text:
    The Bank of United States, Appellant, v. Ida Braveman, Respondent.
    (Submitted March 31, 1932;
    decided April 26, 1932.)

      Arthur Ofner, Warren C. Fielding, Henry L. Bayles and Carl J. Austrian for appellant.
    It being conceded that the maker is solvent, defendant may not set off her deposit in the insolvent bank against her liability as indorser on the note. (Gerseta Corp. v. Equitable Trust

      Co., 241 N. Y. 418; Van Dyck v. McQuade, 85 N. Y. 616; Fera v. Wickham, 135 N. Y. 223; Rothschild v. Mack, 115 N. Y. 1; Curtis v. Davidson, 215 N. Y. 395; De Camp v. Thomson, 159 N. Y. 444; Smith v. Felton, 43 N. Y. 419; Matter of Receiver of Middle District Bank, 1 Paige, 585; Susquehanna S. S. Co. v. Andersen & Co., 239 N. Y. 285; Royal Indemnity Co. v. Heller, 256 N. Y. 322; New York Central Ins. Co. v. National Protection Ins. Co., 14 N. Y. 85; Keon v. Saxton & Co., 257 N. Y. 412; Borough Bank of Brooklyn v. Mulqueen, 70 Misc. Rep. 137; Carnegie Trust Co. v. Kistler, 89 Misc. Rep. 404; O’Connor v. Brandt, 12 App. Div. 596; Edmondson v. Thomasson, 112 Va. 326; Knaffle v. Knoxville Banking & Trust Co., 128 Tenn. 181; Lippitt v. Thames Loan & Trust Co., 88 Conn. 185; Matter of Garfunkel, 8 Fed. Rep. [2d] 790; Bryant v. Williams, 16 Fed. Rep. [2d] 159; Farmers’ Loan & Trust Co. v. Kip, 192 N. Y. 266.)

      Mortimer Braveman for respondent.
    An indorser has an absolute right of setoff in an action at law. (Knaffle v. Knoxville Banking & Trust Co., 128 Tenn. 181; Carnegie Trust Co. v. Kistler, 152 N. Y. Supp. 240; Curtis v. Davidson, 215 N. Y. 395; Willoughby v. Ball, 90 Pac. Rep. 1019.) The solvency of the maker does not affect the indorser’s right of setoff. (Curtis v. Davidson, 164 App. Div. 597; 215 N. Y. 395; Davis v. Industrial Manufacturing Co., 114 N. C. 321; Bank of Anderson v. Majeski, 149 S. C. 185; Streeter v. Junker, 230 Ill. App. 366; Arnold v. Niess, 1 Walk. 115; Williams v. Coleman, 190 N. C. 368; Yardley v. Clothier, 49 Fed. Rep. 337; 51 Fed. Rep. 506; Williams v. Rose, 218 Fed. Rep. 898.)

      Harry Weinberger, amicus curiæ.

    Defendant, being sued alone, may set off her deposit in the insolvent bank against her liability as indorser on the note, though the maker is concededly solvent, defendant not having been indemnified by the maker. (Curtis v. Davidson, 215 N. Y. 395; Myers v. New York County Nat. Bank, 36 App. Div. 484; Agawam Bank v. Strever, 18 N. Y. 512; Glennan v.
      Rochester Trust & S. D. Co., 209 N. Y. 18; Scott v. Armstrong, 146 U. S. 507; Matter of Hatch, 155 N. Y. 401; Gerseta Corp. v. Equitable Trust Co., 241 N. Y. 418; Williams v. Rose, 218 Fed. Rep. 898; Davis v. Industrial Mfg. Co., 114 N. C. 242; Arnold v. Niess, 1 Walk. 715; Hughitt v. Hayes, 136 N. Y. 163.)
   Hubbs, J.

The parties herein have submitted for determination, pursuant to sections 546-548 of the Civil Practice Act, a question in difference arising upon facts stated in substance as follows:

The plaintiff, a domestic banking corporation, was taken over for the purpose of liquidation by the Superintendent of Banks on December 11, 1930, pursuant to the provisions of article II, section 57, of the Banking Law (Cons. Laws, ch. 2), being chapter 369 of the Laws of 1914, as amended. Prior to that date, defendant had indorsed and transferred to the bank for value before maturity a note made by Isidor Braveman, Inc. On December 11, 1930, the bank was still the owner and holder of that note, which was not then due. On the same date the defendant had on deposit to her credit in plaintiff bank the sum of $155.40. Upon the due date there remained unpaid on the note $1,006.55, with interest. The note not being paid at maturity, it was protested and notice was given to the defendant. The defendant tendered to the bank the amount due on the note less her deposit and demanded the note. The tender was refused upon the ground that the defendant is not entitled to have her deposit offset against the note. The solvency of the maker and its ability to indemnify and repay to the defendant any sum that she may be required to pay on account of her liability as indorser of said note is conceded.

The question submitted is whether under the stipulated facts, the defendant is entitled to set off her deposit against her liability on the note. It is agreed that the court shall render such judgment as may be proper upon the facts, without costs to either party.

A judgment for the amount due on the note less the amount of the deposit has been granted by the Appellate Division.

The submission may be considered as in the nature of an action to recover of defendant as indorser the amount due on the note with a counterclaim for the amount of the deposit. (Hanrahan v. Terminal Station Commission, 206 N. Y. 494, 504.) The right of the plaintiff to bring such an action cannot be questioned. (Banking Law, §71.)

We have thus squarely presented the question as to whether in an action at law by the liquidator of a domestic banking corporation to recover of an indorser the amount due on a note maturing after the assets of the bank have been taken over by the liquidator, the indorser is entitled to have offset against her liability on the note a deposit standing to her credit on the books of the bank when taken over where it conclusively appears that the maker of the note is solvent and fully able to indemnify the indorser.

At an early date, upon an application by the receiver of an insolvent bank to the chancellor for instruction, the rule was laid down that if the real debtor was unable to pay, the indorser could offset his deposit with the bank, “ but no such offset should be allowed to an endorser where he is indemnified by the real debtor, or where the latter can be compelled to pay.” (Matter of Middle District Bank, 1 Paige, 585.) (See, also, Lippitt v. Thames Loan & Trust Co., 88 Conn. 185, 200.)

Where the proceeding is in equity by an indorser to procure the allowance of an equitable setoff, the applicant for equity must show that he has no adequate remedy at law against the primary obligor. (Curtis v. Davidson, 215 N. Y. 395; Bryant v. Williams, 16 Fed. Rep. [2d] 159.) Where an action is one at law, brought by a receiver to recover of an indorser, upon proof of the insolvency of the maker or in the absence of proof of the maker’s solvency, the right of set off exists as to a deposit standing in the name of an indorser. (Curtis v. Davidson, supra; Yardley v. Clothier, 49 Fed. Rep. 337; affd., 51 Fed. Rep. 506.) Apparently but once has the precise question here presented been before a court of this State and in that case it was held that where the maker is solvent the right of setoff does not exist in favor of the indorser. (Borough Bank v. Mulqueen, 70 Misc. Rep. 137.) The principle has been recognized by courts of other jurisdictions. (New Farmers’ Bank v. Young, 100 Ky. 683; Lippitt v. Thames Loan & Trust Co., 88 Conn. 185, 200; Knaffle v. Knoxville Banking & Trust Co., 128 Tenn. 181; 130 Tenn. 336; Davis v. Industrial Mfg. Co., 114 N. C. 242; Matter of Garfunkel, 8 Fed. Rep. [2d] 790; Edmondson & Reekes v. Thomasson, 112 Va. 326; Bryant v. Williams, 16 Fed. Rep. [2d] 159.)

The correctness of the decision in the Mulqueen case is recognized in Curtis v. Davidson (supra, at p. 398). In the latter case the court said: “In order to defeat the endorser’s right of setoff it must appear that he has more than a speculative or uncertain chance of indemnity from the maker.”

The principle last stated is based upon the same broad ground applied in National Surety Co. v. Manhattan Co. (252 N. Y. 247) in denying the right to a bank in an action against it to recover the amount debited to a depositor’s account because of the payment of forged checks to set up the negligence of the depositor where the bank had recourse against a solvent guarantor of the signatures on the forged checks. (See, also, Critten v. Chemical Nat. Bank, 171 N. Y. 219, at 229.)

In an action by a receiver against an indorser in order to prevent a setoff of a deposit, the burden is upon the plaintiff to establish the solvency of the maker. Once that has been established, it becomes apparent that the indorser will be fully indemnified by the maker, upon whom the primary obligation rests, and- to allow a setoff of the deposit under such circumstances to the indorser might permit him to receive full payment of his deposit to the detriment of the general creditors.

The cases cited by the respondent where a setoff has been allowed fall into three classes, illustrated by the following cases where it appeared that the maker was insolvent (Davis v. Industrial Mfg. Co., 114 N. C. 242); where there was a lack of evidence as to the solvency of the maker (Carnegie Trust Co. v. Kistler, 89 Misc. Rep. 404; Yardley v. Clothier, 49 Fed. Rep. 337; affd., 51 Fed. Rep. 506; Curtis v. Davidson, supra); where the physical indorser was the actual maker of the note (Scott v. Armstrong, 146 U. S. 499; Building & Engineering Co. v. Northern Bank, 206 N. Y. 400).

There are statements in the opinion in the case of Curtis v. Davidson which standing alone indicate that an indorser is entitled to a setoff of his deposit, whether the maker is solvent or insolvent. The case only decides, however, that the answer therein was sufficient as against a demurrer as neither the complaint nor answer disclosed whether the maker of the note was solvent or insolvent.

The authorities in other jurisdictions are in conflict. Many of them are collated in a note to the case of Prudential Realty Co. v. Allen (241 Mass. 277; 25 A. L. R. 935).

While principles of justice and equity require that a setoff be allowed where the litigation is between the parties, another equitable principle comes into operation when the litigation is between a depositor and the receiver of an insolvent party. In such a situation, the rights of general creditors have intervened and equity requires that the assets of the insolvent party be equally distributed among such general creditors. (Gerseta Corp. v. Equitable Trust Co., 241 N. Y. 418.) To allow an indorser to set off his deposit when the maker is solvent and able to indemnify the indorser as in this case would enable the indorser to collect the full amount unpaid on the note from the maker and at the same time receive a larger amount of his deposit than other depositors. Such a result would be inequitable. (Lippitt v. Thames Loan & Trust Co., supra.)

The rule as stated by Chancellor Walworth in Matter of Middle District Bank (supra), as applied in equity, has never been questioned by any court of this State.

