text:
    In the Matter of New York State Labor Relations Board, Appellant, against Holland Laundry, Inc., et al., Respondents.
    Argued May 16, 1945;
    decided July 19, 1945.

      William E. Grady, Jr., and Philip Feldblum for appellant.
    I. The defense of res judicata is insufficient, for there was not identity of parties in the injunction action and in the Board’s unfair labor practice proceeding. Neither the Board nor the union was party to the injunction action. II. The union was not bound by the judgment in the injunction action. (Matter of Stork Restaurant, Inc., v. Boland, 282 N. Y. 256; Marshall Field & Co. v. Board, 318 U. S. 253; Matter of N. Y. State Labor Relations Board v. Timen, 264 App. Div. 120; Labor Board v. Bradford Dyeing Assn., 310 U. S. 318; National Labor Relations Bd. v. National Motor B. Co., 105 F. 2d 652; National Labor R. Board v. Grower-Shipper V. Assn., 122 F. 2d 368; National Labor Relations Board v. Sunshine Mining Co., 110 F. 2d 780; Fish v. Vanderlip, 218 N. Y. 29; Davies v. Stumpf, 262 App. Div. 499, 288 N. Y. 704; Hendrick v. Biggar, 209 N. Y. 440; Haverhill v. International R. Co., 217 App. Div. 521, 244 N. Y. 582; Wolf v. Kenyon, 242 App. Div. 116; Bigelow v. Old Dominion Copper Co., 225 U. S. 111; First National Bank of Fleischmanns v. Creamery Package Mfg. Co., 21 N. Y. S. 2d 976; Matter of Smith, 175 Misc. 545, 175 Misc. 688.) III. The Board, not the union, was the complainant and sole protagonist in the Board’s unfair labor practice proceeding. (Matter of Stork Restaurant, Inc., v. Boland, 282 N. Y. 256;
      Amalgamated Workers v. Edison Co., 309 U. S. 261.) IV. The defense of res judicata is insufficient, for the subject matter of the injunction action and the subject matter of the unfair labor practice proceeding are not the same. V. The injunction action was private litigation between private parties and involved private property rights only. No public right was involved and in no sense was the public a party thereto. (Exchange Bakery & Restaurant, Inc., v. Rifkin, 245 N. Y. 260; Truax v. Corrigan, 257 U. S. 312; Duplex Co. v. Deering, 254 U. S. 443; Gompers v. Bucks Stove & Range Co., 221 U. S. 418; Hitchman Coal & Coke Co. v. Mitchell, 245 U. S. 229; Nat. Licorice Co. v. Labor Board, 309 U. S. 350.) VI. The Board’s unfair labor practice proceeding was an assertion of the public right, and that alone. (Matter of Stork Restaurant, Inc., v. Boland, 282 N. Y. 256; Met. Life Ins. Co. v. Labor Relations Board, 280 N. Y. 194; Nevins, Inc., v. Boland, 167 Misc. 428; Amalgamated Workers v. Edison Co., 309 U. S. 261; Myers v. Bethlehem Corp., 303 U. S. 41; Newport News Co. v. Schauffler, 303 U. S. 54; National Labor Relations Bd. v. General Motors Corp., 116 F. 2d 306; National Labor Relations Bd. v. West Kentucky C. Co., 116 F. 2d 816; Agwilines, Inc., v. National Labor Relations Board, 87 F. 2d 146; Matter of Benedict [Limited Editions Club, Inc.], 265 App. Div. 518.)

      Charles Wilson and Louis Malin for respondents.
    I. The former adjudication conclusively determined the issues before the Labor Board. The issues were the same. (Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304; Allen v. United States Fire Ins. Co., 245 App. Div. 31, 270 N. Y. 597; Furman v. Furman, 178 Misc. 582, 287 N. Y. 772; Reich v. Cochran, 151 N. Y. 122; Foster v. White & Sons, 244 App. Div. 368, 270 N. Y. 572; Holmes v. Ivanhoe Cleaners & Dyers, Inc., 252 App. Div. 765; Bell v. Merrifield, 109 N. Y. 202; Sielcken-Schwarz v. American Factors, Ltd., 265 N. Y. 239; Willie v. Maier, 256 N. Y. 465; Marine, T. Corp. v. Switzerland, G. Ins. Co., 263 N. Y. 139; Wilson’s Executor v. Deen, 121 U. S. 525.) II. The Labor Board may not disregard the former adjudication. (Jewish Hospital of Brooklyn v. “ John Doe ”, 252 App. Div. 581; Devon Knitwear Co., Inc., v. Levinson, 173 Misc. 779; United Baking Co. v. Bakery & Conf. Workers’ Union, 257 App. Div. 501; Busch Jewelry Co., Inc., v. United Retail, etc., Union, 170 Misc. 482; Domanick v. Triboro Coach Corp., 259 App. Div. 657; Matter of Slattery v. Bd. of Est. & Appor., 246 App. Div. 296, 271 N. Y. 346; Dorrell v. State, 83 Ind. 357; United States v. Balt. & Ohio R. R. Co., 229 U. S. 244; Matter of Collins v. Collins, 245 App. Div. 612.) III. The former adjudication is conclusive herein regardless of the identity of parties. (Labor Board v. Mackay Co., 304 U. S. 333; Ballston-Stillwater K. Co. v. National Labor R. Board, 98 F. 2d 758; Hazel-Atlas Glass Co. v. National Labor Relations Bd., 127 F. 2d 109; Wilson & Co. v. National Labor Relations Board, 120 F. 2d 913; National Labor Relations Bd. v. Carlisle Lumber Co., 99 F. 2d 533; National Labor Relations Board v. Ohio Calcium Co., 133 F. 2d 721; Labor Board v. Fansteel Corp., 306 U. S. 240; Standard Lime & Stone Co. v. National Labor R. Board, 97 F. 2d 531; Matter of N. Y. State Labor Rel. Bd. v. Union Club, 268 App. Div. 516; Gilman v. Tucker, 128 N. Y. 190; Railroad Equipment Co. v. Blair, 145 N. Y. 607; Donnell v. State, 83 Ind. 357.) IV. The union is bound by the former adjudication. (Castle against Noyes, 14 N. Y. 329; Carleton v. Lombard, Ayers & Co., 149 N. Y. 137; Souffront v. Compagnie Des Sucreries, 217 U. S. 475; Boston & Maine R. R. v. Delaware & Hudson Co., 238 App. Div. 191; D. & H. Co. v. M. & F. E. R. R. Co., 268 N. Y. 394; Rudd v. Cornell, 171 N. Y. 114; Flynn v. Colonial Discount Co., 149 Misc. 607.) V. The prior adjudication is binding upon the former employees and is a bar to an award of reinstatement and back pay. (Meagley v. City of Binghamton, 36 Hun 171; National Labor Rel. Board v. Walt Disney Productions, 146 F. 2d 44; National Labor Relations Board v. Mall Tool Co., 119 F. 2d 700; National Labor Relations Board v. William Davies Co., 135 F. 2d 179; United Baking Co. v. Bakery & Conf. Workers’ Union, 257 App. Div. 501; Domanick v. Triboro Coach Co., 259 App. Div. 657; Labor Board v. Fansteel Corp., 306 U. S. 240; Edison Co. v. Labor Board, 305 U. S. 197.)
   Lehman, Ch. J.

In August, 1937, Holland Laundry, Inc., hereinafter referred to as the Employer, entered into an agreement which recites that it is made with a “ duly elected collective bargaining committee consisting of the employees of the Holland Laundry engaged as route salesmen, drivers, and drivers’ helpers, and each and every one of the employees of said company engaged as route salesmen, drivers and drivers’ helpers, hereinafter called the ‘ Employees ’.” The agreement was signed by the “ bargaining committee ” and also individually by the group of employees designated in the contract. The contract fixed the wages, hours and conditions of work of those employees and provided among other things that “ during the entire period of this agreement to September 1, 1942, they, or any of them, will not go out on strike that any employee shall have “ the right to join any union of his own choosing or to refrain from joining any union but that they “ or any of them shall not and have not the right to demand a closed shop or a signed agreement by his Employer with any union and that “ it is strictly understood and agreed * * * that the question as to the propriety of an Employee’s discharge is in no event to be one for arbitration or mediation and that any action of reinstatement, if any, will be taken voluntarily by the Employer if it deems such reinstatement advisable.”

A majority of the employees who signed this agreement thereafter became members of Laundry Workers Joint Board of Greater New York A O W, hereinafter referred to as the “ Union,” and in October, 1939, went out on strike in disregard of the agreement they had signed. The Employer then commenced an action in the Supreme Court, Kings County, against the striking employees. The complaint in that action alleged that “on or about October 10, 1939, defendants, in violation of the aforesaid agreement, called a strike against plaintiff and since said day have been on strike against plaintiff that in connection with the strike “ defendants have picketed and do picket the homes of great numbers of plaintiff’s customers that defendants have sought by the use of force and violence to intimidate employees and customers and committed other unlawful acts; and that the “ plaintiff has complied with all the obligations imposed by law which are in anywise involved in this controversy, and has offered and has made every reasonable effort to settle the within dispute by offering to negotiate with defendants or with any committee or agency selected by them * * * any grievance defendants have or claim to have ”. The prayer of the complaint was that the defendants be enjoined (1) “ from using violence, coercion, intimidation by force of numbers or otherwise, fraudulent representation or other unlawful means upon plaintiff’s customers and employees; (2) from picketing the homes of plaintiff’s customers; (3) from continuing to strike in .violation of their agreement ”.

