text:
    Society Milion Athena, Inc., et al., Respondents, v. National Bank of Greece et al., Appellants, Impleaded with Others.

      Argued April 5, 1939;
    decided July 11, 1939.

      Thomas I. Sheridan, Dean Alfange and Irving H. Rosenberg for National Bank of Greece, appellant.

      William O. Robertson, Michael H. Cardozo, Jr., Aristotle Souval and Louis J. Felstiner for Hellenic Bank Trust Company et al., appellants.

      Frederick W. R. Pride and Harry J. McIntyre for Spyros Skouras, appellant.

      Samuel Gottlieb, 2. Gainsburg and Alexander D. Diamond for respondents.
   Lehman, J.

The defendant National Bank of Greece is a corporation organized under the laws of the Kingdom of Greece and engaged in the business of banking with branches and agencies in Greece and other countries. It did business in the- State of New York through an agency located here. For that purpose the bank obtained a license from the Superintendent of Banks in accordance with the provisions of section 145 (now § 200) of the Banking Law (Cons. Laws, eh. 2) and subject to the restrictions contained in section 146 (now § 202). The defendant Hellenic Bank Trust Company is a domestic banking corporation organized under the laws of the State of New York. It conducted its banking business at the same address as the agency of National Bank of Greece. At their joint office the plaintiff Society Milion Athena, Inc., on January 19, 1931, delivered or deposited 7,349 francs in French money to be repaid in the same currency on January 19, 1936, with four and one-half per cent interest. On September 25, 1931, the plaintiff Louis Aggelopoulas delivered or deposited at the same place the sum of $11,000, to be repaid in the same currency on September 26, 1936, with five and one-half per cent interest. The moneys so delivered or deposited have not been repaid. A decree of the government of Greece, issued in 1932, prohibits repayment by National Bank of Greece, The license issued to National Bank of Greece was not renewed after March, 1933, and its agency here was discontinued.

The plaintiffs in this action seek to compel the repayment of the moneys paid and received at the joint office of the defendant banks. They claim that the moneys were there received jointly by both banks; that such receipt by National Bank of Greece was in violation of the restrictions contained in its license; that Hellenic Bank Trust Company was organized by National Bank of Greece as a cloak to conceal the fact that the foreign bank was conducting an unrestricted banking business here in violation of the Banking Law and the terms of its license; and that the plaintiffs were induced to pay their moneys by the fraud of the defendant banks.

The allegations of the complaint are, it is plain, sufficient to constitute a cause of action in favor of each plaintiff against the two banks to recover damages caused by such fraud and wrong. Such causes of action for damages arise out of the same transaction or series of transactions and involve common questions of law and fact. The plaintiffs might then be joined in accordance with the provisions of section 209 of the Civil Practice Act, but each cause of action must in such case be separately alleged. In this case, however, the plaintiffs ask equitable relief. They ask that relief not only in their own behalf but also in behalf of all others similarly situated who might join in the action, and they have joined as defendants in the action directors of the two banks who, they allege, participated in the wrong.

The defendants moved to dismiss the complaint on the ground that it fails to state facts sufficient to constitute a cause of action or in the alternative to compel the plaintiffs to serve an amended complaint excising parts thereof relevant only to a derivative action and separately stating a cause of action on behalf of each plaintiff individually. The plaintiffs made a counter motion for the appointment of a receiver, pendente lite, of the property of defendant National Bank of Greece in the State of New York and for a temporary injunction against interference by the defendants with such property. The motions of the defendants were denied and the counter motion of the plaintiffs was granted and the orders entered upon these motions have been affirmed by the Appellate Division, which granted to defendants leave to appeal. Five questions have been certified to us.

The motions by the defendants are based entirely upon the allegations of the complaint, which we must assume to be true. The counter motion of the plaintiffs is based upon affidavits containing allegations which, in part at least, are contradicted by affidavits submitted by the defendants. Allegations contained in such affidavits may not be considered upon the defendants’ challenge of the complaint. The complaint itself contains fifty paragraphs. It fills more than thirty pages of the printed record. We summarize in this opinion the allegations of the complaint only so far as necessary for discussion of the certified questions. The plaintiff’s right to any relief, legal or equitable, arises from the alleged wrongful receipt of moneys by the defendant banks. The sufficiency of the complaint in that regard is hardly open to serious challenge. By similar wrongful acts the defendants may have obtained moneys from others but each alleged wrong .injures a different person. Each person wronged may determine for himself the remedy which he will seek for the wrong to him and when he asserts a remedy the wrongdoers might be able to assert against him a defense not available against others. Separate wrongs to separate persons, though committed by similar means and even pursuant to a single plan, do not alone create a common or general interest in those who are wronged. Though it is alleged that “ upwards of five thousand ” persons were, like the plaintiffs, wronged by the defendant banks, such persons are not, merely because of that fact, united in interest with either plaintiff, and the plaintiff may not maintain a representative action,, pursuant to section 195 of the Civil Practice Act, in their behalf. (Brenner v. Title Guarantee & Trust Co., 276 N. Y. 230.)

The plaintiff, conceding that they may not maintain a representative action based upon separate wrongs to different persons, contend that they may maintain an action in the nature of a creditor’s bill to set aside transfers of property in fraud of creditors; to compel the directors to pay damages resulting from wrongs which they have committed and to account for any sums which may be due from them; and finally to obtain the appointment of a receiver of the foreign banking corporation and “ a judicial administration of the affairs of the banks.” (Cf. Richmond v. Irons, 121 U. S. 27.)

Before we consider whether the plaintiffs may maintain a derivative action for such relief or any part of it we must determine whether the plaintiffs have alleged facts sufficient to constitute an equitable cause of action even in then-own behalf. The complaint in our opinion alleges facts sufficient to permit the plaintiffs to bring actions to set aside a fraudulent conveyance by their debtor though they are not judgment creditors. (Debtor and Creditor Law [Cons. Laws, ch. 12], art. 10; American Surety Co. v. Conner, 251 N. Y. 1, 6.) The creditor in such an action may “ have the conveyance set aside or obligation annulled to the extent necessary to satisfy his claim.” (§ 278.) He is not entitled'to a judgment setting it aside completely and subjecting the property to the claims of other creditors through a receiver and judicial administration of the affairs of the debtor; nor does the complaint show any reason why the individual defendants should be made parties to an action for such relief.

We search then for other possible ground why a court of equity should take jurisdiction of a representative action in which complete relief might be obtained by all who have claims against the defendants arising from their wrong. We fail to find such ground. Laudable desire to avoid multiplicity of actions by persons who have suffered wrong is insufficient unless those who would bring such actions are in some manner united in interest. (Cf. Beckford v. Federal Reserve Bank, 5 Fed. Supp. 873.) By the exercise of diligence any creditor may obtain a preference over other creditors at least until the court takes over the property of the debtor and administers it for the equal payment of all creditors. None of them has any lien or interest, legal or equitable, against the property transferred or against any other assets of the defendants. If they establish damages they may, like other creditors, seek satisfaction out of the property of the debtors here or in other jurisdictions, but they have no joint or common ■interest in any fund. The case differs in that respect from Tyndall v. Pinelawn Cemetery (198 N. Y. 217); Guffanti v. National Surety Co. (196 N. Y. 452).

The question then arises whether there is any ground for a judicial administration of the affairs of National Bank of Greece and the judicial liquidation of its property here. An officer of the court appointed for such purpose might', we assume, seek reimbursement from unfaithful directors for waste of corporate funds even though individual creditors who are not judgment creditors might not demand such relief. (Levy v. Paramount Publix Corp., 149 Misc. Rep. 129; affd., 241 App. Div. 711; 265 N. Y, 629.) We do not reach that question until we determine whether the court may appoint such an officer. In Richmond v. Irons (supra), a case upon which the- plaintiffs lean heavily, the Revised Statutes of the United States provided for the liquidation of a national bank under the circumstances there shown, and the jurisdiction of the court was invoked pursuant to the statutory provisions, That was true also in Wyman v. Wallace (201 U. S. 230). In all the cases cited by the respondents where the court sustained actions for the appointment of a receiver or for judicial administration of the affairs of an insolvent corporate debtor, in order to secure ratable distribution of the debtor’s assets among all creditors, there was statutory authority for the liquidation of the ássets by the courts, or an ancillary receiver of a foreign corporation was appointed here after liquidation was begun at the domicile of the corporation.

We fail to find any statutory or judicial- authority for the assumption of power by a court to appoint a receiver or liquidator of the assets here of a foreign corporation on any ground urged here. It may be that the Superintendent of Banks has power to act as statutory liquidator under section 606, subdivision 4 of the Banking Law, even though the bank has ceased to do business here, especially in view of the alleged promise of the National Bank of Greece to liquidate its assets here. Even then, however, no creditor in his own behalf or as representative of all creditors could ask for the appointment of a judicial liquidator, at least until after the Superintendent of Banks refused to proceed. (Cf. Isaac v. Marcus, 258 N. Y. 257.)

We conclude, then, that the complaint alleges facts sufficient to constitute a cause of action by the individua] plaintiffs against all the defendants to recover damages for fraud and other wrongs in which all are said to have participated, and also causes of action in favor of tho individual plaintiffs in the nature of a creditor’s bill to set aside conveyances which it is said were fraudulent. As to that cause of action the individual defendants are not proper parties. We, therefore, answer the first question in the affirmative and the second question in the negative. These causes of action should be separately stated and numbered (Brenner v. Title Guarantee & Trust Co., supra); and we, therefore, answer the third question in the negative. Since the plaintiffs have not any right to maintain a derivative action, the motion to strike out the parts of the complaint appropriate only to such an action should have been granted. We, therefore, answer the fourth question in the negative. The counter motion by the plaintiffs for the appointment of a receiver and other relief should have been denied, and we answer the fifth question in the negative.

