author: Conway, J.

text:
    Estro Chemical Co., Inc., Appellant, v. Harriet V. Falk, Respondent.
    Argued May 15, 1951;
    decided July 11, 1951.

      Raphael H. Weissman for appellant.
    I. The release given without consideration was merely a ‘ ‘ waiver ’ ’ of the statutory right to recover the excess over the emergency rent paid and, as such, it is “ unenforceable and void ” by the express provisions of the Commercial Rent Law. (O’Neil v. Brooklyn Sav. Bank, 267 App. Div. 317, 293 N. Y. 666, 324 U. S. 697; Giannini v. Sheeran, 276 App. Div. 760.) II. To exclude from the operation of the statute against “ any waiver ” a release concededly given without consideration, on the ground that there was “ entire freedom of contract ” when given, is to read a limitation into the statute contrary to its plain meaning and is to frustrate the public policy of the Commercial Rent Law, expressly declared to be anti-inflationary. (Matter of Katz’s Delicatessen v. O’Connell, 302 N. Y. 286.)

      Otto A. Samuels for respondent.
    I. The release though general in form concededly covers the claim in this action. II. The release is not within the scope or intent of the Commercial Rent Law. (Twentieth Century Associates v. Waldman, 294 N. Y. 571; Matter of Fifth Madison Corp. [New York Tel. Co.], 297 N. Y. 155; Morse & Grossman, Inc., v. Acker & Co., 297 N. Y. 304; White-Way Arcade v. Broadway Turtle King, Inc., 273 App. Div. 281; D. A. Schulte, Inc., v. Gangi, 328 U. S. 108; Matter of Cretella v. New York Dock Co., 289 N. Y. 254.) III. There is a clear distinction between releases given before and those given after the cause of action accrued. (Wood Co. v. Horgan, 291 N. Y. 422; Seeley v. Prentiss Tool & Supply Co., 158 App. Div. 853, 216 N. Y. 687; Maruzzella v. Metro Associated Services, 275 App. Div. 114; Lackey v. Hempel, 276 App. Div. 909; St. Andrews Parish v. Gallagher, 121 Misc. 167.) IV. The release operated as a gift, for which no consideration is required. (McKenzie v. Harrison, 120 N. Y. 260; Gray v. Barton, 55 N. Y. 68; Ferry v. Stephens, 66 N. Y. 321; Carpenter v. Soule, 88 N. Y. 251.)
   Conway, J.

This is an action brought by the plaintiff tenant, in its first cause of action, to recover from the landlord rent paid in excess of the emergency rent permissible under the applicable provisions of the Commercial (Emergency) Rent Law (L. 1945, ch. 3, as amd.). That excess rent, it is alleged in the complaint, was paid under a rental agreement between plaintiff and defendant which continued up to February, 1949.

In contemplation of termination of the agreement just mentioned, negotiations were commenced in February, 1949, looking toward a new one. On the 21st day of February, the two parties executéd an agreement to submit to a named arbitrator the determination of a reasonable rent for the commercial space involved, to be based upon the fair rental value thereof as of the date of submission. An award was made and a lease thereupon entered into for a term of three years ending in February, 1952. The award was confirmed in all respects by the Supreme Court of the State of New York. In this second cause of action, plaintiff alleges that the arbitration was a fabrication and a sham contrived to give color of legality to the rent reserved in the new agreement which was in excess of the fair rental value of the commercial space demised.

Limiting ourselves now to á consideration of the first cause of action pleaded, the landlord’s answer in addition to certain denials, pleaded as an affirmative defense a release in writing claimed to have been given for a valuable consideration. We shall assume for the purpose of our discussion that the release was based upon valid consideration since it is so pleaded in the answer. The question presented then is whether under the statute there can be a valid release given to a landlord by a tenant after a cause of action has accrued to the tenant for the recovery of excessive rent paid to the landlord. We have reached the conclusion that it may not.

The statute, section 12, expressly forbids the waiver of any of its provisions in the following words: Any waiver of any of the provisions of this act shall be unenforceable and void.” In section 1 of thé act it is declared that a public emergency exists, that action by the Legislature is imperative and will not permit of delay; that the emergency legislation affecting rent for commercial space in certain cities is necessary to remedy the exaction of unjust, unreasonable and oppressive leases and agreements for such space. We sustained the validity and constitutionality of the act in Twentieth Century Associates v. Waldman (294 N. Y. 571, 581), pointing out that so far as tenants were concerned, “ * * * the Legislature was justified in concluding that there was no reality of consent; that their freedom of contract ’ had become an illusory concept and that their existing leases had created, and would continue to contribute to, the public emergency.” We are satisfied that the act was intended to apply to the facts disclosed in this record. One of the purposes of the act was to prevent excessive rents. The legislation was a recognition of the fact that as a result of the unequal bargaining power between landlord and tenant, businessmen required compulsory legislation to prevent rental agreements of commercial space from becoming or continuing to be unjust and oppressive. The same policy considerations which forbid waiver of basic maximum rents under the act, also prohibit waiver or release of the tenant’s right to the return of moneys paid in excess of such maximum rents. This view accords with that expressed in O’Neil v. Brooklyn Sav. Bank (267 App. Div. 317, affd. 293 N. Y. 666, affd. sub nom. Brooklyn Sav. Bank v. O’Neil 324 U. S. 697). Knowledge on the part of a landlord, that he cannot escape liability for excess payments of rent under any circumstances, tends to insure compliance with the statute. The obtaining of excessive rents strikes at the very purpose of the act. Any agreement by which a tenant waives or releases the benefits conferred by the act, nullifies that purpose and must be held to be expressly forbidden by section 12.

There are decisions of this court holding that contracts to waive in advance the provisions of a statute are void but that subsequent agreements, after liability or default has occurred, wherein the parties in good faith and for a new consideration attempt to settle differences between them, are enforcible. (See Wood Co. v. Horgan, 291 N. Y. 422; Seeley v. Prentiss Tool & Supply Co., 158 App. Div. 853, affd. 216 N. Y. 687; Adler v. Weis & Fisher Co., 218 N. Y. 295.) However, we think that the express provision of the statute now under consideration and public policy require a holding in cases such as this, involving as it does excessive payment of rent, that under no circumstances may tenants waive or release or otherwise settle by agreement their right to recover rent paid in excess of that permitted by law. This is in accord with holdings that a ‘ ‘ statutory right conferred on a private party, but affecting the public interest, may not be waived or released if such waiver or release contravenes the statutory policy.” (Brooklyn Sav. Bank v. O’Neil, 324 U. S. 697, 704, affg. 293 N. Y. 666, supra; Midstate Horticultural Co. v. Pennsylvania R. R. Co., 320 U. S. 356.)

We now turn to the second cause of action in which recovery was sought for excessive rent paid by plaintiff for a period commencing March 1, 1949. In effect plaintiff seeks in that cause of action to vacate and set aside the arbitration award, confirmed by the Supreme Court, upon the ground that it was a fabrication and sham and was contrived to give a color of legality to an agreement which was unjust, unreasonable and oppressive. Arbitrations authorized under the Commercial (Emergency) Bent Law are subject to the same rules of law as other arbitration proceedings and are governed exclusively by the provisions of article 84 of the Civil Practice Act. One seeking to vacate such an award must do so by timely motion as provided by section 1463 of the Civil Practice Act. That is the exclusive remedy. It may not be done by plenary action. (American Reserve Ins. Co. v. China Ins. Co., 297 N. Y. 322, 326; Raven Elec. Co. v. Linzer, 302 N. Y. 188; Feinberg v. Barry Equity Corp., 302 N. Y. 676.)

The judgment of the Appellate Division should be modified by reversing so much thereof as granted the motion of defendant for summary judgment dismissing the first cause of action and to that extent the order of Special Term should be affirmed. In all other respects the judgment of the Appellate Division should be affirmed, without costs.

Loughban, Oh. J., Lewis, Desmond, Dye, Fuld and Fbobssel, JJ., concur.

Judgment accordingly.


source: Caselaw Access Project

license: Public Domain

text:
    Louis Mandel, Appellant, v. Max Liebman, Respondent.
    Argued May 22, 1951;
    decided July 11, 1951.

      Simon Rosenzweig and Milton Paulson for appellant.
    I. The Appellate Division committed error by considering the issue of whether the contracts between the parties were unconscionable. (Binsse v. Wood, 37 N. Y. 526; Read v. Knell, 143 N. Y. 484; Wright v. Wright, 226 N. Y. 578; Wendell v. Leo, 115 App. Div. 850; Wisser v. O’Brien, 44 How. Prac. 209; Meiselman v. Crown Heights Hosp., 285 N. Y. 389; Hoose v. Drumm, 281 N. Y. 54; Ehrenworth v. Stuhmer & Co., 229 N. Y. 210; Burns v. Wilkinson, 228 N. Y. 113; Adams v. Irving Nat. Bank, 116 N. Y. 606; Matter of Levinsohn Corp. [Cloak, etc., Union], 299 N. Y. 454; Sahoff Corp. v. May Co. Real Estate, 258 App. Div. 157.) II. In any event, the employment and settlement contracts were not unconscionable. (Yonkers Fur Dressing Co. v. Royal Ins. Co., 247 N. Y. 435; Friese v. Hoefler, 38 Misc. 814; Wood v. Duff-Gordon, 222 N. Y. 88; Moran v. Standard Oil Co., 211 N. Y. 187; Grossman v. Schenker, 206 N. Y. 466; Meers v. Munsch-Protzmann Co., 217 App. Div. 541; Meyers v. Nolan, 18 Cal. App. 2d 319; Merts v. Merts, 271 N. Y. 466; Shedlinsky v. Budweiser Brewing Co., 163 N. Y. 437.)