Upon an application by the Employer for an injunction pendente lite the justice at Special Term heard the witnesses offered by each side. Each allegation of the complaint was litigated as upon the trial of an action. After the hearings were concluded the justice at Special Term filed a decision containing forty-three findings of fact and eight conclusions of law'in favor of the plaintiff employer, including the conclusion that VII. Plaintiff is entitled upon the filing of a bond in the sum of $3,000.00 to an injunction during the pendency of this action restraining defendants and all persons associated with them (1) from continuing directly or indirectly to perform any acts in furtherance of a strike, other than refusing to remain in employ of plaintiff; (2) from any acts of picketing of plaintiff’s trucks or plaintiff’s customers or plaintiff’s place of business; (3) from making any fraudulent representations in respect of plaintiff or its business; (4) from interfering with or intimidating by threats of violence or otherwise any of plaintiff’s, employees or from picketing or following any of plaintiff’s trucks or employees.”

The parties to the action then stipulated that “ the same proof that was adduced by the parties upon the hearing * * * would be adduced upon a trial for a permanent Injunction,” and that without further findings or conclusions the plaintiff have a permanent injunction in accordance with the above conclusion,” but that the defendant shall not be barred by anything in the stipulation from filing an appeal from the judgment granting a permanent injunction. Final judgment was accordingly entered on December 8, 1939. An appeal from that judgment was discontinued without costs by stipulation of the parties. !. The final judgment constitutes a conclusive adjudication binding upon the parties in the action in all subsequent litigation between tJie■ same parties regardless of whether or not the findings are sustained by the evidence or the conclusions accord with sound principles of law.

The findings of the Trial Justice. conform closely to the allegations of the complaint. Referring to the agreement signed in August, 1937, the Trial Justice found that “ the employees of plaintiff in the making of the said contract were represented by a bargaining committee * * * chosen freely * * * without any participation in any manner by plaintiff in their choice or without plaintiff in any manner influencing or seeking to influence its employees in their choice of such committee. * * * After the said contract had been agreed upon and executed by plaintiff and the said committee of plaintiff’s employees, the said contract was signed by all the drivers, route salesmen and drivers’ helpers,” including all the striking employees who were named as defendants in the injunction-action, and that “ the said employees of plaintiff signed said contract voluntarily and without any persuasion or influence by the plaintiff.” The Trial Justice also found that “ defendants in connection with said strike have committed and threatened to commit unlawful acts and in the carrying on of said strike have violated the aforesaid contract made between them and plaintiff which said contract is not contrary to public policy that the plaintiff “ at no time has refused to bargain collectively with the representatives of its employees ” or “ to discuss grievances ” with them; that the defendants have never notified the plaintiff that 1 ‘ they desire any change in the bargaining agency which should represent them dr that their bargaining agency had been superseded or that they desired their committee to be superseded by the ‘ Laundry Workers Joint Board ’ or by any other bargaining agency ”; and that plaintiff prior to and during the strike offered to negotiate any grievances with the original-bargaining committee referred to in the contract or any other bargaining agency defendants chose to represent them.”

After the judgment was entered in favor of the Employer, in effect adjudging that the Employer was guilty of no unfair labor practices and that the employees had violated their valid agreement not to strike, conferences took place between the Union and the Employer at which the Union requested the Employer to reinstate the striking employees. 'The Employer refused such a request on January 7, 1940. ■ In spite of the fact that ir, litigation between the Employer and its employees the Supreme Court of the State had found that the Employer had not been guilty of any unfair labor practices, the Union in February, 1940, presented to the New York State Labor Belations Board a verified charge that the Employer had “ engaged in and was engaging in unfair labor practices.” After preliminary investigation of the Union’s verified charge the Labor Relations Board, pursuant to the provisions of the New York State Labor Relations Act (Labor Law, art. 20), issued and caused to be served a complaint charging that the Employed, by numerous- acts specified in the complaint, “ in or about the months of July, August and September, 1937, initiated, dominated and interfered with, and contributed support to the formation ” of “ an employee organization, association, agency or plan, purporting to exist," in whole ór in part, for the purpose of dealing with the * * * [Employer] on behalf of employees within the appropriate unit * * * concerning terms or conditions of employment, labor disputes or grievances.” The “ employee organization, association, agency or plan ” referred to in the complaint of the State Labor Relations Board is the “ Collective Bargaining Committee of the Employees of Holland Laundry, Inc.” which had negotiated and signed the contract dated August 19,1937, and is described in the contract as the ‘ ‘ collective bargaining committee ’ ’ "which ‘ ‘ the Employees engaged by and working for the Employer as route salesmen, drivers and drivers’ helpers have duly and regularly selected and designated The complaint further charges that this “ bargaining committee,” thereafter referred to in the complaint of -the State Labor Relations Board as “ the Association,” is a “ company union within the meaning of Section 701, subdivision 6,” of article 20 of the Labor Law, and that the Employer, by acts specified in the complaint, “ commencing in or about July, 1937, and continuing to the date of this complaint, sought to and did interfere with, restrain and coerce the employees within the appropriate unit * * * in the exercise of their right to join or assist the Union"” (i.e., Laundry Workers Joint Board of New York, affiliated with Amalgamated Clothing Workers of America, C.I.O.), “ and to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection According to the allegations of the complaint of the Board, “ prior to October 9, 1939, a majority of the employees within the appropriate unit * * * had designated the Union as their representative for the purposes of collective bargaining * # *• in respect to rates of pay, wages, hours of employment and other conditions of employment,” but the Employer failed and refused to negotiate in good faith with the Union and “on or about October 11, 1939, in protest against and as a consequence of the acts ” of the Employer “ a majority of the employees then within the appropriate unit * * * went on strike.”

The complaint of the State Labor Relations Board names these employees. All were defendants in the action for an injunction brought by the Employer, in which judgment in favor of the Employer had been granted on December 9, 1939. As we have said, the Employer thereafter refused to reinstate these employees and the complaint charges that such refusal was wrongful. No further detailed comparison of the findings and conclusions of the Supreme Court in the injunction action with the specifications of alleged wrongful acts of the Employer contained in the complaint of the Labor Relations Board seems needed to show that the court had exonerated the Employer of any wrong in connection with substantially every charge specified in the complaint of the Labor Relations Board and, if the findings of the court in the injunction action are binding upon both the Employer and the employees, the refusal of the Employer to reinstate the striking employees was justified. At the hearing of the charges before the Labor Relations Board, counsel for the Employer objected to the proceedings on the ground “ that the issues created by the complaint in this proceeding have been adjudicated before and passed upon by the Supreme Court ” and stated that, after the introduction of the documentary evidence establishing such prior adjudication, the Employer would not participate further in the hearing. Accordingly, the evidence thereafter introduced by the Board is uncontroverted. It is apparent from the nature of such evidence that much of it could not be controverted.

On December 23, 1942, after the hearings were completed upon its complaint, the State Labor Relations Board rendered its decision, finding among other things that The Collective Bargaining Committee of the Employees of Holland Laundry, Inc., was initiated by the Employer in July or August, 1937, and the Employer “ dominated and interfered with and contributed support to the formation of the Committee ”; that this organization is a “ company union ” and that the Employer and its agents and officers have “ urged, persuaded and warned the employees to form, join and continue membership in the Committee ” and “ have participated in, assisted in, supervised and controlled meetings, management, operation and policies of the Committee. ’ ’ That the Employer * ‘ required ’ ’ its employees to enter into the “ purported collective bargaining agreement ” of August 19,1937, * ‘ for the purposes of forestalling attempts by its employees to join, for the purposes of collective bargaining, a labor organization of their own choosing.” That “ on or about August 12, 1938, and prior to October 9, 1939, a majority of the employees within the appropriate unit had designated Laundry Workers Joint Board as their representative for the purposes of collective bargaining with Holland Laundry, Inc.,’-’ and that by October 9, 1939, the Union was, and at all times since then has been, the exclusive representative of all the employees within the appropriate unit for the purposes of collective bargaining with Holland Laundry, Inc.,” but that the Employer has “■ failed and refused to meet, confer, discuss and negotiate with the Union ” for the purpose of collective bargaining. That “ on October 11, 1939, in protest against and as a consequence ” of the acts of the Employer, a majority of the employees then within the appropriate unit * * * went out on strike.” That the employer was requested by the Union on January 7, 1940, to reinstate the striking-employees but the Employer refused and has “ at all times since then, continued to refuse to reinstate the said employees, for the reason that they joined and assisted the Union and engaged in Concerted activities for the purpose of collective bargaining and other mutual aid and protection and * * * thereby discharged them on January 7, 1940.”

Based upon these findings the Labor Board made its order commanding the Employer and its officers and agents to “ cease and desist from: (a) encouraging membership in any company union or discouraging membership in the Laundry Workers Joint Board or any other labor organization of their employees’ own choosing, by discriminating against employees in regard to hire or tenure of employment or any terms or conditions of employment ”. In subsequent paragraphs of the order the Employer is commanded to “ cease and desist ” from acts which would tend to nullify in whole or in part the provisions of paragraph (a), and especially to “ cease and desist ” from “(d) * * * maintaining, enforcing or attempting to maintain or enforce or give effect or enter into any contract ” with the “ company union ” or from “ (f) refusing to bargain collectively with the Laundry Workers Joint Board.” < In addition the order commands that the Employer take the specified “ affirmative action which the Board finds will effectuate the policies of the Act.” The “ affirmative action ” commanded by the Board includes an offer to each of the striking employees of immediate reinstatement to the position held by each of them on the day immediately preceding the strike “ without prejudice to any rights and privileges previously enjoyed by them ” and to “ make whole each and every one ” of them “ for any loss of pay they have suffered by reason of their respective discharges caused by Respondents’ failure or refusal to reinstate them, by payment to each of them of a sum of money equivalent to that which they would each normally have earned from the date of Respondents’ failure or refusal to reinstate them to the date of such offer of reinstatement, less any amounts earned by each of them during that period.” In addition the Employer was commanded to ‘ ‘ withdraw all recognition from the * * * Collective Bargaining Committee of the Employees of Holland Laundry, Inc., as the representative of any of their employees.”

