text:
    Thomas W. McAnarney, Respondent, v. Newark Fire Insurance Company, Appellant, Impleaded with Another.
    Insurance (fire) — contract — damages — market value of buildings destroyed not exclusive measure of loss — cost of reproduction less depreciation not sole measure of damage — every fact and circumstance that would logically tend to formation of correct estimate of loss should be considered — erroneous exclusion of declarations against interest as to value of buildings — erroneous charge that on question of value jury must consider only cost of reproduction, less depreciation — erroneous charge that obsolescence or inutility of structures might not be considered.
    1. Under the standard policy of fire insurance limiting insurance to “ actual cash value (ascertained with proper deductions for depreciation) of the property at the time of loss or damage,” the market value of buildings destroyed by fire is not the exclusive measure of the loss. The words “ actual cash value ” must be interpreted as having a broader significance than “ market value ” and to mean “ actual value ” expressed in terms of money.

      2. Nor is cost of reproduction less physical depreciation the sole measure of damage. The words of the policy, “ not exceeding the amount which it would cost to repair Or replace the same with material of like kind and quality within a reasonable time after such loss or damage,” afford no remedy to the assured. They merely express a privilege granted to the insurer. They do not restrict the field of investigation to such cost or provide that, with depreciation, it shall constitute an exclusive measure of recovery.
    3. In an action, on such a policy, to recover the value of buildings destroyed by fire, the triers of fact may, and should, call to their aid, in order to effectuate complete indemnity, every fact and circumstance which would logically tend to the formation of a correct estimate of the loss. They may consider original cost and cost of reproduction; the opinions upon value given by qualified witnesses; the declarations against interest which may have been made by the assured; the gainful uses to which the buildings might have been put; as well as any other fact reasonably tending to throw light upon the subject. In determining depreciation they should be permitted to consider that buildings destroyed were no longer useful for the purposes for which they were erected and their adaptability or inadaptability to other purposes.
    4. In such an action, therefore, the trial judge committed reversible error in excluding declarations against interest as to the value of the buildings, made by the plaintiff; in charging the jury that upon the question of value they must consider no other subject than cost of reproduction less depreciation, and in further charging that the obsolescence of the structures or their inutility for commercial or manufacturing purposes might not be considered. I

      McAnarney v. Newark Fire Ins. Co., 221 App. Div. 818, reversed.
    (Argued December 12, 1927;
    decided January 10, 1928.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the third judicial department, entered September 16, 1927, affirming a judgment in favor of plaintiff entered upon a verdict.

      Robert P. Schur, Ross M. Lovell and Royal H. Weller for appellant.
    The primary purpose of the fire insurance contract is indemnity. By the terms of the standard fire insurance policy, the insured is limited to the recovery of the actual cash value of the property insured or of the cost of repair or replacement minus depreciation, whichever is the less. The plaintiff’s contention that the provisions of the policy relating to cash value must be entirely ignored and that the only criterion is the cost of replacement, is untenable. (Clinton v. Hope Ins. Co., 45 N. Y. 454; Globe & Rutgers Fire Ins. Co. v. Prairie Oil Co., 248 Fed. Rep. 452; Citizens Savings Bank & Trust Co. v. Fitchburg Mutual, 86 Vt. 267; Brown v. Ins. Co., 92 Vt. 372.) There was error in the trial court’s ruling that the obsolescence of the buildings could not be considered in determining the depreciation. (New York Life Insurance Co. v. Anderson, 263 Fed. Rep. 527; Nashville, C. & St. L. Ry. Co. v. United States, 269 Fed. Rep. 351; Van Baumbach v. Sargent Land Co., 242 U. S. 503; San Francisco, P. S. S. Co., v. Scott, 253 Fed. Rep. 854.) There was error in the rulings of the trial court on the evidence and in the charge. (Rheinfeld v. Dahlman, 19 Misc. Rep. 162; Perlman v. Shanck, 192 App. Div. 179; Ins. Co. v. Starr, 71 Tex. 733.)

      James M. E. O’Grady, E. W. Personius and Leo Wax-man for respondent.
    Defendant’s definition of “ indemnity ” and “ actual cash value ” are not in accordance with the terms of the policy. (Laurent v. Chatham Fire Insurance Company of New York, 1 N. Y. Super. Ct. 45; Foley v. Manufacturers’ Fire Insurance Co., 152 N. Y. 131; Boskowitz v. Continental Ins. Co., 175 App. Div. 18; Washington Mills Mfg. Co. v. Weymouth Ins. Co., 135 Mass. 503; Ætna Ins. Co. v. Johnson, 74 Ky. 587; Stenzel v. Penn. Fire Ins. Co., 110 La. Ann. 1019; Yost v. Anchor Fire Ins. Co., 6 J. & S. 594.) No error was committed in excluding evidence. (Boskowitz v. Cont. Ins. Co., 175 App. Div. 18.) There was no error in the court’s charge. (Perlman v. Shanck, 192 App. Div. 179; Reehil v. Fraas, 129 App. Div. 563.)
   Kellogg, J.

The plaintiff was the vendee of certain real estate, purchased in the year 1919 from the defendant Lembeck & Betz Eagle Brewing Company, under written contract, for the sum of $8,000. Seven large buildings, designed for the manufacture of malt, stood upon the premises. Malt had been extensively manufactured therein prior to the year 1918. Owing to the passage of the National Prohibition Act, its manufacture was discontinued in March of that year and thereafter the buildings ceased to be employed for any useful purpose. In January, 1920, policies of insurance insuring the plaintiff and the Lembeck & Betz Eagle Brewing Company, as their interest might appear, against loss of the buildings by fire, in the aggregate sum of $42,750, were taken out. In April, 1920, the buildings were destroyed by fire. Subsequently the plaintiff served proofs of loss wherein he valued the buildings at approximately $60,000 and made claim for the total amount of the insurance. The defendant Newark Fire Insurance Company was one of the insuring companies. It had issued a policy insuring the plaintiff and the defendant Lembeck & Betz Eagle Brewing Company against fire loss in the amount of $2,500. The plaintiff demanded payment from it and, upon its refusal, brought this action to recover the sum of $2,500 promised by its policy. The Lembeck & Betz Eagle Brewing Company had refused to unite with the plaintiff in bringing suit. It was, therefore, made a party defendant. The action was tried before a jury, to which the trial judge submitted the written question: What was the intrinsic or depreciated structural value of the buildings burned? ” The jury returned a verdict specifying the value to have been $55,000. The trial court, having ascertained that the plaintiff had paid to the Lembeck & Betz Eagle Brewing Company the full purchase price for the property, directed judgment in favor of the plaintiff against the Newark Fire Insurance Company for the amount of its policy, with interest.

Complaint is made that the trial court in the course of the trial committed a variety of errors in ruling upon the admissibility of proof offered by the defendant. It refused to receive proof that the plaintiff, when a director of the Lembeck & Betz Company, in the year 1919 reported to that company that he had been unable to obtain a purchaser for the property; that in the same year the corporation had directed the plaintiff to erect a sign upon the premises advertising the property for sale for the sum of $12,000. It refused to receive in evidence an affidavit made by the plaintiff in the year 1919 which was filed with the local board of assessors. In this affidavit the plaintiff had stated that the property had no value except for the production of malt; that the production of malt upon the premises had entirely ceased; that the owners would accept for the property the sum of $15,000; that the best offer which had been received was $6,000. To' the rulings made, excluding such proof and proof of a similar nature, the defendant duly excepted. Complaint is also made of the court’s charge to the jury and of its refusals to charge. The court said to the jury: Your answer shall not be the market value — shall not be the sum that the buildings would sell for, but what it cost to build them — what it cost to build the structures, less depreciation proven in the case.” It charged that the fact that the buildings, because of the passage of the National Prohibition Act, could no longer be used for the manufacture of malt, and the fact that the buildings could no longer be employed for any useful purpose, were wholly immaterial. It further charged that the value of the buildings destroyed was to be measured solely by the cost of replacement less deductions for physical deterioration. The defendant duly excepted to the charges made. It requested the court to charge several propositions of law which were the direct converse of the charges thus made, and, to its refusal, duly excepted.

The policy in suit contained the standard clause, applicable alike to fire losses whether of chattels or buildings, reading as follows: The Insurance Company does insure * * * and legal representatives to the extent of the actual cash value (ascertained with proper deductions for depreciation) of the property at the time of loss or damage, but not exceeding the amount which it would cost to repair or replace the same with material' of like kind and quality within a reas nable time after such loss or damage.”

We cannot agree with the defendant that, under this clause, the market value of the buildings destroyed was the exclusive measure of the plaintiff’s loss. Insurance is thereby limited to actual cash value (ascertained with proper deductions for depreciation) of the property at the time of loss or damage.” Value ascertained by market price is necessarily expressive of a suitable deduction for depreciation. If actual cash value ” were synonymous with market value,” the words in parenthesis, to have force, would require depreciation to be twice subtracted. No such anomolous result could have been intended. In order that the parenthetical words should have force, therefore, “ actual cash value ” must be interpreted as having a broader significance than market value.” Moreover, if market value were the rule, property, for which there was no market, would possess no insurable value, a proposition which is clearly untenable. We think it manifest that the clans was not intended to restrict a recovery for this insurance loss to the market value of the insured buildings. We interpret actual cash value ” to have no other significance than actual value ” expressed in terms of money. For methods by which actual value may be ascertained, we must look beyond the terms of the policy to general principles of the law of damages.