Order of Appellate Division affirming order of Special Term denying motion made by defendants to dismiss the complaint or for alternative relief and order of Special Term modified to the extent that the motion for the alternative relief is granted with leave to the plaintiffs to serve an amendéd complaint within twenty days. Order of Appellate Division affirming order of Special Term granting counter motion of the plaintiffs reversed and motion denied, without costs.

The orders should be modified in accordance with this opinion, and, as so modified, affirmed, without costs. The first question certified should be answered in the affirmative and the second, third, fourth and fifth in the negative.

Crane, Ch. J., O’Brien, Htjbbs, Lotjghran, Finch and. Bippey, JJ., concur.

Ordered accordingly.


source: Caselaw Access Project

author: Lehman, J.

license: Public Domain

text:
    In the Matter of the Estate of Alice G. Vanderbilt, Deceased. Gertrude V. Whitney et al., as Executors of Alice G. Vanderbilt, Deceased, et al., Appellants. State Tax Commission et al., Respondents.

      Argued February 27, 1939;
    decided July 11, 1939.

      Arthur A. Ballantine, Roy C. Gasser, Thomas B. Gilchrist, Horace R. Lamb and Leo Gottlieb for Gertrude V. Whitney et a]., as executors, et al., appellants.

      Thomas B. Gilchrist and Hampton D. Ewing, Jr., for Thomas B. Gilchrist, as general guardian of the property of Gloria L. M. Vanderbilt, an infant, appellant.

      Mortimer M. Kassell and Harry T. O’Brien, Jr., for State Tax Commission, respondent.
   Lehman, J.

Alice G. Vanderbilt died on April 22, 1934. Her “ gross estate was appraised at $10,120,907.17. Deductions of $766,319.32, allowed by statute, left a net estate of $9,354,587.85. A transfer tax measured by that net estate has been assessed. The decedent was the widow of Cornelius Vanderbilt, who died in September, 1899. By his will Cornelius Vanderbilt created a fund to provide an income of $250,000 to his wife during her lifetime. He directed that at the death of his wife “ the principal set apart * * * to create the annual payment of two hundred and fifty thousand dollars to my wife, shall be given to our children, Gertrude, Alfred G., Reginald C. and Gladys Moore; and if any then be dead, to their issue, in such proportions and amounts as my said wife may direct or appoint in her last Will and Testament, and in default of such appointment the same shall be divided among our said four children equally, share and share alike, the issue of any such child or children to take its parent’s share, per stirpes and not per capita.” The decedent Mrs. Vanderbilt exercised the power of appointment conferred upon her. At her death the fund which was subject to that power was appraised at $5,935,572.07, and the full amount was included in the decedent’s taxable estate by the tax appraiser. This, the appellants contend, was error.

By the exercise of her power of appointment the decedent gave to one daughter and the issue of a deceased son far more than they would otherwise have received under the will of Cornelius Vanderbilt, thus correspondingly reducing the amount which the other daughter and the issue of the other son would have received if she had failed to exercise her power. The legatees, who received less through the exercise of the power than they would otherwise have received, have asserted a right to elect to take under the will of the creator of the power. The Surrogate has sustained their right to such election and the State does not challenge that ruling. Their legacies, then, are taxable, if at all, as part of the estate of Cornelius Vanderbilt, the donor of the power, and the amounts which they have received have been eliminated from the gross estate of Mrs. Vanderbilt, the donee of the power. (Cf. Matter of Duryea, 277 N. Y. 310.) Upon this appeal the question is whether the shares of the trust fund passing to the other daughter and grandchildren in accordance with the exercise of the power of appointment by the donee of the power were properly included in the gross estate of Mrs. Vanderbilt, subject to tax as part of her estate. The shares so included constitute the major portion of the trust fund and more than half of the estate of Mrs. Vanderbilt, the donee of the power.

The property which was included in Mrs. Vanderbilt’s estate did not at any time belong to her. It did not at her death pass from her to those whom she appointed to take. Her power of appointment was not general. By its exeroise she could obtain no benefit for herself, her creditors or her estate. During her life the fund was held by trustees under the terms of the will of Cornelius Vanderbilt. She enjoyed under his will a life interest in the fund, and a tax measured by the value of that life interest was paid upon the death of Cornelius Vanderbilt. The remainder, which would vest in others upon her death, was not included in the tax assessed upon the transfer of his property. Mrs. Vanderbilt might, by exercise of her power of appointment, determine the shares which members of a limited group, defined by the will of Cornelius Vanderbilt, should receive out of property in the estate of Cornelius Vanderbilt and held by trustees under his will. When she exercised that power she gave her appointees nothing which belonged to her and she relinquished no rights which she might have asserted for herself. Nevertheless, the transfer of that property has been taxed in her estate and not in the estate ■of Cornelius Vanderbilt. The tax so imposed is many times greater than it would have been if the transfer had been taxed in the estate of the donor of the power. The appellants maintain that the Tax Law (Cons. Laws, ch. 60), properly construed, does not authorize the inclusion in the taxable estate of Mrs. Vanderbilt of property which was in no real sense a part of her estate, and that the Legislature could not authorize its inclusion without violation of restrictions placed by the Constitution of the United States upon the legislative power. The questions raised require a detailed statement and analysis of the history of the statutes of the State imposing death duties and of the proceedings had in fixing the tax upon the estate of Cornelius Vanderbilt in accordance with the statute in effect at his death.

The Tax Law then in effect (Laws of 1896, ch. 908, as amd. by Laws of 1897, ch. 284) provided that “ a tax shall be and is hereby imposed upon the transfer of any property * * * in the following cases:

** 1. When the transfer is by will or by the intestate laws of this state from any person dying seized or possessed of the property while a resident of the state. * * *

“ 5. Whenever any person or corporation shall exercise a power of appointment derived from any disposition of property made either before or after the passage of this act, such appointment when made shall be deemed a transfer taxable under the provisions of this act in the same manner as though the property to which such appointment relates belonged absolutely to the donee of such power and had been bequeathed or devised by such donee by will; and whenever any person or corporation possessing such a power of appointment so derived shall omit or fail to exercise the same within the time provided therefor, in whole or in part, a transfer taxable under the provisions of this act shall be deemed to take place to the extent of such omissions or failure, in the same manner as though the persons or corporations thereby becoming entitled to the possession or enjoyment of the property to which such power related had succeeded thereto by a will of the donee of the power failing to exercise such power, taking effect at the time of such omission or failure.” (§ 220, subds. 1 and 5.)

We are concerned primarily with those provisions of the statute which might apply to taxation of transfers of property effected through the exercise of a power of appointment by the donee of the power. We are not concerned with those provisions of the statute which might apply where there has been failure to exercise such a power.

Thus when the tax was assessed on the estate of Cornelius Vanderbilt, though the life estate passing under the testator’s will-to his wife was at that time subject to a tax as part of his estate, the transfer of the fund at the death of his wife, either by her exercise of the power of appointment conferred upon her or, upon her failure to exercise that power, in accordance with the terms of the will of the donor of the power was declared by the statute to be taxable only at the date of the death of the donee of the power in the same manner as though the property * * * belonged absolutely to the donee of such power and had been bequeathed or devised by such donee by will.” The statute, it is clear, is not intended to draw any distinction between general powers of appointment and special or non-beneficial powers. It applies to every form of power. It was so construed and applied in assessing the tax upon the transfer of the estate of Cornelius Vanderbilt and we are not referred to any case in which any other construction was urged where there is an absolute gift of a power of appointment.” (Cf. Matter of Burgess, 204 N. Y. 265, 270.) Such an absolute gift of a power of appointment was made here. Even though choice by the donee of the power was limited, to a small group of persons and there may have been a theoretical possibility that none of that group would be in existence at the time fixed for the exercise of that power, yet under all possible circumstances the property was certain to pass under the exercise or non-exercise of the power of appointment,” and, therefore, the transfer was taxable in the estate of the donee. That would not be true where the gift of the power is to take effect only in contingencies which might never arise. In that respect this case differs from Matter of Burgess (supra), where the testator himself chose the persons to whom remainders should pass in certain contingencies, and conferred a power of appointment upon his trustees only if those contingencies did not arise. The property affected by the power contingently given was in that case included in the taxable estate of the donor of the power, for otherwise, if the contingency upon which the gift of the power was to become effective should not arise, the transfer would not, under the statute, have been subject to any tax. '

It should perhaps be added that until 1930 there was little, if any, reason based on any practical consideration why there should be differentiation between general powers of appointment and limited or non-beneficial powers. All transfers of the property of residents of the State by will or by the intestate laws were to be taxed. Transfers effected directly by the will of the resident owner were, of course, to be taxed in the estate of the testator; transfers effected by exercise of a power of appointment conferred by such will were to be taxed as if the property had belonged to the donee of the power. The rate of taxation was not then measured by the size of the decedent’s estate and would not be affected by the provision of the statute that a transfer of that property by the exercise of a power of appointment should be taxed as part of the estate of the donee of the power rather than of the donor. That provision was, then, hardly more than a new and convenient rule of administration. Under earlier statutes, taxing transfers by decedents, this court had held that where the donee of the power has the right of selection, the interest appointed vests in the appointee at the time of the appointment, but his title relates to and is acquired under the instrument creating the power,” and is taxable as part of the estate of the donor. (Matter of Stewart, 131 N. Y. 274, 281.) Even then, it was necessary to postpone assessment and collection of the tax until the death of the donee, for under the earlier statutes it was held, too, that contingent remainders, or remainders which, though technically vested, were defeasible, could not be taxed until they vested indefensibly. (Matter of Curtis, 142 N. Y. 219; Matter of Burgess, supra.) By taxing transfers of property effected through exercise of a power of appointment as if the property had belonged to the donee of the power rather than to the donor, the tax procedure was simplified, and at times the administration of the estate of the donor could be closed earlier than would otherwise have been possible.