After notice of the order was served upon the Employer, the Labor Relations Board, pursuant to section 707 of the Labor Law, petitioned the Supreme Court to make and enter an order and decree enforcing the order of the Board. The findings of the Supreme Court in the earlier injunction action contradict the findings of the Labor Relations Board and the conclusions of the court are inconsistent with the conclusions of the Labor Relations Board. Enforcement of the order of the Board would nullify in large part the judgment of the eourt.j Just as the Employer had objected to the Labor Relations Board holding hearings on a complaint charging the Employer with “ unfair labor practices ” after the Supreme Court had held that these practices were fair, the Employer on the same ground objected to the application for an order or decree of the court enforcing the order of the Board, and made a cross motion to vacate and set aside the order of the Board. At Special Term the objection was overruled and the application for an enforcement order was granted; but the order of Special Term was unanimously reversed by the Appellate Division j^the application of the Labor Relations Board was denied, with costs, and the cross motion of the Employer to vacate the order of the Labor Relations Board and set aside the order was granted.

The Supreme Court of New York, in the injunction action, declared that the contract of August 19,1937, is * ‘ not contrary to public policy that all of the provisions contained therein are binding and enforcible; that a strike of the employees was unlawful since the employees had agreed in the contract not to strikeT} It found too that the striking employees “ misrepresent' the contract * # * by branding the same as a ‘ yellow dog contract ’ora1 company union contract [Evidence produced at the hearing of the Board establishes almost beyond dispute that the contract of 1937 was prepared by the Employer, approved by a “ Bargaining Committee ” fostered by the Employer and signed by the employees at the instigation of the Employer. The contract in its terms substantially follows the “ Balleisen formula ” criticized by courts in other jurisdictions. ■: Within three months of the decision in the injunction action the Supreme Court of the United States, in an opinion by Mr. Justice Stone, analyzing a contract in similar form and containing exactly similar provisions, unanimously held that such contracts “ by their terms * * * imposed illegal restraints upon the employees’ rights to organize and bargain collectively ”; that the provisions in such contracts whereby each employee agreed “ not to demand a closed shop or a signed agreement by his employer with any Union ’ * # * foreclosed the employee from bargaining for a closed shop or a signed agreement with the employer, frequent subjects of negotiation between employers and employees,” and is “in plain conflict with the public policy of the Act ”. (Nat. Licorice Co. v. Labor Board, 309 U. S. 350, 360.) The court there also pointed out other provisions of the contract which are contrary to the public policy of the National Labor Relations Act. [The National Labor Relations Act and the State Labor Relations Act “ are not only alike in their provisions but are almost identical in their language ”. \ (Matter of Davega-City Radio v. Labor Board, 281 N. Y. 13, 22.) Opinions of the Federal court construing the National Labor Relations Act apply with equal force to the State Labor Relations Act, though they are of course not legally binding in that field. There can be no doubt that the order of the Board is valid and should be enforced by order of the Supreme Court pursuant to the provisions of section 707 of the Act unless the earlier judgment of the Supreme Court of the State precludes the Labor Board from investigating matters on which the court had passed judgment and from calling upon the Employer to defend acts which the Supreme Court had declared lawful.

“ Sound public policy requires that different judicial decisions shall not be made on the same state of facts, and that a judgment rendered jurisdictionally and unimpeached for fraud shall be conclusive, as to the questions litigated and decided, upon the parties thereto and their privies, whom the judgment, when used as evidence, relieves from the burden of otherwise proving, and bars from disproving, the facts therein determined.” (Fulton Co. G. & E. Co. v. Hudson Riv. T. Co., 200 N. Y. 287, 296.) (Italics are new.) That principle requires that “ what has been definitely determined by competent tribunals shall be accepted as irrefragable ”. It has been said that within the field in which the principle is applicable it “ renders white that which is black, and straight that which is crooked. Facit excurvo rectum, ex albo nigrum. No other evidence can afford strength to the presumption of truth it creates, and no argument can detract from its legal efficacy.” (Jeter v. Hewitt et al., 22 How. [U. S.] 352.) The reasons underlying the principle indicate the limits of the field within which the principle applies. “ The fundamental principle governing the general doctrine of res ad judicata ” is “ that a party shall not be heard a second time on an issue which he has once been called upon and permitted to try and contest.” (Hendrick v. Biggar, 209 N. Y. 440, 444.) ' ‘ The rules of law upon this subject are founded upon these evident principles or axioms that it is for the interest of the community that a limit should be prescribed to litigation, and that the same cause of action ought not to be brought twice to a final determination. Justice requires that every cause be once fairly and impartially tried; but the public tranquillity demands that, having been once so tried, all litigation of that question, and between those parties, should be closed forever. It is also a most obvious principle of justice that no man ought to be bound by proceedings to which he was a stranger; but the converse of this rule is equally true, that by proceedings to which he was not a stranger, he may well be held bound. ’ ’ Green-leaf’s Evidence, sections 522, 523; quoted with approval in Fish v. Vanderlip (218 N. Y. 29, 37.) With exceptions not material here, every person is entitled to contest once an issue of fact or of law which affects his rights. A decision on such issues in favor of a party cannot “ relieve ” him from the burden of proving the facts again and of again convincing the court of the soundness of his position when that position is challenged by a stranger to the original contest. Nor does a judicial determination against a party bar him from contesting the same issues with a stranger to the original litigation. Only when there is identity of parties does a prior adjudication bar further contest.

It is clear that in accordance with these principles the employees named as defendants in the injunction action brought by the Employer cannot in subsequent litigation between the same parties again contest the issues finally decided against them in the injunction action. We assume, for the purposes of this appeal, that the Union has had such control of the defense in the injunction action that, in subsequent litigation between itself and the Employer, it also cannot challenge the findings in that action; though there may be doubt whether a judicial determination made in an action in which the Union, an association of changing members, represented one group of members, would be binding upon the Union in litigation where it represents a broader group. It is, however, unnecessary to decide such questions in this case for here neither the Union nor the employees who were named as defendants in the injunction action are parties to the proceeding or to the appeal,, though their interests will be directly affected by its outcome. In such case the rule of res judicata does not in strict sense govern, though the public policy upon which the rule is based may place some limit upon the scope of the investigation of the Labor Belations Board and the effect of its decision.

The “ board is empowered and directed,” as provided by the Labor Belations Act, “ to prevent any employer from engaging in any unfair labor practice.” (Labor Law, § 706.) That power has been conferred upon the Board and that duty imposed upon it by the Legislature in the ‘ ■ exercise of the police power of the state for the protection of the public welfare, prosperity, health and peace of the people of the state,” and upon a legislative finding that the denial by some employers of the right of employees freely to organize and the resultant refusal to accept the procedure of collective bargaining ” tend to “ lead to strikes, lockouts and other forms of industrial strife and unrest which are inimical to the public safety and welfare, and frequently endanger the public health.” (Labor Law, § 700.) The Board is not solely a judicial body appointed to adjudicate impartially controversies between employers and employees. The Board is a public agency acting in the public interest; the instrument created by the Legislature to assure to the people of the State protection from the unfair labor practices ” described in the statute. (Cf. Amalgamated Workers v. Edison Co., 309 U. S. 261.) An order of the Board commanding that an 'employer shall cease and desist from such unfair labor practices vindicates a public right to protection against conduct which the Legislature has found is inimical to the welfare of the People of the State. No agreement of the employee and employer and no litigation between them for the vindication of their private rights can deprive the public of its right to protection against labor practices which the Legislature has forbidden. ¡ Doubtless, as the Appellate Division pointed out in its opinion, the court, in making its determination in the injunction suit, gave consideration to the public interest but the People of the State had no opportunity in that action to contest the issue whether the Employer has been guilty of the unfair labor practices ” described in the complaint of the Labor Relations Board. ‘Á determination of the issues in an action between private parties cannot bar a contest to vindicate the public interest, as provided in the statute, just as a judgment in civil litigation between private parties does not bar a contest of the same issues by the State in a criminal action.

Contracts which are the fruits of unfair labor practices ” and which “ stipulated for the renunciation by the employees of rights guaranteed by the Act ” constitute “ a continuing means of thwarting the policy of the Act.” (Nat. Licorice Co. v. Labor Board, 309 U. S. 350, 361, supra.) No principle of “ res judicata ” or of “ estoppel ” and no public policy precludes an investigation of the facts by the Labor Board in the public interest or bars the Board from making a valid order commanding the Employer to “ cease and desist ” from acts which upon such investigation appear to be unlawful and which constitute “ a continuing means of thwarting the policy of the Act.”

