by the policy here — " Buildings * * * —operation by owner or lessee — including care, custody and maintenance of premises * * * ”— clearly indicates an intention to cover the operations of the owner or lessee with reference to the specified-and described premises and not the operations of a general contractor or building maintenance corporation with reference to buildings owned or leased by others and located elsewhere. Here the building on which claimant was working at the time of the accident was not listed in the policy and was neither owned nor leased by the employer-corporation.

The case of Matter of Jaabeck v. Crane’s Sons Co. (238 N. Y. 314) relied upon by appellant and the Workmen’s Compensation Board is not in point. We pointed out in that case that the policy provided that it covered the operations of the employer at the Brie Basin, Brooklyn, N. Y." and elsewhere in New York State (P. 320.) Matter of MacDonald v. Grand Battery & Ignition Service (254 N. Y. 605), Matter of Collier v. Dangard (256 N. Y. 561) and Matter of Lind v. Roberts (261 N. Y. 626) did not involve the care, custody and maintenance of specified premises and the claimant in each of those cases was found at the time of the injury to have been engaged in doing work which, while being performed away from the particular location from which the business was conducted, was incidental to the general business operations of the employer which were fully covered and described in the declarations forming a part of the policy. Here although the work claimant was doing at the time of the accident may have been incidental to the general business of the employer-corporation — as found by the board — it was not incidental to the business operations of ■ the employer-corporation described in the declarations of the policy. (See par. 6 of policy, sufra.) Those declarations restricted coverage to the business operations of the employer-corporation and work incidental thereto at certain specified buildings owned or leased by it. They did not extend to or include operations upon which the employer-corporation might become engaged by maintaining buildings owned or leased by others and located elsewhere.

The order of the Appellate Division should be reversed dnd the claim dismissed as to appellant, Metropolitan Casualty Insurance Company of New York, with costs against the Workmen’s Compensation Board.

Loughran, Ch. J., Lewis, Thachek, Desmond, Dye and Fuld, JJ., concur.

Order reversed, etc.


author: Ftjld, J.

text:
    The People of the State of New York ex rel. Eddy Newman, Appellant, against John F. Foster, as Warden of Auburn Prison, Respondent.
    Submitted May 20, 1947;
    decided July 2, 1947.

      Eddy Newman, in person, appellant.
    I. The crime for which relator was convicted in New Jersey is not felony under the Laws of the State of New York because it is not punishable- by imprisonment in a State prison in New York State. (People ex rel. Kruger v. Snyder, 25 N. Y. S. 2d 644; Matter of Stauber v. Larkin, 241 App. Div. 797; People ex rel. Atkins v. Jennings, 248 N. Y. 46; People v. Wood, 145 Misc. 678; People v. Knatt, 156 N. Y. 302; People v. Voelker, 255 N. Y. S. 883.) II. An offence is a first offence unless the contrary is charged. The allegations of the prosecutor in New Jersey, charged relator with. carrying a concealed weapon but made no reference to any previous conviction. He was therefore charged and convicted of a crime which if committed in the State of New York,, would be a misdemeanor. (Commonwealth v. Harrington, 130 Mass. 35; Wood v. People, 53 N. Y. 511; Hoggett v. State, 101 Miss. 272; Rosenberg v. State, 5 Ala. App. 196; Singer v. United States, 278 F. 415; Commonwealth v. McDermott, 224 Pa. 363 ; State of Iowa v. Smith, 129 Iowa 709; Commonwealth v. Harrington, 130 Mass. 35; People v. Sickles, 156 N. Y. 541; State v. Finding, 123 Minn. 413; People ex rel. Gainance v. Platt, 148 App. Div. 579; People v. Johnson, 112 App. Div. 812; People ex rel. Pettibone v. Superintendent of New York State Reformatory, 294 N. Y. S. 255; Commonwealth v. Dunster, 145 Mass. 101; Commonwealth v. Mead, 10 Allen 396; People v. Bretton, 144 App. Div. 282.)