The Tax Law was further amended by chapter 76 of the Laws of 1899 so as to provide: When property is transferred in trust or otherwise, and the rights, interest or estates of the transferees are dependent upon contingencies or conditions whereby they may be wholly or in part created, defeated, extended or abridged, a tax shall be imposed upon said transfer at the highest rate which, on the happening of any of the said contingencies or conditions, would be possible under the provisions of this article.” (§ 230.) In accordance with these provisions, which went into effect a short time before the death of Cornelius Vanderbilt, contingent estates or interests created by his will were taxed tentatively at the highest possible rate. (Matter of Vanderbilt, 172 N. Y. 69.) Such contingent estates then taxable did not, however, include any estate or interest in the trust fund to which Mrs. Vanderbilt’s power of appointment related, for in construing the statute this court had held that “ it is the exercise of the power * * * which effects the transfer which the statute makes taxable,” and that section had no application in such case. (Matter of Howe, 86 App. Div. 286, 288; affd. on opinion below, 176 N. Y. 570.)

The State regulates succession to a decedent’s property. It permits an owner to provide by will to whom his property shall be transferred upon his death. He may appoint the person to whom the property shall go or he may give to another a power of appointment to be exercised at some future time. E the donee of the power is given a life interest in the property and a general power of appointment which he may exercise for his own benefit, his rights of enjoyment and control are closely analogous to the rights of an owner. Even then, however, it remains theoretically true that the property does not become his and by exercise of the power of appointment he transfers to the appointee a title which relates back to the instrument creating the power.

The statutory rule ignores all such theoretical considerations when it requires that a transfer effected through exercise of the power of appointment shall be taxed in the same manner as though the property to which such appointment relates belonged absolutely to the donee of such power and had been bequeathed or devised by such donee by will.” The statutory rule was, "nevertheless, based soundly upon practical considerations which the Legislature decided should control. “ Whatever be the technical source of title of a grantee under a power of appointment, it cannot be denied that in reality and substance it is the execution of the power that gives to the grantee the property passing under it.” (Matter of Dows, 167 N. Y. 227, 231; affd. sub nom., Orr v. Gilman, 183 U. S. 278.) For that reason this court held that a tax may be imposed upon a transfer effected through exercise of the power, and that is true though there was no statute imposing a succession tax of any kind in force when the original disposition of the property was made and the power was created. That transfer is not taxed, and the statute makes no effort to reach it. It is the practical transfer through the exercise of the power by will that is taxed and nothing else.” (Matter of Delano, 176 N. Y. 486, 494.) In affirming that decision the Supreme Court of the United States pointed out that: “ It may be that the donee had no interest in the estate as owner, but it took her act of appointment to finally transfer the estate to some of the class and take it from others. Notwithstanding the common-law rule that estates created by the execution of a power take effect as if created by the original deed, for some purposes the execution of the power is considered the source of title.” (Chanler v. Kelsey, 205 U. S. 466, 474.) The statutory rule treating the execution of the power as the real source of title is, therefore, not arbitrary; at least, so long as the tax is not measured by the size of the estate of the person who makes the transfer. Mere postponement of the assessment of the tax is not a ground for complaint to the court. That is true even though the rate of taxation might be changed in the interval between the death of the donor of the power and the death of the donee or even though in the interval the tax laws were so amended that transfers previously not taxable were subjected to a tax. (Matter of Dows, supra.) Indeed, the appellants do not claim invalidity of the statutory rule on such ground; they claim it is invalid as applied in this case on grounds which we shall hereafter consider.

We point out here, again, that we are concerned only with a transfer effected by the exercise of a power of appointment, not with any transfer upon failure to exercise such power. A statutory rule that whenever the donee of a power shall omit or fail to exercise it, a transfer shall be deemed to take place as though the persons becoming entitled to the possession or enjoyment of the property to which such power related had succeeded thereto by a will of the donee of the power taking effect at the time of such omission or failure, is without any foundation either in fact or in theory. In such case the donee of the power transfers nothing to the person who succeeds to the property of the donor of the power in accordance with the will of the donor or the intestacy laws in effect at his death. Therefore, this court held that the part of the statute was invalid which purported to tax in that manner succession to property through failure to exercise a power. (Matter of Lansing, 182 N. Y. 238.) That decision did not affect the provisions of the Tax Law for the taxation of transfers through exercise of the power. To conform to that decision the Legislature then amended section 220 of the Tax Law by omitting the provision for the taxation of transfers upon failure to exercise a power of appointment but left intact the provision for taxation of transfers effected through exercise of a power. (Laws 1911, ch. 732.) That provision is still part of the Tax Law (§ 220, subd. 4), though no longer applicable to persons dying on or after September 1, 1930.

It thus appears plain that the transfer of the fund, created by the will of Cornelius Vanderbilt, to provide an income for his wife during her lifetime, which took effect at her death, was not subject to a death tax in the estate of Cornelius Vanderbilt, because at the time of his death the statute provided that the tax on such a transfer, effected by exercise of a power of appointment, should be imposed in the estate of the donee of the power. It would have been imposed in the estate of Mrs. Vanderbilt, the donee of the power, if she had died before September, 1930, and no effective challenge could have been made to a tax so imposed. Prior to her death, however, the Legislature, by chapter 710 of the Laws of 1930, added article 10-C to the Tax Law, which substituted, in respect to persons dying after it took effect, an estate tax, similar to the Federal estate tax, in place of the tax imposed by the earlier statute, which we have described as an inheritance tax (Matter of Cregan, 275 N. Y. 337). That involves, it has been said, a distinction between a tax on the interest to which some person succeeds on a death and a tax on the interest which ceased by reason of the death.” (Knowlton v. Moore, 178 U. S. 41, at p. 77.) The older inheritance tax might be described as a tax on the privilege of receiving property on the death of another, and the new estate tax as a tax on the privilege of transmitting property upon death. (Coolidge v. Long, 282 U. S. 582.) These differences are not merely theoretical. They may carry practical consequences. The rate of the older inheritance tax was measured by the size of the interest received by the individual; the rate of the estate tax is measured by the size of the estate left by the decedent passing to few or many in accordance with the decedent’s will or the intestacy laws. An inheritance tax, measured by the size of the interest received by an individual through the exercise of a power of appointment, though imposed in the estate of the donee of the power as if the transfer had been made by the donee of the property owned by him, produces no arbitrary inequality even where the power of appointment is a non-beneficial power and refers to property never owned by the donee. An estate tax measured by the size of the estate transmitted to others upon the owner’s death might, however, produce unjust inequality if the law arbitrarily includes for such purpose any property which is in no real sense a part of the estate in which it is taxed. Accordingly, though the earlier “ inheritance tax ” statutes made no distinction between transfers effected through exercise of a general power of appointment and transfers effected through exercise of a limited or non-beneficial power, the statute of 1930 modelled upon the Federal estate tax laws incorporated a distinction previously drawn in the Federal statutes between transfers made through the exercise of general ” powers of appointment and transfers through the exercise of limited powers. It provided that the value of the gross estate of a decedent subject to the tax shall include the value of any property passing under a general power of appointment exercised by the decedent.” (§ 249-r, subd. 7.) The value of property passing under a limited power of appointment would thereafter be included in the value of the estate, subject to tax, of the donor of the power.

That left a gap in the Tax Law, through which a transfer effected thereafter by exercise of a limited power of appointment created by will of a testator dying before the statute took effect would escape all taxation. To fill in that gap the Legislature, by chapter 320 of the Laws of 1932, added subdivision 7-a to section 249-r to provide that the value of the gross estate of a person dying thereafter should include the value of all property passing under a power of appointment exercised by the decedent (a) by will, or (b) by deed * * * intended to take effect in possession or enjoyment at or after, his death, * * * provided that the transfer of such property is not or was not subject to a death tax in the estate of the grantor of such power but would have been so taxable except for a statute providing that the tax on the transfer of such property should be imposed in the estate of the grantee of such power in the event of the exercise thereof.”

It is plain that the purpose of the new subdivision was to restore the old rule that a transfer of property under a limited power of appointment exercised by a decedent should be taxed in the estate of the grantee of the power, in the small class of cases where otherwise the transfer would escape taxation. In those cases, the rule formulated in respect to an inheritance tax is to be applied now to an estate tax where the rate is measured by the size of the estate of the grantee of the power; and we are told that where, as in this case, the grantee did not own the property and the power of appointment could not be exercised by the grantee for his own benefit, such a tax produces a result so arbitrary and unjust that it would violate the provisions of the Fourteenth Amendment of the Federal Constitution. At least, it is said, the validity of such a tax would be so doubtful that the statute should be construed in manner which would avoid the doubt.