      Milton N. Mound and Richard Wincor for respondent.
    I. The composite instrument sued upon provides for a tribute in perpetuity and is unconscionable and void. (Jules-Wallace & Co. v. R. A. Management, Inc., 148 Misc. 180; Porter v. Chicago & N. W. R. R. Co., 162 Wis. 446; Keeler v. Taylor, 53 Pa. 467; Sargent v. McLeod, 209 N. Y. 360; Gray v. Hook, 4 N. Y. 449; Baksi v. Wallman, 271 App. Div. 422, 297 N. Y. 456; Martin v. Camp, 219 N. Y. 170; Buckley v. Surface Transp. Corp., 277 App. Div. 224; Chiapparelli v. Baker, Kellogg & Co., 252 N. Y. 192.) II. No issue remains that could warrant a new trial. (Richardson v. Crandall, 48 N. Y. 348; Cummings v. Union Blue Stone Co., 164 N. Y. 401; O’Mara v. Dentinger, 271 App. Div. 22; Equity Service Corp. v. Agull, 250 App. Div. 96; Sprague v. Webb, 168 App. Div. 292; Baird v. Sheehan, 38 App. Div. 7, 166 N. Y. 631; Weil v. Neary, 278 U. S. 160; Saratoga Co. Bank v. King, 44 N. Y. 87; Matter of Abbey [Meyerson], 274 App. Div. 389, 299 N. Y. 557.)
   Conway, J.

The defendant is an author, writer and director in the entertainment world. The plaintiff is an attorney who devotes himself to the business of acting as personal representative, advisor and manager for persons engaged in the entertainment world. On May 8, 1946, they entered into a written contract whereby defendant agreed to employ plaintiff “ as his personal representative and manager ” for a term of five years. Defendant agreed to pay to plaintiff, as compensation, 10% of all his earnings during the term of the contract, and thereafter on earnings from employments commenced during the term of the contract and continued or renewed or resumed beyond the term of the contract.

Shortly thereafter, a dispute arose between the parties as to the possession of specified business papers of defendant which plaintiff refused to return to defendant, despite demand therefor, because of defendant’s failure to pay the percentage of earnings agreed upon in the contract of May 8,1946. Defendant then obtained an order of Special Term, dated February 17, 1947, in a summary turnover proceeding, directing plaintiff to turn over the papers to defendant. A similar dispute with respect to additional papers thereafter arose, and defendant commenced another turnover proceeding against plaintiff which was referred to a referee. While this was pending, plaintiff commenced an action against defendant for the compensation allegedly due him under the contract of May 8, 1946.

On November 11, 1947, the parties, each of whom was then represented by his own attorney, entered into a written settlement agreement wherein they agreed to discontinue the proceeding and action. Defendant further agreed to recognize the validity ” of the contract of May 8,1946, and to release plaintiff from all obligations to render any services thereunder. Plaintiff, on the other hand, agreed to waive the compensation provided for in the original contract in any year in which defendant should earn less than $20,000, and to turn over to defendant all contracts and documents belonging to defendant which he had in his possession.

Plaintiff subsequently commenced this action to recover the compensation allegedly due him for the period from May 8,1948, to May 8, 1949, under the contract of May 8, 1946, as modified by the settlement agreement of November 11, 1947. The action was dismissed on the merits at the close of plaintiff’s case upon the ground that the decision of Special Term in the first turnover proceeding constituted a conclusive and binding adjudication that the original contract of May 8, 1946, created the relationship of attorney and client between plaintiff and defendant. The Trial Justice presumably was relying upon the rule that a client who has signed a retainer agreement with respect to some matter in controversy may discharge the attorney at any time, with or without cause, and relegate the attorney to a quantum meruit action for his services to the time of the discharge. We note at this point that the decision of Special Term in the first turnover proceeding was not in any way res judicata here. The most that that determination established was that the specific papers there involved had come into plaintiff’s possession in the course of an attorney-client relationship. The May 8, 1946, contract recited that plaintiff had theretofore been acting for defendant “ as lawyer, manager and advisor

The majority in the Appellate Division affirmed the judgment dismissing the complaint, but on a ground different from that advanced by the trial court. The majority in the Appellate Division went behind the settlement agreement of November 11, 1947, and held that the original contract of May 8, 1946, as modified by the settlement agreement, “ was void, unconscionable and against public policy.” (277 App. Div. 1097, 1098.) In reaching that conclusion, the court pointed out that, under the original contract of May 8, 1946, the plaintiff was not required to render any services to defendant; that plaintiff had introduced no proof of the rendition of any services to defendant ; and yet defendant was required to pay to plaintiff ‘ ‘ what might be called a tribute in perpetuity.” The dissenting Justices in the Appellate Division agreed that under the special circumstances of this case the court was justified in going behind the settlement agreement to determine the meaning, validity and extent of obligation under the original contract, but that, since such determination and the defenses pleaded in the answer raised questions of fact, there should be a new trial.

We agree that there must be a new trial at which the court and jury, with adequate proof in the record, may, in the words of the dissenting opinion below, “ scrutinize the entire transaction -from both sides and in respect to both agreements. ’ ’ So many questions depend upon the proof whitih may be adduced at such new trial that we deem it inappropriate to discuss, generally, at this time, the legal relations between the parties under the original contract, as modified by the settlement agreement. Accordingly, we limit ourselves to consideration of the points on which we disagree with the majority in the Appellate Division.

It is apparent that the majority, in holding the contracts to be “unconscionable”, thought that the obligations assumed thereunder by the parties were so shockingly disproportionate that they could not be enforced. It is commonplace, of course, that adult persons, suffering from no disabilities, have complete freedom of contract and that the courts will not inquire into the adequacy of the consideration. “ ‘ If a person chooses to make an extravagant promise for an inadequate consideration it is his own affair ’ (8 Holdsworth, History of English Law, p. 17). It was long ago said that ‘ when a thing is to be done by the plaintiff, be it never so small, this is a sufficient consideration to ground an action 11 (Sturlyn v. Albany, 1587, Cro. Eliz. 67, quoted by Holdsworth, supra; cf. Walton Water Co. v. Village of Walton, 238 N. Y. 46, 51).” (Cardozo, Ch. J., in Allegheny Coll. v. National Chautauqua Co. Bank, 246 N. Y. 369, 377.) “ The slightest consideration is sufficient to support the most onerous obligation; the inadequacy, as has been well said, is for the parties to consider at the time of making the agreement, and not for the court when it is sought to be enforced. It is competent for the parties to make whatever contracts they please, so long-as there is no fraud or deception or infringement of law. Hence, the fact that the bargain is a hard one will not deprive it of validity.” (17 C. J. S., Contracts, § 127, pp. 474-475; see Youssoupof v. Widener, 246 N. Y. 174, 187, 188; Ga Nun v. Palmer, 216 N. Y. 603, 609; Stettheimer v. Killip, 75 N. Y. 282; Earl v. Peck, 64 N. Y. 596, 598-599; Worth v. Case, 42 N. Y. 362, 369-370; Osgood v. Franklin, 2 Johns. Ch. 1, 23, affd. sub nom. Franklin v. Osgood, 14 Johns. 527.)

Despite the general rule, courts sometimes look to the adequacy of the consideration in order to determine whether the bargain provided for is so grossly unreasonable or unconscionable in the light of the mores and business practices of the time and place as to be unenforcible according to its literal terms. (See 1 Corbin on Contracts, § 128, p. 400.) It has been suggested that an unconscionable contract is one “ such as no man in his senses and not under a delusion would make on the one hand, and as no honest or fair man would accept, on the other ’.” (See Greer v. Tweed, 13 Abb. Prac. [N. S.] 427, 429; Hume v. United States, 132 U. S. 406; Baxter v. Wales, 12 Mass. 365, 366.) The inequality, Chancellor Kent said, “ must be so strong and manifest as to shock the conscience and confound the judgment of any man of common sense.” (Osgood v. Franklin, supra, p. 23.)