      Nathaniel L. Goldstein, Attorney-General (Wendell P. Brown, Patrich H. Clune and William S. Elder, Jr., of counsel), for respondent.
    The New Jersey conviction was for a crime, which, had it been committed in New York, would have been felonious. (People ex rel. Fellman v. Foster, 270 App. Div. 877, 296 N. Y. 954; People ex rel. Munos v. Morhous, 268 App. Div. 1013; People v. Gennaro, 261 App. Div. 533; Matter of Emert v. Thorn, 249 App. Div. 301; People v. Gutterson, 244 N. Y. 243.)
   Ftjld, J.

Relator’s challenge to the legality of his sentence as a fourth felony offender must be sustained; one of the crimes relied upon was improperly included.

Relator was sentenced as such fourth offender in the Bronx County Court in 1935, following his conviction of burglary. Eleven years later, he sued out a writ of habeas corpus and, disputing Ms status, attacked the validity of the sentence imposed. The Supreme Court, Cayuga County, dismissed the writ, and the Appellate Division unanimously affirmed. Appeal to this court is by our permission.

It is undisputed that relator was thrice convicted of crime prior to 1935. According to the information filed pursuant to section 1943 of the Penal Law, those offenses were (1) grand larceny, in 1917, in the Supreme Court, Franklin County; (2) burglary, in 1923, in the Kings County Court, and (3) carrying a concealed weapon, in 1920, in the Court of Special Sessions of Union County, New Jersey. The first two — convictions in. tMs State — are concededly felonies. A question exists only as to the crime committed in New Jersey, which was based upon a statute providing that one “ who shall carry any revolver, pistol, firearm * * * concealed in or about his clothes or, person, shall be guilty of a misdemeanor * * (Laws of New Jersey, 1912, ch. 225, § 1.) The information, to which relator pleaded guilty in the New Jersey court, alleged only the carrying of a concealed revolver and, indeed, any further recital would have been immaterial, surplusage under the statute.

Section 1942 of the Penal Law is the statute which provides for the punishment of a fourth offender; it defines him as one who, after having been three times convicted in New York of felonies or in any other jurisdiction “ of crimes which if committed within this state would be felonious ”, commits a felony here. Whether the acts committed in the foreign jurisdiction would be felonious if committed within this State, depends, of course, upon New York law. What those acts were, however, is to be determined by reference only to the foreign judgment of conviction and the indictment or information upon which it was predicated, and .the court is restricted to consideration of the operative and material facts therein set forth. (See People v. Voelker, 222 App. Div. 717; see, also, People v. Wicklem, 183 Misc. 639, 642; People v. Dacey, 166 Misc. 827, 836-837.) To permit proof of facts different from those alleged would lead only to abuse and to impossibility of administration. (See Matter of Emert v. Thorn, 249 App. Div. 301; People v. Wicklem, supra; People v. Dacey, supra.)

We turn, then, to the law of this State: a person who shall have or carry concealed upon his person [a] * * * firearm ” is guilty of a misdemeanor, unless “ previously convicted of any crime ” (Penal Law, § 1897, subd. 5). (Italics supplied.) The offense charged is a misdemeanor unless the prior conviction is expressly alleged; failure to recite that fact is fatal to any claim of felony. (Cf. People ex rel. Sloane v. Lawes, 255 N. Y. 112, 116; People ex rel. Gainance v. Platt, 148 App. Div. 579, 581; People ex rel. Pettibone v. Superintendent of Elmira Reformatory, 162 Misc. 125, 126.)

I It follows, therefore, that the New Jersey information charged an offense which — if committed here — would have been a misdemeanor and not a felony. Even though a defendant be a bad man, a vicious criminal, he may he punished as a fourth offender only if section 1942 of the Penal Law encompasses his case. The scope of that statute, we have said, may not he extended “ by judicial interpretation (People ex rel. Carollo v. Brophy, 294 N. Y. 540, 544.)

The orders should be reversed aiid the proceeding remitted to the Supreme Court for proceedings not inconsistent with this opinion.