The question remains whether the parts of the order commanding in substance that the employer take affirmative action as therein described are valid either in whole or in part1; ( The Board has express power to command such affirmative action “ as will effectuate the policies ” of the Act including “ (a) withdrawal of recognition from * * * any employee organization or association * * * defined * * * as a company union or established, maintained or assisted by any action defined in this article as an unfair labor practice; (b) awarding of back pay ”; and, (c) and (d), reinstatement with or without back pay of employees who have been affected by unfair labor practices described in the Act. (Labor Law, § 706, subd. [3].) Though the determination of the court in the injunction action is not conclusive in the investigation held by the Labor Relations Board for the protection of the rights of the public, that determination of the Supreme Court is binding upon both parties in disputes between themselves arising thereafter, and constitutes justification for action thereafter by the Employer towards its employees in accordance with that judgment. (See Freeman on Judgments [5th ed.], § 1040.) Certainly the employees who were defendants in that action could not thereafter again assert against the Employer rights based upon a claim that they were wrongfully dismissed and were entitled to reinstatement. In dealings with those employees the Employer might rely-upon that decision. Refusal of their request for reinstatement was justified as a matter of law, and though the Employer cannot rely upon that decision in its dealings with other employees who were not parties to the action and though the Labor Board for the protection of the rights of the public may compel the Employer to “ cease and desist ” from further violations of the Labor Law in its relations with its employees, the Labor Relations Board cannot retroactively declare that acts of the Employer which at the time were jiistified by an existing valid judgment constitute unlawful labor practices. For that reason the Labor Board could not in this proceeding command the Employer to reinstate, with or without pay, its employees who were justifiably refused reinstatement in accordance with a judgment binding upon both the Employer and those employees. If they are not reinstated there is no evidence or finding that a majority of the employees of the Holland Laundry, Inc., now in the appropriate bargaining unit have chosen the Union as their bargaining agency. In the absence of such a finding the Employer should not be compelled to bargain collectively with the Union.

The order of the Appellate Division should be reversed, without costs, the order of the Special Term modified, and the matter remitted to Special Term for entry of an order in accordance with this opinion. [See 295 N. Y. 568.]

Loughran, Lewis, Conway, Desmond, Thacher and Dye, JJ., concur.

Ordered accordingly.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Gertrude Sullivan, as Administratrix of the Estate of Thomas F. Sullivan, Deceased, Appellant, v. Central Hanover Bank & Trust Company et al., Respondents.
    Argued June 13, 1945;
    decided July 19, 1945.

      Ralph Stout, William H. George and Thomas F. Twyford for appellant.
    I. The questions of negligence and of proximate cause were upon the evidence questions of fact for the jury. (Bernstein v. Greenfield, 281 N. Y. 77; Cornbrooks v. Terminal Barber Shops, Inc., 282 N. Y. 217; Marks v. Nambil Realty Co., Inc., 245 N. Y. 256; Vollstedt v. Moller, Inc., 238 App. Div. 705; Siskind v. Katz, 249 App. Div. 659; Moran v. Bendora Realty Corp., 259 App. Div. 1035; Rosenberg v. Schwartz, 260 N. Y. 162; Hart v. Hudson River Bridge Co., 80 N. Y. 622; Ingersoll v. Liberty Bank of Buffalo, 278 N. Y. 1; Matter of Lathers, 137 Misc. 226; Kirchner v. Muller, 280 N. Y. 23; Lee v. City Brewing Corporation, 279 N. Y. 380; Payne v. City of New York, 277 N. Y. 393; Carlock v. Westchester Lighting Co., 268 N. Y. 345; O’Neill v. City of Port Jervis, 253 N. Y. 423; United Mut. Fire Ins. Co. v. Jamestown Mut. Ins. Co., 242 App. Div. 420; Rague v. Staten Island Coach Co., 288 N. Y. 206.) II. It was a question of fact for the jury whether Cavanagh was acting for the defendants with their knowledge and consent at the time he directed the making of the repairs after he had collected the rent from plaintiff on December 15, 1937. (Hederman v. Fairbanks, Morse & Co., 286 N. Y. 240; City National Bank of Holyoke v. Menzer, 222 App. Div. 233; Matter of People [Melrose Ave.], 234 N. Y. 48; Dickinson v. Salmon, 36 Misc. 169.)

      Samuel E. Swiggett for respondents.
    I. It was proper to direct the dismissal of the complaint in this case because the plaintiff, aside from anything else, failed to prove two factors necessary for a good cause of action for negligent repairs. (Marks v. Nambil Realty Co., Inc., 245 N. Y. 256; Kirshenbaum v. General Outdoor Adv. Co., 258 N. Y. 489.) II'. The evidence was insufficient to enable the jury to find with a reasonable degree of certainty that the alleged defective balustrade was a proximate cause of the death of plaintiff’s intestate. (Digelormo v. Weil, 260 N. Y. 192; Ingersoll v. Liberty Bank of Buffalo, 278 N. Y. 1.) III. Even though it could be inferred from the evidence that repairs had been made to the balustrade by one person at the request or direction of another, there was no proof that either of such persons was an agent of or had any authority to act for defendants, much less that the one at whose alleged request or direction the repairs were made had authority from defendants to make representations in regard thereto. (Glennan v. Rochester Trust & S. D. Co., 209 N. Y. 12; Weber v. Bridgman et al., 113 N. Y. 600; F. L. & T. Co. v. Wilson, 139 N. Y. 284; Constant et al. v. University of Rochester, 111 N. Y. 604.)
   Per Curiam.

The evidence presented questions of fact as to defendants’ negligence, the causal relation of such negligence to the accident and the authority of the witness Cavanagh to represent the defendants. It was error to grant defendants’ motion to dismiss the complaint after the rendition of a verdict in favor of the plaintiff.

The judgments should be reversed and a new trial granted, with costs to the appellant to abide the event.

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

Judgment reversed, etc.


text:
    The People of the State of New York, Respondent, v. Sidney Rudish, Appellant.
    Reargued June 12, 1945;
    decided July 19, 1945.

      John J. Fitzgerald for appellant.
    As Malinski must be retried, Rudish should also be given a new trial. (Code Crim. Proc., § 528; People v. Munroe, 190 N. Y. 435; People v. Weiss, 290 N. Y. 160; People v. Ligouri, 284 N. Y. 309; People v. Peller, 291 N. Y. 438.)

      William O’Dwyer, District Attorney (Henry J. Walsh and Thomas Cradock Hughes of counsel), for respondent.
    Upon the facts and under the law a new trial is not called for. (People v. Feolo, 282 N. Y. 276; People v. Clougher, 246 N. Y. 106; People v. Malinski, 292 N. Y. 360; Ashcraft v. Tennessee, 322 U. S. 143.)
   Per Curiam.

Upon this reargument we assume that the evidence against Eudish was sufficient and that as to him no error of law was committed upon the trial. Nevertheless, since the Supreme Court of the United States directed a new trial as to Malinski because one of his confessions was inadmissible, the defendant Eudish should, in the interest of justice, receive a new trial with that confession excluded.

The judgment of conviction should be reversed and a new trial ordered-

Lehman, Ch. J., Loughran, Desmond, Thacher and Dye, JJ., concur; Lewis and Conway, JJ., dissent on the ground that the decision on this reargument should await the retrial of People v. Malinski.

Judgment of conviction reversed, etc.


author: Lehman, Ch. J. Dye, J. Desmond, J.

text:
    Tomasetti Construction Co., Inc., Appellant, v. Long Island Rail Road Company, Respondent.
    Argued April 4, 1945;
    decided July 19, 1945.

      William Weisman and Norman Laidhold for appellant.
    I. The contract of July 3,1940, was the contract of the railroad company. The parties to the contract were expressly named. (Johnson v. State of New York, 172 Misc. 776.) II. The provisions of the contract relate only to the named parties. III. Defendant expressly agreed to pay plaintiff. (Taylor v. United States Casualty Co., 269 N. Y. 360; Remo Engineering Corp. v. City of New York, 260 App. Div. 587, 286 N. Y. 651; Matter of Kolb v. Holling, 285 N. Y. 104.) IV. The Supreme Court has exclusive jurisdiction of the subject matter and the parties. The grade crossing elimination statutes do not extend the jurisdiction of the Court of Claims to plaintiff. (Columbia Machine Works v. Long Island R. R. Co., 267 App. Div. 562; Moller v. New York Central R. R. Co., 282 N. Y. 188.) V. The Court of Claims has no jurisdiction here. (Goldstein v. State of New York, 168 Misc. 337; Throckmorton v. State of New York, 128 Misc. 599; Syracuse Grade Crossing Commission v. D., L. & W. R. R. Co., 263 App. Div. 930; Matter of Delaware, L. & W. R. R. Co. v. Fengler, 175 Misc. 1037, 262 App. Div. 685, 288 N. Y. 141; Haslam v. State of New York, 167 Misc. 455; Pantess v. Saratoga Springs Authority, 255 App. Div. 426.)

      Frederick Evan Crane, William McNamara and Louis J. Carruthers for respondent.
    I. The Supreme Court does not have jurisdiction of either the subject matter of this action or the person of the defendant as the subject matter is a contractual obligation of the State; payable out of the State treasury, and the defendant an instrumentality or agent of the State. (State Const., art. VII, § 14; L. 1939, ch. 289; Saranac L. & T. Co. v. Roberts, 195 N. Y. 303; Buckles v. State of New York, 221 N. Y. 418; Galbes v. Girard, 46 F. 500; Moller v. New York Central R. R. Co., 282 N. Y. 188; Breen v. Mortgage Commission, 285 N. Y. 425; Beldon v. Mortgage Comm. of State of New York, 173 Misc. 731.) II. It is well established that an agent who makes a contract for a disclosed or known principal incurs no personal liability whether he signs the contract individually or as an agent. (Ell Dee Clothing Company v. Marsh, 247 N. Y. 392; Clarkson v. Krieger, 254 N. Y. 114; Voss v. John Lowry, Inc., 225 App. Div. 507, 252 N. Y. 587.)

      Nathaniel L. Goldstein, Attorney-General (Gerald J. Carey and Orrin G. Judd of counsel), for State of New York, amicus curiæ in support of respondent’s position.
    The Supreme Court does not have jurisdiction of the subject matter of this action. (Transit Comm. v. L. I. R. R. Co., 253 N. Y. 345; Breen v. Mortgage Commission, 285 N. Y. 425; Moller v. New York Central R. R. Co., 282 N. Y. 188; Metropolitan Trust Co. v. Tax Comrs., 220 N. Y. 344; Adler, Inc., v. Noyes, 285 N. Y. 34; Ell Dee Clothing Co. v. Marsh, 247 N. Y. 392; Clarkson v. Krieger, 254 N. Y. 114; Voss v. Lowry, Inc., 225 App. Div. 507, 252 N. Y. 587.)