No principle, obtaining in the law of damages, requires that the recovery be restricted to the market value of the buildings. True it is that articles of commerce destined for sale must be appraised, to measure loss through conversion or breach, of contract, by the market prices at which such articles are bought and sold. The reason for the rule is this: the loser of the article, if awarded the prevailing price therefor, may enter the market and, with the sum awarded, replace the article lost with a substitute identical in kind and quality. Replacement in kind necessarily accomplishes complete indemnity. However, the rule presupposes the existence of a broad market with frequent trading in articles of an identical character with the article lost. (Starkey v. Kelly, 50 N. Y. 676; Dana v. Fiedler, 12 N. Y. 40; Messmore v. N. Y. Shot & Lead Co., 40 N. Y. 422; Wehle v. Haviland, 69 N. Y. 448; Todd v. Gamble, 148 N. Y. 382; Saxe v. Penokee Lumber Co., 159 N. Y. 371.) It must be a market in which the loser “ could have replaced the goods.” (Wehle v. Haviland, supra.) It must show “ what would be the value to a party if he wanted to get the same articles again.” (Starkey v. Kelly, supra.) It must enable the loser to supply himself with this article by going into the market and making his purchase at such price.” (Messmore v. N. Y. Shot & Lead Co., supra.) It has been said that value does not inhere in the thing to be valued; that it is a subjective conception; that identity of belief, on the part of many traders, as indicated in a market, causes the conception to assume the objective quality of an established fact. (Sedgwick on Damages, sec. 242.) “ Market value,” as an exclusive measure of damages, necessarily involves identity of concept as disclosed by frequency of sale. Proof of a single sale is not enough to establish a market value.” (Sedgwick, sec. 244.) Clearly, where no sales have been made, the opinion of an expert that the property in question will sell ” for a given sum does not establish market value,” in the sense of an exclusive criterion of value. There cannot be an established market value for barges, boats, and other articles of that description, as in cases of grain, cotton, or stock. The value of such a boat depends upon the accidents of its form, age, and materials; and as these differ in each individual there could be no established market value.” (The Granite State, 3 Wall. 310, at p. 314.) A luxurious private yacht of large dimensions, though marketable in the sense that she can be sold, in the true sense of the term has no market value. She does not fall within the class of articles which are sold from day to day, so that frequent current market transactions will enable the owner, if he desires to sell; to obtain, within a reasonable time, a fair value, or, if he is compelled to replace, to replace at a like fair value.” (The H. F. Dimock, 77 Fed. Rep. 226.) The proposition that if there be no market, in a restricted sense, yet if the commodity is the subject of sale and there is a selling price, the same rule obtains and proof of cost should be excluded,” has not found approval in this court. (Todd v. Gamble, supra.) Self-evidently, the buildings which are the subject of this action had no market value ” in a strict sense. In the first place, buildings, independently of the land upon which they stand, are never the subject of market sales. In the second place, no two buildings are alike in size, proportion, ornamentation, or otherwise. Doubtless no buildings, duplicating those destroyed, could be found the world over. They are "incapable of replacement from any market whatsoever. Therefore, the strict rule that market value or market price is an exclusive measure of damage does not apply.

We do not agree with the plaintiff that, under the standard clause, the sole measure of damage was cost of reproduction less physical depreciation. The words not exceeding the amount which it would cost to repair or replace the same with material of like kind and quality within a reasonable time after such loss or damage,” afford no remedy to the assured. They merely express a privilege granted to the insurer. The insurer might, if it so elected, reconstruct the destroyed buildings upon their ancient pattern with materials of like kind and quality, or pay the assured the necessary cost of such reconstruction. If the insurer so elected, it could be allowed nothing for the difference between the value of the old and the new buildings. (Wood on Fire Insurance, sec. 472.) The clause makes no allusion to depreciation, except as it. provides for the recovery of “ actual cash value ” to be “ ascertained with proper deductions for depreciation.” This provision, while it doubtless comprehends cost of reproduction, does not restrict the field of investigation to such cost or provide that, with depreciation, it shall constitute an exclusive measure of recovery.

Indemnity is the basis and foundation of all insurance law. (Castellain v. Preston, 11 Q. B. D. 380; Richards on Insurance Law, p. 27; Wood on Fire Insurance, sec. 471.) “ The contract of the insurer is not that, if the property is burned, he will pay its market value, but that he will indemnify the assured, that is, save him harmless or put him in as good a condition, so far as practicable, as he would have been in if no fire had occurred.” (Washington Mills Mfg. Co. v. Weymouth Ins. Co., 135 Mass. 503.) The insurer, in our case, in its contract with the plaintiff stipulated that it “ does insure ” the plaintiff “ to the extent of the actual cash value.” Under our interpretation of the phrase, the insurer “ does insure ” to the limit of actual value. To» insure is “to guarantee or secure indemnity for future loss or damage.” (The Century Dictionary.) Where insured buildings have been destroyed, the trier of fact may, and should, call to its aid, in order to effectuate complete indemnity, every fact and circumstance which would logically tend to the formation of a correct estimate of the loss. It may consider original cost and cost of reproduction; the opinions upon value given by qualified witnesses; the declarations against interest which may have been made by the assured; the gainful uses to which the buildings might have been put; as well as any other fact reasonably tending to throw light upon the subject. (Sedgwick on Damages, sec. 722; Wood on Fire Insurance, sec. 472; State Insurance Co. Taylor, 14 Colo. 499; Citizens’ Bank v. Fitchburg Fire Ins. Co., 86 Yt. 267; The H. F. Dimock, supra; Washington Mills Mfg. Co. v. Weymouth Ins. Co., supra; Shattuck v. Stoneham Branch R. R. Co., 6 Allen, 115; Swan v. Middlesex Co., 101 Mass. 173; Wigmore on Evidence, sec. 1943.)

In the case at bar the trier of fact, in considering cost of reproduction, was required by the policy to make proper deductions for depreciation.” “ The word (depreciation) means, by derivation and common usage, ‘ a fall in value; reduction of worth.’ ” (N. Y. Life Ins. Co. v. Anderson, 263 Fed. Rep. 527, at 529.) It includes obsolescence. (Nashville, C. & St. L. Ry. Co. v. U. S., 269 Fed. Rep. 351, at 355; San Francisco & P. S. S. Co. v. Scott, 253 Fed. Rep. 854, at 855.) An obsolete thing is a thing no longer in use. In determining the extent to which these buildings had suffered from depreciation the trier of fact should have been permitted to consider that, owing to the passage of the National Prohibition Act, they were no longer useful for the purposes to serve which they were erected. It should have been permitted to consider their adaptability or inadaptability to other commercial purposes. The law of damages distinguishes between marketable chattels possessed for purposes of sale and chattels possessed for the comfort and well-being of their owner. In the instance of the former it judges their value by the market price. In the instance of the latter it measures their loss, not by their value in a second-hand market, but by the value of their use to the owner who suffers from their deprivation. The latter measure is employed in the case of household furniture, family records, wearing apparel, personal effects and family portraits. (Barker v. Lewis Storage & Transfer Co., 78 Conn. 198; Green v. Boston & Lowell R. R. Co., 128 Mass. 221; Lake v. Dye, 232 N. Y. 209, at p. 214.) Doubtless the law should similarly discriminate between buildings used and usable for commercial purposes and buildings used and usable for residence purposes. The considerations affecting the value of a family residence and of an apartment house or office building are not entirely the same.” (Citizens’ Bank v. Fitchburg Fire Ins. Co., supra.) It might well he held that handsomely carved woodwork or other ornamental features, when found in a private home, have insurable value; whereas, when found in a factory, since they are not useful for factory purposes, they have no such value. However that may be, it is a self-evident proposition that factory buildings peculiarly adapted to the manufacture of malt must have depreciated in value when malt may no longer be manufactured; that buildings useful only for factory purposes have lost value when they are no longer used or usable for such purposes.

The foregoing discussion necessarily establishes that the trial judge committed reversible error in excluding the declarations against interest as to the value of the buildings, made by the plaintiff; in charging the jury that upon the question of value they must consider no other subject than cost of reproduction less depreciation, and in further charging that the obsolescence of the structures or their inutility for commercial or manufacturing purposes might not be considered. Accordingly, the judgment must be reversed.

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

Cardozo, Ch. J., Pound, Crane, Andrews, Lehman and O’Brien, JJ., concur.

Judgment reversed, etc.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Christian A. Bentsen, Respondent, v. James A. O’Boyle, Appellant.
    Negligence — master and servant — ships and shipping — obstruction on deck of barge causing plaintiff to step on ice-covered pump box — • no inference of negligence on part of owner.
    Negligence on the part of the owner of a barge may not be inferred from the location of a small pump box upon the deck and in the obstruction of a space between the pump box and the coaming surrounding the cargo space, thus closing a narrow passageway through which the plaintiff, who was at work upon the barge, might otherwise have walked in the performance of his duty, as a result of which the plaintiff stepped upon the pump box, which was coated with ice, in making his way forward, slipped and fell, receiving injuries.