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

Orders reversed, etc.


text:
    United States Fidelity and Guaranty Company, Respondent, v. Triborough Bridge Authority et al., Respondents. United States of America, Intervener, Appellant.
    Argued May 27, 1947;
    decided July 2, 1947.

      John F. X. .McGohey, United States Attorney (John B. Greegan of counsel), for appellant.
    I. The surety by paying the claims of the subcontractors did not discharge an obligation of the authority so as to become subrogated to the rights of the .authority in the unpaid contract price. Nor do the subcontractors, the true creditors of the surety, have any rights in the fund to which the surety could be subrogated. (Maryland Casualty Co. v. Portland Const. Co., 71 F. 2d 658; American Surety Co. of N. Y. v. Town of Islip, 268 App. Div. 92; Platt v. The Richmond Y. R. & C. R. R. Co., 108 N. Y. 358; Amiesite Constr. Co. v. Luciano Contr. Co., 284 N. Y. 223; Hanssel v. Tomasetti Contr. Corp., 8 N. Y. S. 2d 873, 257 App. Div. 1031, 283 N. Y. 164; Johnson Service

      Co. v. Monin, Inc., 253 N. Y. 417; Riverside Contr. Co. v. City of New York, 218 N. Y. 596; Arrow Iron Works, Inc., v. Greene, 260 N. Y. 330; Remsen v. Beekman, 25 N. Y. 552; United States v. Emory, 314 U. S. 423; Adamson v. Paonessa, 180 Cal. 157; Sundheim v. School Dist. of Phila., 311 Pa. 90.) II. The surety has no equitable lien on the fund independent of the right of subrogation. If the surety has such a lien it is ineffective against the statutory lien of the United States for taxes. Furthermore the United States by reason of the levy acquired a superior right in the fund by the force and effect of section 3710 of the Internal Revenue Code. (Pittsburgh-Westmoreland Coal Co. v. Kerr, 220 N. Y. 137; Hedley v. New Amsterdam Casualty Co., 267 App. Div. 800, 293 N. Y. 921; Kane Co. v. Kinney, 174 N. Y. 69; Glass City Bank v. United States, 326 U. S. 265; Munsey Trust Co. v. United States, 67 F. Supp. 976; Schmoll v. United States, 63 F. Supp. 753; United States v. Marine Midland Trust Co., 46 F. Supp. 38; Commonwealth Bank v. United States, 115 F. 2d 327.) III. The trial court erred in allowing interest on the amount awarded to the surety. (Deering v. Schreyer, 185 N. Y. 560.) IV". The trial court erred in not awarding to the United States the balance of the fund remaining after the allowance of the claim of the surety. (Friedman v. Board of Education of City of N. Y., 256 App. Div. 318.)

      William B. Shelton and John J. O’Connor for plaintiff, respondent.
    I. The contractor had no enforcible title or interest in the balance in the hands of the bridge authority so long as the claims of its subcontractors for labor and material supplied in the performance of the contract remained unpaid. (Prairie State Bank v. United States, 164 U. S. 227; Scarsdale Nat. Bank & Trust Co. v. U. S. Fidelity & Guar. Co., 264 N. Y. 159; Johnson Service Co. v. Monin, Inc., 253 N. Y. 417.) II. Upon the execution of the bond the surety acquired an equitable lien on the contract moneys in the hands of the bridge authority and became" subrogated to the fund itself and to every right and remedy which the bridge authority had in respect thereto. These rights accrued to the surety upon the execution of the bond and became enforcible by the surety, upon the discharge of. its surety obligations. (Martin v. National Surety Co., 300 U. S. 588; Maryland Casu