In this jurisdiction, where the same court exercises jurisdiction in both law and equity, no controlling reason exists why the same rule of liability should not be enforced in each court. Indeed, “ the courts of law and equity follow the same general doctrines on the subject of set-off.” (Duncan v. Lyons, 3 Johns. Ch. 351, 358; see, also, Beecher v. Vogt Mfg. Co., 227 N. Y. 468, 473.)

The judgment should be modified by disallowing the setoff and providing that plaintiff recover of the defendant the sum of $1,006.55, and as thus modified, affirmed, without costs to either party.

Pound, Ch. J., Crane, Lehman, O’Brien and Crouch, JJ., concur; Kellogg, J., not sitting.

Judgment accordingly.


source: Caselaw Access Project

author: Hubbs, J.

license: Public Domain

text:
    Allen Nelson, Respondent, v. Arnold Nygren, Appellant.

      (Argued March 18, 1932;
    decided April 26, 1932.)

      Frank Gibbons for appellant.
    The plaintiff was guilty of contributory negligence. (Higgins v. Mason, 255 N. Y. 104; Clark v. Traver, 205 App. Div. 206; 237 N. Y. 544; Sheehan v. Coffey, 205 App. Div. 388; Seltzer v. Indemnity Ins. Co., 252 N. Y. 330; Knapp v. Barrett, 216 N. Y. 226; Peterson v. Ballantine, 205 N. Y. 29; Baker v. Lehigh Valley R. R. Co., 248 N. Y. 131; La Gay v. Director General of Railroads, 231 N. Y. 191; Oppenheimer v. Garkin, 262 Mass. 281; Lambert v. Eastern Massachusetts St. Ry., 240 Mass. 495; Chesapeake Tel. Co. v. Merriken, 128 Atl. Rep. 277; Krueger v. Krueger, 197 Wis. 588; Simrell v. Eschenbach, 303 Penn. St. 156.)

      J. Russell Rogerson for respondent.
    The contributory negligence of plaintiff was a question for the jury, to be determined in the light of the facts and circumstances. (Dowling v. Hastings, 211 N. Y. 199; Baxter v. Auburn & Syracuse Electric R. R. Co., 190 N. Y. 439; Clark v. Traver, 205 App. Div. 206; Gardner v. Friederich, 25 App. Div. 521.)
   Hubbs, J.

At about 12.30 a. m. on a clear night, plaintiff and defendant left Olean in defendant’s automobile, intending to drive to Maple Springs, a distance of from 65 to 70 miles. As they left Olean the plaintiff told the defendant he would drive when they reached Randolph, that being approximately the half-way point, and to awaken him when they reached that place. The defendant acquiesced. The plaintiff then put blankets around himself, curled up on -the seat and went to sleep.

Before reaching Randolph, and while the plaintiff was still asleep, the car left the highway. The plaintiff was found under the car, seriously injured. The defendant did not testify, but there is testimony to the effect that he said to the sheriff shortly after the accident, when asked how it occurred, that he must have fallen asleep. There is affirmative testimony that neither the plaintiff nor the defendant had been drinking, and that shortly before the accident the car was traveling at a speed of not to exceed 35 or 40 miles per hour. The plaintiff and the defendant were both experienced drivers and entirely familiar with the road, which was a State highway, straight, dry and in good condition.

The trial court submitted to the jury the question of the plaintiff’s freedom from contributory negligence as one of fact. The jury rendered a verdict for the plaintiff which was affirmed by the Appellate Division, one justice dissenting.

The sole question presented upon this appeal is whether, under the facts and circumstances in this particular case, the conduct .of the plaintiff, in voluntarily going to sleep with the consent of the driver, while riding as a guest in an automobile, constituted contributory negligence as a matter of law, so as to preclude a recovery against the driver, who has been found to have been negligent.

It has been decided in Massachusetts that a guest riding on a rear seat who voluntarily goes to sleep is guilty of contributory negligence as a matter of law. (Oppenheim v. Barkin, 262 Mass. 281.) There the guest did not go to sleep by arrangement with the driver. It should be noted that in that State a guest can recover against a driver only in the event of gross negligence.

The same rule was adopted in Wisconsin in a case where a mother remained asleep while riding as a guest of her son, who, while driving the car, had dozed off after they had been on the road all night. (Krueger v. Krueger, 197 Wis. 588.) But in the later case of Schmidt v. Leuthener (199 Wis. 567) it was decided that the act of a front seat guest in closing his eyes and trying to sleep while on a long trip, was not contributory negligence as a matter of law which would preclude his recovery for the driver’s negligence. In the same case it was said that a back seat guest was not guilty of contributory negligence as a matter of law in reading a newspaper.

No other case holding such conduct to constitute contributory negligence as a matter of law has been called to our attention. On the contrary, we find that in several States such conduct on the part of a guest has been decided not to constitute contributory negligence as a matter of law.

In Pennsylvania, where a guest is deemed negligent only if he fails to take measures to avoid “ apparent dangers,” it was decided that a sleeping guest was not guilty of contributory negligence as a matter of law, but the question was treated as one of fact to be decided in the light of the circumstances surrounding the case. (Simrell v. Eschenbach, 303 Penn. St. 156.) In Maryland, in a case where the driver, unknown to. the sleeping guest, was unfamiliar with the road and permitted the car to run off and hit a telegraph pole, it was held that the guest was not guilty of contributory negligence as a matter of law. (Chesapeake & Potomac Tel. Co. v. Merriken, 147 Md. 572.) Likewise, in Vermont, it has been held that the fact that a passenger riding on a rear seat, at the time of the accident may have been asleep does not constitute contributory negligence as a matter of law. (McAndrews v. Leonard, 99 Vt. 512.) In McDermott v. Sibert (218 Ala. 670) submission of the question to the jury as one of fact was held to be proper. And in Dedman v. Dedman (155 Tenn. 241) it was decided that one riding in an automobile as a guest, sitting with the driver, a hired servant of the owner, was not guilty of contributory negligence as a matter of law in engaging in conversation with those on the rear seat, giving no heed to the management of the car, although the driver would doubtless have heeded any direction given by the guest. That was held to be the proper rule although the car was traveling at an excessive speed, over a smooth road and the guest was a competent and experienced driver, familiar with the road, it further appearing that the car was a heavy one, capable of attaining a high speed without noticeable vibration.

In Iowa it has been said that a guest is not bound to keep a constant lookout for causes which might occasion injury, but he cannot close his eyes to obvious danger, or intrust his safety absolutely to the driver when the same knowledge of obvious or threatened danger is possessed by both; that care is measured by the attending circumstances. (Matter of Hill, 202 Iowa, 1038.)

In the last analysis, the rule governing a guest riding in an automobile is that he should conduct himself as an ordinarily prudent person would, under like circumstances. If he does he cannot be held negligent as a matter of law. Following the language adopted in the days of the stage coach and other horse-drawn vehicles, courts often add that he should call attention to apprehended danger, protest against fast driving, leave the automobile if it could be done with safety or demand that it be stopped and then get out of it. Such statements are only illustrations of what a reasonably prudent person might do under the circumstances. They do not constitute a legal standard of what a reasonably prudent person must do. The question is not whether the guest should protest against fast driving, call attention to apprehended danger, or demand that the car be stopped so that he could get out. The legal question is whether, •under the circumstances, he acted with the care that a reasonably prudent man would have used under the circumstances.

Who is to answer that question, the court or the jury? We believe it is for the jury to determine. The question of contributory negligence ordinarily is a question of fact. It is only when there is no dispute upon the facts and only one conclusion can be drawn therefrom that it may be decided as a question of law. To decide as a matter of law that if a guest, under circumstances like those in this case, should go to sleep in an automobile, he would be guilty of contributory negligence, would be to disregard realities and situations growing out of modern conditions.

In the case of Weidlich v. N. Y., N. H. & H. R. R. Co. (93 Conn. 438, at 442) the court clearly states the modern view of the law of contributory negligence as applied to a guest riding in an automobile: " The intestate was seen a few moments before the accident and a short distance from the crossing, seated on the rear seat of the closed automobile. If he had been asleep, or reading a book, or engrossed in talk with another than the driver, or in deep thought, he would not have been negligent because of this. Ordinary experience instances this as not infrequently the conduct of the ordinarily prudent person when riding as a guest on the rear seat of an automobile. No duty was upon the intestate to explain, excuse or justify his course.”

The judgment should be affirmed, with costs.

Pound, Ch. J., Crane, Lehman and O’Brien, JJ., concur; Kellogg, J., not sitting.

Judgment affirmed.


text:
    In the Matter of International Milling Company, Respondent. Joseph A. Broderick, as Superintendent of Banks of the State of New York, Appellant.

      (Argued March 30, 1932;
    decided April 26, 1932.)

      Warren C. Fielding, Arthur Ofner, Joseph F. Hunter and Carl J. Austrian for appellant.
    The petitioner became a creditor by accepting an unconditional credit. (Neg. Inst. Law, § 350-1, subd. 3; Hecker-Jones-Jewell Milling Co. v. Cosmopolitan Trust Co., 242 Mass. 181; Union Nat. Bank v. Citizens Nat. Bank, 153 Ind. 44.) The petitioner is remitted to the rights of a preferred creditor. (Cunningham v. Brown, 265 U. S. 1; Matter of Cavin v. Gleason, 105 N. Y. 256; Matter of Hicks, 170 N. Y. 195; Madison Trust Co. v. Carnegie Trust Co., 215 N. Y. 475; Whiting v. Hudson Trust Co., 234 N. Y. 394; Fur & Wool Trading Co. v. Fox, Inc., 245 N. Y. 215; Matter of Egan, 258 N. Y. 334; Matter of Bond v. Broderick, 232 App. Div. 468.) The order cannot be sustained as a reclamation order, because the supposed proceeding in which it was made did not conform to the requirements of sections 71 and 76 of the Banking Law. (Van Tuyl v. New York Real Estate Security Co., 153 App. Div. 409; 207 N. Y. 691; Stater v. Oriental Mills, 18 R. I. 352; Empire State Surety Co. v. Carroll, 194 Fed. Rep. 593; Cunningham v. Brown, 265 U. S. 1; Merchants S. & G. Co. v. Board of Trade of Chicago, 201 Fed. Rep. 20; People ex rel. Stearns v. Marr, 181 N. Y. 463; Matter of Lennon, 166 U. S. 548; Heinze v. Butte & B. Consol. Min. Co., 129 Fed. Rep. 274; Simon v. Aldine Publishing Co., 12 N. Y. Civ. Prac. 290; Matter of Westminster Realty Corp., 123 App. Div. 797; Schreiber v. Garden, 152 App. Div. 817; Child v. Washed Sand & Gravel Co., 181 Minn. 559; N. Y. C. R. R. Co. v. Conlin Bus Lines, Inc., 258 Mass. 498; Wasserman v. Wasserman, 223 App. Div. 773; Matter of White, 119 App. Div. 140; Lafayette Trust Co. v. Beggs, 213 N. Y. 280.)