      Bentsen v. O’Boyle, 220 App. Div. 755, reversed.
    (Argued December 6, 1927;
    decided January 10, 1928.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered June 6, 1927, affirming a judgment in favor of plaintiff entered upon a verdict.

      Theodore H. Lord and James B. Henney for appellant.
    The accident was not due to the defendant’s negligence, and the complaint should be dismissed. (White v. Lehigh Valley R. R. Co., 220 N. Y. 131.)

      Silas B. Axtell and Charles A. Ellis for respondent.
    The evidence established that the deck of the barge was rendered an unsafe place in which to work and unseaworthy, owing to the location of the starboard pump box and the arrangement of the hatch covers bétween the pump box and the hatch coaming in such manner as to leave an insufficient walkway for plaintiff to pursue his work and constituted a failure to provide a fair and adequate walkway, making it unsafe for plaintiff to pursue his work, even in the exercise of ordinary care. It was the duty of the employer to use reasonable diligence to furnish his servants a safe place to work. (The Kingshorn, 297 Fed. Rep. 621; Atlantic Transport Co. v. Szezeck, 234 U. S. 52; B. & O. R. R. Co. v. Baugh, 149 U. S. 386.)
   Per Curiam.

The jury were permitted to find a verdict for the plaintiff based upon the alleged negligence of the defendant. This negligence, it was claimed, consisted in the location of a small pump box upon the deck of a barge owned by the defendant and in the obstruction of a space between the pump box and the coaming surrounding the cargo space, thus closing a narrow passageway through which the plaintiff, who was at work upon the barge, might otherwise have walked in the performance of his duty. As a result the plaintiff walking from the rear of the barge towards the bow, stepped upon the pump box in making his way forward. The top of the box was coated with ice. Upon this the plaintiff slipped and fell, receiving somewhat serious injuries.

We hold that these circumstances do not permit the júry to infer negligence on the part of the owner of the barge.

The judgment appealed from should be reversed and a new trial granted, with costs to abide the event.

Cabdozo, Ch. J., Pound, Crane, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

, Judgment reversed, etc.


text:
    The People of the State of New York, Respondent, v. Isaac G. Wolf, Appellant. The People of the State of New York, Respondent, v. George Jennings, Appellant.
    Crimes — appeal — practice — appeals by People in criminal cases governed by Code of Criminal Procedure, § 620 — upon reversal by County Court of judgments of conviction by police justice, appeal may be taken only to Court of Appeals, by permission — appeals to Appellate Division unauthorized and judgments of that court void.
    Section 520 of the Code of Criminal Procedure governs the practice for appeals by the People as well as by defendants. Upon the reversal by a County Court of judgments of conviction rendered by a police justice, the People could have appealed to the Court of Appeals if a judge of this court or a justice of the Appellate Division had allowed such appeal. Appeals to the Appellate Division were unauthorized and judgments thereafter rendered by that court were without jurisdiction. The defendants upon appropriate motion made to the Appellate Division will be entitled to an order expunging them as void. Appeals therefrom to the Court of Appeals should, therefore, be dismissed.

      People v. Wolf, 220 App. Div. 71, appeal dismissed.

      People v. Jennings, 220 App. Div. 71, appeal dismissed.
    (Argued December 5, 1927;
    decided January 10, 1928.)
    Appeal, in each of the above-entitled actions, by permission, from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered March 18, 1927, reversing a judgment of the Nassau County Court which in turn reversed a judgment of the Police Court of the village of Kings Point, convicting the defendants of violating a village ordinance.

      Erastus J. Parsons for appellant.

      Elvin N. Edwards, District Attorney (.Bronson Winthrop and Allen T. Klots of counsel), for respondents.'
    The Appellate Division had power and jurisdiction to entertain the appeal by the People from the County Court. (People v. Phillips, 219 App. Div. 352; People v. Goldberger, 219 App. Div. 259; People v. Fitzgerald, 244 N. Y. 307; People v. Johnson, 187 N. Y. 319.)
   Per Curiam.

The appellants were convicted in the Police Court of the village of Kings Point, Nassau county, of the violation of a village ordinance. They appealed to the County Court, which reversed the conviction, holding that the ordinance was unconstitutional. The order of reversal was entered June 14, 1926. On July 1, 1926, section 520 of the Code of Criminal Procedure was amended by Laws of 1926, chapter 465, so as to establish a new practice upon appeals in criminal causes.

The People, dissatisfied with the judgment of the County Court, did not follow the practice prescribed by the amendment. They acted on the assumption that section 770 of the Criminal Code continued to define the governing rule upon appeals by the People where the judgment of conviction had been rendered by a minor court. Accordingly they obtained from a justice of the Supreme Court on August 3, 1926, an order allowing axi appeal to the Appellate Division, and served a notice of appeal on August 26. The Appellate Division entertained the appeal, and in March, 1927, reversed the judgment of the County Court, and affirmed the judgments of conviction. Thereafter the same court allowed an appeal to this court, and certified a question for review as follows: “ Was the order and judgment of reversal of the County Court of Nassau county, rendered June 14, 1926 herein, properly reversed by this court upon the law, as ordered and adjudged by the order and judgment of this court entered herein, March 18, 1927? ”

We have held in People v. Kevlon (247 N. Y. 192), decided herewith, that section 520 of the Code of Criminal Procedure governs the practice for appeals by the People as well as by defendants. Upon the reversal by the County Court of the judgment of conviction rendered by the police justice, the People could have appealed to this court if a judge of this court or a justice of the Appellate Division had allowed such appeal. Instead, they undertook to appeal to the Appellate Division. That appeal was unauthorized. The judgment thereafter rendered was without jurisdiction, and the defendants upon appropriate motion made to the Appellate Division will be entitled to an order expunging it as void.

The case before us illustrates the wisdom of the ruling that section 520 applies, though the appeal is by the People. If the County Court had affirmed the judgment of conviction, there is no doubt that section 520 would have governed an appeal by the defendants. Any further appeal must have then been taken, not to the Appellate Division, but to this court, and then only by allowance. It would be anomalous to have a review by the Appellate Division upon appeal by the People, and a review by this court upon appeal by the defendant. The anomaly would not end there. A reversal by the Appellate Division and a reinstatement of the conviction, would leave the defendants helpless, for section 520 is explicit to the effect that there shall be no more than two appeals. The statutory scheme would be mutilated in its essential features if a defendant were thus to be deprived of the opportunity to obtain the judgment of this court as to the merits of a conviction.

We are not unmindful of our ruling in People v. Ekerold (211 N. Y. 386, decided in June, 1914) to the effect that an appeal may be allowed in criminal causes on questions certified by the Appellate Division after a judgment of affirmance which might otherwise be final. That ruling was made under article 6, section 9, of the Constitution of 1894: “ The Appellate Division in any department may, however, allow an appeal upon any question of law which, in its opinion, ought to be reviewed by the Court of Appeals.”

We were of the opinion that criminal as well as civil causes were within the scope of that provision. The new judiciary article of the Constitution (Art. VI, § 7), though containing a like provision, says distinctly that it shall apply to civil causes only. As to appeals in criminal causes, the provision is that they may be taken to this court directly from a court of original jurisdiction where the judgment is of death, and in other criminal cases from an Appellate Division or otherwise as the Legislature may from time to time provide.” The Legislature has acted pursuant to this authority, and the rule it has laid down is exclusive of any other.

The appeals in both cases should be dismissed.

Cabdozo, Ch. J., Pound, Crane, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.

Appeals dismissed.


author: O’Brien, J.

text:
    The People of the State of New York, Appellant, v. Elmer Kevlon, Respondent.
    Crimes — appeal — decision of appellate court in criminal case final as to both parties unless permission to appeal to Court of Appeals is granted — appeal by People, without permission, from judgment of Appellate Division reversing judgment of conviction, dismissed.
    1. The language of section 520 of the Code of Criminal Procedure requires the conclusion that the party defeated in the court of original jurisdiction is entitled to one appeal and that the appellate court first entertaining appellate jurisdiction is, in the absence of a certificate allowing an additional appeal, deemed to be the court of last resort. Its decision is final as against both parties except in the event of the issue of a certificate.
    2. An appeal by the People, therefore, without permission, to the Court of Appeals from a judgment of the Appellate Division reversing a judgment of the Court of General Sessions rendered upon a verdict of conviction, should be dismissed.

      People v. Kevlon, 221 App. Div. 224, appeal dismissed.
    (Argued November 28, 1927;
    decided January 10, 1928.)

      Appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered June 14, 1927, which reversed a judgment of the Court of General Sessions of the county of New York, rendered upon a verdict convicting the defendant of the crime of robbery in the second degree and remanded the defendant for resentence.

      Joab H. Banton, District Attorney (Robert C. Taylor of counsel), for appellant.

      Leonard F. Fish and David C. Broderick for respondent.
   O’Brien, J.

In the Court of General Sessions for New York county defendant with two others pleaded guilty of the crime of robbery in the second degree. A fourth member of the band, who has not been apprehended, had carried a pistol during the commission of the robbery and had passed it to one of his confederates who momentarily retained it. Although defendant never had the pistol in his possession, the sentence imposed upon him included the increased term provided for by section 1944 of the Penal Law for carrying a pistol while in the act of committing a felony. The Appellate Division has reversed solely on the law and has remanded defendant for resentence. The People, without obtaining a certificate either from a justice of the Appellate Division or from a judge of this court, appeals as matter of right.