      alty Co. v. United States, 53 F. Supp. 436; Century Cement Mfg. Co. v. Fiore, 264 App. Div. 475; Scarsdale National Bank & Trust Co. v. U. S. Fidelity & Guar. Co., 264 N. Y. 159; Exchange State Bank v. Federal Surety Co., 28 F. 2d 485; Hinningsen v. U. S. Fidelity & Guar. Co., 208 U. S. 404; Lacy v. Maryland Casualty Co., 32 F. 2d 48.) III. The United States of America acquired no greater rights in the fund in the hands of the bridge authority than its taxpayer had under the provisions of the contract. (Scarsclale National Bank & Trust Co. v. U. S. Fidelity & Guar. Co., 264 N. Y. 159; Prairie State Bank v. United States, 164 U. S. 227; Karno-Smith v. Maloney, 112 F. 2d 690; Lacy v. Maryland Casualty Co., 32 F. 2d 48; Municipal Housing Authority v. Hatfield Elec. Corp., 264 App. Div. 99; Prairie State Bank v. United States, 164 U. S. 227; Municipal Housing Authority v. Hatfield Elec. Corp., 264 App. Div. 99.) IV. The surety was entitled to interest on the amount of its claim from the date on which it made its payments in discharge of its surety obligations. (Faber v. City of New York, 222 N. Y. 255; Berger v. N. J. Fidelity & Plate Glass Ins. Co., 245 N. Y. 1.)
   Fuld, J.

Money held by defendant Triborough Bridge Authority is claimed by both the surety, United States Fidelity and Guaranty Company, as plaintiff — which became responsible, under a bond, for defaults in the debts of a contractor — and the Government of the United States as intervener — which seeks taxes owed by the contractor.

The facts are not disputed. On July 10, 1940, defendant Authority entered into a contract with Petraeca & Banko, Inc., for the construction of grade separations on the Hutchinson Biver Parkway Extension, for a contract price of $687,694.50. The contract required the contractor to furnish a surety bond in a specified form and further provided, in effect, that, if the contractor failed to pay all bills for labor and materials furnished in the performance of the contract, defendant Authority should have the right to withhold out of any payments due the contractor such sums as might be necessary to insure satisfaction of such unpaid bills.

On the same day — July 10, 1940 — the contractor, as principal, and plaintiff, as surety, executed a bond in the form required by the contract. This bond was conditioned upon faith-fui performance of the contract and upon payment of all claims for labor and materials furnished.

On December 6, 1941, the completed work was accepted by defendant Authority which then held $108,904, representing the final payment due under the contract. At that time, the contractor was in default as to debts totaling $55,611.61 — due and owing to subcontractors for labor and materials furnished. The corresponding payment provision of the bond therefore became operative, and, accordingly, upon demand by the unpaid subcontractors, plaintiff satisfied those debts in full in July and August, 1942. In the meantime, however, in May of 1942, the United States Commissioner of Internal Revenue assessed income taxes against the contractor for the years 1939, 1940 and 1941, aggregating $174,946.67, and immediately thereafter demanded payment. No part of the tax having been paid, a notice of lien was filed in June, 1942.

Plaintiff sued to impress an equitable lien — to the extent of its payments to the subcontractors — upon the fund in the hands of defendant Authority. The United States intervened, asserting its tax lien against the entire fund and asking for judgment declaring its lien superior to plaintiff’s and awarding it the entire fund. The trial court, however, decided in plaintiff’s favor; it held the surety’s lien superior, impressed an equitable lien upon the fund in its favor and directed payment to it in the sum of $55,611.60, plus interest. It declined, though, to dispose of the balance of the fund, upon the ground that all of the necessary parties were not before the court. The Appellate Division — one justice dissenting and opining that intervener should have been allowed the balance — affirmed.