      Philip Halpern and Frank C. Bowers for Public Service Commission of the State of New York, amicus curiæ in support of respondent’s position.
    The complaint was properly dismissed for lack of jurisdiction. (L. 1928, ch. 677, § 2, subd. 9; Moller v. New York Central R. R. Co., 282 N. Y. 188; Adler, Inc., v. Noyes, 285 N. Y. 34; Breen v. Mortgage Commission, 285 N. Y. 425.)
   Lehman, Ch. J.

In an action brought by the plaintiff in the Supreme Court of New York, the complaint alleges that on July 3, 1940, plaintiff and defendant entered into a written agreement which is identified as contract No. 3, by the terms of which, among other things, the plaintiff agreed to perform certain work, labor and services, and to furnish certain materials in connection with a grade crossing elimination project in the Boroughs of Brooklyn and Queens, City and State of New York ”; that the plaintiff has completed all the work and furnished all the materials required of it pursuant to the contract and has duly performed all the terms and conditions of the contract on its part to be performed; that during the progress of the work, defendant paid to the plaintiff on account of the said contract the sum of $2,585,548.72 and that by the computations made by the defendant, there has been found to be due from the defendant to the plaintiff, the sum of $113,-748.23 ”. In a second cause of action the plaintiff alleges that after the plaintiff had entered upon the performance of the work required by the contract, it performed “ at the special instance and request of defendant ’ ’ extra work and furnished extra services to the defendant, exclusive of work, labor and materials set forth in the first cause of action, “ at the agreed price and reasonable value of $119,799.25.”

The defendant moved in the Supreme Court to dismiss the complaint “ on the ground that [the] Court has not jurisdiction of the subject matter of this action or of the defendant ”. The motion was denied at Special Term, the court holding that questions of fact are raised by the pleadings and affidavits.” Upon appeal by the defendant to the Appellate Division, the order denying the motion was reversed and the motion to dismiss granted. The plaintiff appeals from the judgment dismissing the complaint entered upon the order of the Appellate Division

The contract, though referred to in the complaint and identified as contract No. 3 ”, is perhaps not incorporated in the complaint in accordance with technical rules of pleading but upon the motion to dismiss it was marked as an exhibit and concededly the defendant’s challenge of the jurisdiction of the court is based upon the premise that the subject matter of the action which the plaintiff has brought is the obligation the defendant, assumed under the contract marked as an exhibit or which is imposed upon the defendant by law, to pay the plaintiff for work, labor and materials required by the contract and for extra work, labor and materials furnished by the plain - tiff at the request of the defendant in connection with the plaintiff’s performance of the work required by the contract. The sufficiency of the complaint is not directly challenged, and in determining the question whether the Supreme Court has jurisdiction of the subject matter of the action, the contract referred to in the complaint as “ contract No. 3 ” and marked as an exhibit upon the motion to dismiss the complaint serves to identify the subject matter ” of the action; and for that purpose, at least, must be read into the complaint.

The State of New York is not named as a party to the contract for construction work in connection with the grade crossing elimination, but the Constitution of the State imposes upon the State an obligation to pay the cost of such work where the work is authorized, and the contracts for the work executed, in accordance with the law of the State. Even though the State does not in terms assume any obligation under the contract and is not named as party defendant in the summons and complaint, if the plaintiff is seeking to enforce the obligation of the State to pay the cost of the work and the action is brought against the defendant railroad company upon a contractual obligation which it assumed, if it did assume it, only as an agency of the State, it is clear that the Supreme Court has no jurisdiction of the subject matter of the action. (Cf. Maltby v. County of Westchester, 267 N. Y. 375; Moller v. New York Central R. R. Co., 282 N. Y. 188; Breen v. Mortgage Commission, 285 N. Y. 425.) On the other hand, if the plaintiff is seeking to hold the defendant liable for its personal dereliction or for its default in the performance of an obligation which it assumed in its corporate capacity and not as an agency of the State, or which is imposed upon it by law, the Legislature has not attempted to deprive the Supreme Court of jurisdiction of the subject matter of the action, and, under the Constitution, could not do so. (Cf. Seglin Construction Co., Inc., v. State of New York, 249 App. Div. 476, affd. 275 N. Y. 527; Remo Engineering Corp. v. City of New York, 260 App. Div. 587, affd. 286 N. Y. 657; Columbia Machine Works v. Long Island R. R. Co., 267 App. Div. 582.)

The Constitution of the State, as amended and in force since January 1, 1939, provides: The legislature may authorize by law the creation of a debt or debts of the state, not exceeding in the aggregate three hundred million dollars, to provide moneys for the elimination, under state supervision, of railroad crossings at grade within the state, and for incidental improvemeñts connected therewith as authorized by this section * * *. The expense of any grade crossing elimination the construction work for which was not commenced before January first, nineteen hundred thirty-nine, including incidental improvements connected therewith as authorized by this section, whether or not an order for such elimination shall theretofore have been made, shall be paid by the state in the first instance, but the state shall be entitled to recover from the railroad company or companies, by way of reimbursement (1) the entire amount of the railroad improvements not an essential part of elimination, and (2) the amount of the net benefit to the company or companies from the elimination exclusive of such railroad improvements, the amount of such net benefit to be adjudicated after the completion of the work in the manner to be prescribed by law, and in no event to exceed fifteen per centum of the expense of the elimination, exclusive of all incidental improvements. The reimbursement by the railroad companies shall be payable at such times, in such manner and with interest at such rate as the legislature may prescribe. * * * A grade crossing elimination the construction work for which shall be commenced after January first, nineteen hundred thirty-nine, shall include incidental improvements rendered necessary or desirable because of such elimination, and reasonably included in the engineering plans therefor.” (Art. VII, § 14.)

The liability imposed by this section upon the State, to pay, in the first instance, the entire expense of the construction work of any grade crossing elimination is made subject solely to the condition that the work shall be performed “ under state supervision ”. It is imposed even in those cases where the railroad company must thereafter reimburse the State for part of the expense. The Legislature was free to provide by statute that contracts for such work might be made by the railroad company interested in the elimination of the grade crossing and, in such case, except as the statute might otherwise provide, the railroad company and the contractor could by agreement also assume personal and corporate obligations towards each other supplementary to the obligation of the State to pay the entire cost of the work. Upon this appeal only the narrow question is presented whether this action is brought to enforce such a corporate obligation.

To carry out the purpose of article VII, section 14, of the Constitution, the Legislature at its first session after that section was adopted enacted chapter 289 of the Laws of 1939 entitled “ An Act supplemental to several acts providing for the elimination of highway-railroad crossings at grade, applicable only to eliminations the construction work whereof shall be commenced after January first, nineteen hundred thirty-nine. ’ ’ It provides among other things: ‘1 This is an enabling act to carry out section fourteen of article seven of the constitution as approved by the people November eighth, nineteen hundred thirty-eight ” (§ 1). The elimination of highway-railroad crossings at grade, upon which .construction work is commenced after January first, nineteen hundred thirty-nine, “ shall include incidental improvements rendered necessary or desirable because of such elimination, and reasonably included in the engineering plans therefor * * (§ 2.) The expense ” of every such grade crossing elimination including incidental improvements connected therewith, as determined by the commission to be necessary or desirable because of the elimination and reasonably included in the plans for such elimination and railroad improvements not an essential part of the elimination but desired by the railroad company or companies, shall be paid in the first instance out of the state treasury to the persons and corporations entitled thereto from time to time on accountings and vouchers approved by the department or commission' having jurisdiction * * * upon audit and warrant of the comptroller * * *.” (§ 4.) Whenever a railroad company shall be directed to perform construction work in the cities of New York, Buffalo or Syracuse, the transit commission, the Buffalo commission, or the Syracuse commission, within their respective jurisdictions, shall supervise such work and expenditures therefor and the commission having jurisdiction shall review and approve all plans, forms of contracts, specifications and lists of bidders and certify completion or partial completion thereof.” (§9.)

Contracts for grade crossing elimination are, of course, governed by the provisions of that statute and of other statutes and laws of the State of New York and of the United States, and the contract in this case expressly so provides. The contract and specifications also expressly provide that this project is being performed by The Long Island Eailroad Company in conjunction with the Transit Commission, State of New York ”. Though the parties named in the contract are the defendant railroad company, which is performing the project ” in conjunction with the Transit Commission, and the plaintiff, who agrees to perform work and furnish materials in connection with the project, yet the law imposes upon the State the obligation to pay the expense of the “ project ” and that obligation of the State may be enforced in the Court of Claims by appropriate action brought by the appropriate party. The railroad company and the contractor were not entirely free to plan the project as they saw fit or to fix the terms for its performance. The contract was made pursuant to the order and determination of the Transit Commission and the work must be performed under the supervision of the Commission and pursuant to plans approved by the Commission in order to promote the safety and convenience not only of the railroad but also of the State highway.

The contract thus has a dual aspect. The railroad company assumed corporate obligations for the benefit of the contractor, and such obligations may be enforced against it by the contractor by suit-in the Supreme Court; and it has exacted from the contractor, in manner approved by the Commission, obligations which it may enforce for its own benefit or for the benefit of the State. On the other hand the obligation of the State to pay the expense of the work which the contractor agreed to do arises not from any agreement of the railroad company that the State shall pay such expense, but is imposed by law wherever a railroad company by direction of the Commission enters into a contract for grade crossing elimination work upon terms approved by the Commission; and the railroad company acts solely as a State agency in entering into an agreement which defines the obligation of the State and which regulates the conditions under which that obligation shall be carried out by the State. No action upon contract may be maintained against it for any default by the State in carrying out an obligation defined by the contract.