      W. Randolph Montgomery for respondent.
    The relation between the bank and the respondent was that of bailor and bailee. (Matter of Bank of Cuba, 198 App. Div. 733; People v. Bank of Dansville, 39 Hun, 187; Washington L. & B. Co. v. Fourth Nat. Bank, 38 Fed. Rep. [2d] 772.) Section 350-1 of the Negotiable Instruments Law cannot change the relationship of the parties or the terms of their contract. (Matter of Buchanan, 184 App. Div. 237; People ex rel. Simpson v. Wells, 181 N. Y. 252.) The relationship between the respondent and the bank from that of bailor and bailee, or trustee and beneficiary, to that of debtor and creditor was not changed by the issuance of a cashier’s check. (Central Trust Co. v. Bank of Mullens, 150 S. E. Rep. 137; People v. Bank

      of Dansville, 39 Hun, 187.) The court had jurisdiction to enter a summary order directing the payment to the claimant of the fund in question. (Lafayette Trust Co. v. Beggs, 213 N. Y. 280; Isaac v. Marcus, 258 N. Y. 257; Yokohama Specie Bank, Ltd., v. Chinese Merchants Bank, 219 App. Div. 256; Matter of Union Bank, 147 App. Div. 593; 204 N. Y. 313; New York & Western Union Tel. Co. v. Jewitt, 115 N. Y. 166; People v. Bank of Dansville, 39 Hun, 187; Matter of Bank of Cuba, 198 App. Div. 733.)
   Hubbs, J.

Petitioner drew a sight draft on the Liberty Baking Corporation for $1,372.50 payable to the order of The Bank of United States and forwarded it to the payee for collection. Attached to the draft was a paster which read as follows:

“To the Collecting Bank: This draft is not to be treated as a deposit. The funds obtained through its collection are to be delivered to the International Milling Company and are not to be commingled with other funds of the collecting bank.
“ INTERNATIONAL MILLING COMPANY.”

The draft was received by the payee on December 3d, 1930, and paid by the drawee on December 9th. The payee deducted a collection fee and mailed to the petitioner its cashier’s check for the balance. On December 11th the Superintendent of Banks, acting pursuant to section 57 of the Banking Law (Cons. Laws, ch. 2), took possession of The Bank of United States for the purpose of liquidation. The check issued by the bank was subsequently presented for payment and payment being refused was duly protested. The petitioner thereupon moved at Special Term for a summary order directing the Superintendent of Banks to pay over the proceeds of the draft in question, which order was granted and unanimously affirmed by the Appellate Division.

The serious question presented upon this appeal is whether the appellant holds the fund derived from the payment of the draft as bailee or debtor, and, as bearing upon that question, whether petitioner, by receiving and presenting for payment the cashier’s check accepted an unconditional credit and thus became a preferred creditor and ceased to have the rights of a bailor.

Primarily, the bank was petitioner’s agent and received the proceeds of the draft as bailee. If the identical fund, segregated and denominated as petitioner’s property, had passed into the hands of the receiver, there could be no doubt of the receiver’s duty to turn over such fund to petitioner. Under what conditions and by what process does the nature of the relationship change? In considering that question we must consider the intention of the parties, as evidenced by the contract, in this instance clear, unequivocal and designed to prevent any possible occurrence of a situation liable to the construction contended for by the appellant. The contract is that the proceeds of the collection shall not be commingled with the other funds of the bank, but delivered to petitioner.

The fact that previous drafts had been collected by the bank and remitted for in the same manner has very little weight as it does not appear that they were collected pursuant to the same form of contract here involved. This contract calls, not for remittance, but for delivery of the proceeds. The means of delivery was left to the bank and the circumstance that it attempted to deliver by the same method adopted previously did not bind the petitioner or fulfill its contract as delivery of the identical fund or its equivalent was not accomplished. The contemplated delivery was never made because of the intervention of the receivership. To say that by crediting the proceeds to petitioner’s account on the books of the bank and commingling the proceeds of the collection with the general funds of the bank changed the relation between the parties from that of bailor and bailee to that of creditor and debtor would be to give effect to a positive breach by the bank of its contract and to make binding upon the petitioner acts which it specifically contracted against but over which it had no control.

There is lack of uniformity in the authorities in regard to the relationship which arises between a drawer and a payee bank which has received the proceeds of a collection. Under ordinary circumstances, the view generally adopted is that after the collection has actually been made by the bank the relation of debtor and creditor arises. (Hecker-Jones-Jewell Milling Co. v. Cosmopolitan Trust Co., 242 Mass. 181; 24 A. L. R. 1148, and note.)

The question has been before the courts of this State in Arnot v. Bingham (55 Hun, 553); Frank v. Bingham (58 Hun, 580); People v. Merchants’ Bank (92 Hun, 159). In the first and last cases cited it was held that the owner of the security was entitled to recover of the receiver the proceeds to the extent that money actually came into the hands of the receiver which could be applied to the claim of the drawer or owner of the security, and in the second case cited, which arose out of the same receivership as the first case cited, a contrary rule was stated.

In Matter of Bank of Cuba (198 App. Div. 733) it was decided that the money remained the property of the owner of the draft although merged with the funds of the bank, and in People v. Bank of Dansville (39 Hun, 187) the same rule was followed.

In this case it is alleged in the affidavit in support of the motion that the appellant took possession of all property and funds in the possession of The Bank of United States, “ including the proceeds of said collection hereinbefore referred to.” The answering affidavit on behalf of the appellant does not deny possession of the proceeds but specifically admits that the collection was made.

The mere mingling of funds which are to be devoted to a specific purpose with other funds of the depositary does not destroy the right of the true owners to claim such specific funds.” (Brown v. Spohr, 180 N. Y. 201, 212; Van Alen v. American Nat. Bank, 52 N. Y. 1; Central Nat. Bank v. Connecticut Ins. Co., 104 U. S. 54.)

The bank did not acquire title to the fund in question when the draft was paid by the drawee, and could not acquire title thereto by commingling such fund with its general funds. The Superintendent of Banks, when he took over the bank for the purpose of liquidation, acquired no greater interest in the fund than the bank possessed.

It is urged that the order should be reversed on the merits because of an outstanding negotiable instrument. That objection, if it had been raised at Special Term, could have been obviated by a direction in the order that payment should only be made upon delivery of the cashier’s check and being raised for the first time upon appeal to this court is not of sufficient importance to require a modification of the order.

Petitioner did not accept an unconditional credit and thereby become a general creditor. In receiving and presenting the cashier’s check, petitioner did nothing more than to co-operate with the bank in the attempted delivery of the proceeds of the collection. It did nothing to cause the bank to change its position and did not estop itself from insisting upon compliance with the terms of its contract. The bank had entered the credit before receipt of the cashier’s check by petitioner, and presumably had at the same time commingled the proceeds of the collection with its general funds, without the consent of petitioner and contrary to the terms of its contract.

It does not appear that petitioner knew either that a credit had been made in its favor or that the funds had not been kept separate. It was entitled to rely upon compliance by the bank with the terms of the contract.

Petitioner is not remitted to the rights of a preferred creditor within the meaning and intent of section 350-1 of the Negotiable Instruments Law (Cons. Laws, ch. 38). The pertinent portion of that section provides: Where an agent collecting bank other than the drawee or payor shall fail or be closed for business as above, after having received in any form the proceeds of an item or items entrusted to it for collection, but without such item or items having been paid or remitted for by it either in money or by an unconditional credit given on its books or on the books of any other bank which has been requested or accepted so as to constitute such failed collecting or other bank debtor therefor, the assets of such agent collecting bank which has failed or been closed for business as above shall be impressed with a trust in favor of the owner or owners of such item or items for the amount of such proceeds and such owner or owners shall be entitled to a preferred claim upon such assets, irrespective of whether the fund representing such item or items can be traced and identified as part of such assets or has been intermingled with or converted into other assets of such failed bank.”

As the bank was a bailee and not a debtor as to the fund in question, there can be no doubt as to petitioner’s right, under the section quoted, to claim a preference. To hold that the section excludes petitioner from claiming the identical fund as bailor would in the event the assets should prove insufficient to meet the claims of preferred creditors amount to a confiscation of petitioner’s property without due process of law. Such a construction would make the statute unconstitutional and is unnecessary because the statute contains no words evidencing an intent that it should exclude existing remedies.

Sections 71 to 76, inclusive, of the Banking Law prescribe the procedure relative to the filing of claims and specify the allegations and proof necessary to sustain an action or proceeding on a claim against the assets of the bank. Here we deal, not with the assets of the bank, but with specific property title to which never vested in the bank. As to such property, the sections are inapplicable.

Section 67 of the Banking Law recognizes that there may come into the hands of a liquidator property not assets but as to which the bank stands as bailee and a method is prescribed for giving notice to the owners to remove such property.

No procedure is prescribed for reclamation of such property in the event of a refusal by the liquidator to deliver it upon demand. In such case the court has inherent power over the liquidator as over any other receiver, in the absence of controversy as to ownership or other legal or equitable defense, summarily to direct redelivery by the receiver. The liquidator, it is true, is in effect a statutory receiver, yet we recognize that even assets of the bank in his hands may for some purposes be regarded as “ in custodia legis.” Whatever his power, “ there still remains a field within which the court is supreme. (Isaacs v. Marcus, 258 N. Y. 257, 268, 269.)

We do not mean to say that in all cases a summary order would be proper. It might be that upon a particular application a question as to title would arise as between' bailor and another claimant; or the funds in the hands of the liquidator might appear insufficient to meet the claims of petitioner and others similarly situated, when the question would arise as to whether the diligent claimant shculd be rewarded or the fund held for a pro rata distribution among several contesting claimants. What determination should be made under varying circumstances would depend upon the facts presented in each case.

The order appealed from should be affirmed, with costs.

Pound, Ch. J., Crane, Lehman, O’Brien and Crouch, JJ., concur; Kellogg, J., not sitting.

Order affirmed.


author: Pound, Ch. J. Crane, J. (dissenting).

text:
    Gotham Music Service, Inc., et al., Respondents, v. Denton and Haskins Music Publishing Co., Inc., Appellant.
    (Argued March 29, 1932;
    decided April 26, 1932.)