The conclusion of the courts below — that the surety’s rights are prior to those of the intervener — is in accord with settled law. (See e.g., Scarsdale Nat. Bank & Trust Co. v. United States Fidelity & Guar. Co., 264 N. Y. 159; Prairie State Bank v. United States, 164 U. S. 227; American Surety Co. v. Sampsell, 327 U. S. 269.) Plaintiff succeeded — under principles of subrogation — to all rights which defendant Authority might have against the contractor, including that of withholding money due the contractor and of applying it to the payment of unsatisfied claims for labor and materials furnished. As this court (per Cbahe, J.) clearly demonstrated in the Scarsdale case (supra.), the equity in the surety’s favor arose at the time it gave its bond, although the right became available and enforcible when it carried out the contract’s provisions; it was there said (264 N. Y., at p. 164): 11 However, wé are* here dealing with the contract which-contained the right to retain earned moneys and apply them on the cost of any completed work. To all rights under this contract the bonding company was subrogated. The equity in favor of the surety company arose at the time of the giving of its bond. The right became available when the surety company completed that work at a loss. (Prairie State Bank v. United States, 164 U. S. 227, at pp. 232, 237, 240.) The equitable lien arose at the time of the execution of the bond and was thus superior to the assignment. (Exchange State Bank v. Federal Surety Co., 28 Fed. Rep. [2d] 485, 488.) This is the reasoning and the rule-adopted by the weight of authority. [Cases cited.] ’’ (Italics in original.) In the present case — applying the rule thus announced — plaintiff’s lien, created in July of 1940, when the bond was executed, was prior and superior to intervener’s lien which did not come into being until 1942.

The Supreme Court’s recent decision in United States v. Munsey Trust Co. (332 U. S. 234), neither reaches nor points a contrary result. There;-the Government, itself in possession of the fund, asserted a claim of its own by way of setoff and, to the extent of that setoff, the fund upon which the suréty’s lien could operate was necessarily reduced. Quite different is such a case from one like the present — as the Supreme Court observed — where the owner [defendant Authority herein] was a mere stakeholder and had no rights of its own to assert.” (United States v. Munsey Trust Co., supra.)

The attempt to distinguish between the bond in the Scars-dale case (supra) and in the Prairie State Bank case (supra) —■ a completion bond — and the one here involved — a bond to pay labor and material - claims -— is without basis. A failure by the contractor to pay for labor and material was just as much a failure to perform and carry out the terms of the contract as an abandonment of the work would have been. The Authority had the right to remedy that failure and to apply any moneys in its hands to that' end before paying other claimants. In either case, the bond was given to assure performance of the contract, to assure against defaults of its provisions. Inter-*vener’s argument that plaintiff’s bond ran not to the Authority but solely to the subcontractors, not only is counter to the language employed in the bond but has been expressly repudiated and rejected by this court. (Johnson Service Co. v. Monin, Inc., 253 N. Y. 417, 420-421; Fosmire v. National Surety Co., 229 N. Y. 44, 48-49; see, also, Municipal Housing Authority v. Hatfield Elec. Corp., 264 App. Div. 99; Century Cement Mfg. Co., Inc., v. Fiore, 264 App. Div. 475; Maryland Casualty Co. v. United States, 53 F. Supp. 436.)

In addition, it is, of course, settled that intervener’s rights to the moneys held by defendant Authority can be no greater than those which its taxpayer — the contractor — had. (Karno-Smith Co. v. Maloney, 112 F. 2d 690, 692; Internal Revenue Code, § 3670; U. S. Code, tit. 26, § 3670.) Here the contractor’s rights to the fund were clearly subordinate to the right of defendant Authority — and, by subrogation, of plaintiff — to withhold and apply those moneys to the payment of unsatisfied claims for labor and materials. So long as such claims were outstanding and unpaid and so long as defendant Authority had the right to withhold and apply, the contractor had no rights to the fund, and, consequently, had no property interest therein upon which intervener could place a lien.

Intervener’s contention that the judgment improperly allowed interest to plaintiff, is without merit. There was here no dispute as to the actual payments made by plaintiff; its loss being susceptible of exact computation, interest was properly allowed from the dates of those payments. (See Faber v. City of New York, 222 N. Y. 255, 262; Flamm v. Noble, 296 N. Y. 262.)

Since disposition of the money remaining — after payment to plaintiff — has not finally been determined by the courts below, that matter may not now be considered by us.

The judgment should be affirmed, with costs.

Loughran, Ch. J., Lewis, Conway, Desmond and Dye, JJ., concur; Thacher, J., taking no part.