There might be some force to the claim of unconscionability in the ease at bar if the contract could properly be construed as was done by the majority in the Appellate Division. That court held that under the express terms of the contract of May 8,1946, plaintiff was not required to render any services to defendant. We do not think that that is a permissible construction under our decisions. (See Wood v. Duff-Gordon, 222 N. Y. 88, 90-91; Moran v. Standard Oil Co., 211 N. Y. 187, 197; Grossman v. Schenker, 206 N. Y. 466, 469; Pawlowski v. Woodruff, 122 Misc. 695, affd. 212 App. Div. 871.) Here, the contract provides that it is “ MUTUALLY AGREED BY THE PARTIES ”, among other things, that the defendant hereby employs ” the plaintiff “ as his personal representative and manager to use his ability and experience as such manager and personal representative in the guidance and furtherance ” of defendant’s career and to advise him in connection with all offers of employment and contracts for services, and conclude for him such contracts.” Thus, there is a clear implication that plaintiff was required to do that for which he was employed. Even if the contract had merely provided that plaintiff was employed ‘ ‘ as personal representative and manager ’ ’, with no further description of his duties, that would have been sufficient, for it could be shown that to these parties, in a specialized field with its own peculiar customs and usages, that phrase was enough to measure the entire extent of plaintiff’s required services. (See Meyers v. Nolan, 18 Cal. App. 2d 319, 322-323.)

The further provision in the contract — that plaintiff 1 ‘ shall only devote as much time and attention to the activities and affairs ” of defendant “ as the opinion and judgment ” of plaintiff “ deems necessary ” — must be given a reasonable interpretation consonant with the purpose of the contract. It would be an unnatural and bizarre construction of the document to hold that that provision was intended to excuse plaintiff from any obligation to render service under the contract, while continuing to reap benefits thereunder. The provision seems merely to constitute an attempt on the part of plaintiff to protect himself from excessive and unreasonable demands upon his time. See Meyers v. Nolan (supra, p. 323) where it was said: £ £ The fact that the contract provided that the managers could devote as much time to defendant’s affairs as they deemed necessary does not destroy its mutuality. The very nature of the business of the parties was such that representation of other actors was to be expected. The clause was evidently inserted to avoid misunderstanding on the subject and to more clearly define the rights and obligations of the managers.” Of course, as defendant urges, it is theoretically possible that plaintiff, under this provision, could deem it necessary to devote no time to the activities and affairs of defendant, but in that event, it is clear that plaintiff would not be performing the contract but would be breaching it and foregoing his right to compensation.

Since plaintiff, as we hold, was required to render some service to defendant under the contract, it cannot be said that the contract was unconscionable. Defendant was the best judge of the necessity and worth of plaintiff’s services, and of the price he wished to pay to obtain them. In return for plaintiff’s contractual obligation to render such services, defendant agreed to pay as compensation an amount based upon a percentage of his earnings. It is not for the court to decide whether defendant made a good or bad bargain. We fail to see how the contract can be described as one ££ £ such as no man in his senses ® * * would make ’ ” and ££ £ no honest or fair man would accept ’ ” (Greer v. Tweed, supra, p. 429; Hume v. United States, supra, p. 23), or one which would ££ shock the conscience and confound the judgment of any man of common sense ” (Osgood v. Franklin, supra), or even one which is ££ so extreme as to appear unconscionable according to the mores and business practices of the time and place ” (1 Corbin on Contracts, § 128, p. 400), particularly since, as we are told, without denial the contract of May 8, 1946, is similar in most respects to contracts in current and general use in the entertainment industry. (See as to California agents under the statute applicable there, 4 Nichols Cyclopedia of Legal Forms [1950 Pocket Supp.], § 4.989b; Lindey, Motion Picture Agreements [1947], Form IV-P, pp. 346-348.)

There is thus no need at this time to discuss the measure of compensation provided in the contract which the Appellate Division characterized as “ a tribute in perpetuity.” We note only, without passing upon the matter, that a question may be raised as to the validity or enforcibility of one provision relating to compensation. Defendant agreed that any future earnings of his in the entertainment world shall be due to the opportunities now procured for him ” by plaintiff. This provision would seem to create a conclusive presumption that any employments obtained by defendant during the term of the contract, and any continuance or renewal thereof thereafter, shall be deemed to have been due to the efforts of plaintiff, entitling the latter to the agreed percentage thereon. Somewhat comparable provisions have been held unenforcible. (See Hamlin v. Wheelock, 42 Hun 530; Wright v. Fulling, 104 App. Div. 49.) The question, however, is not presented on this record for, while defendant did testify as to the amount of his earnings for the year in question and the different sources thereof, there was no evidence as to which sources were referrable to plaintiff’s advice, guidance and assistance, and which were not. (See Mayer v. Fuller, 17 Misc. 611, 612-613 [App. Term, 1896, McAdam, J.].) Moreover, as already indicated on pages 91 and 92 (supra), defendant had terminated plaintiff’s employment prior to the settlement contract, and under the settlement contract has released plaintiff from all-obligations to render any services under the prior employment contract. Likewise, there is no occasion now to consider the effectiveness of the provision that the contract was to be binding upon the parties and ‘‘ their heirs, executors, administrators and assigns ” as against the rule that contracts for personal services terminate with the death of one of the parties.

Nor may the dismissal of the complaint be predicated upon the ground, not raised at the trial, that plaintiff had failed to adduce proof of the rendition of any services for defendant under the contract. There appears in this record an admission by defendant’s attorney in an affidavit filed in the prior turnover proceeding that plaintiff had rendered certain services to defendant for which compensation might be due. But, even assuming that there was a failure of proof in this respect, that was not a proper basis for affirming the judgment which had dismissed the complaint on another and untenable ground. If the question had been raised at the trial, the plaintiff might easily have obviated the claimed defect by introducing the required evidence. (See Cohen, Powers of the New York Court of Appeals, § 155; 4 Carmody on New York Practice, § 1349, pp. 3120-3122; Binsse v. Wood, 37 N. Y. 526, 532; Wisser v. O’Brien, 44 How. Prac. 209, 211.)

Finally, we do not think that the contract of May 8, 1946, at least upon its face, may be held to be a retainer agreement between attorney and client with respect to some matter in controversy under which the client may discharge the attorney at any time, with or without cause, and relegate the attorney to an action for his services to the time of discharge. (See, e.g., Matter of Montgomery, 272 N. Y. 323, 326; Lurie v. New Amsterdam Cas. Co., 270 N. Y. 379, 381; Martin v. Camp, 219 N. Y. 170, 174.) Here, plaintiff was employed as defendant’s personal representative and manager, a position which might well have been filled by a nonlawyer. As a lawyer, plaintiff might be called upon to use his legal training in handling defendant’s affairs, but that is not sufficient, as a matter of law, to transform an otherwise binding contract of employment into a contract at will on the part of the employer. An attorney, like any other man, may enter into a contract of employment which can be enforced against the employer, and that is so even though the employment may envisage the exercise of his legal skills and ability. (See Greenberg v. Remick & Co., 230 N. Y. 70, 73.)

Likewise, it cannot be said as matter of law that the contract was illegal and void for the reason that plaintiff, in violation of section 172 of the General Business Law, was conducting a theatrical employment agency without a license therefor. By express exemption in subdivision 4 of section 171 of the General Business Law, a person engaged in the business of managing “ entertainments, exhibitions or performances, or the artists or attractions constituting the same, where such business only incidentally involves the seeking of employment therefor ” is not required to be licensed. As noted, plaintiff was employed as defendant’s personal representative and manager ”. It was specifically provided that this contract does not in any way contemplate that the second party [plaintiff] shall act as agent for the purpose of procuring further contracts or work ’ ’ for defendant, the plaintiff was “ not required in any way to procure ” such contracts or work, and that in the event defendant “ needs additional employment or work then an agent shall be employed by the second party [plaintiff] to procure such employment, and the services of said agent shall be separately paid for ” by defendant. (See Hyde v. Vinolas, 234 App. Div. 364, 365; Meyers v. Walton, 76 Misc. 510 [App. Term, 1912, Lehman, J.]; Pawlowski v. Woodruff, 122 Misc. 695, affd. 212 App. Div. 871, supra; Allen v. Brice, 165 Misc. 181; Gervis v. Knapp, 182 Misc. 311, 313.)

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

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

Judgments reversed, etc.


author: Lewis, J.

text:
    In the Matter of the Estate of August H. Sturmer, Deceased. Floyd L. Chapman, Individually and as Executor of August H. Sturmer, Deceased, et al., Appellants and Respondents; Margaret F. Sturmer, Respondent and Appellant. (Two Proceedings.)
    Argued May 14, 1951;
    decided July 11, 1951.

      Howard J. Walker for Floyd L. Chapman and another, appellants and respondents.
    I. The decision of the Appellate Division that the widow is entitled to exercise her right of election under section 18 of the Decedent Estate Law should be reversed. (Matter of Moore, 165 Misc. 683, 254 App. Div. 856, 280 N. Y. 733; Matter of Phillips, 293 N. Y. 483; Matter of Richardson, 191 Misc. 995; Matter of Wynne, 194 Misc. 459.) II. The determination of the Appellate Division that the United States Gov-eminent bonds, bank accounts and real estate are not part of decedent’s estate should be affirmed. (Matter of Jagodzinska, 272 App. Div. 660; Matter of Hickmott, 166 Misc. 536, 256 App. Div. 1047; Matter of Riley, 261 App. Div. 690; Inda v. Inda, 288 N. Y. 315; Matter of Porianda, 256 N. Y. 423; Moskowitz v. Marrow, 251 N. Y. 380; Matter of Juedel, 280 N. Y. 37; Matter of Deyo, 180 Misc. 32; Matter of Kalina, 184 Misc. 367, 270 App. Div. 761.)