In the absence of compliance with the provisions of section 520 of the Code of Criminal Procedure, we have no jurisdiction to hear the appeal. Since the amendment to this section by chapter 465, Laws of 1926, its provisions supersede all other laws dealing with appeals in criminal actions when the judgment of the trial court is a judgment of conviction. Its subdivision 4 so expressly declares. By section 520 as there amended the Legislature conferred a right of review upon a person convicted of crime, but declared there shall be only one such appeal and the decision of the appellate court shall be final, and no> appeal shall lie from that court to any other court except-as hereinafter provided.” Subdivision 1 authorizes an appeal from the Court of General Sessions to the Appellate Division, except where the penalty is death, and subdivision 3 further regulates appeals in this language: “ Where an appeal has been taken and has been decided by any of the appellate tribunals hereinbefore referred to, a further right of appeal to the Court of Appeals shall lie as hereinafter prescribed, but not otherwise.” Then provision follows for an additional appeal only in the event of the granting of a certificate by a justice of the Appellate Division or a judge of the Court of Appeals. We are of the opinion that the Legislature declared its whole policy in relation to appeals by the People when it amended section 520 to take effect July 1, 1926, and supplemented those provisions by the amendment to section 518 to take effect July 1,. 1927. -In saying this we exclude appeals under sections 518 and 519 which have to do with determinations other than judgments of conviction. An interpretation directed exclusively to that part of section 520 which provides for “ only one such appeal ” might conceivably lead to the conclusion that it is only the party who has appealed from the court of first instance who is forbidden to take further appeal. Such interpretation, however, would compel disregard of that command in the same section which says that the decision of the appellate court shall be final, and no appeal shall He from that court to any other court except as hereinafter provided.” Here is an instance where we think the Legislature intended its words to be Hterally followed. The confusion to which any other construction would load us is pointed out in pur opinion in People v. Wolf (247 N. Y. 189), decided herewith, The language of section 520, as we read it, is such as to require the conclusion that the party defeated in the court of original jurisdiction is entitled to one appeal and that the appellate court first entertaining appellate jurisdiction is, in the absence of a certificate allowing an additional appeal, deemed to be the court of last resort. Its decision is final as against both parties except in the event of the issue of a certificate.

The appeal should be dismissed.

Cardozo, Ch. J., Pound, Crane, Andrews and Lehman, JJ., concur; Kellogg, J., not sitting.

Appeal dismissed.


author: Cabdozo, Ch. J. Lehman, J. Kellogg, J.

text:
    In the Matter of Ida L. Gallien et al., as Executors of Brace M. Gallien, Deceased, Respondents. Wesleyan University et al., Appellants.
    Will — trust — provision for payment from income of monthly sum to foster daughter and balance to wife and on her death balance to be applied to support of incompetent son with direction for distribution “ when the above payments shall cease” — word “when” equivalent to “as” — division to be made when payments severally cease — trust as to foster daughter fails but is valid as to residue — immediate division of principal not required if wife die before son — payments to beneficiaries postponed until death of survivor.
    1. In construing a will by which the whole estate, after payment of debts, was given in trust, with direction to the trustee to pay from the income, monthly, a small sum to a foster daughter “ so long as she may live,” the balance of the income to be paid to testator’s widow “ as she may desire it,” and, on her death, the balance of the income, or so much as may be necessary, to be expended for the “ proper support and maintenance ” of an ineompe ent son, followed by the provision “ when the above payments shall cease by reason of the deaths of the beneficiaries mentioned, I direct my trustee to pay ” certain bequests, the word “ when ” in the sentence defining the time of distribution is equivalent to “ as ” and division is to be made when the payments severally cease and the deaths severally occur.
    2. The trust for the foster daughter fails, and as to the capital reasonably necessary to produce the income payable to her, distribution is to be made upon the basis of intestacy, but the trust is valid as to the residue.
    3. A contention that if the will is read as directing a division when payments severally cease, immediate division of the principal would be necessary if the wife died before the son, cannot be sustained. No such result would follow. The income would then be carried over to the survivor by the express mandate of the will. Not till the death of the survivor would the time arrive when the payments,to the beneficiaries as directed by the testator could be said to have ceased as to any portion of the trust estate.

      Matter of Gallien, 221 App. Div. 409, reversed.
    (Argued November 21, 1927;
    decided January 10, 1928.)
    Appeal from an order of the Appellate Division of the Supreme Court in the third judicial department, entered August 11, 1927, which affirmed a decree of the Albany County Surrogate’s Court construing the will of Brace M. Gallien, deceased.

      Neile F. Towner for Wesleyan University, appellant.
    The gift to Mabel Crans is an annuity and her life is not to be considered in the determination of the duration of the trust under decedent’s will. Such trust is valid as its duration is not beyond the period fixed by statute. (Seitz v. Faversham, 205 N. Y. 202; Matter of Ossman v. Von Roemer, 221 N. Y. 381; Peoples Trust Company v. Flynn, 188 N. Y. 393; Matter of Hitchcock, 222 N. Y. 73; Hascall v. King, 162 N. Y. 152; Green v. Green, 125 N. Y. 512; Buchanan v. Little, 154 N. Y. 147; Bailey v. Buffalo Loan, Trust & Safe Deposit Co., 151 App. Div. 167; Orr v. Orr, 147 App. Div. 753; 212 N. Y. 615; Central Trust Co. v. Flack, 177 App. Div. 504.) The bequest to Mabel Crans is severable. (Matter of Horner, 237 N. Y. 489; Matter of Trevor, 239 N. Y. 6; Matter of Buttner, 243 N. Y. 1.)

      Newton B. Van Derzee for First Presbyterian Church, appellant.
    In construing a will an unlawful perpetuity will never be presumed when another construction is possible. (Matter of U. S. Trust Co., 86 Misc. Rep. 603; 216 N. Y. 639; Matter of Stanfield, 135 N. Y. 292; Turner v. Mather, 86 App. Div. 172; Buchanan v. Little, 154 N. Y. 147; Spencer v. Spencer, 38 App. Div. 403; Matter of Collins, 144 N. Y. 522; Matter of Trumbell, 199 N. Y. 454.) The legacy to Mabel Grans does not and could not affect the duration of the trust. (Peoples Trust Co. v. Flynn, 188 N. Y. 385; Crozier v. Bray, 120 N. Y. 375; Mee v. Gordon, 187 N. Y. 400.)

      E. Crosby Kindleberger and Arthur 0. Townsend for Addison J. Gallien et al., appellants.
    By considering the provision for Mabel Grans as an annuity and not as a trust for a third life, the clear intention of the testator can and will be carried out. (Robinson v. Martin, 200 N. Y. 159; Matter of Buechner, 226 N. Y. 400; Carrier v. Carrier, 226 N. Y. 114; Cammann v. Bailey, 210 N. Y. 19; Matter of Silsby, 229 N. Y. 396; Matter of Evans, 234 N. Y. 42; Kalish v. Kalish, 166 N. Y. 368; Matter of Horner, 237 N. Y. 489; Matter of Trevor, 239 N. Y. 6; Matter of Buttner, 243 N. Y. 1.) The provision for Mabel Grans is not so closely blended with the trust for the widow and the incompetent son as to become wholly void. (Matter of Perkins, 245 N. Y. 478; Matter of Chittick, 243 N. Y. 304; Matter of Buttner, 243 N. Y. 1; Schettler v. Smith, 41 N. Y. 328; Herzog v. Title G. & T. Co., 177 N. Y. 86; Matter of Wilcox, 194 N. Y. 288.)

      Arthur L. Andrews for National Commercial Bank and Trust Company, as trustee.
    Annuitants are not considered as persons to be taken into consideration in determining the number of measuring fives. (Buchanan v. Little, 154 N. Y. 147; Peoples Trust Co. v. Flynn, 188 N. Y. 385; Schermerhorn v. Cotting, 131 N. Y. 48.) The provision for Mabel Grans is severable from the provision for the widow and son. (Matter of Chittick, 243 N. Y. 304.)

      Melvin T. Bender and Roland Ford for Ida L. Gallien et al., as executors, respondents.
    The trust for the benefit of IdaL. Gallien, Brace Goodwin Gallien and Mabel Grans unlawfully suspends the power of alienation. (Buchanan v. Little, 154 N. Y. 147; Hooker v. Hooker, 41 App. Div. 235; 166 N. Y. 156; Cochrane v. Schell, 140 N. Y. 516;
      Herzog v. Title Guaranty & Trust Co., 177 N. Y. 86; Matter of Trevor, 239 N. Y. 6; Crane v. Bennett, 177 N. Y. 106.) Since the trust is invalid all the disposing provisions of the will must fail. (Central Trust Co. v. Egleston, 185 N. Y. 23; Walter v. Walter, 60 Misc. Rep. 383.)