Judgment affirmed. [See 297 N. Y. 694.]


author: Lewis, J.

text:
    In the Matter of Hazel Marcus, Appellant. R. H. Macy & Co., Inc., Respondent.
    Submitted May 15, 1947;
    decided July 2, 1947.

      William Bosenfeld for appellant.
    I. The statutes clearly grant the right to an appraisal under the circumstances. (Stock Corporation Law, § 36, par. [E], § 38, subd. 9, par. [d].) II. The dilution of the voting rights of one class of stock by the granting of voting rights to another class of stock constitutes a “ limiting ” of the voting rights of the former class. (Matter of Kinney, 279 N. Y. 423.) III. The courts below overlooked or ignored the fact that the preferred stock to which voting rights were given had been previously authorized.

      Leon Lauterstein, Melbourne Beryerman and George Siegel for respondent.
    I. As a matter of law appellant is not entitled to an appraisal of the value of her common stock. Respondent, by granting voting rights to the preferred stockholders without giving them any new or additional rights to vote separately as a class, did not abolish or limit the voting rights of any common stockholder. (Lord v. Equitable Life Assurance Society, 194 N. Y. 212.) IT. Appraisal has been refused where new or additional rights were given to stockholders of a certain class leaving the rights of stockholders of another class untouched. The enactment of paragraph (d) of subdivision 9 of section 38 of the Stock Corporation Law evinces no intention to grant an appraisal in such situation. (Matter of Kinney 279 N. Y. 423; Matter of Silberkraus, 250 N. Y. 242; Matter of Dresser, 247 N. Y. 553; Wagstaff v. Holly Sugar Corp., 253 App. Div. 616, 279 N. Y. 625; Pouch v. Prudential Ins. Co., 204 N. Y. 281; Matter of Cole, 235 N. Y. 48.) III. Because paragraph (d) of subdivision 9 of section 38 of the Stock Corporation Law denies the right of appraisal even though voting rights of existing stock *1 may be limited by the voting rights given to new shares of any class authorized by the certificate ”, it does not follow that an appraisal is warranted where the giving of voting rights to the existing preferred stock does not, as matter of law, limit the rights of the common stock. (Grausman v. Porto Rican-American Tobacco Co., 95 N. J. Eq. 155.) I'V. The statute does not give any right of appraisal where, as here, the majority stockholders apart from the statute had a legal right to undertake the action and a dissenting minority stockholder had no right to block such action. (Matter of Timmis, 200 N. Y. 177; Matter of Leventall, 241 App. Div. 277; Lord v. Equitable Life Assurance Society, 194 N. Y. 212.) V. Courts of equity have inherent general equitable discretion in dealing with the relations between a corporation and its stockholders. Therefore, on application for the appointment of appraisers the court has power to deny the application in the exercise of sound discretion if it is not made in good faith but is sought for an ulterior purpose. (Matter of Durr v. Paragon Trading Corp., 270 N. Y. 464; Matter of Baker Macfadden Publications, 270 App. Div. 440.)
   Lewis, J.

The appellant, since May 19, 1943, has been the registered owner of fifty shares of the common stock of the respondent, R. H. Macy & Co., Inc. On September 28, 1945, the respondent gave formal notice to its stockholders, including the appellant, that among other matters to be acted upon at its annual meeting to be held on October 30, 1945, would be a proposal, recommended by its board of directors, that its certificate of incorporation be so amended as to add to the rights of preferred stockholders voting rights, equal share for share, to those to which the holders of the corporation’s common stock are entitled. On October 27, 1945, prior to the annual meeting to which such notice referred, the appellant sent to the respondent by registered mail a written notice that, as a common stockholder, she objected to the proposed amendment of the certificate of incorporation, and to the adoption of any resolution designed to effect an amendment by which there would be added to the rights of owners of the corporation’s preferred stock voting rights equal, share for share, to the voting rights of common stockholders. By her written notice of objection the appellant also demanded payment for . the common stock then owned by her. Subsequently, at the annual meeting of the corporation — when the proposal to amend the certificate of incorporation was approved by the stockholders — the common stock owned by the appellant was voted against such amendment.