The complaint in this action is for the failure by the defendant railroad company to pay for work performed by the contractor. No other default by the defendant is alleged in either cause of action pleaded in the complaint, and it is perhaps significant that the complaint contains no express allegation that the defendant agreed to pay either for work required by the contract or for the “ extra work ” performed or the materials furnished by the plaintiff. To establish liability the plaintiff relies upon its legal conclusions that under the contract the defendant is liable for the agreed price of the work and materials required by the contract, and that by the computations made by the defendant there has been found to be due from the defendant to the plaintiff, the sum of $113,748.23 ”; and in its second cause of action the plaintiff relies upon an implied promise that the defendant will pay for “ extra ” work performed and materials furnished by plaintiff “ at the special instance and request of defendant ”. As we have pointed out, if the contract contains a promise to pay for the work in its corporate capacity and not as an agent for the State, the Supreme Court has jurisdiction of an action to enforce that promise. It has no jurisdiction to enforce a promise to pay made by the defendant as agent of the State. So, too, the Supreme Court would have jurisdiction to enforce an implied promise of the defendant to pay for services rendered and materials furnished ‘ ‘ at [its] special instance and request ” if the request was made by the defendant in its corporate capacity and the services were rendered and the materials furnished to the defendant in the same capacity. It has no jurisdiction to enforce an implied promise to pay for services rendered or materials furnished to the defendant as agent of the State and at the special instance and request of the defendant acting as such agent. The question then which we must decide upon this appeal is, we repeat, whether the subject matter of this action is an alleged liability arising from a promise, express or implied, by the defendant in its corporate capacity and not as agent of the State.

The contract provides among other things: “XXIV. For the true, faithful and complete performance of the work and obligations of this contract, the Company herein covenants and agrees to pay the Contractor as full compensation for all labor, material, tools, royalties and work required to complete the contract in accordance with the terms and conditions set forth, both general and special, the following ‘ Unit ’ or ‘ Lump Sum ’ prices: ”

The succeeding paragraphs of the contract contain the terms and conditions which define the defendant’s obligation to pay and the plaintiff’s right to demand payment. The plaintiff is required to submit bills for work performed and materials furnished by the plaintiff as provided in the contract or pursuant to orders for extra work issued in accordance to the contract. The “ statement of the Contractor, when approved by the Engineer, shall be included in the monthly statement of * Accounts Payable ’ of the Engineer, prepared in accordance with Section XXVI ” and the amount thereof shall in turn be included in a voucher, which the Engineer shall prepare and submit to the Transit Commission for approval and transmission to the Comptroller of the State of New York for payment out of the State treasury in accordance with the provisions of Section 4 of the Grade Crossing Elimination Act of 1939 (§ XXV, par. h.) “ Payments shall be made by the Company during the progress of the work embraced in this contract, in accordance with a ‘ Statement ’ of ‘ Accounts Payable ’ prepared by the Engineer and based on the Contractor’s monthly statement, described in Section XXV, when approved as correct by the Engineer, and in accordance with the rules herein prescribed; it being understood, however, that the Company shall be under no obligation to make such payments until three (3) days shall have elapsed after receipt by it from the Comptroller of the State of New York of the monies covered by the voucher referred to in paragraph (h) of said Section.” (§ XXVI, par. b.) The obligation of the Company to make payment of the balance found due on final settlement as provided in Section XXVI paragraph d is in the same manner qualified by the words that the Company shall be under no obligation to make such payment until three (3) days have elapsed after receipt by it from the Comptroller of the State of New York of the monies covered by the final voucher referred to in the preceding paragraph hereof.”

These provisions of the contract, and others which might be quoted, create an obligation of the railroad company to do the things therein specified in order to obtain from the treasury of the State as provided in the Constitution and the statutes of the State, the monies which would be required for payment to the contractor in accordance with the terms of the contract, and to pay such monies to the plaintiff “ during the progress of the work ” and upon the final settlement three days after receipt by the Comptroller. There is no claim in this action that this obligation has been breached. The subject matter of this action is the asserted legal obligation of the railroad company to pay for services rendered or materials furnished in connection with a grade crossing elimination project though no moneys have been received by the railroad company from the State for that purpose. The railroad company in its corporate capacity has not undertaken to obtain such monies from the State or to make any payment to the contractor either for work specified in the contract or for extra work except from monies received from the State, which the State is under the Constitution and statutes bound to pay. There lies the distinction between this case and the case of Remo Engineering Corp. v. City of New York (260 App. Div. 587, 286 N. Y. 657, supra.)

Since the subject matter of the action is the asserted liability of the defendant for work, labor and materials furnished pursuant to a contract for construction in connection with a grade crossing elimination project and for extra work, and since both under the law of the State and under the provisions of the contract the expense of such construction must be paid in the first instance by the State and the defendant has not assumed any obligation in its corporate capacity to make any payments to the plaintiff until it has received the moneys required for such payment, and the complaint contains no allegations that the defendant has in its corporate capacity promised to pay the plaintiff regardless of whether the State furnished the monies required, it seems to a majority of the court that the Supreme Court has no jurisdiction of the subject matter of the action. We emphasize that this is the only question presented upon this appeal and decided now.

The judgment should be affirmed, with costs.

Dye, J.

(dissenting). I dissent. The Grade Crossing Eliminations Act (L. 1928, ch. 677, as amd. by L. 1939, ch. 289) and the State Constitution (art. VII, § 14) do not limit or restrict the original jurisdiction of the Supreme Court (art. VI, § 1). In the absence of express language, they do not constitute an authority for the proposition that a railroad in the performance of elimination work is an agency of the State so as to deprive the Supreme Court of original jurisdiction to hear and determine disputes between private parties, arising out of the performance of the elimination work, and confer jurisdiction thereof on the Court of Claims.

While the Court of Claims Act (§ 8) contemplates a general waiver of immunity by the State, it is not tantamount to saying that every time a private railroad corporation performs elimination work, which must conform to plans and specifications approved by the State before it can receive reimbursement out of State monies, it thereby becomes a State agency. To hold that it does is to deprive the plaintiff of its right to proceed against its privy and is contrary to the interpretation heretofore given to the immunity statutes; for instance, in Pantess v. Saratoga Springs Authority (255 App. Div. 426) involving an independent agency, it was held that the suit was properly brought in the Supreme Court; this was also the ruling in Remo Engineering Corp. v. City of New York (260 App. Div. 587, affd. 286 N. Y. 657); while in Breen v. Mortgage Commis sion (285 N. Y. 425) involving an administrative body designated a State agency by statute, the Court of Claims was held to have jurisdiction. Nor does Seglin Construction Co., Inc., v. State of New York (249 App. Div. 476, affd. 275 N. Y. 527) in which subcontractors’ claims were considered in the Court of Claims in connection with the whole claim, change the rule, as such jurisdiction was specifically conferred by the Enabling Act, Laws of 1931, chapter 692, which was held to bean enlargement of the Court of Claims’ jurisdiction and was in no respect treated as a diminution of the jurisdiction of the Supreme Court.

Here the railroad has defaulted in payment and is attempting to excuse its breach by referring to the provisions in the contract that “ the company shall be under no obligation to make payments until three days shall have elapsed after the receipt by it * * * of the monies ” and that under the statute the expense of grade crossing eliminations “ shall be paid by the State in the first instance ”. While withholding of preliminary payment by the State may be available to the railroad as a defense or as a postponement of action until payments are received, default by the railroad in performing the routine administrative acts preliminary to reimbursement payment by the State should not be blessed by giving it the dignity of an exculpatory act and thereby permitting the railroad to cancel out its covenant to pay the contractor for its work and by such default transform itself into a State agency so as to deprive the Supreme Court of jurisdiction of a dispute between it and its privy. The amended Grade Crossing Elimination Act never contemplated such a result.

While this court has not previously passed on the narrow point presented in the case at bar, it has only recently indicated , the method of payment in connection with a dispute involving the phrases, shall be paid by the State in the first instance ” (N. Y. Const., 1939, art VII, § 14) and “ shall be paid in the first instance out of the State treasury * * * ” (L. 1939, ch. 289, § 4), when it directed the City of Buffalo to provide funds to pay the salary of an engineering department employee in the Buffalo Transit Commission. In directing it to provide the funds for the payment of the salary the court pointed out that the question debated in the Constitutional Convention in 1938 was “ whether the railroads should pay something or the State should pay all ”, and that no change in the method of administration was considered, and that, in amending the Laws of 1928, chapter 677, by enactment of Laws of 1939, chapter 289, the Legislature intended: “ a continuance of the method of payment for elimination construction work done after January 1, 1939, in the same manner as for work done prior thereto ”. (Matter of Kolb v. Holling, 285 N. Y. 104, 110.)

There is nothing in the contract at bar whereby the State undertook to pay the contractor. Its obligation was to reimburse the railroad for the whole cost upon its performance of the elimination work in accordance with the plans and specifications. Mere approval of the contract, plans and specifications as to form by the Attorney-General, and as to availability of funds for reimbursement by the Comptroller, does not make the State liable as a party. At most such acts are only the exercise of an administrative routine designed to constitute a warranty of validity, that the proposed work is within the scope of the statute and that money paid in reimbursement thereof will be lawfully expended.