      Herman J. Diekman for Brace G. Gallien, respondent.
    The power of alienation is unlawfully suspended by the terms of the will of Brace M. Gallien. (Matter of Horner, 237 N. Y. 489; Herzog v. Title Guarantee & Trust Co. of New York, 177 N. Y. 86.) All of the paragraphs of the will are so connected that they constitute an entire scheme and since the trust is illegal and invalid all of the disposing provisions of the will must fail. (Brown v. Quintard, 177 N. Y. 75; Knox v. Jones, 47 N. Y. 389; Hooker v. Hooker, 166 N. Y. 156; Bailey v. Buffalo L., T. & S. D. Co., 213 N. Y. 525; Central Trust Co. v. Egleston, 185 N. Y. 23; Whitefield v. Crissman, 123 App. Div. 233; Matter of Douglass, 120 Misc. Rep. 193.)
   Cabdozo, Ch. J.

Brace M. Gallien left a will disposing of an estate of the value of from $150,000 to $200,000. He was survived by his wife and by a son of unsound mind. The son had been cared for by one Mabel Grans, who is described as a foster daughter, but who was never adopted. She survived the testator only four days. By the will, which was written on a printed form, the whole estate, after payment of debts, is given to a trustee in trust “ from the income thereof to pay monthly to our foster daughter, Mabel Crans, so long as she may live, the sum of fifty dollars ($50) per month for her personal use. The balance of the income of my estate is to be paid to my wife Ida L. Gallien as she may desire it. If my said wife, should be survived by our son Brace Goodwin Gallien, then the said balance of income or so much thereof as may be necessary is to be expended for his proper support and maintenance.” Immediately after this gift there is one of interests in remainder: When the above payments shall cease by reason of the deaths of the beneficiaries mentioned, I direct my said trustee to pay the following bequests in the order mentioned dividing the residue of my estate into 'six equal parts.” One-sixth is given to a brother; one-sixth to another brother; one-sixth in trust for a sister; the residue to a church and to Wesleyan University. The surrogate held that the trusts for the wife, the son and the foster daughter suspend the power of alienation and the absolute ownership for more than two lives in being at the death of the testator and that the entire will is void. In his view, the whole estate must have been kept within the trust if Mabel Grans had survived the other beneficiaries, though the income to be paid to her would be only $50 a month ($600 a year) out of a yearly income of $10,000 or more. The preservation of an idle trust might be incongruous with reason. Even so, the incongruity was unavoidable in view of the language of the will. The Appellate Division affirmed by a divided court.

When the above payments shall cease by reason of the deaths of the beneficiaries mentioned,” what is undisposed of shall be divided. The question is whether division is to be made when the payments severally cease and the deaths severally occur, or is to be postponed until all the deaths shall have occurred and all the payments shall have ceased. We reach the first of these results if we hold that the word “ when ” at the.beginning of of the sentence may fairly be interpreted as equivalent to as.” Equivalent they often are (Murray, Oxford Dictionary, s. v. As, subd. Ill, 16; s. v. When, subd. II, c). The will in that view is to be construed as if it read: “ As the -above payments shall cease (or shall severally cease) by reason of the deaths of the beneficiaries mentioned,” what is undisposed of shall be divided. Such a reading has support in the evidences of intention furnished by the will itself as well as in settled principles of testamentary construction. One of the best known of those principles is that if two or more constructions are reasonably possible, the' one that will sustain the validity of the will is to be preferred, generally speaking, to the one that will defeat it (Roe v. Vingut, 117 N. Y. 204, 212; Phillips v. Davies, 92 N. Y. 199; Greene v. Greene, 125 N. Y. 506, 512). The court struggles to preserve, and surrenders to nothing short of obvious compulsion. In the attainment of its end, it may “ reject words and limitations, supply them or transpose them, to get at the correct meaning ” (Phillips v. Davies, supra; cf. Roome v. Phillips, 24 N. Y. 463; Miller v. Gilbert, 144 N. Y. 68, 74). There are internal evidences of intention here to reinforce these general precepts. The will does not say that division is to be postponed until the entire trust shall terminate. It says that when there is cessation of “ payments,” there shall also be division. Certainly some payments will cease upon the death.of wife and son. If the trust is to exist thereafter, it will cease to be bounded by the time when the income or any substantial part of it can continue to be paid in accordance with the trust provisions. “ We are not to gather, from the language of the will, the absurd and destructive intention to continue a trust beyond the limit implied by its own nature and inherent character, unless compelled to do it by language which will admit of no other interpretation ” (Crooke v. County of Kings, 97 N. Y. 421, 438; cf. Locke v. F. L. & T. Co., 140 N. Y. 135, 147). More significant, however, than any argument that has its roots in verbal criticism is the argument that is drawn from a survey of the consequences to be promoted or averted. By reading as ” for “ when,” or construing the cessation of payments as several or distributive rather than general or collective, we not only save the validity of the trust or at least the greater part of it. We cut an avenue of escape from consequences so unreasonable, we might even say so ludicrous, that a sensible testator cannot be supposed to have intended or approved them. The wife and the son were the chief objects of solicitude. The care of them was the primary purpose of the trust. The trifling provision for the foster daughter ” was an incident and nothing more. To tie up the whole estate in a continuing trust after the death of wife and son in order to make these petty payments, is a result so extraordinary, even if it were lawful, that only words inexorably clear should drive us to accept it. Acceptance will be the more reluctant when one of the consequences accompanying it is to make the will unlawful.

We hold, accordingly, that when ” in the sentence defining the time of distribution is equivalent to “ as.” If the will were so phrased, it would be the duty of the trustee, upon the death of wife and son with the foster daughter living, to retain within the trust an amount adequate to.make provision for the monthly payments of fifty dollars, and to make division of the residue. A severance of the trust to that extent would then be an implied command (Matter of Horner, 237 N. Y. 489; Matter of Trevor, 239 N. Y. 6; Locke v. F. L. & T. Co., 140 N. Y. 135, 149; Hopkins v. Kent, 145 N. Y. 363). A like duty exists under the will as it is written. We do not say that such a severance will save'the trust in its entirety. It must fail even then as to the share directed to be retained for the use of Mabel Grans, since there are possible contingencies in which three lives might have to elapse before the trust as to that share would end. If the foster daughter were to die before the wife, the income thus released "would become an accretion to the income payable to the wife, and in the event of her death might be added to the income of the son. This would transgress the statutory limit. On the other hand, the trust for wife and son must terminate in any event at the end of two lives, since their shares are to be severed and distributed in fee if the daughter shall survive them.

We see no difficulty in determining the proportion of the estate to be set apart as sufficient to yield the monthly payments (Bradhurst v. Field, 135 N. Y. 564). A different question would be here if the testator could be supposed to have intended that the payments should have the security of a trust enveloping the whole estate regardless of its size. Such was the situation, e. g., in Cochrane v. Schell (140 N. Y. 516, 535). Here the direction to divide the principal when payments to the beneficiaries shall cease is equivalent to a direction to make whatever severance is necessary. Nor is there substantial ground for the belief that the failure of the trust for Mabel Grans will so mutilate the will in the essence of its plan as to make it better to drag down to destruction at the same time the trust for wife and son. Mabel Grans would not take anything if the will were rejected altogether. She was not an heir or next of kin. We have no such problem here as arises at times where the failure of a separable trust will involve an unintended discrimination between children or other relatives who would take equally or proportionately if there were to be intestate succession (Benedict v. Webb, 98 N. Y. 460, 466). Nothing is done here save what we may safely presume that the testator would have wished the court to do in the presence of such an emergency if he had been able to foresee its happening (Kennedy v. Hoy, 105 N. Y. 134).

We are told that the will, if read as directing a division when payments severally cease, would fail even then to express the wish of the testator. The argument is made that immediate division of the principal would be necessary in that event if the wife died before the son. No such result would follow. The income would then be carried over to the survivor by the express mandate of the will. Not till the death of the survivor would the time arrive when the payments to the beneficiaries as directed by the testator could be said to have ceased as to any portion of the trust estate. Subtle refinements are unnecessary to give support to that construction. What is needed is nothing more unusual than a common sense appraisal of probabilities and meanings.

We hold that the trust for the foster daughter fails, that as to the capital reasonably necessary to produce the income payable to her, distribution is to be made upon the basis of intestacy, and that the trust is valid as to the residue.

Questions-may arise hereafter in respect of the validity of some or all of the gifts to take effect as remainders when the trust is at an end. None of these questions was considered by the courts below. We leave them open now, to be dealt with hereafter by the surrogate or the Supreme Court if it shall be found expedient to answer them (Matter of Farmers’ Loan & Trust Co., 226 N. Y. 691).

The order of the Appellate Division should be reversed, and the proceeding remitted to the Surrogate’s Court for the entry of a decree construing the will in accordance with this opinion, costs to be allowed to all parties appearing and filing briefs in this court, payable out of the estate.

Lehman, J.

(concurring in part). There can be no question that the primary purpose of the testator in creating a trust of all his property was to make provision for his wife and son. A small fractional part of the income was to be paid to his foster daughter, Mabel Grans, so long as she lived. The balance was to be paid to the wife or son. The death of Mabel Grans would increase the income payable to them. Their death was not to affect payment to her. When the testator’s wife and son both die the primary purpose of the trust fund will be complete. The question presented upon this appeal is whether the testator evidenced an intent that the trust fund or any part of it was to continue after the primary purpose of its creation had ceased. The testator’s desire to safeguard the payment of the sum of $50 a month to Miss Grans must have been strong indeed, if he intended that after the death of his wife and son, property with an income of $10,000 should be held in trust to effectuate that desire. If the testator had intended such result, we might look with confidence for some direction for the disposition of the large surplus of income remaining after the small payments to Miss Grans were made. Here such direction is -wanting.