      Abner Greenberg for appellant.
    The State courts have no jurisdiction over an action to protect exclusive rights in a copyrighted publication. (Underhill v. Schenck, 238 N. Y. 7; Palmer v. De Witt, 47 N. Y. 532; Jewelers’ Mercantile Agency v. Jewelers’ Weekly Pub. Co., 155 N. Y. 254; Harper v. Klaw, 232 Fed. Rep. 609.) Only the title of an original and copyrighted work can be protected. (Osgood v. Allen, 1 Holmes, 185; Underhill v. Scheneck, 238 N. Y. 7; Merriam v. Syndicate Pub. Co., 237 U. S. 622; Cheney Bros. v. Doris Silk Corp., 35 Fed. Rep. [2d] 279; Black v. Ehrich, 44 Fed. Rep. 793; Bamforth v. Douglas Post Card & Machine Co., 158 Fed. Rep. 355; Kipling v. Putnam, 120 Fed. Rep. 631; Kipling v. Fenno, 106 Fed. Rep. 692.) There is no question of unfair competition as the plaintiffs have no exclusive right to the production and sale of the work sued on. (White Studio v. Dreyfoos, 221 N. Y. 46; International Film Service v. Associated Producers, 273 Fed. Rep. 585; Underhill v. Schenck, 238 N. Y. 7; Glaser v. St. Elmo, 175 Fed. Rep. 276; Munro v. Tousey, 129 N. Y. 38; Crowell Pub. Co. v. Italian Printing Co., 28 Fed. Rep. [2d] 613; Wilcox v. Singer Machine Co., 14 Daly, 116; 118 N. Y. 677; Diamond Expansion Bolt Co. v. U. S. Expansion Bolt Co., 177 App. Div. 564.) Plaintiffs by permitting a general publication of the work prior to copyright protection lost all individual rights therein and the work became publici juris. (Wheaton v. Peters, 8 Pet. [U. S.] 591; Werckmeister v. American Lithograph Co., 134 Fed. Rep. 321.)

      Samuel Jesse Buzzell for respondents.
    Where, through the efforts and expenditures of the plaintiffs, a title has acquired a secondary meaning in the identification of the plaintiffs’ musical composition, and the same has become associated with the good will of the plaintiffs’ business, the courts will grant injunctive relief and compel the defendant to account. (Klaw v. General Film Co., 154 N. Y. Supp. 988; 171 App. Div. 945; Aronson v. Fleckenstein, 28 Fed. Rep. 75; Hall v. Broadway Bazaar, 194 N. Y. 435; White Studio v. Dreyfoos, 221 N. Y. 46; Fisher v. Star Pub. Co., 231 N. Y. 414; Ramer Reviews, Inc., v. Service Bulletin, Inc., 16 T. M. R. 295; Monroe v. Tousey, 129 N. Y. 38; Mark Realty Corp. v. Hearst, 180 App. Div. 549; Ralston Purino Co. v. Sunnywax Paper Co., 26 Fed. Rep. [2d] 941; German American Button Co. v. Heymsfeld, Inc., 170 App. Div. 416; Burrow v. Marceau, 124 App. Div. 665; Vulcan v. Meyers, 139 N. Y. 364; Chappel v. Sheard, 2 K. & J. Rep. 117; Chappell v. Davidson, 2 K. & J. Rep. 123; Art Metal Works v. Cunningham Products Corp., 137 Misc. Rep. 429.) The title “ St. James’ Infirmary,” the name of plaintiffs’ musical composition, is an arbitrary and fanciful one, and not descriptive, and is susceptible of exclusive appropriation. (Frohman v. Morris, Inc., 123 N. Y. Supp. 1090.)
   Pound, Ch. J.

Some years ago, as far back as 1925, a song called Gambler’s Blues ” was sung and played throughout the country. It was a melancholy ballad purporting to have been sung by a gambler in a barroom after he had seen his sweetheart lying dead in the infirmary. It was not a copyrighted publication. Both song and melody became publici juris or of public right. Any one was free to produce them.

In March, 1929, the plaintiffs revived the old song under the title St. James’ Infirmary.” The infirmary heretofore unidentified was given a name. They put forward an advertising and publicity campaign to sell the old composition under the new name. They made the song popular. In or about March, 1930, the defendant, a rival music publishing house, put on the market the same song and melody under the title “ St. James’ Infirmary or Gambler’s Blues.” Its nominal purpose was to link both titles under one name so that a customer who called for either might be supplied. The defendant has been restrained from using the title “ St. James’ Infirmary” or any simulation or imitation thereof as the title of a (i. e., any) musical composition and judgment for damages has been entered against it.

Infringement of copyright is not involved. Respondents’ brief so states and the complaint contains no claim that copyright property has been misappropriated. If such were the grievance, the remedy would be in the Federal courts. (Underhill v. Schenck, 238 N. Y. 7.) Plaintiffs have no property in the name St. James’ Infirmary.” The name describes the song and, generally speaking, any one may use it to describe the same song. (Black v. Ehrich, 44 Fed. Rep. 793; Atlas Mfg. Co. v. Street & Smith, 204 Fed. Rep. 398, 404; Merriam Co. v. Syndicate Pub. Co., 237 U. S. 618.) The plaintiffs must establish that defendant’s acts amount to an unlawful abuse of competition by creating a reasonable likelihood of deception; that persons who desire the song and melody because plaintiffs have made them popular may be misled by defendant into thinking that they are purchasing the plaintiffs’ version of the song. This they have wholly failed to accomplish.

Defendant is not deceiving the public. The song is popular, not because plaintiffs publish it, but because they have advertised it and thus made it known to the public. Their names are not identified with the new name. The demand is for the song and not for the publisher.

In Fisher v. Star Co. (231 N. Y. 414, 433) the equitable power of the court was invoked to restrain the use by others than Bud Fisher, the plaintiff, of the well-known “ Mutt and Jeff ” newspaper cartoons or humorous strips to which he had by his skill given a financial value although he had not at first protected them by copyright. The court held that no person should be permitted to pass off as his own the thoughts and works of another.” (White Studio, Inc., v. Dreyfoos, 221 N. Y. 46.) Fisher was so identified in the mind of the public as the creator of “ Mutt and Jeff ” that it would be unfair to him to permit others to put out their drawings of Mutt and Jeff ” in competition with his own drawings.

The situation here is quite different. A name which is descriptive of one song may not be attached by a competitor to another when the duplication will mislead the public into the belief that the two songs are alike, but the name, so far as it is a symbol descriptive of the old song, is not protected unless it is identified with the source or origin of production. (Underhill v. Schenck, supra.) Here it is sought to protect the title because plaintiffs invented it but no question of imitation or deception or mistake arises. No unlawful competition in trade is shown, nor breach? of contract or trust. In the absence of the use of the name in such a way as to create a likelihood that people wall be misled, the name is publici juris and may be used by all.

The judgment of the Appellate Division should be reversed and the complaint dismissed, with costs in all courts.

Crane, J. (dissenting).

I view this case somewhat differently from the chief judge. True, the song, called Gambler’s Blues ” became publici juris, and any one was free to use it, print copies of it, and sell it on the market. No one had or could have a restricted right to sell the song. Also, the name, the original name, Gambler’s Blues,” followed the song, and any one could use this name in reproducing it. The plaintiffs, however, did more than this to make the song valuable. No one wanted it; it had passed out of use, had ceased to be popular; there was no demand for it. The plaintiffs made changes in tempo of the music, added a few verses and gave it a new name, St. James Infirmary,” and then started an advertising campaign, spending thousands of dollars in making the name, “ St. James Infirmary,” known to the public. Under this name the plaintiffs advertised extensively throughout the country their rearrangement of this old song.

Now comes the defendant and seeks to reap the harvest of this advertising. It publishes the old song and gives it the name which the plaintiffs have made popular, namely, “ St. James Infirmary.” If they had called it by. its original name, Gambler’s Blues,” no one could complain and no rights would have been violated. This would not do; the defendant must reap the profits which legitimately should go to the plaintiffs as the result of their expenditures for advertising, and so the defendant takes “ St. James Infirmary ” for no other reason than to gain the reward of others’ work.

Within the principle of all the cases, this is unfair competition. I know of no reason why a name or a trade may not be built up for a song or bit of literature as well as for any commodity. When one buys Uneeda biscuits or Cremo cigars or talcum powder, no one has in mind the manufacturer; this legal phraseology is a mere fiction. The producer may change its corporate existence innumerable times and the public does not know or care. What they do know is that an ordinary bit of merchandise has, through advertising, become very popular, and they want the merchandise with that name. It is the name that counts and has been made a valuable asset. So with this old song which nobody wanted; a revised edition was given a new name; the name, through advertising, became popular, created the demand, and the sale of the song under this new name brought in much profit to the plaintiffs, until the defendant diverted it by making unfair use of the name. The whole secret of advertising is to make a name popular; a slogan sells go,ods when many times their intrinsic value would create no demand. I find support for these views in Fisher v. Star Co. (231 N. Y. 414, 427, 428), where we said regarding the names “Mutt” and “Jeff”: “The controlling question in all cases where- the equitable power of the courts is invoked is, whether the acts complained of are fair or unfair. * * * Any civil right not unlawful in itself nor against public policy, that has acquired a pecuniary value, becomes a property right that is entitled to protection as such.”

“ Unfair trade,” said Mr. Justice Holmes, in International News Service v. Associated Press (248 U. S. 215, 246), “ means that the words are repeated by a competitor in business in such a way as to convey a misrepresentation that materially injures the person who first used them, by appropriating credit of some kind which the first user has earned.”

“ If a copyright does not exist, or, once existing, has been lost, the name is lost too, in so far as it is merely a symbol descriptive of the copyrighted thing.” (Underhill v. Schenck, 238 N. Y. 7, 20.) Thus, the old name, “ Gambler’s Blues,” is as free for use in connection with the old song as the song itself. This does not mean, however, that an established trade may not be built up for an arrangement under a new name which will prevent unfair competition by use of the same name and arrangement, even though no copyrights exist.

“ The principles which interdict unfair competition in trade will protect a publisher who has imparted to his books peculiar characteristics, which enable the public to distinguish them from books published by others and containing the same literary matter, against the copying of the characteristics, though the copyright on the literary matter has expired.” (Merriam Co. v. Straus, 136 Fed. Rep. 477; Merriam Co. v. Saalfield Pub. Co., 238 Fed. Rep. 1, cited in Fisher v. Star Co., 231 N. Y. 414, 431.)