      Domenick L. Gabrielli for respondent and appellant.
    I. The widow is entitled to exercise her right of election under section 18 of the Decedent Estate Law. (Matter of Cote, 87 N. Y. S. 2d 555; Matter of Burridge, 261 N. Y. 225; Girard v. Girard, 29 N. M. 189; Matter of Brown, 153 Misc. 282; Thompson v. Thompson, 163 Misc. 946; Rubin v. Myrub Realty Co., 244 App. Div. 541.) II. The determination of the Appellate Division that the bonds, bank accounts and real estate are not a part of decedent’s estate should be reversed. (Matter of McCarthy, 164 Misc. 719; Matter of Simpson, 175 Misc. 718; Matter of Buchanan, 184 App. Div. 237; Krause v. Krause, 285 N. Y. 27.)
   Lewis, J.

The controversy involved in these two proceedings has arisen in the course of administering the estate of August H. Sturmer, deceased.

In 1913, the decedent married Margaret Fluent Sturmer with whom he lived until 1926 when they entered into a separation agreement. From that time until the husband’s death on April 23, 1949, they lived apart. By a will admitted to probate in July, 1949, the decedent left his entire estate to a nephew, Floyd L. Chapman, who was also named as executor. Thereupon Margaret Fluent Sturmer filed, pursuant to section 18 of the Decedent Estate Law, an election to take against the will of her deceased husband. Subsequently, the widow commenced a proceeding in Surrogate’s Court, in which she sought an order declaring her husband’s estate to be the ownér of: (1) certain United States Savings Bonds; (2) three joint accounts in commercial banks; (3) one joint savings account in a savings bank; and (4) a parcel of real estate conveyed by decedent before his death to Floyd L. Chapman. An answer interposed by the executor of the decedent’s will sought dismissal of the petition and a determination that the widow’s right of election was barred by reason of the alleged fact that in 1926 decedent and his wife had entered into a valid separation agreement in which petitioner waived her right to share in the decedent’s estate. Thereafter, the parties stipulated to consolidate and try together the issue involving the widow’s right of election and issues involved in the separate proceeding in which the widow sought to have certain securities, bank accounts and real property declared to be assets of the decedent’s estate.

Upon issues thus presented for decision the Acting Surrogate ruled that the widow had not waived her right of election by the separation agreement entered into in 1926. He also held (1) that the United States bonds were not assets of the estate and became the property of the survivors named thereon; (2) that title to the real property in question vested in the grantee Chapman and was not an asset of the estate; and (3) that the three joint accounts in the commercial banks were assets of the estate but that the joint account in the savings bank passed to the survivor.

The Appellate Division (two Justices dissenting) affirmed the ruling by the Acting Surrogate that the separation agreement did not bar the widow’s right to elect; and his ruling that the United States bonds and the joint account in a savings bank did not become assets of the estate but that title thereto vested in the survivor. As to the joint accounts in the commercial banks, the Appellate Division reversed the findings of the Surrogate and ruled that they, like the joint savings bank accounts, were not assets of the estate and that title thereto had passed to the survivor. Finally, the Appellate Division held that the Surrogate had no jurisdiction to determine in this proceeding the title to the parcel of real estate conveyed by decedent to Floyd L. Chapman.

The case comes to us upon appeal by the decedent’s widow from the order of the Appellate Division; also upon appeal by Floyd L. Chapman, individually and as executor of the decedent’s will, and by Frances Berlitz, from so much of the order of the Appellate Division as affirmed the decree of the Acting Surrogate. Although each brief deals with other points, counsel for each party on the argument before us expressly agreed that the present appeal is limited to two points, viz., the validity of the widow’s light of election and the ownership of the three joint accounts in commercial banks.

As to the widow’s right of election: The executor does not question the fact that Margaret Fluent Sturmer is the widow of decedent. It is also conceded that decedent made no provision in his will for his widow — leaving his entire estate to a nephew with whom he lived. The executor’s contention is that, by the separation agreement executed by the parties on January 18, 1926, the widow waived all rights to her husband’s estate, including the right to elect against his will. At the time of the execution of that agreement in 1926, section 18 of the Decedent Estate Law, under which the widow filed her election, had not been enacted. Insofar as here relevant that section, on the date it became effective, viz., September 1, 1930, provided as follows (L. 1929, ch. 229, as amd. by L. 1930, ch. 174):

“ § 18. Election by surviving spouse against or in absence op testamentary provision. 1. Where a testator dies after August thirty-first, nineteen hundred and thirty, and leaves a will thereafter executed and leaves surviving a husband or wife, a personal right of election is given to the surviving spouse to take his or her share of the estate as in intestacy, subject to the limitations, conditions and exceptions contained in this section. * * *
‘ ‘ 9. The husband or wife during the lifetime of the other may waive the right of election to take against a particular last will and testament by an instrument subscribed and duly acknowledged, or may waive such right of election to take against any last will and testament of the other whatsoever in an agreement so executed, made before or after marriage. An agreement so executed made before the taking effect of this section wherein Oj spouse has waived or released all rights in the estate of the other spouse shall be deemed to release the right of election granted in this section."

Thereafter, in 1947, subdivision 9 of that section (quoted supra) was amended (L. 1947, ch. 379) and at the time of the decedent’s death provided as follows:

‘ ‘ 9. The husband or wife, during the lifetime of the other, may waive or release the right of election to take as against a particular last will, or as against any last will of the other spouse. A waiver or release of all rights in the estate of the other spouse shall be deemed to be a waiver or release of the right of election as against any last will. A waiver or release to be effective under this subdivision shall be subscribed by the maker thereof and either acknowledged or proved in the manner required for the recording of a conveyance of real property.
‘ ‘ A waiver or release of the right of election granted in this section shall be effective, in accordance with its terms, whether
“ (a) executed before or after the marriage of the spouses affected;
“ (b) executed before, on, or after September first, nineteen hundred thirty;
(c) unilateral in form, executed only by the maker thereof, or bilateral in form, executed by both of the spouses affected;
“ (d) executed with or without consideration;
“(e) absolute or conditional.”

The separation agreement by which the executor claims decedent waived her right of election contains the usual provision for the parties to live separate and apart. Instead of providing for periodic payments, however, it provided for a lump sum payment to the wife and in consideration thereof:

“ * * * the second party hereto [the wife], does hereby expressly release and relieve the first party of and from any and all obligations arising out of the marriage status for her support and maintenance or otherwise, and she does hereby expressly accept the said sum and the provisions in this instrument so made for her, in full payment, settlement and satisfaction, of any and all claims and demands of every name, kind and nature, that she may now have, hold or own against the said first party hereto, for her support maintenance or otherwise, or that she might or could have hold or own in the future against the said first party hereto for her support, maintenance or otherwise, and further in full payment, satisfaction and discharge of any and all claims that she might or in the future could have, hold or own for alimony, counsel fee or otherwise.
The second party hereto in consideration of the foregoing does further and hereby expressly release and relinquish unto the said first party, any and all right, title or interest of every hind, name and nature, she may have, hold or own, in and to any property of his, both real and personal, and in and to any property, both real and personal, which he, the said first party, may or might acquire in the future. * * *
“ And the said party of the second part further promises, covenants and agrees that she will upon request enter into and execute any and all further written instruments, releases or other paper-writings, which may or might become proper and necessary to be executed, and having to do with or affecting the interests, property, property-rights, and estate of the first party, her said husband, provided however, that such instrument or instruments, or such act on her part, shall in no wise injure or jeopardize, the provisions herein made for the said party of the second part.”

In ruling that by the separation agreement the widow had not waived her right of election created by section 18 of the Decedent Estate Law, the Acting Surrogate and the Appellate Division held that the terms of the agreement were not sufficiently definite to deny her that right.