We are urged for that reason to limit the words property passing under a power of appointment ” to property in which the decedent had or could acquire a beneficial interest, and for analogy and precedent we are referred to a series of cases in the Federal court exemplified by Helvering v. Parker (84 Fed. Rep. [2d] 838), where the courts have held that the Federal Estate Tax Law (§ 302-g; U. S. Code, tit. 26, § 411, subd. [g]), requiring the inclusion, in a decedent’s taxable estate, of the proceeds of life insurance policies “ taken out by the decedent upon his own life ” did not apply where the insured reserved no right to surrender and cancel the policies, to pledge them for loans or to dispose of their proceeds for his own benefit during his life and no other beneficial right incidental to ownership or control. (Cf., also, Reinecke v. Northern Trust Co., 278 U. S. 339; Helvering v. Helmholtz, 296 U. S. 93; White v. Poor, 296 U. S. 98.)

A statute must be construed, if fairly possible, so as to avoid not only the conclusion that it is unconstitutional but also grave doubts upon that score.” (United States v. Jin Fuey Moy, 241 U. S. 394, 401; cf. Knowlton v. Moore, supra, at p. 77.) Tax statutes “ in case of doubt * * * are construed most strongly against the Government, and in favor of the citizen.” (Gould v. Gould, 245 U. S. 151, 153.) (Italics in both cases are ours.) Here, however, the purpose of the statute is clearly expressed and the construction urged upon us is not “ fairly possible.” The original statute made no distinction between beneficial or general power and limited or non-beneficial powers. The new statute does make the distinction between general ” powers and other powers, but it is clear that a transfer -under any power of appointment, not general, which was taxable under the old statute in the estate of the donee of the power is intended to be so taxable also under subdivision 7-a of section 249-r. We cannot give to the statute a more limited application. If the subdivision does not apply in this case the passing of title to this property will escape taxation. That was not the legislative intent.

The serious question in this case is whether the tax violates the Constitution of the United States. The State has a broad power of taxation, but in the exercise of that power it may not provide a measure for a tax which is entirely arbitrary and which produces inequality and injustice so great as to deprive a taxpayer of the equal protection of the law. So it has been held that a statute which imposes a tax upon an assumption of fact which the taxpayer is forbidden to controvert, is so arbitrary and unreasonable that it cannot stand under the Fourteenth Amendment.” (Heiner v. Donnan, 285 U. S. 312, 325.) Taxation, it has often been pointed out, is an intensely practical matter. The Legislature may not arbitrarily fix the measure of a tax by a fiction. (Hoeper v. Tax Commission, 284 U. S. 206.) Always there must be some reason based on fact, not fiction, for imposing a particular tax upon a particular class, and absence of any basis for the classification may not be hidden by an arbitrary creation of a conclusive presumption. (Schlesinger v. Wisconsin, 270 U. S. 230.) The Supreme Court has authoritatively stated the rule which in such cases creates invalidity: a statute which imposes a tax upon an assumption of fact which the taxpayer is forbidden to controvert, is so arbitrary and unreasonable that it cannot stand under the Fourteenth Amendment.” A statutory rule is beyond the power of the Legislature if the result would be “ that upon those who succeed to the decedent’s estate there is imposed the burden of a tax, measured in fact by property which comprises no portion of the estate, to which the estate is in no way related, and from which the estate derives no benefit of any description.” (Heiner v. Donnan, supra, p. 327; cf. Nichols v. Coolidge, 274 U. S. 531; Frew v. Bowers, 12 Fed. Rep. [2d] 625.)

The standard of what is arbitrary and unreasonable is not rigid. As we have often pointed out, the question is usually one of degree. A difference in the facts, seemingly slight; an emphasis on one factor rather than another, may produce varying results. Even in the cases cited there was division of opinion in the court, though the difference of opinion concerned only the application of the general rule. The rules are too well established to be challenged. The facts present in this case are so different from those presented in the cited cases that they furnish, at best, imperfect5 analogies.

In considering the validity of the tax three factors must-constantly be kept in mind: the nature of the tax, the measure of the tax and its incidence. Perhaps repetition is unnecessary, but we again point out that the statute in effect at the death of Cornelius Vanderbilt imposed no tax upon an inchoate transfer of a decedent’s property to be effected thereafter by exercise of a power of appointment. Under that statute and under the present statute “it is the practical transfer through the exercise of the power by will that is taxed and nothing else.” (Matter of Delano, supra, p. 494.) In 1932, when the Legislature enacted subdivision 7-a of section 249-r, the “ practical transfer ” had not been made. The Legislature was free at that time to impose a tax upon such transfer by a decedent dying thereafter, even if the earlier tax statute had imposed no such tax. (Chanler v. Kelsey, supra.) The Legislature chose to lay an “ estate ” tax [measured by the aggregate of the property which was in a practical sense transferred by the will of the grantee of: the power. Though the tax is paid out of the estate of .‘the decedent, the Decedent Estate Law (Cons. Laws, ch. 13) provides that the tax so paid “ shall be equitably prorated among the persons interested in the estate to whom such ■property is or may be transferred or to whom any benefit accrues.” (§ 124.) We may, therefore, properly assume that Mrs. Vanderbilt’s appointees will ultimately bear the main burden of the tax in proportion to the property received; •

i Since an estate tax is an excise laid in respect to the privilege of transmitting property rights at death (Coolidge v. Long, supra), it can hardly be said that the statutory rule that the rate of the tax should be measured by the aggregate ■of. the property so transmitted is entirely without basis in fact, even though the decedent did not own some of the -property but merely had. a limited power of appointment. •In the cases cited by the appellants property was included in the aggregate which measured the tax, though it was not ■transmitted to others at the death by the decedent. In those cases death did not result “in a shifting, or in the ^completion of a shifting * * * of any economic benefit .of property, which is the subject of a death tax.” (Heiner v. Donnan, supra, p. 323.) There, by arbitrary choice to include in the “ estate ” of the decedent property which did not pass at the decedent’s death, to which the estate was in no way related and from which the estate derived no benefit, the Legislature increased the rate of taxation upon the transfer of property which the decedent owned and transmitted. In the case we are now considering, no property is included in the aggregate, which measured the tax, which does not pass at Mrs. Vanderbilt’s death to persons who take the property only because she so provided in her will. True, the inclusion of that property in Mrs. Vanderbilt’s estate increases the rate of the tax which must be paid ultimately by those to whom the property owned by Mrs. Vanderbilt was transferred, as well as the tax which must be paid ultimately by those who receive property over which she had a limited power of appointment. Argument may be made that such a tax is not fair; indeed, the fact that under the Federal statute only a transfer of property under a general power of appointment is taxed in the estate of the grantee of the power indicates that Congress believed that it is fairer, as a general rule, that transfer under limited powers should be taxed in the estate of the grantor of the power. Such unfairness ” does 'not, however, render the statute invalid.

The ultimate burden of an estate tax rests upon the persons to whom the estate is transferred. Since the tax is measured by the total transferred to one or many, each pays a tax measured, not by the benefit he receives, but in some degree by the benefit others receive. Argument might be made that all estate taxes are to that extent unfair, but estate taxes are not open to challenge on such ground. The question is always whether the classification is reasonable; incidental hardship resulting from a reasonable classification is no ground of attack. If an estate tax upon the transfer through the exercise of the power of appointment by Mrs. Vanderbilt were imposed now in the estate of Cornelius Vanderbilt in accordance with provisions of article 10-C, perhaps the tax would be as large as if imposed in the estate of Mrs. Vanderbilt. The great disparity in the amount of the tax imposed in the estate of Mrs. Vanderbilt and the amount of the tax if imposed in the estate of Cornelius Vanderbilt is due to the fact that a tax in the estate of Cornelius Vanderbilt would be measured in accordance with the statute in effect at his death, though, as we have pointed out, the tax is upon the transfer effected by Mrs. Vanderbilt’s will and should be taxed in accordance with statutes in force at her death. Its inclusion in an estate tax, measured by the aggregate of the property transferred under her will, is not so unreasonable that it may be challenged in the courts. *

The classification so made applies only to transfers under a limited power of appointment created by the will of a person dying prior to September 1, 1930. Transfers under such powers created by persons dying thereafter would be subject to a. tax measured in a different way — and such tax might be higher or lower but would not be the same. That, it is said, denies to the taxpayer the equal protection of the law. In urging that contention the appellants lean heavily on the case of Binney v. Long (299 U. S. 280). In that case the Legislature based discrimination upon whether a transfer was made before or after a date which it arbitrarily chose. In the instant case the discrimination is not based upon a date arbitrarily selected but is a logical solution by the Legislature of a problem which it was required to meet. The discrimination, as we have already said, is between a transfer under a limited power of appointment theretofore granted and a transfer under such a power thereafter granted, and it was calculated to prevent transfers thereafter effected under powers theretofore granted from escaping all taxation. That is not an arbitrary discrimination.

Other objections raised by the appellants have been rejected after careful consideration. We do not extend this opinion further by detailed analysis.

The order of the Appellate Division should be affirmed, with costs.

O’Brien, Hubbs, Loughran, Finch and Rippey, JJ., concur; Crane, Ch. J., taking no part.

Order affirmed.


author: Crane, Ch. J.

text:
    In the Matter of Thomas Booker et al., Appellants, against Grace A. Reavy et al., Constituting the Civil Service Commission of the State of New York, Respondents.
    Argued September 26, 1939;
    decided October 17, 1939.

      Adrian Seligman and Alexander J. Brown for appellants.

      John J. Bennett, Jr., Attorney-General (Patrick H. Clune and Everett D. Mereness of counsel), for respondents.
   Crane, Ch. J.