Here the copyright on the song had expired, but this did not prevent the plaintiffs from having a right to their rearrangement and the new name which they had given it, especially when through much expenditure of money they had built up a demand for the song under that name.

The full and complete answer to the plea of the defendant is to go out and sell the original song under its old name and see how far it gets with it. When the defendant refuses to do this, it is evident that it wants the benefits coming from the plaintiffs’ new arrangement and new name, which they have given the song. This is not fair.

The judgment should be affirmed.

Lehman, O’Brien and Crouch, JJ., concur with Pound, Ch. J.; Crane, J., dissents in opinion in which Hubbs, J., concurs; Kellogg, J., not sitting.

Judgment reversed, etc. (See 259 N. Y. 629.)


author: Crane, J.

text:
    In the Matter of Louis A. Guarino et al., Appellants, against Robert G. Anderson et al., as Supervisors of the County of Nassau, Respondents.

      (Submitted March 25, 1932;
    decided April 26, 1932.)

      Frederic White Shepard for appellants.
    Section 240, subdivision 18, of the County Law is constitutional. (Farrington v. State, 248 N. Y. 112; People ex rel. Gagan v. Purdy, 173 App. Div. 350.) The petition states a valid claim under the first part of subdivision 18 of section 240 which provides for expenses lawfully incurred by a county officer in defending an action brought against such officer, for an official act done pursuant to law. (Matter of Uterhart, N. Y. Law Journal, Jan. 29, 1927, p. 1939; Levy v. Wiedersum, N. Y. Law Journal, June 1, 1927, p. 1067; Thorne v. Wiedersum, N. Y. Law Journal, Feb. 3, 1930, p. 2247; Matter of Ryan v. City of New York, 228 N. Y. 16.) Petitioners would be entitled to a peremptory mandamus even though their claims should be held to fall in the second class and the making of such claims a county charge should be held to be within the discretion of the respondents. (People ex rel. Dady v. Prendergast, 203 N. Y. 1; People ex rel. Lewis v. Fowler, 229 N. Y. 84.)

      H. Stewart Mc Knight, County Attorney (Fred Ingraham of counsel), for respondents.
    Article VIII, section 10, of the New York Constitution prohibits the Board of Supervisors from expending county funds except for county purposes. (Kilroe v. Craig, 208 App. Div. 93; Matter of Chapman v. City of New York, 168 N. Y. 80; Sun Publishing Assn. v. Mayor, 152 N. Y. 257.)
   Crane, J.

The County Law (Cons. Laws, ch. 11), section 240, enumerating county charges, provides in subdivision 18 as follows: “ All damages recovered against, or costs and expenses lawfully incurred by a county officer in prosecuting or defending an action or proceeding brought by or against the county or such officer, for an official act done, when such act was done, or- such action or proceeding was prosecuted or defended pursuant to law, or by authority of the board of supervisors; and any such damages so recovered, or costs and expenses incurred by any such officers, for any act done in good faith in his official capacity, without any such authority, may be made a county charge by a majority vote of all the members elected thereto.”

On the 6th day of November, 1930, August Thiede and Silas Foster, members of the police force of Nassau county, were indicted for the crime of omission of duty in that they failed to report a certain alleged public nuisance which the indictment stated had been maintained in said county.

The law firm of Guarino & Mulry were retained by these officers to defend them, and the indictments were subsequently dismissed. The lawyers presented a claim of $3,200 for counsel fees to the Board of Supervisors of Nassau county, and demanded an audit thereof, pursuant to the provisions of the County Law, above quoted. The Board having failed to act, an order of mandamus was Sought of the Special Term of the Supreme Court, the denial of which has been affirmed by the Appellate Division on the ground that the County Law in this particular is unconstitutional, citing Matter of Chapman v. City of New York (168 N. Y. 80).

In so far as the Legislature attempts to give away or authorize the appropriation of public moneys for expenses theretofore incurred by a public officer in defending himself against false accusations, the act is unconstitutional. This does not, however, follow when the act of the Legislature is not retroactive, but prospective — speaks for the future — so that an officer holds and continues his position not only for the compensation provided by law, but also with the assurance of the legislative act that he will be compensated for the expense of defending himself against accusations growing out of his official duties. (Gavin v. Board of Supervisors, 221 N. Y. 222; Matter of Kane v. McClellan, 110 App. Div. 44.)

While we agree with the result reached by the lower courts in denying the mandamus in this case, we do so upon the ground that the claim is not one which the Board of Supervisors have any authority to audit. Neither the courts nor the Board of Supervisors have any power to audit or allow a claim against a county, which is not authorized by law. (Matter of Tinsley, 90 N. Y. 231; People ex rel. Merritt v. Lawrence, 6 Hill, 244.) The section of the County Law (240) above quoted makes no provision for such claims as were presented by the petitioning lawyers for the police officers, and the Board was, therefore, under no duty to pass upon or audit them. When claims are proper charges against a county, a Board of Supervisors may be compelled by mandamus to exercise its judgment in allowing the amount in whole or in part, or else in rejecting it altogether. (New York Catholic Protectory v. Rockland County, 212 N. Y. 311; Smith v. Hedges, 223 N. Y. 176; Chase v. Saratoga County, 33 Barb. 603; People ex rel. Benedict v. Board of Supervisors of Oneida County, 24 Hun. 413.) The Board, however, need pass upon no claims which under no circumstances can be made county charges. The authority of the Board is derived from this section of the County Law; as applicable to officials who have been prosecuted. It reads: “All * * * costs and expenses lawfully incurred by a county officer in * * * defending an action brought * * * against * * * [him] for an official act done * * * pursuant to law, or by-authority of the board of supervisors.” August Thiede and Silas Foster incurred no expense in defending an action brought against them for an official act done pursuant to law or pursuant to the authority of the Board of Supervisors.

The next phrase of the section permits the county to reimburse an officer for the cost and expenses incurred for any act done in good faith in his official capacity without any such authority. That is, if the officer is prosecuted for an act which he performed, pursuant to law or the authority of the Board of Supervisors, or if he acted in good faith, but without such warrant of law or authority from the Board of Supervisors, believing, however, that he acted lawfully, he may get his expenses if he be prosecuted for such an act. Every prosecution of a police officer or county official is not covered by this section. The expenses incurred in defending a prosecution or action relate to those which are brought against him for the duties which he performed as an official according to law, or the authority of the Board of Supervisors, or in the honest belief that his duties which he performed were in accordance with law or authority. The statute does not cover expenses incurred in defending indictments for dereliction of duty, for failure to act or doing things in bad faith. In so far as Matter of Uterhart (144 Misc. Rep. 188); Levy v. Wiedersum (144 Misc. Rep. 83), and Thorne v. Wiedersum (N. Y. Law Journal; Feb. 3, 1930) are in conflict with what is here written, they are not to be followed.

The order should be affirmed/ with costs.

Pound, Ch. J., Lehman, Hubbs and Crouch, JJ., concur; Kellogg and O’Brien, JJ., not sitting.

Order affirmed.


author: Pound, Ch. J.

text:
    Margaret L. Donahue, as Committee of the Property of Peter Donahue, an Incompetent Person, Appellant, v. New York Life Insurance Company, Respondent.

      (Argued March 22, 1932;
    decided April 26, 1932.)

      Monroe J. Cahn for appellant.
    The judgment in the prior action is not res judicata. (Schoenholz v. N. Y. Life Ins. Co., 234 N. Y. 24; Griffen v. Keese, 187 N. Y. 454; Stokes v. Foote, 172 N. Y. 327; Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304; Springer v. Bien, 128 N. Y. 99; Silberstein v. Silberstein, 218 N. Y. 525; People ex rel. McCanliss v. McCanliss, 255 N. Y. 456; Cauhape v. Parke, Davis & Co., 121 N. Y. 152; Wille v. Maier, 256 N. Y. 465; Mehlhop v. Central Union Trust Co., 235 N. Y. 102; Jasper v. Rozinski, 228 N. Y. 349; Macy v. Ladd, 227 N. Y. 670; Hilliker v. Rueger, 219 N. Y. 334; Tax Lien Co. v. Schultze, 213 N. Y. 9; Clark v. Scovill, 198 N. Y. 279; Rudd v. Cornell, 171 N. Y. 114; Stokes v. Stokes, 155 N. Y. 581; House v. Lockwood, 137 N. Y. 259; Townsley v. Niagara Life Ins. Co., 218 N. Y. 228.)

      Raeburn W. Jenkins and Louis H. Cooke for respondent.
    The judgment in the prior action was on the merits and established title to the policy of insurance and is conclusive against the plaintiff in this action. (House v. Lockwood, 137 N. Y. 259; Springer v. Bien, 128 N. Y. 99; Matter of Wainman, 121 Misc. Rep. 318; Matter of Grant, 122 Misc. Rep. 491; Matter of LaBourgeois, 80 So. Rep. 673; Matter of Cooper, 123 Atl. Rep. 45; Hicks v. N. W. Mutual Life Ins. Co., 147 N. W. Rep. 883.) There may be a valid transfer of title as between the parties by a delivery of the policy and such delivery carries with it all of the rights of the insured. (Rothstone v. Norton, 231 App. Div. 59; 256 N. Y. 601; McNevins v. Prudential Ins. Co., 57 Misc. Rep. 608; Steinback v. Diepenbrock, 158 N. Y. 24.)
   Pound, Ch. J.

Peter Donahue took out a policy on his life in the defendant insurance company in May, 1919, for $13,000, payable to his estate. In May, 1926, he made Helen R. Maloney the beneficiary thereof and delivered the policy to her.

In November, 1928, Peter Donahue was adjudged an incompetent and the plaintiff was appointed the committee of his property.

The policy, in substance, provides that the defendant, in consideration of the premium paid., will pay to Peter Donahue or his duly designated beneficiary on his death the sum of $13,000 and will pay said Peter Donahue, in case of disability before he becomes sixty years of age, annually, a sum equal to one-tenth of the face of the policy during his lifetime, and also certain dividends, but such payments shall not reduce the sum payable on the policy.

The first annual payment under the disability provision became due May 11, 1930, and this action was brought by the plaintiff to recover the same, together with a dividend which accrued on the same date. The court below has held that a judgment in a prior action brought by plaintiff against the defendant and Helen R. Maloney is res judicata and has dismissed the complaint.

The complaint in the former action demanded judgment that the defendant Maloney had no interest in the policy or in the proceeds thereof; that plaintiff is entitled to revoke the designation of the defendant Maloney as beneficiary and that she be required to deliver the policy to plaintiff. The conclusions of law were that the committee could not change the beneficiary and that the delivery of the policy to defendant Maloney was a gift. No decision of the question of the assignment or transfer of disability payments under the policy was essential to the decision of the issue thus presented nor was such question decided either by express declaration or necessary implication. The question remains, what rights passed with the gift of the policy?