Our reading of the separation agreement leads us to conclude that the widow thereby effectively waived her rights under section 18 id. By the terms of that agreement she expressly released “ all right, title or interest ” to any property her husband then had or might acquire in the future and agreed to execute releases which may or might become proper and necessary to be executed, and having to do with or affecting the interests, property, property-rights, and estate of the first party, her said husband * *

In our view the paragraphs quoted above from the writter instrument make clear the intention of the petitioner to make no claim against her husband’s property while he was alive or against his estate in case she survived him. It is difficult to conceive of language which would express more clearly the wife’s intention to relinquish all her rights to her husband’s property and “ estate

As sections 18 and 83 of the Decedent Estate Law had not been enacted at the time of the execution of the separation agreement, there was no reason for specific reference in the agreement to a release of a right of election not then known to the law. We regard it as clear, however, that the release she then executed of all her right, title and interest in all property her husband then had or might6 acquire in the future ’ ’, brings that agreement within the clause of section 18 which provides that “ A waiver or release of all rights in the estate of the other spouse shall be deemed to be a waiver or release of the right of election as against any last will. * * * ” Furthermore, the fact that the agreement was executed prior to the enactment of section 18 does not defeat its effectiveness as a waiver of rights created by that section because, since the effective date of its enactment, subdivision 9 has provided specifically that a waiver shall- be valid in accordance with its terms whether executed before or after September 1, 1930. In reference to that provision, this court has had occasion to note that “ ‘ The purpose of this new sentence was to give legal recognition to an agreement by which a husband or wife had waived all rights in the estate of the other spouse in an instrument executed before September 1, 1930.’ (Matter of Moore, 165 Misc. 683, 687, affd. 254 App. Div. 856; 280 N. Y. 733.)” (Matter of Phillips, 293 N. Y. 483, 488, italics in original.)

The rule of Matter of McGlone (284 N. Y. 527, affd. sub nom. Irving Trust Co. v. Day, 314 U. S. 556) —upon which the petitioner relies • — • is not determinative of the problem here presented. In that case, there was no ruling as to the sufficiency of the language of the instrument as constituting a waiver — it being held that the instrument was invalid as a waiver because it was not duly acknowledged as required by section 18. Likewise in Matter of Burridge (261 N. Y. 225), the agreement in question referred to a release of a husband’s property “ during his natural life ”. In those circumstances the court held that the release could not be construed as a renunciation of the widow’s right to inherit from her husband upon his death.

Where, however, as in the case at bar, the separation agreement was subscribed and duly acknowledged, and there is no evidence of fraud or concealment in the execution of the agreement ; and where the agreement indicates clearly an intention by a wife to waive her rights in her husband’s estate, we conclude she may not now elect against the will under section 18 of the Decedent Estate Law.

From the conclusion thus reached it follows that the widow has no standing to maintain the proceeding by which she seeks a determination as to the disposition of specified items of personal property which are a part of the decedent’s estate.

Accordingly, the order of the Appellate Division should be reversed and the matter remitted to the Surrogate’s Court for further proceedings not inconsistent with the opinion herein, without costs.

Loughran, Ch. J., Conway, Desmond, Dye, Fuld and Froessel, JJ., concur.

Order reversed, etc.

       Italics — wherever used in this opinion — are added, unless otherwise indicated.


author: Froessel, J.

text:
    In the Matter of the Board of Education of Union Free School District No. 1 of the Towns of Bethlehem, Coeymans and New Scotland, Appellant, against Lewis A. Wilson, as Acting Commissioner of Education of the State of New York, Respondent.
    Argued May 15, 1951;
    decided July 11, 1951.

      Andrew Wright Lent for appellant.
    I. The denials of the amended answer are ineffectual. (Linton v. Unexcelled Fireworks Co., 124 N. Y. 533; Barton v. Griffin, 36 App. Div. 572; McEncroe v. Decker, 58 How. Prac. 250; Strauss v. Trotter, 6 Misc. 77; Hardenburgh v. Fish, 61 App. Div. 333; Wood v. Scudder, 155 App. Div. 254; Lion Brewery v. Loughran, 223 App. Div. 623; Emery v. Baltz, 94 N. Y. 408.) II. There are not “ statements of new matter ” in the answer by way of defense (Civ. Prac. Act, § 1291). (Standard Sewing Mach. Co. v. Kattell, 132 App. Div. 539.) III. The amended answer is fatally defective in that it does not “ set forth such facts as may be pertinent and material to show the grounds of the action taken by the respondent which is complained of ”.
      (Matter of Gardiner v. Harnett, 255 App. Div. 106; Matter of Doherty v. McElligott, 258 App. Div. 257; Matter of Maresca v. McElligott, 262 App. Div. 179; Matter of Ackerman v. Kern, 256 App. Div. 626; Matter of Bd. of Educ. of Central School Dist. No. 1, 264 App. Div. 974; Matter of Sitts v. Mealey, 173 Misc. 82.) IV. If the denials are good, there were triable issues of fact presented to the court. (Blackburn v. Clements, 272 App. Div. 1098.) V. The statute does not empower the Commissioner of Education to take away any part of an existing school district. (People ex rel. Bd. of Supervisors v. Travis, 184 App. Div. 730; Matter of Dwyer, 192 App. Div. 72; Matter of New York & Brooklyn Bridge, 72 N. Y. 527; People ex rel. Gilmour v. Hyde, 89 N. Y. 11.) VI. The power to change an existing district cannot be sustained as an implied power. (Lawrence Constr. Co. v. State of New York, 293 N. Y. 634; People ex rel. City of Olean v. Western New York & P. T. Co., 214 N. Y. 526; Saltser & Weinsier, Inc., v. McGoldrick, 295 N. Y. 499; Matter of Morrissey v. State Employees’ Retirement System, 298 N. Y. 442; Matter of City of New York [Furman St.], 275 App. Div. 948.)

      Richard W. Lent for Board of Education of Union Free School District No. 1 of the Towns of Never sink and Fallsburgh, Sullivan County; Denning, Wawarsing and Rochester, Ulster County, amicus curiæ, in support of appellant’s position.
    The statute cannot be construed to give to the commissioner the power to divide a district without violating the principles of constitutional construction. (Plymouth Coal Co. v. Pennsylvania, 232 U. S. 531; Hathorn v. Natural Carbonic Gas Co., 194 N. Y. 326.)

      Charles A. Brind, Jr., for respondent.
    I. The Commissioner of Education acted within his express statutory power in laying out the central school district. (Gardner v. Ginther, 232 App. Div. 296, 257 N. Y. 578.) II. The commissioner has not acted arbitrarily or capriciously in making the order here under review. (Bramley v. Miller, 270 N. Y. 307; Lair v. Grant, 137 Misc. 470; Gardner v. Ginther, 232 App. Div. 296, 257 N. Y. 578; Matter of Donlan v. Spaulding, 196 Misc. 173.) III. The answer is sufficient.

      John W. Manning for Former Union Free School District No. 1 of the Town of Coeymans, Albany County, and another, amici curiæ, in support of respondent’s position.
    The order dismissing the petition should be affirmed. (Bullock v. Cooley, 225 N. Y. 566.)
   Froessel, J.

Petitioner seeks in this article 78 proceeding to set aside or modify a determination of the State Commissioner of Education whereby Central School District No. 1 of the Towns of Coeymans and New Scotland, Albany County, and New Baltimore, Greene County, was laid out, pursuant to the provisions of section 1801 of article 37 of the Education Law. Special Term dismissed the petition on the merits, and the Appellate Division unanimously affirmed.

A knowledge of the background out of which the controversy arose is essential to a consideration of the contentions raised. The disposition of former Common School District No. 2 (hereinafter called District No. 2) of the Town of Coeymans lies at at the heart of the dispute. That district embraces the Castleton Bridge of the New York Central Railroad, having a substantial assessed valuation.

On February 8, 1947, voters of nine common school districts, among them District No. 2, petitioned their trustees to take action to consolidate said districts into a union free school district. Thereafter and on March 10, 1947, the legal voters of said school districts voted for the formation of such union free school district, which is the petitioner herein. Prior to the vote upon such consolidation, however, and on February 26, 1947, the district superintendent made an order dissolving District No. 2, and annexing its territory to the adjoining Union Free School District No. 1 of the Town of Coeymans. Much litigation followed over the status of the district, including a taxpayer’s action which reached this court (Blackburn v. Clements, 297 N. Y. 971), and in which we, dismissed the complaint on the ground that such action did not lie as against a school district.

Following the order of the district superintendent, District No. 2 voted to object thereto, an appeal was taken by said district, and a committee was duly appointed by the County Judge of Albany County pursuant to the statute (Education Law, formerly § 128, now § 1505). That committee duly affirmed the order of the district superintendent. Upon further appeal to the Commissioner of Education, the order was again affirmed on June 24, 1949. Petitioner’s district was not officially designated as a district by the district superintendent until shortly after time to appeal from the order dissolving District No. 2 had expired, and it took no part in that appeal, but District No. 2 did participate throughout.

On May 25, 1949, the order now before us which created the central school district was made by the commissioner. That order provided that said central school district should include District No. 2 “ as it existed on December 1, 1946, whether the same is now part of Union Free School District No. 1 aforesaid [to which it was transferred by order of the district superintendent] or part of ” petitioner’s district.

We come then to the contentions of petitioner. There is no merit whatever in its assault upon respondent’s amended answer, and we agree with Special Term that it sufficiently raises “ the essential issues of this proceeding, viz., the power of the commissioner to make the order and whether he acted capriciously and arbitrarily in so doing.” • (196 Misc. 239, 245.)