Thereafter, as a nonconsenting common stockholder, the appellant instituted the present proceeding to determine • the value of her stock as a basis for the enforcement of payment therefor. (Stock Corporation Law, §§ 21, 38, subd. 9, par. [d].) At Special Term her application for the appointment of appraisers to evaluate her stock was denied and the petition herein was dismissed. Upon her appeal to the Appellate _Division the order of Special Term was unanimously affirmed.

By this appeal — which was taken by our leave — we are to determine whether upon the facts of record before us the appellant may invoke paragraph (d) subdivision 9 of section 38 of the Stock Corporation Law as a means legally appropriate to accomplish the appraisal of her stock and to enforce payment therefor.

The respondent does not deny the appellant’s allegation that prior to its corporate action taken on October 30,1945, to which she objected, the corporation had an authorized capitalization of 500,000 shares of cumulative preferred stock ($100 par value) and 2,500,000 shares of common stock (without par value); nor is it denied that there were then issued and outstanding 165,600 shares of authorized preferred stock and 1,656,000 shares of common stock. It also appeared that prior to the annual stockholders’ meeting of October 30,1945, the respondent’s certificate of incorporation gave to the holders of the preferred stock no voting rights except in the event of specified contingencies.

Concededly the amendment to the respondent’s' certificate of incorporation, adopted by the stockholders at the annual meeting of October 30, 1945, granted to the holders of the corporation’s preferred stock additional rights which increased their voting privileges from a right to vote only in specified contingencies to voting rights equal to those of the holders of the corporation’s common stock By thus granting to the 165,600 preferred shares then outstanding" voting rights equal share for share to those to which the holders of common stock are entitled, the aggregate number of shares having voting rights equal to those of the common shares was substantially increased and thereby the voting power of each common share outstanding prior to October 30, 1945, was altered or limited by the resulting prorata diminution of its potential worth as a factor in the management of the corporation’s affairs.

We conclude that such an alteration or limitation in the voting power of the common shares held by the appellant — when considered with the facts that she gave to the respondent formal written notice of her objection to the proposed amendment to the corporation’s charter with a demand for payment for her stock, and thereafter caused her shares to be voted against that amendment at the annual meeting of October 30, 1945 — was sufficient to qualify her to invoke the statutory procedure upon which the present proceeding is based.

By paragraph (E) of section 36 of the Stock Corporation Law the respondent was given the right to alter the privileges or voting powers of any shares previously authorized, or the restrictions or qualifications thereof * * But that statutory right was burdened with conditions set forth in section 38, which section provides in part:

“ § 38. Provisions applicable to one or more proceedings UNDER SECTIONS TWENTY-EIGHT AND THIRTY-SIX. Tile following provisions shall be applicable to a certificate under * * * section thirty-six. * * *

“9. If the certificate * * *

(d) abolishes any voting right of the holders of shares of any class or limits their voting rights, except as the same may be limited by the voting rights, given to new shares of any class authorized by the certificate; any holder of any such shares not in favor of such action may at any time prior to the vote authorizing such action * * * object to such action and demand payment for his stock, and thereupon such stockholder or the corporation shall have the right, subject to the conditions and provisions of section twenty-one, to have such stock appraised and paid for as provided in said section. Such objection and demand must be in writing and filed with the corporation.” (Emphasis supplied.)