The holding about to be made by a majority of this court will deny to this contractor the use of a tribunal in which to plead its cause for there is no specific authority permitting this private corporation to sue in the Court of Claims since we can not say the State is a party to the contract. It is dismissing the instant complaint on the jurisdictional ground that the railroad is an agent of the State, completely disregarding the allegations in the complaint that the action is for breach of a contract between private corporations. Such a dismissal should be based only on a holding that as a matter of law the complaint itself is directed against the railroad company, not in its corporate capacity, but in its official status as an agent of the State (see Adler, Inc., v. Noyes, 285 N. Y. 34). There is nothing to that effect in the complaint. Everything in the contract indicates that the railroad had no such thought in mind when it executed the contract, and this is borne out by the provisions relating to the default of the contractor. It was the railroad which exacted the performance bond, and, in the event of default, it would be the railroad and not the State that would exact the penalty.

If it is desired, the Legislature in an appropriate ease could appoint the Long Island Bailroad, or any other railroad corporation for that matter, its agent in the elimination of railroad crossings, but we are convinced it would undertake such a course with great reluctance for reasons so obvious as to render recital unnecessary. Why, then, should we read into this situation something that is not there ? Payment in the first instance is a financial relation. The framers of the Constitution and the members of the Legislature never intended to change the long-established administrative practice in referring to grade crossing elimination through the medium of an independent agency. It did intend to pay the full cost, but, before advancing the money, the State retained to itself the right to examine the plans, inspect the materials used for functional quality, supervise the pay and working conditions of the labor employed and inspect the work so that the finished job for which the taxpayers were footing the bill would conform to the requirements of the statute. This is a far cry from creating the railroad its agent by implication.

It is for these reasons that I feel the Supreme Court has jurisdiction to hear and determine the rights of the parties to this contract in the first instance, and to deprive the contractor of the use of this constitutional tribunal is, in effect, depriving him of his cause of action for there is no other in which he can be heard.

The judgment of the Appellate Division should be reversed and that of the Special Term affirmed.

Desmond, J.

(dissenting). I concur with Judge Dye for reversal on these grounds:

1. The contract between plaintiff and defendant contains an express promise by the latter to pay the former for the construction work. That contract contains no such promise by the State or any State office or body, nor is it signed as a party by any of the latter.
2. Despite that express engagement by defendant, the majority of this Court is dismissing plaintiff’s complaint on a ground which makes it impossible for plaintiff to sue defendant in any court on a breach of that promise to pay, since access to the Supreme Court is forbidden, and defendant cannot be sued in the Court of Claims.
3. A dismissal of this suit on jurisdictional grounds can be based only on a holding that as matter of law the complaint itself is directed against defendant, not in its own corporate capacity but in its official status ” as an agent of the State (See Adler, Inc.; v. Noyes, 285 N. Y. 34, 37). There is nothing to that effect in this complaint.
4. The language of the Constitution (art. Vil, § 14) requiring the State to pay the whole cost of gr'ade crossing eliminations “ in the first instance ”, which language is relied upon by the majority here as imposing direct and exclusive liability on the State to pay the charges of those doing the actual work, has been held by this Court in Matter of Kolb v. Bolling (285 N. Y. 104, 110), to have no such meaning or effect.
5. The agreement between plaintiff and defendant that the latter need not pay the former until three days after the State has paid the latter, might be the basis of a defense to this suit — it cannot deprive the Supreme Court of jurisdiction to entertain the cause.

Loughran, Lewis and Thacher, JJ., concur with Lehman, Ch. J.; Conway, Desmond and Dye, JJ., dissent in opinions by Dye, J., and Desmond, J.

Judgment affirmed.


author: Thacher, J.

text:
    In the Matter of the Probate of the Will of G. Frank Weeks, Deceased. Lotta N. Weeks, Appellant; Lionel E. Weeks, as Executor and Trustee under the Will of G. Frank Weeks, Deceased, et al., Respondents.
    Argued May 22, 1945;
    decided July 19, 1945.

      John F. Faulkner and James Lee Kauffman for appellant.
    The antenuptial agreement is invalid because the true worth and financial status of the decedent were withheld by him from the contestant at the time of its execution. (Bonati v. Welsch, 24 N. Y. 157; Weeks v. Weeks, 265 App. Div. 942; Matter of Phillips, 293 N. Y. 483; Graham v. Graham, 143 N. Y. 573; Pierce v. Pierce, 71 N. Y. 154; Matter of McGlone, 258 App. Div. 596; Matter of Filor, 267 App. Div. 269, 293 N. Y. 699.)

      Fred Strohsall and Joseph W. Proctor for Lionel E. Weeks, as executor and trustee, respondent.
    L Appellant in accepting the benefits under the antenuptial agreement and not having offered to restore such benefits, is now estopped from denying the validity of said agreement. (Hathaway v. Payne, 34 N. Y. 92; Tallinger v. Mandeville et al., 113 N. Y. 427; Hungerford v. Hungerford, 161 N. Y. 550.) II. Appellant, by waiting until after the death of her husband, is estopped from now seeking the aid of a court of equity in repudiating her agreements. (Birkbeck’s Estate, 215 Pa. 323; In re Wyss’ Estate, 113 Cal. App. 487; Matter of Cook, 244 N. Y. 63.) III. Certain findings made by the Florida courts are not upon the merits. In addition said findings were neither material or necessary to sustain the Florida decree. Such findings are not binding upon the New York courts which may make new findings in accord with the facts. (Hughes v. Cuming, 36 App. Div. 302; Brody v. Brody, 190 App. Div. 806; Matter of Landon, 149 Misc. 832; Rives v. Bartlett, 215 N. Y. 33; Rudd v. Cornell, 171 N. Y. 114.) IV. The findings by the Florida courts were neither material nor necessary to sustain its decree. (Rudd v. Cornell, 171 N. Y. 114; Silberstein v. Silberstein, 218 N. Y. 525; Shaw v. Broadbent, 129 N. Y. 114; Donahue v. New York Life Ins. Co., 259 N. Y. 98; Kyff v. Kyff, 286 N. Y. 71; Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304.) V. The ante-nuptial agreement is valid. The evidence shows the contestant was not overreached and that she dealt with the decedent under circumstances of equality and with understanding of the effect of her acts in executing the agreements. (Graham v. Graham, 143 N. Y. 573; Matter of McGlone, 258 App. Div. 596; Matter of Markel, 175 Misc. 570; Birkbeck’s Estate, 215 Pa. 323; Estate of Koeffler, 215 Wis. 115; Smith’s Appeal, 115 Pa. 319; Taber v. First Citizens Bank & Trust Co., 247 App. Div. 580, 273 N. Y. 539; Matter of Phillips, 293 N. Y. 483.)

      Irving Cahn, as special guardian for Alma C. Pettit, an incompetent person, respondent.
    I. The decisions of the Circuit Court and the Supreme Court of Florida do not constitute res judicata. (Unglish v. Marvin, 128 N. Y. 380; Remington Paper Co. v. O’Dougherty, 81 N. Y. 650; House v. Lockwood et al., 137 N. Y. 259; Silberstein v. Silberstein, 218 N. Y. 525; Matter of Anderson, 211 N. Y. 136; Bloodgood v. Lewis, 209 N. Y. 95; Mehlhop v. Central Union Trust Co., 235 N. Y. 102; Brown v. McKie, 185 N. Y. 303; Matter of Leonard, 218 N. Y. 513; Gugel v. Hiscox, 216 N. Y. 145; Rowley v. Feldman, 173 N. Y. 607; Commercial Publishing Co. v. Beckwith, 167 N. Y. 329; Lighton v. City of Syracuse, 188 N. Y. 499; McGillis v. McGillis, 154 N. Y. 532; Beveridge v. N. Y. E. R. Co., 112 N. Y. 1; Gaynor v. Village of Port Chester, 230 N. Y. 210.) II. The antenuptial agreement was valid, binding and enforeible. (Nesmith v. Platt, 137 Iowa 294; In re McCready’s Estate, 316 Pa. 246; Robinson’s Estate, 222 Pa. 113; Smith v. Farrington, 29 Atl. 2d 163; Wulf v. Wulf, 261 N. W. 159; In Re Koeffler’s Estate, 254 N. W. 363; Matter of McGlone, 258 App. Div. 596; Cowee v. Cornell et al., 75 N. Y. 91; Carpenter v. Soule, 88 N. Y. 251; Jones v. Jones, 137 N. Y. 610; Williams v. Whittell, 69 App. Div. 340; La Tourette v. La Tourette, 54 App. Div. 137; Matter of Rogers, 250 App. Div. 26; Graham v. Graham, 143 N. Y. 574.) III. Contestant is estopped to attach the antenuptial agreement. (Smith v. Vara, 136 Misc. 500; Deitrick v. Greaney [Mass.], 309 U. S. 190; Morris v. Morris, 234 App. Div. 187, 260 N. Y. 650; Bragg v. Hatfield, 124 Me. 391; McNeeley v. Walters, 211 N. C. 112; Hathaway v. Payne, 34 N. Y. 92; Tallinger v. Mandeville et al., 113 N. Y. 427; Hungerford v. Hungerford, 161 N. Y. 550; In re Wyss’ Estate, 113 Col. App. 487; Matter of Cook, 244 N. Y. 63.)
   Thacher, J.

In this probate proceeding the widow of the decedent objected to the jurisdiction of the Surrogate’s Court of Nasshu County on the ground that the decedent died a resident of the State of Florida. The executors named in the will offered for probate denied the allegations of residence and alleged that the contestant, by entering into an antenuptial agreement and later a separation agreement, had relinquished her rights in the decedent’s estate and by failing to challenge said agreements was estopped from asserting any interest therein. It was also alleged that contestant had procured a final decree of divorce from the testator in the State of Florida and by reason thereof had no claim or interest in the estate.