Petitioner’s attack upon the order creating the central school district is based fundamentally upon the assumption that the order of the district superintendent was null and void, and that District No, 2 was and now is part of petitioner’s -district. On that basis it is urged that (1) the Commissioner of Education does not have, the power to lay out a central school' district in such fashion as to incorporate therein only part of an existing district; (2) if any statute purports to give him such power, it is unconstitutional; (3) even if the commissioner has such power, it was arbitrarily and capriciously exercised in this case.

However, inasmuch as the district superintendent’s order of dissolution and annexation of District No. 2 was upheld on appeal (Education Law, §§ 310, 1505), and the matter was one affecting the administration of the educational system, said determination is final, so far as petitioner, a member of that system, is concerned (Barringer v. Powell, 230 N. Y. 37; Bullock v. Cooley, 225 N. Y. 566; Education Law, § 310).

Assuming, however, that we may now review the decision of rile Commissioner of Education on that issue, petitioner’s position is without foundation. It is well recognized that the administration of the school system requires that there be centralized authority, since education is a State interest (Gardner v. Ginther, 232 App. Div. 296, affd. 257 N. Y. 578; Report of Joint Legislative Committee on the State Educational System, N. Y. Legis. Doc., 1947, No. 25, pp. 10-12; N. Y. Const., art. XI, § 1). The contention of petitioner that, because preliminary action has been taken by the local district to consolidate, the district superintendent was deprived of his statutory power to dissolve the district, and that the voters of the district may therefore treat his order as a nullity, and thus impose their will and discretion upon the State officials, whom the Legislature has invested with broad powers over all education, is without merit. The Commissioner of Education rightly held, on the appeal taken by District No. 2, that such was not the intention of the Legislature.

While we have held that the action of the district superintendent in designating a district formed by voluntary consolidation is ministerial, without more, and he may be compelled to execute the order as presented to him (City of New York v. Porter, 299 N. Y. 587), that case lacked important features present here. In the instant case, the district superintendent had taken discretionary action within the scope of his statutory powers in dissolving the district before the meeting at which the vote was taken, and his order designating petitioner as a union free school district gave that reason as the ground for his refusal to include District No. 2 as part of petitioner. It follows that District No. 2 never became a part of petitioner, and petitioner thus has no standing to question the act of the Commissioner of Education in incorporating that territory into the new central school district.

Even if that were not so, we see no merit in the remaining contentions of petitioner. Sections 1501-1509 of the Education Law deal with alteration of district boundaries by district superintendents, and have no relation to the laying out of central school districts, which is provided for by article 37 (Education Law, § 1801). Section 1801 empowers the Commissioner of Education “ to lay out central school districts * * * and to fix, determine and define the boundaries ” thereof. Subdivision 2 of this section empowers him to lay out territory in new central school districts or to annex to existing central school district territory not contained within a city school district. Subdivision 3 provides for notice to each school district, the “ territory of which is affected ” by his order. Section 1802 provides for notice of organization meetings to voters of the central school district to be posted “ in each school district wholly or partly within the central school district ” (emphasis supplied), and subdivision 2, dealing with annexation, again refers to school districts “affected”. (See, also, Education Law, § 1803-a, added by L. 1950, ch. 801; and see Report of Joint Legislative Committee, supra, pp. 457, 855). The statutes thus clearly grant power to the commissioner to include all or part of an existing district within a central school district laid out by him.

As to the commissioner’s authority, the Constitution of this State empowers the Legislature to “ provide for the maintenance and support of a system of free common schools, wherein all the children of this state may be educated ” (N. Y. Const., art. XI, § 1); the Legislature has charged the Department of Education “ with the general management and supervision of all public schools and all of the educational work of the state ”; and the chief administrative officer of the Department of Education is the commissioner (N. Y. Const., art. V, §§ 2, 4; Education Law, §§ 101, 301). The constitutionality of section 1801 has already been passed upon by this court (Gardner v. Ginther, supra). In respect of the subject matter under consideration, the practice of the Legislature for well over a century to leave to administrative officers the creation of school districts must be held to establish the propriety of such practice. And if indeed there were any delegation of legislative as distinguished from administrative power, it has been accompanied by standards for its exercise. The commissioner is to lay out “ only territory of suitable size conveniently located for the attendance of pupils and having a sufficient number of pupils for the establishment of a central school ” but not territory “ contained within a city school district in a city having a population of more than five [now ten] thousand inhabitants ” (Education Law, § 1801, subd. 2). 'There is therefore no basis for the contention that the power given to the commissioner constitutes an unlawful delegation of legislative power.

With respect to the claim that petitioner has been damaged by being deprived of part of its territory in contravention of its rights as a municipal corporation, it may be answered that a school district, though defined as a municipal corporation under section 3 of the General Corporation Law, has no territorial integrity; it is always subject to the reserved power of the State, exercised through its administrative officers in the Education Department, to change its territory according to current educational needs and good educational principles (Board of Educ. of Union Free School Dist. No. 6 v. Board of Educ. of Union Free School Dist. No. 7, 76 App. Div. 355, affd. 179 N. Y. 556).

The contention that the action of the commissioner results in reducing the security for bonds issued by the district from which territory is taken has also been considered in the past and rejected, chiefly on the ground that the school district has no standing to complain, since any such damage is not the school district’s but its bondholders’ or taxpayers’ (Board of Educ. of Union Free School Dist. No. 6 v. Board of Educ. of Union Free School Dist. No. 7, supra). It follows that petitioner has failed to raise any valid constitutional objection to the exercise of the challenged power of the commissioner.

Petitioner’s final claim that the commissioner’s order is an arbitrary and capricious act is utterly without merit, as is shown quite decisively by the following facts: (1) the commissioner carried out precisely the recommendation of the Joint Legislative Committee; (2) the determination of the district superintendent of schools; (3) the decision of the committee appointed by the County Judge of Albany County; (4) the three-to-one vote of the inhabitants of the territory favoring organization of the central school district; (5) the commissioner’s own investigation, and (6) the additional facts appearing in this record, as, for example, for nineteen years prior to annexation, District No. 2 did not maintain a district school, but had contracted with the district to which it was annexed by the district superintendent’s order for the instruction of its pupils; the superior advantages of the new arrangement in many ways, such as better transportation facilities, kindergarten and high school opportunities, and improved school buildings.

Accordingly, the order of the Appellate Division should be affirmed, without costs.

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

Order affirmed.


text:
    Sadie Philpot et al., Appellants, v. Brooklyn National League Baseball Club, Inc., et al., Respondents.
    Argued May 28, 1951;
    decided July 11, 1951.

      . Noah Seedman for appellants.
    The doctrine of assumption of risk is not applicable to the case at bar; but the doctrine of foreseeability of the danger is, and it is a question of fact for a jury. (Osipoff v. City of New York, 286 N. Y. 422; Chadwick v. City of New York, 301 N. Y. 176; Arena v. Kunzer-Ellinwood,

      Inc., 275 App. Div. 898; Senatore v. Harry M. Stevens, Inc., 275 App. Div. 677; Bloom v. Dalu Corp., 269 App. Div. 192; Poplar v. Bourjois, Inc., 298 N. Y. 62; Tantillo v. Goldstein Bros. Amusement Co., 248 N. Y. 286; Tapley v. Ross Theatre Corp., 275 N. Y. 144; Gerhardt v. Manhattan Beach Park, 237 App. Div. 832, 262 N. Y. 698; McGlone v. Angus, Inc., 248 N. Y. 197; Hogle v. Franklin Mfg. Co., 199 N. Y. 388; Uline Ice, Inc., v. Sullivan, 187 F. 2d 82.)

      James M. Gilleran and John J. O’Connor for Brooklyn National League Baseball Club, Inc., respondent.
    I. The possibility of the accident at bar was so remote that defendants were not negligent as a matter of law. (Van Leet v. Kilmer, 252 N. Y. 454; Flaherty v. State of New York, 296 N. Y. 342; Scolavino v. State of New York, 297 N. Y. 460; McCrink v. City of New York, 296 N. Y. 99; Excelsior Ins. Co. of N. Y. v. State of New York, 296 N. Y. 40; Hart v. Hercules Theatre Corp., 258 App. Div. 537.) II. Assumption of risk was not the rationale of the dismissal of the complaint. However, assumption of risk is present in this case. (Uline Ice, Inc., v. Sullivan, 187 F. 2d 82.) III. No negligence can be predicated on the construction of the tiers in the ball park. (De Salvo v. Stanley-Mark-Strand Corp., 281 N. Y. 333.)

      Constantine Regusis and William E. Lowther for Harry M. Stevens, Inc., respondent.
    I. There is no evidence in the record of any negligence upon the part of defendant Stevens. (Smolen v. Grandview Dairy, Inc., 301 N. Y. 265; Senatore v. Harry M. Stevens, Inc., 275 App. Div. 677.) II. Plaintiffs as a matter of law assumed the risk of being struck by thrown bottles. (Ingersoll v. Onondaga Hockey Club, 245 App. Div. 137.)
   Lewis, J.