The testator’s intent must be gathered' from the language of his will. Strict grammatical construction may at times defeat actual intent. We must give effect to the sense which a testator attached to the words he has used. Here the testator has provided that the trust shall terminate when the above payments shall cease by reason of the death of the above-mentioned beneficiaries If by the words I have italicised the testator indicated that the trust fund was to be held intact until Miss Grans died, though his wife and son may have died before, his indicated intention may not be disregarded. (Cochrane v. Schell, 140 N. Y. 516.) In that event the testator has acted foolishly. He has created a trust which is void in law and which even if valid would result in tying up his whole estate after the death of his wife and son for the sole purpose of safeguarding payment of a small proportion of the income to his foster daughter.

By the terms of the will, after the death of Miss Grans all the income became payable to the testator’s wife and son. Only in the event that both died before Miss Grans could the trust, under any possible construction of the will, continue after the payment of the balance of the income to the wife and son ceased. We may assume with a reasonable basis for the assumption that the testator did not realize that a contingency might arise in which the property would be held merely to safeguard payment of $600 a year to Miss Grans. Otherwise he would have made some provision for the disposition of the balance of income, amounting to $9,400. Here we have at least a clue to the actual intention of the testator in using the words above payments ” and above-mentioned beneficiaries.”

After payment of $50 to Miss Grans, so long as she shall live, payment of the balance was to be made to the wife. If the testator’s son survived the wife, the balance of income was to be expended for him. Payment of the balance of the income to the beneficiaries entitled thereto was the dominant purpose of the trusts. Payments to wife and son are directed, and the beneficiaries are mentioned in the two sentences immediately preceding the direction for the termination of the trust when the above payments shall cease by the death of the beneficiaries mentioned.” To me it seems clear that the testator in using these words had in mind only the payments last directed to the last-mentioned beneficiaries. Under that construction, payments to Miss Grans would still be continued with adequate safeguards. (Buchanan v. Little, 154 N. Y. 147.) Other construction requires that we impute to the testator ignorance of the law and lack of ordinary foresight.

The order of Appellate Division should be reversed.

Kellogg, J.

(dissenting). In order to give effect to an intention of the testator, not expressed but assumed to exist, the court proposes to re-word one sentence of the will to read as follows: As the above payments shall cease (or shall severally cease) by reason of the death of the beneficiaries mentioned, I direct my said trustee to pay the following bequests in the order mentioned, dividing the residue of my estate into six equal parts.” Further reduced, but with the same meaning, the sentence would read “ As the above payments shall severally cease by reason of the death of the beneficiaries mentioned, I direct my trustee to pay the following bequests.” That would mean that, at the death of the/foster daughter, the principal sum, furnishing to her a life income, must then be distributed to remaindermen. It would further mean that, at the death of the wife, the principal sum, furnishing to her a life income, must then be similarly distributed. But this verbal weapon would overshoot the desired mark. It would leave in the trust no sum from which there might be paid an income to the son, as provided elsewhere in the will. Even the authors of the improved sentence would not approve that result. What -they seek is a severance of the capital sum into two parts, one to be devoted to the uses of the foster daughter, the other to be devoted to the uses of both the wife and son. With this end accomplished neither fund would remain in a state of trust for more than two lives. But how can this be achieved by the phrase as the above payments shall severally cease? ” eIf that means aught, it means as the payments to each of the several persons named shall cease ” there shall be division of the principal pro tanto. The revised sentence provides no fine of cleavage between the daughter’s fund on the one hand, and upon the other the fund providing income for the wife and son. The truth is that the will ordains division at the end of the three lives and not sooner. When the payments to the beneficiaries shall cease by reason of their deaths,” that is, the deaths of the three, then, and then only, is the trustee directed to pay the following bequests in the order mentioned, dividing the residue of my estate into six equal parts.” In my judgment the testator attempted to create a trust to endure for a period longer than two lives and, therefore, the will should not stand. I, therefore, dissent.

Pound, Crane, Andrews and O’Brien., JJ., concur with Cardozo, Ch. J.; Lehman, J., votes for reversal in separate opinion; Kellogg, J., dissents in opinion and votes to affirm.

Ordered accordingly.


author: Kellogg, J.

text:
    Fanny Cohen, Appellant, v. Pesach Neustadter, Respondent. Samuel Cohen, Appellant, v. Pesach Neustadter, Respondent.
    Negligence — motor vehicles — trial — charge — injury to passenger in car driven by defendant’s daughter with defendant’s assent — erroneous charge that to justify verdict jury must find defendant directed daughter to drive them— remedy under section 282-e of Highway Law.
    Where in actions to recover for personal injuries and for loss of services arising therefrom, it appears that while plaintiffs were riding in defendant’s automobile, with his assent, the car was overturned through the negligent driving of his daughter, resulting in the injuries and loss complained of, an instruction by the trial court that in order to justify verdicts for the plaintiffs the jury must find that defendant had directed his daughter to drive them and a ruling that it was not sufficient if the daughter made the trip with the express or implied consent of the defendant, are erroneous. Section 282-e of the Highway Law (Cons. Laws, eh. 25) applied, to give plaintiffs a remedy against defendant, if the ear was negligently driven by the defendant’s daughter upon an errand assented to by the defendant.

      Cohen v. Neustadter, 221 App. Div. 102, reversed.
    (Argued December 1, 1927;
    decided January 10, 1928.)
    Appeal, in each of the above-entitled actions, from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered June 24, 1927, affirming a judgment in favor of defendant entered upon a verdict.

      William A. Schackt for appellants.
    It was error for the trial court to charge the jury that they must find that the driver of the car was the agent of the owner and engaged in his business, before a verdict could be rendered for the plaintiffs, and refuse to charge in the language of the statute. (Plaumbo v. Ryan, 213 App. Div. 517; Fluegel v. Coudert, 244 N. Y. 393.)

      James A. Nooney and Joseph Force Crater for respondent.
    No error was committed by the trial court in its instructions and refusals to charge the jury. (Downing v. City of N. Y., 219 App. Div. 444; 245 N. Y. 597; Plaumbo v. Ryan, 213 App. Div. 517; Rolfe v. Hewitt, 227 N. Y. 486; Dawley v. McKibben, 245 N. Y. 53; Grant v. Knepper, 245 N. Y. 158; Feitelberg v. Matuson, 124 Misc. Rep. 595; Cohen v. O’Beyer, 125 Misc. Rep. 390; Butler v. Jackson, 126. Misc. Rep. 568; Potchasky v. Marshall, 211 App. Div. 236; Katz v. Wolff & Reinheimer, Inc., 129 Misc. Rep. 384; Stapleton v. Hertz Drivurself Stations, Inc., 129 Misc. Rep. 772; Shubert v. Shubert Wagon Co., 129 Misc. Rep. 578; Brooks v. McNutt Auto Delivery Co., 126 Misc. Rep. 730.)
   Kellogg, J.

These are two actions in negligence which were tried as one. The first action was brought to recover damages for personal injuries sustained by the plaintiff Fanny Cohen. The second action was brought by her husband, Samuel Cohen, to recover damages for the loss of the services of Fanny Cohen, occasioned by her injuries. The two Cohens were spending their vacation in the Catskills at a boarding house near Mountain-dale. The defendant, an acquaintance of theirs, was spending his vacation in the nearby village of Fallsburg. One day the three met at a country store in Mountain-dale. According to the story told by the Cohens, the defendant asked them to drive with him in his automobile to Fallsburg. Fanny Cohen said that she would like first to change her dress. Thereupon the defendant directed bis daughter, Pearl Neustadter, to drive the Cohens in his automobile to their boarding house in order that Fanny Cohen might effect a change of clothes. According to the Neustadters, the Cohens asked the defendant to drive them in his automobile to Fallsburg. When the defendant had given- his assent, Fanny Cohen remarked that she must return to her boarding house for the purpose already stated. Thereupon the defendant’s daughter Pearl, in the presence of the defendant, invited Fanny Cohen to drive to the boarding house. No direction was given by the defendant to his daughter to make the drive. Concededly, the drive was taken. Concededly, the automobile, on its way back from the boarding house, was overturned at the foot of a steep hill while Pearl Neustadter was attempting to guide it around a turn into a cross road. Concededly, the plaintiff Fanny Cohen was more or less seriously injured by the capsizing of the car. Abundant proof was given to justify the conclusion that the car was negligently driven by Pearl Neustadter. Nevertheless, the jury, by its verdicts, acquitted the defendant from liability. It had been instructed by the trial court that in order to find verdicts for the plaintiffs it must first find that the defendant had directed his daughter to drive the Cohens to the boarding house and return. The court had also ruled that it was not sufficient if the daughter made the trip with the express or implied consent of the defendant. In view of the instructions given, and the compelling nature of the proof as to negligence, it is highly probable that the verdicts resulting were based upon a determination that while the automobile was driven with the assent of the defendant owner, it was not driven by his direction.