An appeal has been taken to this court directly from the order of the Special Term dismissing the petition, on the ground that a constitutional question was solely involved. We are obliged to dismiss the appeal because we can find no such question. After our decision in Palmer v. Board of Education (276 N. Y. 222), the petitioners, who comprise the staff of maintenance employees employed by the Union Free School District No. 2, town of Eastchester, county of Westchester, applied to the Special Term for an order to compel the State Civil Service Commission to extend the rules of the Commission to the petitioners and to place them in the competitive class, and to declare that section 10 of the Civil Service Law (Cons. Laws, ch. 7) is unconstitutional. In the first place we never held in the Palmer case that any one could be placed in the competitive class who had not passed a competitive examination; and we find no allegation that these petitioners have ever been examined.

Passing that point, and dealing with the constitutional question, we cannot see wherein section 10 of the Civil Service Law is unconstitutional. The State Civil Service Commission extended the rules in accordance with our decision so as to make the maintenance positions subject to competitive examination, but the Governor, for reasons which need not be stated, refused to approve of them. The courts can and should enforce the civil service provisions of the Constitution, and can make an order which the Commission will have to obey, that the positions held by the petitioners must be filled by competitive examination, and that such examination should be held within reasonable time; and this order the courts will make even without a rule of the Commission approved by the Governor; but this is far from saying that section 10 is unconstitutional. This section reads: “ The commission shall from time to time make rules for the classification of the offices, places and employments in the classified service of the state, and from time to time rules for the classification of the offices, places and employments in such civil divisions thereof, * * *. Such rules and any modifications thereof, shall take effect when approved by the governor.”

The fact that the Governor does not approve a rule does not make this act unconstitutional, for the Legislature had as much power to require the Governor’s approval as it had to appoint the Commission or give them the duty of making rules. The civil service provisions of the Constitution which require competitive examinations, as far as practicable, have been carried out by the Legislature in the Civil Service Law. This law provides for the appointment of Commissioners and, as has been stated, for the establishment of rules. The Legislature had power to make the Governor one of the Commission or possibly to make him the sole Commissioner. The Constitution placed no limitation upon the Legislature as to the method for enforcing the civil service rights. The Legislature was free to adopt any method so long as the places were filled by competitive examinations, when it was feasible and proper so to do. Sufficient to say that if these petitioners are entitled to take an examination for the position of school maintenance employee their remedy is to apply to the court for a mandamus to compel the Commission to hold such an examination, and to permit them, if eligible, to take it. No rule of a Commission or disapproval by the Governor can stand in the way of filling such positions by competitive examination when they are now occupied by those who have not passed such an examination. Of course, the time and the place and the conditions under which such examinations will be held are largely in the discretion, as. they must be, of the Civil Service Commission, with which discretion the courts are loath to interfere.

For these reasons the appeal should be dismissed, without costs, as this case involves the construction of a statute only.

Lehman, Hubbs, Loughran, Finch and Rippey, JJ., concur; O’Brien, J., taking no part.

Appeal dismissed.


text:
    In the Matter of the Laying Out of a Town Highway in the Town of Ballston. Town Board of Town of Ballston, Appellant; Delaware and Hudson Railroad Corporation et al., Respondents.
    Argued September 27, 1939;
    decided October 17, 1939.

      William Rooney for appellant.

      Joseph Rosch and John H. English for Delaware and Hudson Railroad Corporation, respondent.

      Emil Peters and William C. Maynard for Abram V. Louer, as trustee of Schenectady Railway Company, respondent.
   Crane, Ch. J.

An application was made to the Town Board of the town of Ballston by one James B. White to lay out as a public highway a new highway extending easterly to the westerly shore of Ballston lake from the State highway running between the city of Schenectady and the village of Ballston Spa. The length of this proposed highway is about 3,200 feet. It will cross the tracks of the Delaware and Hudson Railroad Corporation and also the trolley tracks of the Schenectady Railway Company. The new road has been laid out with the exception of a distance of about 150 feet, upon and over an existing private road, that portion west of the railroad tracks having a width of sixty feet, and that extending easterly a width of fifty feet. This private road has been, it is stated, rather extensively used to reach the westerly shore of Ballston lake and a bathing beach and pavilion operated by White Beach, Inc. This private road was on the old Manning farm, of approximately 242 acres, which, in 1926, was purchased by James B. White, petitioner herein, for the purpose of a land development. It was surveyed and plotted out into 274 lots, the map thereof being filed in the Clerk’s office of Saratoga county. The railroad tracks run north and south. The highway mentioned runs north and south, and this private road or proposed new highway cuts across the tracks at about right angles.

The tracks of the Delaware and Hudson Railroad Corporation are below the level of the ground some four feet. The highway, which under the present law cannot pass upon grade, would either go overhead with an appropriate bridge, or else by an underpass. The policy of this State is against the construction of any more grade crossings and for the elimination, as far as practicable, of those now in existence.

There are highway crossings half a mile or more above and below this proposed crossing with roads that lead along the shore of the lake for a large portion of the way at least, and by means of which, with additional construction, the westerly shore could be approached. The petitioner has dedicated the private road, or attempted to dedicate it, to the town, although I cannot find that sections 170 and 171 of the Highway Law (Cons. Laws, ch. 25) relating to dedications have been complied with. These sections read as follows:

§ 170. Survey for the laying out of a highway. Whenever the town superintendent shall lay out any highway, either upon application to him or otherwise, he shall notify the county superintendent, whose duty it shall be to either make a survey, or cause the same to be made, and the town superintendent shall incorporate the survey in an order to be signed by him, and to be filed and recorded in the office of the town clerk, who shall note the time of recording the same.
“ § 171. Highways by dedication. Whenever land is dedicated to a town for highway purposes therein, the town superintendent may with the consent of the town board, either with or without a written application therefor, and without expense to the town, make an order laying out such highway, upon filing and recording in the town clerk’s office with such order a release of the land from the owner thereof. * *

Both required formalities of the law have never been complied with. There is no proof in the record that the land of the proposed road which petitioner White offered to dedicate has been accepted by either the Town Superintendent of Highways or the Town Board; nor is there evidence that the Town Superintendent of Highways has laid out the proposed road, or made or filed any order with the Town Clerk laying it out; nor is there any evidence that the County Superintendent of Highways has made any survey of the proposed road. In fact the decision and resolution of the Town Board indicates that there was up to the time of the hearing no acceptance, for it reads: “ Whereas, the acceptance of the said highway as so offered to be dedicated would mean the construction of the road across the tracks and right of way of the Delaware & Hudson Railroad Company and the Schenectady Railway Company,” etc.

The Town Board, after due notice to the railroads and public hearing, determined, in accordance with section 90 of the Railroad Law, the necessity of the highway, the vote of the Board not being unanimous. On appeal to the Appellate Division that court, by a three to two vote, has reversed this finding of the Town Board both upon the law and the facts. A question has been raised on this appeal as to the power of the Appellate Division to review the conclusion of the Town Board that this highway was necessary. Section 91 of the Railroad Law (Cons. Laws, ch. 49) says: “Any person aggrieved by such decision, or by a decision made pursuant to sections eighty-nine and ninety hereof, and who was a party to said proceeding, may within sixty days appeal therefrom to the appellate division of the supreme court in the department in which such crossing is situated, and to the court of appeals, in the same manner and with like effect as is provided in the case of appeals from an order of the supreme court.” That this review may be had of the decision of a municipality that a new proposed highway is necessary, was determined by this court in Matter of City of Buffalo (Delavan Ave.) (167 N. Y. 256), which held that a determination of a Common Council that it is necessary to lay out an avenue over the tracks of a railroad company is appealable to the Appellate Division of the Supreme Court, which has power to review such determination. The court there said: “ It is further objected in behalf of the city that the determination of the municipal authorities is not an exercise of any judicial function, but is an act of political sovereignty, legislative in its nature, to be exercised by the body to whom the legislature has delegated the authority, and, therefore, not the proper subject of judicial review. If the legislature had delegated the authority to the municipal body without qualification to determine as to the necessity of this crossing, the case would be different ” (p. 259).

The one thing to be reviewed, therefore, by the Appellate Division is the necessity for this highway crossing, which means a review of the evidence to determine whether it be sufficient to justify the conclusion reached by the Board in this instance. (See, also, Matter of City of Niagara Falls [Nineteenth Street], 66 App. Div. 618; affd., 170 N. Y. 576, with the statement that no question of law was presented for the court to consider.) The Appellate Division in that case said: While we would ordinarily be disposed to give almost controlling effect to the judgment of the common council in a matter of this kind, we feel that this court would not be justified in approving its determination, when such action might result in taking Nineteenth street over the appellant’s tracks at grade, and thus create a situation extremely dangerous to those traveling the highway, as well as to the public traveling upon the railways. These considerations lead to the conclusion that the determination of the common council in the premises should be reversed ” (p. 619).

We are not unmindful of the limitations upon the power of review stated in People ex rel. New York & Queens Gas Co. v. McCall (219 N. Y. 84; affd., 245 U. S. 345). In many respects a review of regulatory bodies, such as Public Service Commissions, is different from a review of a decision of the Town Board that it is necessary to cross a railroad at grade or to require it to expend large sums of money to accommodate a few people. The rule is the same for both reviews, but the evidence of necessity should be quite apparent and fully sufficient to justify a finding that the public requires the new highway, or that it is necessary for the community. Even in the McCall case we find a quotation from the Minnesota Supreme Court in State v. Great Northern Ry. Co. (130 Minn. 57, 61), to the effect: “ ‘ The order may be vacated as unreasonable if * * * it is so arbitrary as to be beyond the exercise of a reasonable discretion and judgment ’ ” (p. 88). What is a reasonable exercise of discretion and judgment must always depend upon the surroundings, the facts and the circumstances.