The doctrine of res judicata does not require that a party litigant shall ever be estopped from controverting any matter of law or fact which has not been, either by express declaration or necessary implication, determined by the judicial tribunal whose decision is set up as the res judicata. (Spencer Bower on Res Judicata, p. 102.)

On the trial of the first action the court made the following findings of fact:

“ Sixth. That on or about the 10th day of May, 1926, and at a time when the name of the beneficiary in said policy had been changed to the defendant Helen R. Maloney, the said Peter J. Donahue, the insured, gave and delivered said policy of life insurance to said defendant, and by said delivery of said insurance policy Peter J. Donahue, the insured, assigned, transferred and set over to the said defendant, Helen R. Maloney, all his right, title and interest in and to the said policy of life insurance to Helen R. Maloney for faithful services rendered by her to him for a number of years prior to the said 10th day of May, 1926.”
“ Eleventh. That the change in the name of the beneficiary in said fife insurance policy to the defendant Helen R. Maloney, and the subsequent delivery to her of said policy by the said Peter J. Donahue, was done for the purpose of effectuating the giving, assigning and transferring of all his right, title and interest in and to the said policy of fife insurance and all the benefits thereunder to the defendant Helen R. Maloney.
Twelfth. That at all times since the delivery, assignment and transfer of said policy of fife insurance by the said Peter J. Donahue as aforesaid, the defendant Helen R. Maloney has been and still is in the sole and exclusive possession of same, and at all of said times has been and still is the true and lawful owner' and holder of said policy of life insurance and as such she was and still is entitled to all the rights, privileges, benefits and emoluments arising and flowing from said policy of insurance.” and dismissed the complaint.

While these findings on their face may seem broad enough to determine the issue here presented, they were not essential to the determination of the prior action. At the time the prior action was decided no disability payments had become due and no express finding was made that the transfer of the policy to Helen R. Maloney carried with it the right to collect disability payments if any thereafter accrued. It was, however, decided in the broadest terms that Helen R. Maloney was “ entitled to all the rights, privileges, benefits and emoluments arising and flowing from said policy of insurance,” and it is on this finding, it has been held below, that plaintiff may not recover the disability payments.

A judgment is conclusive upon the parties only in respect to the grounds covered by it and the facts necessary to uphold it, and although a decision, in express terms, professes to affirm a particular fact, yet, if that fact was immaterial to the issue and the controversy did not turn upon it, the decision will not conclude the parties in reference to such fact. It does not work an estoppel as to unessential facts even though such facts are put in issue and decided. (Springer v. Bien, 128 N. Y. 99, 102; House v. Lockwood, 137 N. Y. 259, 268; Rudd v. Cornell, 171 N. Y. 114, 128; Stokes v. Foote, 172 N. Y. 327; Silberstein v. Silberstein, 218 N. Y. 525; People ex rel. McCanliss v. McCanliss, 255 N. Y. 456.)

“ A judgment in one action is conclusive in a later one not only as to any matters actually litigated therein, but also as to any that might have been so litigated, when the two causes of action have such a measure of identity that a different judgment in the second would destroy or impair rights or interests established by the first. It is not conclusive, however, to the same extent when the two causes of action are different, not in form only, but in the rights and interests affected. The estoppel is limited in such circumstances to the point actually determined. * * * The decisive test is this, whether the substance of the rights or interests established in the first action will be destroyed or impaired by the prosecution of the second.” (Cardozo, Ch. J., in Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304, 306, 308.)

It is urged that the findings of ownership quoted above were material in the sense that the general decision might mean that plaintiff could not recover in the earlier action because defendant had become the owner of the policy and all rights arising thereunder and that “ all rights ” necessarily included the disability payments.

What the parties had in mind, however, was the right of the committee to change the beneficiary and the right of such beneficiary to possession of the policy. On the face of the policy the insured, not the beneficiary, is entitled to the disability payments. The policy also provides: The insured may, without the consent of the beneficiary, receive every benefit, exercise every right and enjoy every privilege conferred upon the insured by this policy.”

The question of the right to disability payments has not been litigated. Does such right pass to a donee of the policy or remain with the insured who has sought to protect himself should he become disabled? Is it purely personal in its character, intended for the insured’s own benefit or can it be made the subject of a gift?

The two causes of action are substantially different as to the rights and interests affected. The rights established in the first action, viz., that Helen R. Maloney is the owner of the policy, that the beneficiary cannot be changed by the committee and that the beneficiary is entitled to the possession of the policy, are not, in the circumstances, destroyed or impaired by the prosecution of the second action to recover disability payments payable to the insured. In such circumstances the defense of res judicata is limited to the point actually determined.

The right to the dividend rests on another footing. The gift of the policy to Miss Maloney carries the right to dividends apportioned to the policy.

The judgment of the Appellate Division should be reversed and that of the Special Term modified by deducting therefrom the sum of $70.46 and interest thereon from May 11, 1930, and as so modified affirmed, with costs in this court and in the Appellate Division. (See 259 N. Y. 628.)

Crane, Lehman, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not sitting.

Judgment accordingly.


text:
    The People of the State of New York ex rel. John C. Flinn, Appellant, v. Robert Barr, as Warden of the City Prison, Respondent. The People of the State of New York ex rel. Henry F. Lalley, Appellant, v. Robert Barr, as Warden of the City Prison, Respondent.

      (Argued March 28, 1932;
    decided April 26, 1932.)

      Nathan Burkan, Frederic R. Coudert, Jr., and Herman Finkelstein for appellants.
    Since the same alleged act, at the same time and place, allegedly caused the several deaths, the second grand jury was without jurisdiction in the absence of an order of resubmission as required by section 270 of the Code of Criminal Procedure. (People v. Dillon, 197 N. Y. 254; Wiley v. Solvay Process Co., 215 N. Y. 584; People v. Karr, 240 N. Y. 348; Matter of Heydons, 3 Co. Rep. 18; Woodford v. People, 62 N. Y. 117; People v. Harris, N. Y. Law Journal, March 22, 1912; Rex v. Jennings, Russ. & Ry. 388; State v. Cosgrove, 103 N. J. L. 412; State v. Damon, 2 Tyler [Vt.] 387; Clem v. State, 42 Ind. 420; Hurst v. State,
      129 So. Rep. 714; State v. Houchins, 102 W. Va. 169; Commonwealth v. Veley, 63 Penn. Super. Ct. 489; State v. Poulson, 141 Atl. Rep. 165; State v. Nelson, 29 Me. 329; Lowe v. State, 57 Ga. 171; State v. Hennessey, 23 Ohio St. 339; Sprague v. Aderholt, 45 Fed. Rep. [2d] 790.) Failure to secure an order of resubmission deprived the second grand jury of jurisdiction to investigate the charge and to render the indictments under which relators are held. (People v. Rosenthal, 197 N. Y. 394; People v. Bissert, 71 App. Div. 118; People v. Neidhart, 35 Misc. Rep. 191; People v. Both, 118 Misc. Rep. 414; People v. Dziegel, 140 Misc. Rep. 145.)

      Thomas C. T. Crain, District Attorney (Felix C. Benvenga of counsel), for respondent.
    Where the same act affects the person or property of more than one individual it was not the intention of the Legislature to prevent resubmission of the charge to another grand jury, so far as the act in question affected the person or property of other individuals. (People v. Warren, 109 N. Y. 615; People v. Rodgers, 184 App. Div. 462; 226 N. Y. 671; People v. Bevins, 74 Misc. Rep. 377; 149 App. Div. 935; People v. Warren, 1 Park. Cr. Rep. 338; People v. Van Keuren, 5 Park. Cr. Rep. 66; Woodford v. People, 62 N. Y. 117; State v. Corbitt, 117 S. C. 356; Commonwealth v. Browning, 146 Ky. 670; People v. Brannon, 233 Pac. Rep. 88; People v. Majors, 65 Cal. 138; Commonwealth v. Melissari, 298 Penn. St. 63; State v. Labbee, 234 Pac. Rep. 1049; Blitch v. Buchanan, 132 So. Rep. 474; Vaughan v. Commonwealth, 4 Va. 273.)
   Hubbs, J.

In April, 1930, a grand jury found two indictments for manslaughter in the second degree against relators-appellants. One charged the relators with causing the death of Catherine Porter and the other the death of Edna Burford.

Both lives were lost as a result of a fire at a studio in New York city where motion pictures were produced. Eight others lost their lives in the same fire, including Ruth Sparks and Norene Byrne. A special grand jury was convened to investigate a charge of manslaughter against relators for causing the death of Ruth Sparks and Norene Byrne. The special grand jury dismissed the charge.

Thereafter the indictments here in question were returned against relators by another grand jury. The charge was submitted to the second grand jury by the district attorney without obtaining an order of resubmission as required by section 270 of the Code of Criminal Procedure.

It is conceded that the deaths, resulting from the fire" and investigated by both grand juries, occurred under the same circumstances, at the same time and place, and as a result of the same alleged wrongful act of relators in failing to install a system of automatic sprinklers in the building where the fire occurred. Relators were arrested and thereafter sued out writs of habeas corpus. An order was made dismissing the writs and the order was affirmed by the Appellate Division. No question of practice is involved upon this appeal as the learned district attorney in his brief has assumed that the writs he.

The sole question for our determination is whether the second indictment is void because of the failure of the District Attorney to procure an order of the court directing a resubmission of the charge to the second grand jury. Section 270 of the Code of Criminal Procedure reads:

“ § 270. Effect of dismissal. The dismissal of a charge does not, however, prevent its being again submitted to a grand jury as often as the court may so direct. But without such direction it cannot be again submitted.”

At common law a prosecuting attorney might resubmit a charge to a grand jury after the same charge had been dismissed by a previous grand jury without obtaining an order of the court permitting such resubmission. (United States v. Martin, 50 Fed. Rep. 918.) Grave abuses arose out of such practice, and it was to correct such abuses that the statute was enacted requiring an order of the court before a charge could be resubmitted to another grand jury after it had been dismissed by one.

The object of the section was, as stated in a note to section 286 of the draft of the Code of Criminal Procedure: “To provide a convenient check upon the practice which now prevails, of repeated applications to the Grand Jury for an indictment, where it has been ’ already dismissed.” Since the statute was enacted to remedy an acknowledged defect in our criminal practice and to eradicate a practice which had resulted in wrongs, it must be interpreted fairly to carry out the policy which it was enacted to accomplish. (Chamberlain v. Western Transportation Co., 44 N. Y. 305.) The language of the section is clear and provides in unmistakable terms that a charge cannot be again submitted to a grand jury after it has been dismissed by one unless the court so directs.