The accident occurred on July 15th, 1924. At this time section 282-e of the Highway Law (Cons. Laws, ch. 25), which was added by chapter 534 of the Laws of 1924, had become effective. The section, in part, provides as follows: “Every owner of a motor vehicle operated upon a public highway shall be liable and responsible for death or injuries to person or property resulting from negligence in the operation of such motor vehicle, in the business of such owner or otherwise, by any person legally using or operatingthe same with the permission, express or implied, of such owner.” It has been said: “ As Blackstone tersely expressed it, in the interpretation of statutes due regard must be had to the old law, the mischief and the remedy.” (Woollcott v. Shubert, 217 N. Y. 212.) The old law exempted the owner of a loaned motor vehicle from liability for personal injury or property damage resulting from the negligent driving of the vehicle by the borrower upon business of his own. (Van Blaricom v. Dodgson, 220 N. Y. 111; Potts v. Pardee, 220 N. Y. 431.) The added section rendered obsolete this doctrine of the older law. It made the owner of a motor vehicle liable for the negligence of a driver who operated it for his own purposes with the assent of the owner. (Fluegel v. Coudert, 244 N. Y. 393; Psota v. Long Island Railroad Co., 246 N. Y. 388.) Doubtless the Legislature, in enacting the section, chiefly had in mind, as a mischief to be cured, the remediless plight of a highway traveler injured by a motor vehicle, other than the one in which he might be traveling, through the recklessness of an irresponsible driver to whom the owner had intrusted the vehicle and thereby made the accident possible. We cannot say that the Legislature did not equally have in mind the case of a guest traveling, with the consent of the owner, in the very automobile by the reckless driving of which injury was inflicted upon him. Certainly the section itself draws no distinction between the guest and persons otherwise using the highway, denying to the former, and according to the latter, a remedy against the owner. It ordains merely that the owner of the vehicle shall be liable and responsible “ for death or injuries to person or property.” The class of persons for whose death, or for whose personal or property injuries, there shall be owner’s liability is in nowise restricted by the terms of the section. We see no sound basis upon which we may interpolate restrictive words into the section. Therefore, we think that the provisions of section 282-e applied to give these plaintiffs a remedy against this defendant, if the cár was negligently driven by the defendant’s daughter upon an errand assented to by the defendant. It may be well to state that the question does not here arise whether, under the section, the assent of the owner must be given not only to the operation of his car upon the business of its borrower, but to the presence in the car of an invitee of the borrower, in order that the invitee may have a remedy, since concededly Fanny Cohen rode in the defendant's automobile with the defendant’s assent. For these reasons we think the trial judge erroneously instructed the jury upon a proposition of law of paramount importance upon the issues made, and that the judgments should be reversed.

The judgment in each case should be reversed and a new trial granted, with costs to abide the event.

Cardozo, Ch. J., Pound, Crane, Andrews and O’Brien, JJ., concur; Lehman, L, dissents.

Judgments reversed, etc.


author: ■ Andrews, J.

text:
    United States of America, Appellant, v. Peter De N. Brown, Sr., Trading under the Name of Peter Brown Jun. & Company, Respondent.
    Limitation of actions — attachment — Federal government •— attachment in action by United States brought in State court improperly set aside — rights of United States not affected by Statute of Limitations.
    1. A warrant of attachment, granted in an action brought in our courts by the United States to recover an overpayment made by it to the defendant as hire under a charter party executed by the United States Shipping Board Emergency Fleet Corporation, is improperly set aside because the papers show on their face that tire claim is barred by our Statute of Limitations, where it appears, from such papers, that in milking this particular charter the Fleet Corporation acted merely as age.it; that the United States was the principal and as its agent the corporation chartered the vessel from defendant, retained it, paid the charter hire and made this overpayment and demanded reimbursement which was refused.

      2. The truth of all the facts stated must be assumed, and on such facts the United States may maintain the action in its own right, not as assignee or trustee of the Fleet Corporation, and its rights are not affected by our Statute of Limitations.

      United States v. Brown, 220 App. Div. 692, reversed.
    (Argued November 21, 1927;
    decided January 17, 1928.)
    Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the first judicial department, entered June 3, 1927, which affirmed an order of Special Term granting defendant’s motion to vacate a warrant of attachment and setting aside a levy made thereunder.
    The following question was certified: “ Upon the entire record on appeal herein, is the United States of America, the plaintiff-appellant herein, barred by the Statute of Limitations of the State of New York? ”

      Charles H. Tuttle, United States Attorney (Edgar G. Wandless and J. C. Hawkins of counsel), for appellant.
    The United States of America is not barred by the Statute of Limitations of the State of New York. The general rule that the United States is not bound by any Statute of Limitations in a suit brought by it as a sovereign government to enforce a public right, or to assert a public interest, is firmly established. (United States v. Minnesota, 270 U. S. 181; Davis v. Corona Coal Co., 265 U. S. 219; Grand Trunk Western Ry. Co. v. United States, 252 U. S. 112; C. & D. Canal Co. v. United States, 250 U. S. 123; Stanley v. Schwalby, 147 U. S. 508; United States v. Insley, 130 U. S. 263; United States v. Beebe, 127 U. S. 338; United States v. Nashville, etc., Ry. Co., 118 U. S. 120; United States v. Thompson, 98 U. S. 486; The Messenger, 14 Fed. Rep. [2] 147; United States v. Porto Rico Fruit Union, 12 Fed. Rep. [2] 961.) The chartering of the steamship Nordlys was an act of the United States in its sovereign capacity for war purposes. (United States v. Porto Rico Fruit Union,
      12 Fed. Rep. [2] 961; The Pesaro, 271 U. S. 562; The Messenger, 14 Fed. Rep. [2] 147.)

      Edwin S. Murphy and John M. Woolsey for respondent.
    The United States of America occupies no better position in this action than would be that of the Fleet Corporation as plaintiff. (Triangle Radio Supply Co. v. De Forrest Radio, etc., Co., 210 App. Div. 87; Diefenthaler v. Mayor, etc., 111 N. Y. 331; Ingersoll-Rand Co. v. U. S. S. B. E. Fleet Corp., 195 App. Div. 838; United States v. Strang, 254 U. S. 491; Sloan Shipyards Corp. v. U. S. S. B. E. Fleet Corp., 258 U. S. 549; Gould Coupler Co. v. U. S. S. B. E. Fleet Corp., 261 Fed. Rep. 716; Bank of U. S. v. McKenzie, 2 Fed. Cas. 718; U. S. v. Buford, 3 Pet. [U. S.] 12; U. S. v. Beebe, 127 U. S. 338.) The United States is not here asserting any right vested in it as a sovereign government. (United States Bank v. Planters’ Bank, 9 Wheat. [U. S.] 904; Bank of the United States v. McKenzie, 2 Fed. Cas. 718; Standard Oil Co. of N. J. v. United States of America [The Llama], 267 U. S. 76; C. & D. Canal Co. v. United States, 250 U. S. 123; Seaboard Air Line Ry. v. United States, 261 U. S. 299; Lloyd v. City of New York, 5 N. Y. 369; Missano v. Mayor, 160 N. Y. 123; Matter of Rapid Transit R. R. Comrs., 197 N. Y. 81; Oakes Mfg. Co. v. City of New York, 206 N. Y. 221; Matter of City of New York, 127 Misc. Rep. 710.) This action is barred by the New Y ork Statute of Limitations. (Diefenthaler v. Mayor, etc., 111 N. Y. 331; Model Building & Loan Assn. v. Reeves, 236 N. Y. 331; State of New York v. County of Kings, 125 N. Y. 312; People v. Journal Co., 213 N. Y. 1; United States v. Prioleau, L. R. 2 Eq. 659; United States v. Wagner, L. R. 2 Ch. 582; Rothschild v. Portugal, 3 Y. & Coll. 594; Matter of United States, 96 N. Y. 227; Matter of Merriam, 141 N. Y. 479; 163 U. S. 625.)
   ■ Andrews, J.

This action is brought in our courts by the United States to recover an overpayment claimed to have been made by it in 1918, to the defendant, as charter hire, upon a certain charter party. A warrant of attachment has been set aside solely upon the ground that upon their face the moving papers show that the claim is barred by our Statute of Limitations. This is the one question for our consideration.

In 1916 this country was confronted with a crisis. There were disputes with Great Britain. There were disputes with the German Empire. At sqme time in some way it became probable that we would need to defend our rights by arms. There was strong sentiment that we should prepare for the future. One of the essential elements for any such reasonable preparation was the strengthening of our navy and our mercantile marine. So the Shipping Act (39 U. S. Statutes at Large, 728) was passed for the purpose of encouraging, developing, and creating a naval auxiliary and naval reserve and a merchant marine to meet the requirements of the commerce of the United States with its territories and possessions and with foreign countries; to regulate carriers by water engaged in foreign and interstate commerce of the United States, and for other purposes.”

The President was authorized to appoint five members of a so-called United States Shipping Board.” This Board might, with his approval, construct, purchase or charter vessels suitable for naval or military purposes. It might also use, lease, sell and charter vessels to citizens for commercial purposes, subject to the right of the President to retake possession if required for military or naval uses. And again for use in commerce it was authorized to form one or more corporations to purchase, build, charter and operate merchant vessels. The capital stock of these corporations was not to exceed in the aggregate $50,000,000. The United States might subscribe for all or a part of this stock and might thereafter sell it, provided that it at no time, became a minority stockholder. The corporations might operate vessels commercially but only if the Board could find no citizen who would do so on satisfactory terms, and only for five years after the end of the war if the United States remained a stockholder. Thereupon the corporation was to be dissolved. Its property was to revert to the Board, private stockholders, if any, being paid the fair value of their stock. The $50,000,000 was to be raised by the sale of bonds of the United States. Then follow many regulations affecting water-borne commerce.