When the Appellate Division was given the power to review the finding of the Town Board, that this highway was necessary, it had the right to examine the evidence to see whether the necessity clearly appeared, and that it was in the interest of the public instead of some private enterprise or undertaking. The fact that this farm of a little over two hundred acres had been purchased over ten years ago by the petitioner for a land development, and that but few houses had been sold or erected in the meantime; that he through his corporation was running a bathing or picnic beach at the lake; also that the private roadway was laid out by him for the use of these enterprises; that the highway would have to cross the railroads above or below grade at great expense to the companies; that there were other ways of reaching the west shore of the lake which were or could be easily developed, forces us to decide that the Appellate Division did not exceed its power of review in determining that the decision of the Town Board was beyond the exercise of reasonable discretion and judgment. Certainly the Town Board was overhasty in its action, as there had not been an accepted dedication of a highway, pursuant to sections 170 and 171 of the Highway Law.

For the reasons here stated, the order of the Appellate Division should be affirmed, with costs.

Lehman, O’Brien, Hubbs, Loughran, Finch and Rippey, JJ., concur.

Order affirmed.


author: Per Curiam.

text:
    In the Matter of Paul Crosbie, Respondent, against S. Howard Cohen et al., Constituting the Board of Elections of the City of New York, et al., Appellants.
    Argued October 20, 1939;
    decided October 20, 1939.

      William C. Chanler, Corporation Counsel {Seymour B. Quel of counsel), for Board of Elections of the City of New York, appellant.

      J. Daniel Dougherty for John J. O’Connor, appellant.

      Joseph R. Brodsky and David M. Freedman for respondent.

      Osmond K. Fraenkel for New York City Committee of American Civil Liberties Union, amicus curise.

   Per Curiam.

The subscribing witnesses failed to state the election and Assembly districts wherein were located their present addresses and the addresses from which they last registered.

We think this departure from the. requirements of section 135 of the Election Law (Cons. Laws, ch. 17), as amended by chapter 652 of the Laws of 1939, was so substantial as to invalidate the petition.

The order of the Appellate Division should be reversed and that of the Special Term affirmed, without costs.

Crane, Ch. J., Lehman, Hubbs, Loughran, Finch and Rippey, JJ., concur;. O’Brien, J., taking no part.

Ordered accordingly.


text:
    Philemina De Salvo, Respondent, v. Stanley-Mark-Strand Corporation, Appellant. Sol Duckowitz, an Infant, by Ida Duckowitz, His Guardian ad Litem, Respondent, v. Stanley-Mark-Strand Corporation, Appellant. Irving Zussman, Respondent, v. Stanley-Mark-Strand Corporation, Appellant, Impleaded with Another.

      Argued October 4, 1939;
    decided October 30, 1939.

      Walter G. Evans, Alexander- Orr, Jr., and James H. Brassel for appellant.

      David L. Cohn for Philemina De Salvo, respondent.

      H. Lee Kanner for Sol Duckowitz, respondent.

      Richard J. Mackey, Murray Brensilber and Milton Zwisohn for Irving Zussman, respondent.
   Crane, Ch. J.

The defendant-appellant maintains a moving picture theatre on Broadway in the city of New York, known as the Strand. As to its construction there is no dispute. The theatre was designed by a well-known architect,' Thomas W. Lamb, who had had. thirty-five years’ experience. The plans were approved by the Building Department in 1913 when the building was erected. Over the rear section of the orchestra there was constructed in the mezzanine an open oval seventy-six feet eight inches long and twenty feet wide at its widest points. The opening was surrounded by a balustrade which was thirty-two inches high and five and one-half inches wide. At each end of the opening there were rest rooms, the distance from the rest room door to the railing being eight feet three inches. At other points around the mezzanine the distance from the rail to the wall was greater than that. From the top of the railing to the top of the orchestra seats below was fifteen feet three inches.

This case rests upon the claim that the balustrade around this opening in the mezzanine floor was not high enough to prevent people falling over who may have been pushed or jostled. Thirty-two inches high comes a little above the hips of the ordinary person, and five inches spread on top is of course many times larger than the usual railing. The owner of this theatre, it is claimed, should in the exercise of reasonable care have anticipated that someone might fall over, although such an accident had never occurred, so far as the proof in this case shows. This theatre was constructed in the same way and according to the plans of some of the other theatres in the greater city, as well as in Canada and other cities of the United States. The balustrade, as stated, was thirty-three inches above the concrete floor and thirty-two inches above the carpet.

The nature of the accident was seriously disputed, but, taking the case as made out by the plaintiff, as we must do, it appears that on the night of October 10, 1936, Mr. Duckowitz and Yetta Goldstein were walking along the mezzanine floor when someone shoved Duckowitz who in turn shoved Yetta Goldstein, and both fell over the railing onto people below who also have brought action against this defendant. This case, as stated before, rests entirely upon the point that this railing was insufficient to prevent such an accident, and that the defendant or its officers, in the exercise of reasonable care, should have foreseen the danger. To reach this conclusion requires application of a stricter rule than has ever been applied to negligence cases relating to the construction of buildings.

When a well-known architect constructs a theatre in accordance with the approval of the Building Department, and also similar to like classes of structures, and the theatre as built has been safe in constant use for many years, the mere fact of the happening of an accident is not sufficient to cast responsibility for faulty construction upon the owner. This theatre was inspected annually by the Building Department of the city of New York. The building inspectors called, testified that the conditions met with the official approval of the department. The theatre had a capacity of 2,758 people. It had been operating for twenty-three years at the time of the accident, during the course of which hundreds of thousands of men, women and children passed by the opening and railing without mishap. As stated before, there was no proof of previous accidents in the mezzanine, and the manager of the theatre testified that for fifteen years that he had been there, there had been no accidents. True it is that guards were stationed on the mezzanine floor to prevent people from sitting on the top of the rail, which was five inches wide. This case does not arise out of anybody sitting on the rail, nor from the failure of the guards to prevent people sitting on the rail. It is claimed that Yetta Goldstein, being jostled by the crowd, fell over the thirty-two-inch railing with the five-inch top.

In numerous cases in this State recovery has been sought for accidents happening out of construction work claimed to be defective in plan. The happening of the accident does not and cannot of itself be evidence of faulty construction. Of course a condition may be so bad that its danger is readily apparent, but in the authorities hereafter cited it will be noted that this court has repeatedly held that although a place may be dangerous and an avoidable accident has happened, yet the owner is not liable for faulty construction simply because the accident could have been avoided, unless it be one which could reasonably have been anticipated in the light of experience. Continued user for a long period of time without any accident negatived negligence arising out of claimed faulty construction. The leading case in this State for years has been Loftus v. Union Ferry Co. (84 N. Y. 455), in which Judge Andrews (Sr.) wrote the opinion. As the ferry boats came into the slip there were guards on the side of the slip and of the gangway to prevent people from falling over. The guards proved insufficient and a child fell through and was drowned. It was held that there was no liability. Perhaps it is well to give the facts as stated in the opinion: “ The charge of negligence is based solely upon the alleged insufficiency of the guard on the side of the bridge or float adjoining the passage-way for passengers going upon or leaving the ferry-boat. * * * It did not fill the entire space between the piers. On each side there was a space open to the water of from, eight to twelve inches between the bridge and the adjoining pier. * * * The bridge was constructed five or six years before the accident, and was similar to the bridges at the other ferries of the defendant. It was conceded on the trial that over forty millions of people passed annually over the defendant’s ferries, and until the occurrence in question no accident had happened from any person falling or getting through the spaces in the guard ” (p. 459). A young child, six years old, passing with its mother off the ferryboat onto the bridge or dock, fell through the opening in the guard and was drowned. The court said: The defendant was bound to provide suitable and safe accommodations for the landing of passengers. The rule of the strictest diligence in this respect is the only one consistent with a due regard to the value of human life and with the relation which the defendant assumes to the public. But the rule does not impose upon the defendant the duty of so providing for the safety of passengers, that they shall encounter no possible danger, and meet with no_casualty, in the use of the appliances provided by it. It was possible for the defendant so to have constructed the guard, that such an accident as this could not have happened; and this, so far as appears, could have been done without unreasonable expense or trouble. * * * The company had the experience of years, certifying to the sufficiency of the guard. That it was possible for a child or even a man to get through the opening was apparent enough. But that this was likely to occur was negatived by the fact that multitudes of persons had passed over the bridge without the occurrence of such a casualty. * * * think the exemption of the defendant in this case rests upon the fact * * * that the company had no reason to apprehend an accident like this, * *

(See, for the application of the same rule, Dougan v. Champlain Transportation Co., 56 N. Y. 1; Crocheron v. North Shore Staten Island Ferry Co., 56 N. Y. 656; Cleveland v. New Jersey Steamboat Co., 68 N. Y. 306; Maue v. Erie R. R. Co., 198 N. Y. 221.) In Lafflin v. Buffalo and Southwestern R. R. Co. (106 N. Y. 136) it was claimed that a platform leading to the cars was defective in construction as it' left a space of eleven or twelve inches between the steps and the platform. The court said that as the platform had been used for many years by passengers and no one had been injured on account of this space, no inference could be drawn that the company might have foreseen that an accident was likely to happen. There was no evidence that it was not constructed in the ordinary way. It was not bound so to construct this platform as to make accidents to passengers using the same impossible, or to use the highest degree of diligence to make it safe, convenient and useful. * * * No structure is ever so made that it may not be made safer. But as a general rule, when an appliance or machine or structure, not obviously dangerous, has been in daily use for years, and has uniformly proved adequate, safe and convenient, its use may be continued without the imputation of culpable imprudence or carelessness ” (pp. 139, 141). (See, further, Van Leet v. Kilmer, 252 N. Y. 454; McGrell v. Buffalo Office Bldg. Co., 153 N. Y. 265; Frobisher v. Fifth Avenue Transportation Co., 151 N. Y. 431; O’Connor v. Webber, 239 N. Y. 191.)