An indictment in violation of the provisions of the section is absolutely void, as a second grand jury would be acting without jurisdiction.

It is urged by respondent, thus far successfully, that a direction of the court to resubmit this charge to a second grand jury was not required, as the alleged negligent failure of the relators to install a system of automatic sprinklers resulted in the death of more than one person. It is urged that the death of each of the ten persons constituted a distinct and separate crime and that the District Attorney might, in his discretion, submit a charge of manslaughter against relators to ten different grand juries, naming in each charge a different one of the ten persons whose lives were lost, and if an indictment should be found on each charge try relators on each of the ten charges, all the result of the single negligent act.

The mere statement of the proposition shocks one’s sense of justice and fair play.

From time immemorial, it has been a fundamental principle of Anglo-Saxon law that no person is to be placed in jeopardy more than once for the same offense. The principle was deemed so basic that it was embodied in our Federal Constitution and in those of most of the States. The spirit embodied in that principle must have been one of the controlling influences which led to the enactment of section 270 of the Code of Criminal Procedure. If repeated trials for the same offense, with the attending expense, trouble and delay, is contrary to the spirit of our criminal law, so also is repeated submissions of the same charge to different grand juries except in unusual cases when for cause shown the court in its discretion may direct a resubmission.

In our judgment, the beneficent purpose of the statute should not be nullified by a narrow technical construction which would, while apparently following the letter of the law, destroy its spirit. We believe that to permit ten separate indictments before ten different grand juries without the direction of the court and ten separate trials on the charge of manslaughter, all growing out of the failure of the relators to install an automatic sprinkler system in the building in question, would be contrary to the statute. True it is that ten indictments are not involved in this case; still the principle here asserted is the same. There is no pretense that relators had any intent in fact to commit the crime of manslaughter. The alleged crime was accidental and involuntary, not the result of an affirmative intentional act, but the result of negligent failure to act.

While there is great dearth of authority upon the exact question presented, we believe that Chief Judge Church in an exhaustive and painstaking opinion in the case of Woodford v. People (62 N. Y. 117, 127), has pointed the way to the decision which we should make, upon the facts involved in this case. It is not necessary, however, to express an opinion in regard to all of the statements contained in that opinion. Sufficient it is to hold that the principle there announced is applicable to the facts in this case.

In that case the indictment in one count charged that the defendant and another burned thirty-five dwelling houses by the single act of setting fire to one building. The defendant moved to quash the indictment for duplicity on the ground that the burning of each house was a separate crime. The contention was overruled. The court said: They are charged to have been burned by a single act of firing and burning. A conviction upon separate indictments * * * may have been good for any one, and a conviction or acquittal upon such an indictment would be a bar to an indictment for burning any other house burned by the same act. These consequences must follow from the position that there was but one crime committed in respect to all the dwelling-houses, and that the respective counts charged but one crime.”

That decision was followed in People v. Harris & Blanck (N. Y. Law Journal, p. 2857, March 22, 1912). That case. grew out of the Triangle Shirt Factory fire, in which a hundred lives were lost. After the defendants had been tried and acquitted upon a charge of having caused the death of one, they were indicted and placed on trial on a charge of manslaughter for having caused the death of another. It was charged that the bolting of a door resulted in the deaths. The trial court held: In substance and effect, the offense now charged against these defendants is identical in law and in fact with the offense for which they have already been tried.”

In State v. Cosgrove (103 N. J. L. 412) the defendant was convicted of an assault and battery upon Lillian Dowling. He had previously been acquitted on a charge of manslaughter for causing the death of Mary Mullaney. While the two girls were crossing the street hand in hand they were knocked down by an automobile operated by defendant, and as a result of defendant’s act, Mary Mullaney sustained injuries which caused her death and Lillian Dowling also received injuries. The court decided that as the assault and battery upon the person of Lillian Dowling was the result of the same act which was the basis of the indictment for causing the death of Mary Mullaney and defendant had been acquitted upon the charge of causing her death, he could not be convicted of assault upon Lillian Dowling. The principle involved in that decision is the same as the principle involved in the case at bar.

The case of State v. Evans (33 W. Va. 417) held a plea of former acquittal demurrable upon the ground that the crimes charged were the result of separate acts, but in the course of the opinion it was said: “A case can be conceived where such a plea might be held good. For example, the engineer of a railway train might be charged with negligently and feloniously causing the death of one passenger in a wreck, and being tried and found by the jury entirely blameless for the accident, such acquittal might, perhaps, constitute a perfect defense to a subsequent indictment for killing another passenger who was on the same train.”

We believe that the principle involved in the supposed case is applicable to the case at bar. Various rules have been adopted by the courts of different jurisdictions for the application of the law governing the plea of former jeopardy. The cases on that subject are in great confusion. (12 Cornell Law Quarterly, 212.) They are exhaustively reviewed in a note to the case of State v. Corbitt (117 S. C. 356; 20 A. L. R. 328). We are not required to discuss those cases, as we feel that no matter what the proper rule may be in cases involving the law applicable to the plea of former jeopardy, we should decide under the facts in this case that section 270 of the Code of Criminal Procedure applies, and that the indictment returned by the second grand jury against relators is void.

In each case the order of the Appellate Division should be reversed, the writs of habeas corpus sustained and the relator discharged.

Pound, Ch. J., Crane, Lehman, O’Brien and Crouch, JJ., concur; Kellogg, J., not sitting.

Orders reversed, etc.


author: Crouch, J.

text:
    Mary E. Callahan, as Administratrix of the Estate of Hubert J. Callahan, Deceased, Appellant, v. Terminal Cab Corporation, Defendant, and Albert A. Pierson, Respondent.
    (Argued March 22, 1932;
    decided April 26, 1932.)

      Dominic B. Griffin for appellant.
    The Appellate Division erred in holding that the traffic regulation had no application to the situation. (People v. Harden, 205 App. Div. 717; Boronkay v. Robinson & Carpenter, 247 N. Y. 365; Union Pacific R. R. Co. v. McDonald, 152 U. S. 434; Hayes v. Michigan Central R. R. Co., Ill TI. S. 410; Kelly v. N. Y. State Rys., 207 N. Y. 342; Fluker v. Ziegle Brewing Co., 241 N. Y. 40; State v. Bussian, 111 Minn. 488; McGrath v. N. Y. C. & H. R. R. R. Co., 63 N. Y. 522; Marino v. Lehmaier, 173 N. Y. 530; Grulich v. Paine, 231 N. Y. 311; Corbett v. Scott, 243 N. Y. 66; Martin v. Herzog, 228 N. Y. 164; Viscardo v. Galloway, 227 App. Div. 672; Briggs v. N. Y. C. & H. R. R. R. Co., 72 N. Y. 26.)

      Theodore H. Lord, Daniel R. Harvey and James B. Henney for respondent.
    The trial court erred in charging the jury that the respondent’s negligence might be based on the traffic regulation providing that vehicles should keep as near as practicable to the right-hand curb. (Grulich v. Paine, 231 N. Y. 311; People v. Harden, 205 App. Div. 717; Brown v. Thyne, 242 N. Y. 126; Boronkay v. Robinson & Carpenter, 247 N. Y. 365; Cohen v. Goodman Sons, Inc., 189 App. Div. 209.)
   Crouch, J.

The main drive of Ocean parkway, running south from Brooklyn to Coney Island, is sixty feet wide with a white dividing line in the center. A taxicab, with plaintiff’s intestate as a passenger, was driving south. The defendant Peirson was driving north. Both cars were near the white line. To avoid running into a car ahead which suddenly stopped, the taxicab pulled to the left across the white hue and collided with the Peirson car. Plaintiff sued and had judgment against both the taxicab company and Peirson.

A traffic regulation of the Police Department of New York city, in force at the time of the accident, provided as follows: 11-a. A moving vehicle shall keep as near as practicable to the right hand curb so that faster moving traffic may pass on the left.”

At the request of plaintiff the trial court read that regulation and told the jury in substance that its violation by either of the drivers would be evidence of negligence which could be taken into consideration with all the other evidence as bearing on the issue of negligence, “ provided you also find that there was a causal connection between the violation of the regulation and Callahan’s injury.”

Under an exception to that charge the judgment against Peirson was reversed. On the authority of Cohen v. Goodman & Sons, Inc. (189 App. Div. 209) that regulation was hejd as matter of law to have no application to the situation. Since the decision in the cited case went solely to the issue of causation, we may perhaps assume that the decision here related to that issue, and that no fault was found with the charge so far as it dealt with the issue of negligence. In any event, we think there was no error in the charge as made with respect to either issue. While the stated purpose of the regulation is to control traffic on the right-hand side of the road, its fundamental purpose is safety and security to everybody lawfully on the highway. Under it the duty to keep to the right was owing not alone to faster moving traffic on the same side, but also to any traffic where, under the circumstances of a particular case, danger might reasonably be anticipated from a violation. The primary purpose of a safety regulation does not necessarily limit its scope, when the issue is one of- negligence. (Kelley v. New York State Railways, 207 N. Y. 342; Hayes v. Michigan Central R. R. Co., 111 U. S. 228; Union Pacific Ry. Co. v. McDonald, 152 U. S. 262.) The circumstances disclosed by the evidence in this cáse warranted both the charge and the finding on the issue of negligence.

The issue of causation under the charge involved merely the question of whether the defendant Peirson’s violation of the regulation was a factor in the result. Under the evidence, that question was for the jury. In Cohen v. Goodman & Sons, Inc. (supra) the same question under a similar regulation arose. It was entirely clear upon the facts there that the antecedent violation of the ordinance had nothing to do with the accident. Plaintiff attempted to cross a street in front of an oncoming truck in plain view. Under such circumstances whether the truck was near the curb where the ordinance required it to be, or was in the middle of the street, was immaterial.

The order of the Appellate Division should be reversed and the judgment of the Trial Term affirmed, with costs in this court and in the Appellate Division.

Pound, Ch. J., Crane, O’Brien and Hubbs, JJ., concur; Lehman, J., dissents; Kellogg, J., not sitting.

Ordered accordingly.


text:
    The People of the State of New York ex rel. Samuel Stolofsky, Respondent, v. Superintendent of State Institution for Male Defective Delinquents at Napanoch, Appellant.

      (Argued March 28, 1932;
    decided April 26, 1932.)