By this action the plaintiff, Sadie Philpot, seeks recovery for personal injuries sustained on May 30, 1946, when she was struck by the sharp edge of a broken glass bottle while she and her husband were attending a baseball game at Ebbets Field, a ball park in Brooklyn. The coplaintiff demands reimbursement for expense incurred for the care and treatment of his wife and for loss of her services. As recovery by the husband depends upon the success of his wife’s cause of action, reference will be made only to her suit.

The case is here by our permission (Civ. Prac. Act, § 589, subd. 2, cl. [a]), upon appeal by the plaintiff from a judgment entered upon an order of the Appellate Division which affirmed unanimously a judgment entered at Trial Term dismissing the complaint at the close of plaintiff’s evidence. In those circumstances our duty is to consider facts adduced at the trial in the aspect most favorable to the plaintiff and to accord to her the benefit of every favorable inference which can reasonably be drawn from those facts (Faber v. City of New York, 213 N. Y. 411, 414; Osipoff v. City of New York, 286 N. Y. 422, 425; De Wald v. Seidenberg, 297 N. Y. 335, 336-337).

The evidence comprising plaintiff’s case came into the record by means of procedure which we do not commend and which we are willing to consider only because it was adopted on the trial with the consent of all parties concerned. (Rules Civ. Prac., rule 4; see, also, Clason v. Baldwin, 152 N. Y. 204, 211; Stemmler v. Mayor of City of New York, 179 N. Y. 473, 482; Pines v. Beck, 300 N. Y. 181, 187.)

Although a jury had been impaneled the record of proof up to the conclusion of the plaintiff’s evidence included no testimony by witnesses but comprised "the following concessions, among others, by the defendants that if witnesses were called in support of plaintiff’s case they would testify: That at eleven o ’clock on the morning of May 30, 1946, the plaintiff as a patron of the defendant Brooklyn National League Baseball Club, Inc., — hereinafter referred to as the Baseball Club — occupied a spectator’s seat in a section of the lower stands at Ebbets Field, for which seat she had paid an admission fee; that the upper tier of seats above her slanted downward in such a manner that the edge of it was just a little behind the seat where she was seated ’ ’; that at about 1:30 in the afternoon — during the first inning of the game then in progress — a broken glass bottle either rolled, dropped or was thrown down from above and struck the plaintiff on the right arm causing a laceration which required fourteen sutures for closure; that at the time of plaintiff’s injuries the defendant Baseball Club owned and operated Ebbets Field and the codefendant Harry M. Stevens, Inc.— under a concession contract with the Baseball Club — was the only concessionaire permitted to sell bottled beverages at the ball park; that on the date of the accident the concessionaire dispensed bottled Coca-Cola to the Baseball Club’s patrons; that ‘ the thing that hit her [the plaintiff] was a part of a bottle, a broken part, which had a jagged edge that did the cutting, and that it rolled down from above ”; that both plaintiffs “ saw this jagged-broken bottle of Coca-Cola strike her [the plaintiff], and after it struck her on the wrist it rolled on her lap”; that no receptacles were provided near ,the spectators ’ seats nor in the aisles where empty or broken bottles could be placed; that during the progress of ball games at Ebbets Field employees of the defendant Baseball Club, working independently of men employed by the defendant concessionaire, were instructed to remove broken bottles; that on many prior occasions the plaintiff had attended ball games, usually twice or three times a week when empty and broken bottles were observed being thrown about, being rolled about and being dropped down the ramps and steps which were of concrete material; that if it be shown that the bottle which struck this plaintiff was a Coca-Cola bottle, it will be admitted by the defendant concessionaire that it sold and dispensed bottled Coca-Cola without admitting that this particular bottle was either sold or dispensed by the said Harry M. Stevens, Inc. In addition to the foregoing, it was conceded that if parts of an examination before trial were read such examination would show that during the progress of each ball game men employed by the defendant concessionaire sold bottled beverages to spectators who were permitted to take them to their seats; that on the day of the accident all bottled beverages sold by the defendant concessionaire were dispensed in glass bottles except milk which was dispensed in carton containers; that the defendant concessionaire provided one man in each u section ” of seats whose duty it was to pick up empty bottles during and after each game and that “ quite a few ” bottles are broken during each game.

Upon the record which we now review the Appellate Division ruled that The evidence adduced was insufficient to establish negligence on the part of respondents, or either of them, which was a proximate cause of the accident and the resulting-injuries ” (277 App. Div. 1135). Disagreeing, as we do, with that conclusion as to the defendant Baseball Club we view the record in the light of the rule that ££ One who collects a large number of people for gain or profit must be vigilant to protect them.” (Tantillo v. Goldstein Bros. Amusement Co., 248 N. Y. 286, 290; Tapley v. Ross Theatre Corp., 275 N. Y. 144, 148; and see Arnold v. State of New York, 163 App. Div. 253, 258-262; Platt v. Erie Co. Agric. Soc., 164 App. Div. 99, 103.)

True it is that the vigilance by which is measured the duty of the defendant Baseball Club to its patrons at Ebbets Field may vary in accord with the risk each patron assumes. Thus our problem, would be different had the plaintiff, after payment of the required admission fee, been injured by a ball in flight while she occupied an unscreened seat of her own choice where she accepted the danger which inheres in baseball — the chance of contact with the ball. (See Murphy v. Steeplechase Amusement Co., 250 N. Y. 479, 482.) Here, however, the injuries which befell the plaintiff were not from dangers inherent in baseball as a game but are alleged to be from lack of care by the defendants to protect the plaintiff as a spectator from risk of injuries reasonably to be foreseen.

Upon this record we cannot say as a matter of law that the means adopted by the defendant Baseball Club were sufficient to protect the plaintiff as a spectator at Ebbets Field from risk of bodily harm reasonably to be foreseen from the misuse or mishandling of empty glass beverage bottles. Nor can we say, as a matter of law, that the plaintiff as a spectator assumed the risk of being struck by a falling glass bottle. Those questions were factual and were for determination by a jury.

As to the defendant concessionaire, Harry M. Stevens, Inc., we conclude that the evidence adduced by the plaintiff was not sufficient to establish prima facie actionable negligence. The complaint alleges that both defendants ££ in consideration of the payment of admission ” failed to control, operate, maintain and supervise the ball park in a reasonably safe condition. As the record contains no evidence to support those allegations as to the concessionaire Stevens — which neither owned nor controlled Ebbets Field, nor was responsible for collecting spectators for profit — rwe find no proof of breach of duty owing to the plaintiff by that defendant. Accordingly the complaint against the defendant was properly dismissed. The merits of the Baseball Club’s cross complaint against its concessionaire Stevens, based upon contract, are not now before ns for review.

As to the defendant Brooklyn National League Baseball Club, Inc., the judgments should be reversed and a new trial granted, with costs to abide the event. As to the defendant Harry M. Stevens, Inc., the judgment should be affirmed, with costs.

Loughran, Ch. J., Conway, Desmond, Dye, Fuld and Froessel, JJ., concur.

As to defendant Brooklyn National League Baseball Club, Inc.: Judgments reversed, etc.

As to defendant Harry M. Stevens, Inc.: Judgment affirmed.


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    Henry C. White, Individually and as President of Orchard Park Association, et al., Appellants, v. La Due & Fitch, Inc., et al., Respondents, et al., Defendants.
    Argued April 13, 1951;
    decided July 11, 1951.

      Jacob Gitelman for appellants.
    I. Plaintiffs clearly established that La Due & Fitch, Inc., had represented, prior to the making of sales, that the entire Orchard Park Tract was restricted to two-story houses. II. Defendant La Due & Fitch, Inc., having made the representation, is estopped from denying its truth, and defendant Orchard Park Building Co., Inc., is likewise bound. (Phillips v. West Rockaway Land Co., 226 N. Y. 507; Hofmann v. Hofmann, 283 N. Y. 730; Rothschild v. Title Guar. & Trust Co., 204 N. Y. 458; Selzer v. Baker, 295 N. Y. 145.) III. The statement in the decision of the Appellate Division that “ there is nothing in the record to indicate that the Florises or Yarkas were ‘ injured ’ or ‘ prejudiced ’ by purchasing their respective homes ” is untenable. IV. Plaintiffs offered to pay the cost of the one-story house during its construction and, in addition thereto, to pay a reasonable profit which defendants refused to accept. There was no loches by plaintiffs. V. The theory of equitable estoppel not only can, but should be applied to the facts in this case. (Norton v. Ritter, 121 App. Div. 497; Pizitz Dry Goods Co. v. New York Hamilton Corp., 228 App. Div. 325; Brinckerhoff v. Lansing, 4 Johns. Ch. 65; Trenton Banking Co. v. Duncan, 86 N. Y. 221.) VI. Plaintiffs commenced this action on behalf of themselves as individuals and also on behalf of those similarly situated. The principle of equitable estoppel can be invoked in their favor in their capacity as individuals or as representatives of a class. (Reid v. The Evergreens, 21 How. Prac. 319; Grant v. Van Schoonhoven, 9 Paige Ch. 255; Brenner v. Title Guar & Trust Co., 276 N. Y. 230.)