Two of the plaintiffs in these cases were persons sitting in orchestra seats who were struck by the falling persons. Such accidents should not happen, and all will agree that persons attending theatres should not be placed in jeopardy caused by someone or something falling from above, yet the same risk would have been run if a person had jumped over the railing. When we apply the law as I have given it to the facts, we see that the accident is one of those unfortunate occurrences for which the law provides no remedy. There are many such.

In each action, the judgment should be reversed, and the complaint dismissed, with costs in all courts.

Lehman, Hubbs and Finch, JJ., concur; Loughran and Rippey, JJ., dissent; O’Brien, J„, taking no part. Judgments reversed, etc.


text:
    Augustus Bower, Respondent, v. Fred L. Palmer et al., Doing Business under the Firm Name of F. L. Palmer & Son, Appellants.
    Argued October 9, 1939;
    decided October 30, 1939.

      Gerald S. Hewitt for appellants.

      Louis R. Dowd and Horace L. Bronson for respondent.
   Per Curiam.

The trial court charged “ that those seven cows were of the value and cost him [plaintiff] $920, that they sold for $110 and that his [plaintiff’s] pecuniary damages is the difference of $810.” The cows in question cost plaintiff $920 in October, 1936. The injury to those cows occurred in May, 1938.

In this action to recover damages growing out of defendant’s fraud, plaintiff’s measure of damage was the actual pecuniary loss sustained as a direct result of the wrong. That was the difference in value of the cows in May, 1938, before the wrong, and their value thereafter, not their value in October, 1936, eighteen months before the injury, and their value thereafter.

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

Crane, Ch. J., Lehman, Hubbs, Loughran, Finch and Rippey, JJ., concur: O’Brien, J., taking no part.

Judgments reversed, etc.


author: Crane, Ch. J,

text:
    In the Matter of Clarence C. Stoughton, Appellant, against S. Howard Cohen et al., as the Board of Elections of the City of New York, Respondents.
    Argued October 30, 1939;
    decided October 30, 1939.

      Edward H. Wilson for appellant.

      John J. Bennett, Jr., Attorney-General (Henry Epstein, John C. Crary, Jr., and John F. X. McGohey of counsel), for respondents.
   Crane, Ch. J,

Reference to the revised record of the Constitutional Convention of 1938 shows an intention to amend the then existing Constitution by adding thereto new articles and modifying certain portions.

Turning to the proceedings of Friday, August 26 (p. 3472), and reading through to the end, we find that a resolution was offered in the following words: “ Resolved, That the President be and he hereby is authorized to cause to be prepared, published and made available to the public a copy of the Constitution as revised by the amendments adopted by this Convention, showing all the changes effected by such revision by enclosing in bold-face brackets all matter deleted and italicizing all new matter, with marginal notes as to the source or distribution, if any, of all such new matter and deletions, and so arranged as to set forth the text and changes to be included in each amendment submitted to be voted upon separately ” (p. 3517). Further, the changes which were made in the existing Constitution were to be submitted to the People for adoption on election day. How was this to be done? The report of the committee, of which the President was chairman, was adopted. Nine questions were submitted, all referring to amendments. The resolution begins with these words: “ That the proposed amendments to the Constitution, as contained in the engrossed copy of the Constitution as submitted to and approved by this Convention, be submitted to a vote of the electors of the State for their approval or rejection * * *” (p. 3534).

The first question submitted included all the proposed amendments with the exception of those contained in the following eight other questions submitted, and all of these questions were submitted as proposed amendments.

A reference to Document No. 16, which was prepared under the direction of the President pursuant to the above resolution, shows that article I, section 9, contained no changes, that it is today the same as it was before the adoption of the Constitution in its present form.

On election day (November 8, 1938) the people voted on the proposed amendments and changes. Upon rejection of any of the proposed amendments, the Constitution remained as it had been in such particular. Furthermore, it was never the intention of the framers of the Constitution that article XIX, section 1, should supersede or wipe out all previous acts performed under the old Constitution relating to amendments.

The resolution of the Legislature proposing an amendment to article I, section 9, having been adopted in 1938, prior to the Constitutional Convention, did not fail of purpose or vigor upon the adoption of the work of that Convention. The Legislature in 1939 readopted the resolution and pursuant to the provisions of the prior and present Constitution the proposition goes upon the ballots for the consideration of the electorate this fall.

Section 1 of article XIX of the present Constitution is not inconsistent with the same provisions of section 1 of article XIV of the Constitution before amendment, but is a continuation of the same purpose and method in adopting constitutional amendments through resolutions by the Legislature. That the opinion of the Attorney-General is to be sought under the present provision does not affect the validity of the previous resolution. In 1939 the Legislature complied in this respect with the modification of section 1 of article XIV as set forth in section 1 of article XIX, by seeking his advice which he gave. Neither does section 3 of article XIX nullify the previous resolution. That provision reads: Any amendment proposed by a constitutional convention relating to the same subject as an amendment proposed by the legislature, coincidently submitted to the people for approval shall, if approved, be deemed to supersede the amendment so proposed by the legislature.”

There was no proposed amendment to section 9 of article I regarding pari-mutuel betting submitted by the Convention.

The order should be affirmed, without costs, and the question on these resolutions of the Legislature submitted to the voters at the coming election.

Lehman, Hubbs, Loughran, Finch and Bippey, JJ., concur; O’Brien, J., taking no part.

Ordered accordingly.


author: Finch, J.

text:
    James H. McCabe et al., Appellants, v. City of New York, Respondent.
    Argued September 25, 1939;
    decided November 14, 1939.

      Leonard N. Snedeker, Ralph W. Crolly and Patrick J. Mahoney for appellants.

      William C. Chanler, Corporation Counsel (Paxton Blair and Charles C. Weinstein of counsel), for respondent.

      B. Meredith Langstaff for Brooklyn Heights Association, amicus curise.

   Finch, J.

This is a suit by interested property owners for a declaratory judgment that certain zoning amendments are void because they were adopted by a vote of ten to six and not unanimously by the Board of Estimate. Defendant interposed an answer and both parties moved for judgment on the pleadings. Special Term rendered judgment for plaintiffs, but the Appellate Division reversed and granted judgment for defendant.

The question presented is whether the Board of Estimate or the City Planning Commission is the appropriate body with which property owners should file their protests against changes in the zoning regulations in order to require an unanimous vote of the Board. In the case at bar the protests were lodged with the Board of Estimate and not with the Planning Commission. Nothing contained herein prevents the filing also of protests and any other appropriate action being taken before the .City Planning Commission.

It is conceded and undisputed that in the case at bar the required number of property owners filed with the Board of Estimate protests against the Commission’s plan, and that there was not an unanimous approval thereof by the Board of Estimate.

The determination of the problem depends on the interpretation to be given to section 200 of the New York City charter (effective January 1, 1938), which provides: “ Any existing resolution or regulation of the board of estimate to regulate and limit the height and bulk of buildings (etc.) * * * may be amended, repealed or added to only in the following manner: the [City Planning] commission may upon its own initiative at any time or upon application as provided in section two hundred one, adopt a resolution for any such purpose subject to the limitations provided by law. Before adopting any such resolution, the commission shall afford persons interested an opportunity to be heard at a time and place to be specified in a notice of hearing to be published in the City Record for the ten days of publication of the City Record immediately prior thereto. Any such resolution shall be filed with the secretary of the board of estimate within five days from the date of its adoption. Unless the board of estimate shall modify or disapprove such resolution by a three-fourths vote within thirty days from the date of filing, it shall thereupon take effect, except that in case a protest against a proposed resolution shall have theretofore been presented, duly signed and acknowledged by the owners of twenty per centum or more of the area of the land included in such proposed change, * * *, such resolution shall not be effective unless approved by the board of estimate by unanimous vote of the entire board.”

The new charter thus sought to relieve the Board of Estimate of some of the more burdensome features of zoning law administration by making provisions for them in a new city department known as the City Planning Commission. To the latter were committed the preparatory work on amendments and changes in the zoning ordinance, as adviser in this particular to the Board of Estimate. The Planning Commission, either originally or at the instance of a petitioner, initiates a proposed zoning change, gives public notice of hearing, considers arguments for and against or in modification, and finally adopts its own resolution. This must then be filed with the Board of Estimate, which finally determines whether the proposed change shall become effective. However useful and arduous the duties and powers of the Planning Commission, they do not include that of final determination. This power and function resides in the Board of Estimate. It is true that if the Board of Estimate takes no affirmative action for thirty days, and if the requisite number of property owners have not lodged protests, a resolution of the Planning Commission may become effective. This, however, is but a method of approval by silence or inaction. The Board of Estimate may at any time within the thirty-day period, by the requisite three-fourths vote, amend in any way, or cancel, any proposal of the Planning Commission. It may also approve by unanimous vote, even though a sufficient number of property owners have protested. These two methods of approval by the Board of Estimate reduce still further the work of the Board of Estimate, and recognize that amendments to the Zoning Law may fall into one of two classes, (1) where the suggested change evokes little or no opposition from the property owners concerned, where the resolution may be approved by the mere inaction of the Board of Estimate, and (2) where the proposal is met with substantial opposition, consisting of twenty per cent or more of the area of land included in such proposed change, when the action of the Board must be unanimous.