      John J. Bennett, Jr., Attorney-General (Henry Epstein and Leon M. Layden of counsel), for appellant.
    A male defective delinquent over sixteen years of age may properly be committed to Napanoch when charged with or convicted of vagrancy. (Correction Law, § 438; Code Cr. Pro. § 887.)

      Charles F. Cummings for respondent.
    The court had jurisdiction to discharge the relator from Napanoch upon a charge of vagrancy. (People ex rel. Allan v. Hagen, 170 N. Y. 52; People v. Harding, 115 Misc. Rep. 298; People v. Putnam, 3 Park. Cr. Rep. 386; People v. O’ Neill, 117 App. Div. 826; People ex rel. Frank v. Keeper, 38 Misc. Rep. 240.)
   Crouch, J.

The return to the writ of habeas corpus herein pleads a commitment by the county judge of Onondaga county as authority for the detention of the relator. The commitment, dated November 15, 1925, shows that the relator, “ arraigned, indicted for or convicted of the crime of Vagrancy,” was twenty-five years of age and had been certified as a mentally defective person by two duly qualified examiners of mental defect. The certificate states that the relator had been arrested and convicted three times for annoying little girls;.that he was, among other things, easily angered, excitable, impulsive, depressed, seclusive, secretive, a liar, sexually promiscuous, manually dextrous, of a mental age of eight or nine years, and, in the opinion of the examiners, liable to injure others.

At the date of the commitment the reformatory at Napanoch had been converted, pursuant to the provisions of section 22-b of the Mental Deficiency Law (Cons. Laws, ch. 71, amd. by Laws of 1921, ch. 483; now Correction Law [Cons. Laws, ch. 43, §§ 430, 438]), into a State institution for the care, training and treatment of mental defectives over sixteen years of age charged with, arraigned for or convicted of criminal offenses.” Section 24-b of that law provided that a male mental defective over sixteen years of age charged with, arraigned for or convicted of a criminal offense may be committed to the state institution at Napanoch established pursuant to section twenty-two-b.”

The writ herein was sought, granted and has been Sustained upon the ground that the commitment was void for want of jurisdiction, in that being a vagrant is not a crime and hence not a criminal offense, as that term was used in the Mental Deficiency Law.

The Penal Law contains no provisions relating to vagrants as such. It may be conceded at once that the course of conduct, mode of life and specific acts or omissions which under section 887 of the Code of Criminal Procedure constitute a public offense and fix the actor’s status as a vagrant do not constitute a crime within the definition of section 2 of the Penal Law. That they do not constitute a criminal offense within the meaning of the former Mental Deficiency Law or of the present Correction Law does not follow. The background of all vagrancy statutes has been unemployment and pauperism with their incidental evils. The problem involved, simple at first, became more difficult with the increasing complexity of social organization. In addition to the impotent poor who were unable to support themselves, there came to be a class of able-bodied vagrants who supported themselves by preying on society and thus threatened the public peace and security. The former were dealt with by charity; the latter had to be and were dealt with by the criminal law. (Cf. 4 Holdsworth’s History of English Law, 388, 389.) The statutory history of the subject in this State discloses the same problem and the same method of dealing with it. The act of February 9, 1788 (1 R. L. 114, Van Ness & Woodworth, 1813 ed.), differs but little in substance from the present statute and was essentially criminal in character. In the Revised Statutes the subject (See 1 R. S. p. 632, title II, § 1) was included in chapter XX, which related to the internal police of this State and embraced as well poor support, care of lunatics, habitual drunkards, disorderly persons, immorality and disorderly practices, gambling and profane swearing. Again there was the contrast and the clear distinction between the unfortunate and the criminal poor. The present vagrant statute is included in part VI of the Code of Criminal Procedure, which relates to “ Special Proceedings of a Criminal Nature.” A proceeding thereunder is one of those referred to in section 962 of that Code as “ proceedings in criminal cases.” Under all these statutes the procedure, though summary, has all the characteristics of criminal procedure and a conviction eventuates in a penal judgment and execution. (People v. Phillips, 1 Park. Cr. Rep. 95.) “ Proceedings against vagrants * * * are as essentially punitive as any sentence imposed for crime.” (Cullen, J., in Steinert v. Sobey, 14 App. Div. 505, 508.)

We said in People ex rel. Burke v. Fox (205 N. Y. 490, 494) that vagrancy was not a crime but one of those minor offenses which are merely violations of police regulations. Elsewhere the offense has been described as petty, quasi-criminal, or a lesser offense not amounting to a misdemeanor. In all those cases the distinction made was between the particular offense and crime in the strict sense as defined in the Penal Law. In none of them is there anything to indicate that the offense was not of a criminal nature, and hence a criminal offense, as that term was used in section 24-b of the Mental Deficiency Law. The broad purpose of that law was to segregate the mentally deficient criminal offender and to subject him to treatment and instruction, as well for the protection of society as for his own sake. Had the Legislature intended the law to operate only upon those charged or convicted of strict crime, it is fair to suppose it would have said so. In section 24-b, where the technical terms misdemeanor ” and “ felony ” are aptly used, there again occurs the phrase criminal offense,” instead of the technical word “ crime.” To us it seems unreasonable to narrow by interpretation the wider term which was used and was demanded by the purpose of the law.

The order of the Appellate Division and that of the Special Term sustaining the writ should be reversed and the relator remanded to the custody of the superintendent of the State Institution at Napanoch.

Pound, Ch. J., Crane, Lehman, O’Brien and Hubbs, JJ., concur; Kellogg, J., not sitting.

Orders reversed, etc.


author: Per Curiam.

text:
    In the Matter of Martin’s Securities Co., Inc., Appellant, against James J. Walker et al., as Members of the Board of Commissioners of the Sinking Fund of the City of New York, et al., Respondents.
    (Argued March 29, 1932;
    decided April 26, 1932.)

      Herman Mendes and George Lessall for appellant.
    Mandamus is the proper remedy. (Matter of Oystermen’s

      Dock Co. v. Downing, 258 N. Y. 156; People ex rel. Schanck v. Green, 64 N. Y. 499; People ex rel. Lighton v. McGuire, 31 Misc. Rep. 324; People v. Manning, 37 App. Div. 141; People v. Town Board of Lewis, 27 Misc. Rep. 469.)

      Arthur J. W. Hilly, Corporation Counsel (Alfred D. Jahr and Edwin J. Talley of counsel), for James J. Walker et al., respondents.
    Mandamus is not the proper remedy. (Matter of People ex rel. Richards v. Hylan, 200 App. Div. 871; Matter of Ottinger v. Voorhis, 241 N. Y. 49; People ex rel. Clemens v. Williams, 191 App. Div. 279; People ex rel. N. Y. & H. R. R. Co. v. Board of Taxes & Assessments, 166 N. Y. 155.)

      Jeremiah T. Mahoney for Charles W. Berry, respondent.
    Mandamus is not the proper remedy. (Matter of Friel, 101 App. Div. 155; 181 N. Y. 558; Matter of Ottinger v. Voorhis, 213 App. Div. 561; 241 N. Y. 49; Matter of Boyle v. Hugo, 101 Misc. Rep. 637; People ex rel. Goldenkoff v. Albany Law School, 198 App. Div. 460; People ex rel. Jones v. New York Homeopathic Medical College & Hospital, 47 N. Y. St. Repr. 395; City of New York v. Empire City Subway Co., 202 App. Div. 494; People ex rel. Rand v. Craig, 231 N. Y. 216.)

      Charles J. Miville and John J. Curtin for Brooklyn Daily Eagle, respondent.
    Mandamus will not lie where the acts of the Board did not constitute a completed transaction, and the additional steps to be taken required the use of discretion on the part of the city officials. (Matter of Friel, 101 App. Div. 155; 181 N. Y. 558; Matter of Ottinger v. Voorhis, 213 App. Div. 561; 241 N. Y. 49; Matter of Boyle v. Hugo, 101 Misc. Rep. 637; People ex rel. Goldenkoff v. Albany Law School, 198 App. Div. 460; People ex rel. Jones v. New York Homeopathic Medical College & Hospital, 47 N. Y. St. Repr. 395; City of New York v. Empire City Subway Co., 202 App. Div. 494; People ex rel. Rand v. Craig, 231 N. Y. 216.)
   Per Curiam.

Mandamus is not the proper remedy. There was no clear, legal duty on the part of the Commissioners of the Sinking Fund to certify the resolution.

The question as to the power of the Comptroller is not decided. (Cf. Matter of Craig v. Matthews, 238 N. Y. 88; Craig v. Commissioners of Sinking Fund, etc., 208 App. Div. 412; McCarthy v. Mills, 214 App. Div. 70.)

The order should be affirmed, with costs.

Pound, Ch. J., Crane, Lehman, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not sitting.

Order affirmed.


text:
    Sol Rosenberg et al., Appellants and Respondents, v. General Realty Service, Inc., et al., Defendants, and Union Trust Company of Rochester, Respondent and Appellant.
    (Argued March 25, 1932;
    decided April 26, 1932.)

      Arthur E. Rosenberg for plaintiffs, appellants and respondents.
    The Appellate Division had power to make the order amending plaintiffs’ notice of appeal to the Court of Appeals. (Waldo v. Schmidt, 200 N. Y. 199; Myers v. Lederer, 119 App. Div. 332; Vose v. Conkling, 159 App. Div. 201; Rothenberg v. Metzger, 227 App. Div. 444; Kent v. Sibley, 5 N. Y. Supp. 448; Seymore v. Hughes, 55 Misc. Rep. 248; Kirchner v. Abbots Bakeries, 92 Misc. Rep. 402.)

      Arthur E. Sutherland, Jr., for defendant, respondent and appellant.
    The Appellate Division had no power to make the order amending plaintiffs’ notice of appeal so as to make it an appeal from the judgment instead of the order. (Kirkegaard v. Forman, 248 N. Y. 526; Lavalle v. Skelly, 90 N. Y. 546.)
   Per Curiam.

Whenever a judgment has been entered in the County Clerk’s office on the order of the Appellate Division and the notice of appeal indicates an intention to bring up the determination of the Appellate Division for review, a misdescription of the judgment in the notice of appeal as an order or determination or decision affects no substantial right. The notice of appeal may be amended or the mistake disregarded as immaterial under section 105 of the Civil Practice Act.

The order amending plaintiffs’ notice of appeal to the Court of Appeals herein should be affirmed, without costs, and the question certified answered in the affirmative. The judgment should be affirmed, with costs.

Pound, Ch. J., Crane, Lehman, O’Brien and Hubbs, JJ., concur; Kellogg and Crouch, JJ., not sitting.

Ordered accordingly.