      Theron Robinson and Mitchell T. Williams for respondents.
    I. The theory of equitable estoppel cannot be applied to the facts in this case. (Brewster v. Striker, 2 N. Y. 19; Norton v. Ritter, 121 App. Div. 497; Pizitz Dry Goods Co. v. New York Hamilton Corp., 228 App. Div. 325; McAleenan v. Massachusetts Bonding & Ins. Co., 232 N. Y. 199; Trenton Banking Co. v. Duncan, 86 N. Y. 221; Livingston v. New York, O. & W. Ry. Co., 193 App. Div. 523.) II. If estoppel has been proved in favor of Yarka and Floris, that is not sufficient to establish estoppel in favor of all plaintiffs in their class action. (Reid v. The Evergreens, 21 How. Prac. 319; Grant v. Van Schoonhoven, 9 Paige Ch. 255; Jones v. Healy, 56 N. Y. S. 2d 349; Marshall v. Sherman, 148 N. Y. 9; Nillson v. Lawrence, 148 App. Div. 678; Brenner v. Title Guar. & Trust Co., 276 N. Y. 230.) III. Plaintiffs were guilty of loches in commencing their action. (University Gardens Property Owners Assn. v. Schultz, 272 App. Div. 949; Sahm v. Poushter, 187 Misc. 486; Forstmann v. Joray Holding Co., 244 N. Y. 22; Batchelor v. Hinkle, 210 N. Y. 243.) IV. A uniform plan or scheme of restrictions was never established for the Orchard Park Tract. (Bernardine v. City of New York, 268 App. Div. 444; Waddle v. Cabana, 220 N. Y. 18; Bonnette v. Molloy, 209 N. Y. 167; Lamport v. Smedley, 213 N. Y. 82.) V. Respondents are charged only with notice of restrictive covenants in their chain of title. (Buffalo Academy of Sacred Heart v. Boehm Bros., 267 N. Y. 242.)
   Froessel, J.

Plaintiffs, on behalf of themselves and others similarly situated, seek (1) to enjoin defendants-respondents from completing a one-story ranch house on a certain lot in a tract of land known as Orchard Park, located in the town of Irondequoit, Monroe County, and to compel the removal of said house; (2) a determination that certain covenants and restrictions, particularly as to building height, are common to the tract, and applicable to each lot therein; and (3) to restrain respondents from violation of said restrictions in said tract.

The action is predicated upon two grounds: (a) that the original developers established a uniform plan of restrictions throughout the tract, and (b) that defendant-respondent La Due & Fitch, Inc., represented to plaintiffs Michael J. and Ivy Floris, two of its purchasers, among, others, that the lots in said Orchard Park were restricted, and particularly that no house less than two stories in height could be built thereon, and that it is now estopped from denying it.

The trial court properly dismissed the complaint as to two defendants, the County of Monroe and the loan association, and gave judgment for plaintiffs against respondents (who stipulated that “ for the purposes of this lawsuit ” they were “ in the same position ”), on the theory of equitable estoppel. While it stated there was evidence “ that a uniform plan might have been evolved by the original developers of the tract ”, it was not quite clear that “ the plan was made sufficiently apparent to others that it may be said the alleged restrictions are common to the entire tract ”, and found it unnecessary to decide this issue.

The Appellate Division expressly held that there was no general or uniform plan of building restrictions here, and that plaintiffs had failed to make out a case for equitable estoppel. It therefore dismissed plaintiffs’ complaint, stating, among other things, that, even assuming that false representations were made to plaintiffs resulting in money loss, their remedy was at law.

The original Orchard Park tract was laid out in 1924, partially resubdivided in 1927, and consisted of 449 lots. The developers, prior to June 9, 1930, conveyed upwards of 115 lots to individuals, the deeds to all of which contained certain covenants and restrictions, and all but six of which contained the following restriction: “No dwelling shall be erected upon said premises which shall be less than two full stories in height.” In none of said deeds was there a covenant on the part of the grantor to impose restrictions in subsequent deeds, nor was there an express covenant that such restrictions should run with the land. After 1930, and during the recent economic depression, the original developers met with financial reverses, and in due course the County of Monroe became the owner of many of the unsold lots by way of foreclosure of its tax liens.

While there is thus evidence indicating that the original developers contemplated imposing specific restrictions, including the building height restriction, upon the entire tract, and all houses built therein substantially complied with the height restriction, excepting respondents ’ ranch house now complained of, we agree with the court below that the evidence did not establish that a general or uniform plan of restrictions had been effected (Bristol v. Woodward, 251 N. Y. 275).

We are of the opinion, however, that the weight of the evidence supports the determination of Special Term that respondents are estopped from denying the truth of the representation made by their agents to plaintiffs Michael J. and Ivy Floris that the entire Orchard Park tract is restricted to two-story houses.

When the County of Monroe became the owner of lots in this tract by tax foreclosures, it accepted referees’ deeds subject to all easements and restrictions common to the tract ” and reconveyed accordingly. On May 3, 1948, respondent La Due & Fitch, Inc., entered into a written agreement to purchase from the county some 142 lots in this tract, “ subject to the restrictions common to the tract ”, and accepted deeds accordingly. Among the deeds so accepted, there was included the lot which said respondent conveyed to plaintiffs Floris on February 2, 1949, which conveyance was made subject to the same restrictions.

There is ample evidence to support the Special Term finding that the agents of respondent, La Due & Fitch, Inc., represented to plaintiffs Floris prior to their purchase, as well as to others, that the lots in said Orchard Park were restricted, and particularly that no house less than two stories in height could be built in said tract. The proofs also show that, while respondent’s plans for the building of a one-story ranch house were filed in September, 1948, respondent purposely waited before proceeding with the erection of the house and did not commence the carpentry work until five days after delivery of the deed to plaintiffs Floris. There is also substantial evidence that plaintiffs relied upon such representations, and employed the attorneys for respondent to represent them upon the closing of title.

Much additional evidence was adduced affecting the good faith of respondent, and the credibility of its witnesses on the issue of the alleged representations, which were made after respondent had received an opinion from its counsel concerning said restrictions. In the last analysis we are faced with the question of credibility, and, since in our opinion the weight of evidence clearly lies with the findings of the trial court, we conclude that it was correct in holding that respondents were estopped to deny the representations made by their agents (Phillips v. West Rockaway Land Co., 226 N. Y. 507; Hofmann v. Hofmann, 283 N. Y. 730).

The principle of estoppel prohibits a person, upon principles of honesty and fair and open dealing, from asserting rights, the enforcement of which would, through his omissions or commissions, work fraud and injustice.” (Rothschild v. Title Guar. & Trust Co., 204 N. Y. 458, 464; see, also, Selzer v. Baker, 295 N. Y. 145, 149.) It is called an estoppel * * *,” said Lord Coke, “ because a man’s own act or acceptance stoppeth or closeth up his mouth to allege or plead the truth ”. (2 Coke on Littleton, 352-a; 19 Am. Jur., Estoppel, p. 601; see, also, Bigelow on Estoppel, § 2, p. 603; 3 Pomeroy on Equity Jurisprudence [5th ed.], p. 180; Trustees of Town of Brookhaven v. Smith, 118 N. Y. 634, 641.)

It is urged that plaintiffs Floris sustained no damage, although they bought their home from respondents and continue to occupy the same in reliance on the respondents’ representation. We see no merit in this contention (Tallmadge v. East Riv. Bank, 26 N. Y. 105, 109; Phillips v. West Rockaway Land Co., supra; Hofmann v. Hofmann, supra). Moreover, the parties had the right to determine for themselves in what way and for what purposes their property should be occupied, irrespective of pecuniary gain or loss or the effect on the market value of the lots (Trustees of Columbia Coll. v. Lynch, 70 N. Y. 440, 453).

Nor do we find any merit in the contention that plaintiffs Floris have been guilty of loches. Their deed was delivered on February 2d, the carpentry work on respondents’ ranch house was not commenced until February 7th, and the roof was not completed until late in March. In the following month a demand was made on behalf of plaintiffs that the height restriction be complied with. It cannot be denied that the demand was made with the utmost good faith, for it was coupled with an offer to pay respondents for any loss and, in addition, a reasonable profit.

It is finally urged that the estoppel does not run to all the niembers of the class represented by plaintiffs; and we agree, Since no general or uniform plan of restrictions has been found to have been established, and the trial court having determined that respondent La Due & Fitch, Inc., represented to plaintiffs Floris that the entire tract ivas restricted to two-story houses, those plaintiffs alone may prevail and the action must be dismissed as to the other plaintiffs.

Accordingly, the judgment of the Appellate Division should be reversed and the judgment of Special Term modified by providing for the dismissal of this action as to all plaintiffs except Michael J. and Ivy Floris individually, and as so modified affirmed, with costs to said plaintiffs in this court and in the Appellate Division; without prejudice, however, to the right of respondents to apply to Special Term for an extension of time within which to remove or alter the ranch house in question.

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

Judgment accordingly.