When, in the present proceeding, Special Term concluded that, within the meaning of the statute last quoted above, the new voting privileges granted to respondent’s preferred stockholders at the meeting of October 30,1945, did not cause such a deprivation of an existing stockholder’s rights as would justify granting the relief sought by this proceeding, the court cited our ruling in Matter of Kinney (279 N. Y. 423) as authority for its decision. In doing so we think Special Term failed to give proper weight to the decisive fact that the amendment to the certificate of incorporation which was objected to by the petitioner in the Kinney case (supra), involved a new and previously unauthorised! issue of preferred stock, while in the case at bar the charter amendment, to which the appellant objects, granted new voting rights — equal to those of the common shares — to previously authorised preferred stock of which 165,600 shares were then issued and outstanding. The significance of that fact is emphasized by the following excerpt from the opinion per Finch, J., at pages 430-431 — “* * * section 38 permits an appraisal only when an amended certificate alters the preferential rights of the outstanding stock of a corporation as between the different classes of stock 41 * # it does not apply to a case where such rights are left unchanged as between themselves, but are both made subject to a new issue of stock.” (Matter of Kinney, supra.) (Emphasis supplied.) ¡

In that connection it is significant that when — after our decision in the Kinney case (supra) — the Legislature, by chapter 600 of the Laws of 1943, amended subdivision 9 of'section 38. by granting to a nonconsenting stockholder the right to an appraisal of his stock— “ If the certificate * * * (d) abolishes any voting right .of the holders of shares of any class or limits their voting rights * * * ”, it added the following provision— u except as the same may be limited by the voting rights given to new shares of any class authorized by the certificate ”. (Emphasis supplied.) (And see Stock Corporation Law, § 36, par. [E] and, § 38, subd- 11, as those sections were amended by L. 1943, ch, 600.)

In the case at bar, as we have seen, the appellant as the owner of respondent’s common stock objects to corporate action which granted to previously authorized preferred stock the right to vote upon matters as to which the common stock, prior to( such action, had the exclusive right to vote. Our conclusion is that, by thus limiting the voting power of the appellant’s common shares to a proportionate extent measured at a given time by the number of preferred shares then issued and outstanding, the corporate action to which the appellant has objected was of such a character as to afford her a legal basis to invoke the procedure prescribed by paragraph (d) of subdivision 9 of section 38, as a means to accomplish the appraisal of her stock and payment therefor.

With emphasis placed upon the fact that of the 1,656,000 shares of the respondent’s common stock outstanding the appellant owns only 50 shares, we are told in support of the respondent’s position that The effect of the amendment upon appellant’s stock (if any) was so trivial and insignificant that it may fairly be described as de minimis.” We are also told that if the appellant had a bona fide desire to sell her stock at market value she could have done so on October 30, 1945, for approximately three times the amount of her investment and at more than twenty points per share above its book value. These asserted facts form the basis for the respondent’s argument that the appellant’s application now before us should be denied because it was not made in good faith.

As to that argument it is enough to say that the Legislature has clearly prescribed the conditions under which a nonconsenting stockholder may have his stock evaluated and enforce payment therefor. We find in those conditions no legislative declaration of a minimum percentage or value of stock which must be owned by a nonconsenting stockholder to qualify him to invoke the prescribed statutory procedure. (Cf. General Corporation Law, § 61-b.)

In Anderson v. International Minerals & Chemical Corp. (295 N. Y. 343), we dealt with an analogous situation which arose as an incident to a corporate consolidation. There, as in the case at hand, we considered the Legislature’s purpose in enacting those provisions of the Stock Corporation Law which, under prescribed conditions,' grant to dissenting shareholders the right to have their stock holdings appraised and'to enforce payment therefor. Referring to the legislative purpose Judge Thacher wrote for the court at page 350: “■ The remedy tif'appraisal and payment was intended to afford fair and just compensation to the dissenters and at the same time provide the method by which their objections could be fairly composed so as to enable the consolidation to proceed.”

Where, as in this instance, the Legislature by precise language has created a right and with equal precision has set forth the procedure by which that right may be availed of, the courts may not limit or enlarge that right or alter that procedure. (Matter of Cantor, 261 N. Y. 6, 12; Thompkins v. Hunter, 149 N. Y. 117,122-123.)

The orders should be reversed and the matter remitted to Special Term for further proceedings not inconsistent with this opinion, with costs in all courts to the appellant.

Loughran, Ch. J., Conway, Desmond, Thacher, Dye and Fuld, J«L, concur.

Orders reversed, etc.