Whether, and if so how and when our national government may put aside its sovereignty and engage in commercial ventures we do not discuss. Nor whether, if it may do so, without its express consent its rights, remedies and liabilities under its business contracts are measured by the same rules that govern private persons. There is no indication of such a theory when it is sued on policies of war risk insurance (Standard Oil Co. v. United States, 267 U. S. 76) nor where it operates merchant vessels (Eastern Transportation Co. v. United States, 272 U. S. 675). At least under this act, however, the Shipping Board was not engaged in ordinary commercial activities. It might build, purchase or charter vessels. Their title would be in the United States. It might contract on behalf of the State with individuals to operate them. Such contracts failing it might create a corporation for the same purpose. It is idle to say that Congress by this act committed the government to a mere business speculation. In view of threatened danger, resorting to the broad war powers confided to it, to guard the national safety and vital national interests, it made provision for ships required for military and naval purposes, or, should the need arise, to transport our troops, to feed our people, to continue our commerce. It was purely a war measure with no thought of profit. (Berizzi Brothers Co. v. S. S. Pesaro, 271 U. S. 562.)

War did come on April 6th, 1917. Eight days later the Board authorized the crea ion of the United States Shipping Board Emergency Fleet Corporation. It was incorporated to purchase, contract, equip, charter and operate merchant vessels in the commerce of the United States. All its capital stock was held by the United States. Quick replacement of destroyed tonnage was then vital. Probably an official might not act with the speed required. An independent corporation, not limited by this statute or that, would have the necessary freedom of action. This seems to have been the thought of Congress. And so when in June large appropriations were made for an Emergency Shipping Fund (40 U. S. Statutes at Large, 182) and the President was authorized to buy or requisition ships, materials or plants, and to manage and dispose of ships as he might direct, he was also authorized to expend the moneys appropriated and exercise the powers conferred by an agent or agents. If one such agent should be the Fleet Corporation, the moneys turned over to it might be expended as were its other moneys.

On July 11th, in pursuance of the statute, the President did designate the Shipping Board and the Fleet Corporation as his agents for carrying out the powers conferred upon him.

Of all this we may take judicial notice, even of the incorporation of the Fleet Corporation, and of the fact that the United States became its sole stockholder. Unlike the ordinary private corporation its public character and the historical quality of its acts, dispense with the need of such formal testimony as usually might be required. It is against such a background that we must view the facts appearing in the papers before us.

It is clear that the Fleet Corporation acts in two capacities. Notwithstanding the ownership of its stock by the United States, it is a private corporation. As such it is a distinct entity. It may make contracts and transact the business for which it is organized. It may sue and be sued. Then it is subject to the Statute of Limitations. (Ingersoll-Rand Co. v. U. S. S. B. E. Fleet Corp., 195 App. Div. 838; U. S. v. Strang, 254 U. S. 491; Sloan Shipyards Corp. v. U. S. Fleet Corporation, 258 U. S. 549; Gould Coupler Co. v. Fleet Corp., 261 Fed. Rep. 716.) But when a recovery may be had and a judgment enforced against it, again we do not discuss. Here that question is not involved. Further under the act of 1917 and the proclamation it had extraordinary powers. Under them it acts as an agency of the government for the prosecution of the war. It expends moneys of the United States appropriated for that purpose, on behalf of the government and to serve its ends.

It is evidently the theory of the plaintiff that in making this particular charter it so acted merely as agent and not in its corporate capacity. The United States was the principal. We are told that as agent of the United States it chartered the Nordlys from the defendant in September, 1918; as agent it retained it until July, 1919; that as such agent it paid the charter hire and made this overpayment; that as agent it has demanded reimbursement which was refused, and to recover which, not it but the United States, brings this action in our courts. Nothing in the statutes or the proclamation makes such a theory untenable as a matter of law. (Belknap v. Schild, 161 U. S. 10, 17; Dugan v. United States, 3 Wheat. 172.)

On this motion the truth of all the facts stated must be assumed. Apparently in executing the charter the Fleet Corporation appears as principal. Even so, the contract may have been made by it, acting in an official capacity as agent of the government. We have simply a case where the United States seeks to recover an overpayment made from its moneys on a contract made in fact by it. Whether it will ultimately succeed is not the question.

If the facts pleaded are sustained the government is “ the real contestant party to the * * * property * * * in controversy.” It has an interest in the suit. It has something “ to gain from the relief prayed for ” and something “ to lose if the relief is denied.” It is not “ a mere formal complainant.” (United States v. Beebe, 127 U. S. 338.) It sues in its own right, not as assignee or trustee of the Fleet Corporation. It clearly might sustain such an action, again assuming the facts stated. (Erickson v. United States, 264 U. S. 246.)

If the United States may maintain this action to recover public moneys, appropriated for war purposes, paid out by its agent, then its rights are not affected by our Statute of Limitations. (United States v. Minnesota, 270 U. S. 181; Davis v. Corona Coal Co., 265 U. S. 219; Dupont de Nemours & Co. v. Davis, 264 U. S. 456.) It is not a case where the government, wishing a recovery only authorized by a State statute, seeks to avoid a condition upon which such recovery is permitted. Nor is it a case where another State or a foreign government comes to us for relief. It may also be observed that as the defendant seems to reside in Copenhagen, it is by no means clear that our six-year Statute of Limitations has any application even were the plaintiff an individual. (Civ. Prac. Act, sec. 55.) The question, however, has not been raised. It seems to be assumed that in Denmark no longer time is given for the assertion of a claim than here.

The order of the Appellate Division and that of Special Term should be reversed and the motion to vacate attachment denied, with costs in all courts, and the question certified should be answered in the negative.

Cardozo, Ch. J., Pound, Crane, Lehman, Kellogg and O’Brien, JJ., concur.

Ordered accordingly.


author: Cardozo, Ch. J.

text:
    In the Matter of the Transfer Tax upon the Estate of John Kane, Deceased. Security Trust Company of Rochester, as Administrator with the Will Annexed, et al., Appellants; State Tax Commission, Respondent.
    Tax — transfer tax — stock transferred by husband to himself and wife in 1908 — no present title acquired to any part until death of husband — erroneous limitation of transfer tax to one-half the value of shares, on death of husband after enactment of chapter 664 of Laws of 1915.
    The interest acquired by a wife through the act of her husband in placing shares of stock in their joint names is not one of joint ownership. She does not acquire a present title to any part thereof until the death of her husband when the right of survivorship attaches to the whole. It was, therefore, error to limit the assessment of a transfer tax to one-half the value of shares placed by a decedent in the name of himself and his wife in 1908, to which the wife succeeded on his death, after the enactmen of chapter 664 of the Laws of 1915, imposing a transfer tax upon the vesting by survivorship of property held in the joint names of two or more persons.
    (Submitted January 9, 1928;
    decided January 17, 1928.)
    Motion for reargument. (See 246 N. Y. 498.)
   Cardozo, Ch. J.

We held in our opinion already filed that the rights of Zetta Kane in respect of 900 shares of the stock subjected to the tax, were governed, not by the agreement of January, 1923, but by the transfer made in 1908 by John Kane to the joint names of John Kane and Zetta Kane, his wife.

The case was argued before us on the assumption .that if this was so, the decision in Matter of McKelway (221 N. Y. 15) supplied the applicable rule, and that the tax should then be laid upon a half interest, and not upon the whole.

The counsel for the State Tax Commission does not deny that the argument involved a tacit concession to that effect, which tended, though of course without design, to mislead the court, but he argues that the concession, which appears to have been unintended, was erroneous. We think it was. In Matter of McKelway (supra) we were dealing with a true joint estate. We held that a half interest belonged to the wife in her own right before the amendment of the Transfer Tax Act (Cons. Laws, ch. 60, art. X), and that a half, and only a half, passed to her thereafter as survivor of her husband. We restricted the tax to the half thus accruing by survivorship after the passage of the statute. In the case at hand the interest acquired by the wife through the act of the husband in placing the shares in the joint names was not an interest as joint owner. She did not acquire a present title (except a merely formal one) to a half, or any other part. Whatever title came to her was dependent upon his death. As we pointed out in our opinion: “A husband who puts the title to a chose in action in the name of himself and his wife jointly does not create a joint tenancy in the strict sense. The right of survivorship attaches if title is retained till his death, but he may defeat it altogether if he disposes of the property by conveyance taking effect during his life. (Matter of Albrecht, 136 N. Y. 91, 95; Wetherow v. Lord, 41 App. Div. 413, 417.) ”

Thus, applying the very principles laid down in our opinion, we reach the conclusion that there accrued to Zetta Kane by survivorship upon her husband’s death, and not before, a title to the full 900 shares placed in the joint names in 1908, and not merely to half of them. There was thus error of calculation in limiting the tax to half.

The remittitur will, therefore, be recalled, and upon the return thereof, the decision heretofore made will be modified so as to direct that the order of the Appellate Division be affirmed, without costs to either party.

Pound, Crane, Andrews, Lehman, Kellogg and O’Brien, JJ., concur.