During the proceedings before the Surrogate it was conceded that the Florida decree was not one of divorce, and that consequently contestant at the time of decedent’s death was his lawful wife.

On December 21, 1933, the decedent, then sixty-eight years of age, and the contestant, then sixty-one years of age, were married in Florida, having on the day before entered into an antenuptial agreement under the terms of which each relinquished all right, title or interest in or to any real or personal estate of the other acquired before marriage, it being expressly stipulated that the agreement was not to apply to any property acquired after marriage.

On November 3, 1937, the parties entered into a separation agreement in Florida which recited that they had separated in September, 1937, and that the husband had conveyed certain real estate to the wife and given her various sums of money and promised to give her an additional sum. These considerations were expressly accepted by the wife as a satisfactory, reasonable and sufficient provision for her whole support and maintenance during her natural life, past, present and future. By this agreement each of the parties again renounced any interest in the other’s estate and specifically any right to elect against the other’s will.

On May 23,1939, the wife commenced an action in the Circuit Court of Lake County, Florida, against her husband, alleging extreme cruelty and that the separation agreement of November 3,1937, had been abrogated by cohabitation between the parties subsequent to its execution. The relief asked was that alimony be awarded to the complainant.

Under Florida law, a wife may recover alimony without seeking divorce. (Fla. Stat. Ann., § 65.09.)

The husband in his ánswer admitted that both parties were residents of Florida, denied the material allegations of the bill, alleged the validity of the separation agreement and pleaded a counterclaim for divorce.

Upon testimony taken before a special examiner, the court found that the husband had been guilty of mental cruelty, .that the separation agreement had been abandoned by the subsequent cohabitation of the parties, and awarded alimony of forty dollars a week, taking into consideration in fixing the award provisions of the antenuptial agreement waiving any dower interest in the husband’s estate and the fact that upon his death she would be totally without support.

From this decree the husband appealed to the Supreme Court of Florida, where the decree was affirmed with an opinion (Weeks v. Weeks, 143 Fla. 686). There it was held that the separation agreement was invalid because the marital relation had been resumed by the parties. It was further held that the true financial status of the husband was at all times withheld from the wife and that for this reason the separation agreement might not have been binding on the wife even if it had not been broken by a subsequent resumption of the marital status and relations, and, further, that the rule requiring full and fair disclosure of the financial condition of parties applies both to antenuptial agreements and to separation agreements (Weeks v. Weeks, 143 Fla. at p. 689).

The Surrogate of Nassau County, considering the effect of this determination in the Florida Court upon the rights of the parties, held that, in view of the determination of the Florida Court that the separation agreement was invalid, the questions still open for consideration in.the Surrogate’s Court were: “ 1. Whether under the antenuptial contract she has an interest in decedent’s estate sufficient to sustain her right to contest the probate for lack of jurisdiction in this Court ”, and “ 2. The effect of the Florida decree upon the marital status of the parties.” As to the second question, the Surrogate concluded: “ The second question has now been eliminated, as the proof shows clearly, and indeed it seems now to be conceded, that the decree was not one of divorce, and that consequently the contestant, at the time of decedent’s death was legally his wife.”

The validity of the antenuptial contract depends upon the law of the place where the agreement was made. (Bonati v. Welsch, 24 N. Y. 157; Decouche v. Savetier, 3 Johns. Ch. 190; Crosby v. Berger, 3 Edw. Ch. 538.) In Florida, antenuptial agreements releasing dower rights, if fairly made with full disclosure of the property interests affected, are valid. (Fla. Stat. Ann., § 693.02; North et al., v. Ringling, 149 Fla. 739, 748-750.)

In Weeks v. Weeks (143 Fla. 686), where it was held that the separation agreement here involved was invalid at least because marital relations had been resumed, the highest court in the State went on to say that it might have been held invalid because the husband had at all times withheld from the wife his true financial worth and status and that the rule requiring full and fair disclosure of the financial condition of the parties applies both to antenuptial property agreements and to separation agreements. In support of this latter proposition the court cited Murdock v. Murdock (219 Ill. 123), and other Illinois decisions, as well as Egger v. Egger (225 Mo. 116) and Tilton v. Tilton (130 Ky. 281).

While these statements of the law by the highest court of the State were not necessary to the actual disposition made of Weehs v. Weeks, they were carefully considered and deliberately made, and, in the absence of any authority from that State to the contrary, must be taken as indicating the local law.

In the Surrogate’s Court these questions were presented upon the very same record embodying all of the testimony in Weeks v. Weeks and upon additional testimony which also indicated that no adequate disclosure was made by the husband of his financial and property interests and that the wife was not advised by independent counsel.

Concluding, as we must upon this record, that the antenuptial agreement in this case was invalid under the law of Florida because the husband’s true financial condition was at all times withheld from the wife, all objections to the right of the widow to contest the probate, including the claim of estoppel, must be overruled.

Accordingly, the order of the Appellate Division and the decrees of the Surrogate’s Court should be reversed and the matter remitted to the Surrogate’s Court for further proceedings in accordance with this opinion, with costs in all courts to all parties appearing separately and filing briefs, payable out of the estate. [See 294 N. Y. 979.]

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

Ordered accordingly.


text:
    Walter J. McCabe, Respondent, v. Henry Cohen et al., Respondents, and Gedex Realty Corporation, Appellant.
    Argued May 24, 1945;
    decided July 19, 1945.

      William T. Gallagher and Emery M. Anderson for appellant.
    I. The condition complained of did not constitute a nuisance. (People v. Charles Schweinler Press, 214 N. Y. 395; Kitching v. Brown, 180 N. Y. 414; Mayor of New York v. Board of Health, 31 How. Pr. 385; Cooper v. Schultz, 32 How. Pr. 107; Coe v. Schultz, 47 Barb. 64; United States v. Gradwell, 243 U. S. 476; Antonsen v. Bay Ridge Savings Bank, 266 App. Div. 164, 292 N. Y. 143; Murphy v. City of Brooklyn, 98 N. Y. 642; Bruszacynaska v. Ruby, 267 App. Div. 539, 294 N. Y. 22; People v. New York Edison Co., 159 App. Div. 786; Transit Comm. v. Long Island R. R. Co., 253 N. Y. 345.) II. The judgment is not supported by the precedent of Pharm v. Lituchy (283 N. Y. 130). (Campbell v. Holding Co., Inc., 251 N. Y. 446; Wilks v. N. Y. Telephone Co., 243 N. Y. 351; Waggoner v. Jermaine, 3 Denio 306; Bond v. Smith et al., 113 N. Y. 378.) III. The issues were properly saved for review. (Martin v. Herzog, 228 N. Y. 164; Fitzpatrick v. International Ry. Co., 252 N. Y. 127; Wood v. Duff-Gordon, 222 N. Y. 88; Zeffiro v. Porfido, 265 App. Div. 185; Devoy v. Irish World & Am. Industrial L. Co., Inc., 208 App. Div. 319; Swift v. Poole, 172 App. Div. 10; Goodheart v. American Airlines, Inc., 252 App. Div. 660; Meriden Gravure Co. v. Bedell, 232 App. Div. 454; Raible v. Hygienic Ice & Refrigerating Co., 134 App. Div. 705; Newburgh T. & S. Co. v. Pure Oil Co., 284 N. Y. 293.)

      Thomas J. O’Neill, Daniel Danziger and Leon A. Mnuchin for plaintiff, respondent.
    I. The undisputed evidence established as a matter of law that appellant created and for a long time knowingly maintained a statutory nuisance which caused plaintiff’s injuries. (Pharm v. Lituchy, 283 N. Y. 130; Chotapeg, Inc., v. Bullowa, 291 N. Y. 70.) II. Defendant-appellant having created or maintained a nuisance and having quit-claimed its premises with a nuisance thereon is liable to plaintiff who was injured as the proximate result of the creation or maintenance of this nuisance. (Pharm v. Lituchy, 283 N. Y. 130; Wilks v. N. Y. Telephone Co., 243 N. Y. 351; Ahern v. Steele et al., 115 N. Y. 203; Plumer v. Harper, 3 N. H. 88; Curtice v. Thompson, 19 N. H. 471; Brown v. St. Louis, 268 S. W. 678; Lamb v. Roberts, 72 So. 309; Philips v. Mutual Life Insurance Co., 20 N. Y. S. 2d 609, 21 N. Y. S. 2d 394; Weiner v. Leroco Realty Corp., 279 N. Y. 127; McLaughlin v. Kelly, 79 Atl. 552; Eastman v. Amoskeag Manufacturing Company, 44 N. H. 143; Brown v. St. Louis, San Francisco R. R. Co., 268 S. W. 678; III. No proper exception to the charge was taken by appellant.

      Samuel J. Penn and H. Sidney Landau for defendants-respondents.
    I. Defendants-respondents had no notice of the dangerous condition of the premises. II. The condition of the building constituted a nuisance. (Administrative Code of the City of New York, § 564-15.0.)
   Per Curiam.

There was evidence from which the jury could have found that the president of the defendant-appellant knew that the fire escapes, including the stairway in question, were at a point where further corrosion would make them dangerous ”; that he had reason to believe that the vendee would not realize the risk involved and that he failed to disclose this condition to the vendee. Under the rule approved in Kilmer v. White (254 N. Y. 64) and in Pharm v. Lituchy (283 N. Y. 130), the trial court properly refused to dismiss the complaint (Restatement of Torts, § 353).

In view of the defendant-appellant ’s failure to take proper exception to the charge with respect to sections 564-15.0 and C26-193.0 of the Administrative Code, we do not pass upon the applicability of those sections to the evidence in this record.

The judgment should be affirmed, with costs.

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

Judgment affirmed.