Where must these protests be filed to be effective? Appellants contend that they must be filed with the Board of Estimate, and respondent contends that the same section requires the filing with the Planning Commission. In the case at bar they have been filed with the Board of Estimate, and we are to determine whether the filing is sufficient. We hold that it is, for the following reasons.

The language of the statute (§ 200), read in the ordinary manner, does not indicate an intent to require that the protest of the property owners should be filed with the Planning Commission either before or after it formulates its resolution. Surely the language does not say so, but instead it would seem that the language requires a filing with the Board of Estimate. The words in section 200, “ except that in case a protest against a proposed resolution shall have theretofore been presented * * *,” would seem to contain a plain meaning. The word “ theretofore refers to the expiration of the thirty days from the date of filing. This would show that the protests should be filed with the Board of Estimate within thirty days from the date of filing. Moreover, that portion of the section which deals with such protests is the part of the section which deals with action by the Board of Estimate, and not the earlier part of the section which deals with the preliminary action of the Commission. Therefore, the language of the section would seem to require the filing with the Board of Estimate. A further consideration sustaining this contention is that the filing of protests have no compelling effect on the resolution of the Planning Commission. When once this resolution is adopted, it goes to the Board of Estimate as the resolution of the Planning Commission, and there is no provision that any of the proceedings before the Planning Commission, including any protests filed with the Planning Commission, shall accompany the resolution. Nowhere in the charter is there any provision requiring the Planning Commission to transmit to the Board of Estimate any notice of protest which may be filed with it. This lack of mandatory direction is an important factor in the conclusion to be reached. Furthermore, until the proposed resolution is finally resolved by the Planning Commission, the matter is embryonic and ambulatory. Until the resolution of the Planning Commission is finally adopted by it, it is impossible for the property owners to prepare their protests since until that time the only notice that the property owners have had has been ten days’ notice by publication of a proposed change. Until adopted, there is no certainty what form the resolution will take. Any protests obtained against the resolution as proposed become abortive if it is finally changed before adoption. Moreover, as the City Planning Commission obviously is taking a long range view of city planning, and considering the proposed change in the best interests of the city as a whole, such protests may be with good reason disregarded by the Planning Commission, and in any event would not limit the vote of the Planning Commission. On the other hand, protests filed with the Board of Estimate directly affect the vote required, and compel it to be unanimous in that Board.

Leading to the same conclusion is the fact that under the old charter, where the changes were initiated, heard and decided by the Board of Estimate and Apportionment, and protests were required to be filed with it, the change in the new charter has to do with the work of the Planning Commission created for the purpose of holding public hearings on zoning changes, asking advice and suggestions, from the various parties, and of relieving the Board of certain onerous duties. If it had been the intent of the framers of the new charter to change the place of filing, express language to that effect would be required, particularly in view of the provisions of the old charter (L. 1901, ch. 466, as amd.) and of section 957 of the new charter, making the Board of Estimate the successor to the Board of Estimate and Apportionment, and so continuing in the new Board the powers and duties of the old Board.

Since the property owners have here duly complied with the requirements of the charter as to protest, and since the Board of Estimate did not by unanimous action approve the proposal of the Planning Commission, it did not become effective.

Except, therefore, for a slight modification hereinafter noted, the judgment appealed from must be reversed and that of Special Term reinstated. The judgment granted at Special Term, in favor of plaintiffs, provided that a due protest filed within the thirty-day period after the resolution of the Planning Commission has been transmitted to the Board of Estimate, is effective to require an unanimous vote of that Board. This would lead to the result that, where the Board of Estimate has acted upon such a resolution before the expiration of thirty days, a filing of the protest subsequent thereto, but within thirty days, would require the unanimous re-enactment by the Board if the previous action had been other than unanimous. The Special Term went further, however, and held that the action of the Board after the filing of the protests must be had within the thirty-day period. Since the protestants are given the right to file the protest during the whole of the thirty-day period, the action of the Board could not well take place also within that period. A reading of section 200 would seem to require only that if the requisite number of protests have been duly filed, that then the action of the Board contrary to these protests must be unanimous, but such action need not take place within the thirty-day period.

The judgment of the Appellate Division should be reversed and that of the Special Term modified in accordance with the opinion herein, and as so modified affirmed,, with costs in this court and in the Appellate Division.

Crane, Ch. J., Lehman, O’Brien, Hubbs, Loughran and Rippey, JJ., concur.

Judgment accordingly.


text:
    In the Matter of Metropolitan Life Insurance Company, Appellant, against John P. Boland et al., Constituting the New York State Labor Relations Board, et al., Respondents. Grace A. Reavy et al., Constituting the Civil Service Commission of the State of New York, Interveners, Respondents.
    Argued October 2, 1939;
    decided November 14, 1939.

      Samuel Seabury for appellant.

      John J. Bennett, Jr., Attorney-General (Benry Epstein of counsel), and Ralph T. Seward, Eugene Cotton, Bernard Jajfe and David Scribner for respondents.
   Per Curiam.

For the purpose of conducting a hearing on a charge of violation by appellant of the provisions of the New York State Labor Relations Act (L. 1937, ch. 443), the Labor Relations Board appointed a trial examiner upon his certification by the Civil Service Commission after exemption from competitive examination under the provisions of section 15 of the Civil Service Law (Cons. Laws, ch. 7) and section 9 of rule VIII of the Rules for the Classified Civil Service. It was assumed by the Board and by the Civil Service Commission that the appointment was to be made in accordance with and by the authority of the Civil Service Law and the rules and regulations of the Commission.

Appellant appeared specially and objected to proceeding before the appointee on the ground that his appointment was illegal and not made in accordance with the provisions of the Labor Relations Act. Upon the objection being overruled, appellant brought this proceeding under article 78 of the Civil Practice Act to vacate and set aside the order of the Board appointing and designating the examiner to conduct the hearing, to restrain the appointee from conducting the hearing and the Board from conducting the hearing before any person other than a member of the Board or a person appointed by the Board from an eligible list promulgated by the Civil Service Commission as a result of competitive examination held pursuant to the Civil Service Law and rules as required by section 702, subdivision 5, of the Labor Law (Cons. Laws, ch. 31). Appellant was defeated at Special Term as matter of law and not in the exercise of discretion and orders upon its decision were affirmed by the Appellate Division by a divided court. Pending final decision, hearings before the appointee have been stayed.

Trial examiners are to be appointed by the Board (Labor Law, § 702, subd. 4) “ from eligible lists to be promulgated by the civil service commission as the result of competitive examinations held pursuant to the civil service law and rules and on the basis of training, practical experience, education and character, provided, however, that special consideration and due weight shall be given to the practical training and experience which a person may have for the particular position involved regardless of academic training. Promotions, suspensions, and removals of persons appointed from such lists shall be in accordance with the provisions of the civil service law ” (§ 70,2, subd. 5).

The wording of the section is unambiguous and shows the purpose and intent of the Legislature to permit the Board to appoint a trial examiner only from a list promulgated by the Civil Service commission after and as a result of competitive examination. Such a construction is reinforced by the fact that the statute exempts the executive secretary and attorneys for the Board and that a distinction is made between the appointment of an examiner and promotions, suspensions and removals of persons appointed from such lists. The Legislature states that appointments of examiners must be made from lists made up through competitive examinations but that promotions, suspensions and removals shall be in accordance with the provisions of the civil service law.” It is further confirmed by the fact that the language used in the Labor Relations Act differs in words, substance and meaning from that used by the Legislature in statutes authorizing appointments by other administrative agencies (Cf. Correction Law [Cons. Laws, ch. 43], §§ 8, 14, 16, 18, 273, 334, 377, 432; Public Health Law [Cons. Laws, ch. 45], §§ 342-a, 364; State Charities Law [Cons. Laws, ch. 55], § 54; Alcoholic Beverage Control Law [Cons. Laws, ch. 3-B], § 15; Mental Hygiene Law [Cons. Laws, ch. 27], §§ 33, 200-a; Executive Law [Cons. Laws, ch. 18], §§ 117, 131; Workmen’s Compensation Law [Cons. Laws, ch. 67], § 88; Public Housing Law [Cons. Laws, ch. 44-a], § 32; Labor Law, § 518 [6-a]). Appointments, under these statutes, are respectively to be in or from the competitive class of the civil service,” “ subject to civil service rules,” subject to the civil service law,” “ subject to the civil service requirements,” “ subject to the provisions of the civil service law,” or subject to the regulations of the civil service,” meaning thereby that the Civil Service Law and the rules of the Commission are to be resorted to in certifying persons to those agencies for appointment. Under such circumstances, the Civil Service Commission is free to classify the position as exempt, competítive, non-competitive or labor (Civil Service Law, § 12) or dispense with an examination (§ 15). Here, the Legislature has expressly said that the appointment can be made only “ from eligible lists to be promulgated by the civil service commission as the result of competitive examinations.” In substance, and to all intents and purposes, the Legislature said that appointees to the position of examiner could not be exempted from competitive examination by the Civil Service Commission and that the Commission should be barred from classifying the position as exempt from competitive examination. The Legislature had the power to classify, within constitutional limitations, as it desired (Matter of Andreson v. Rice, 277 N. Y. 271, 276). Had the Legislature intended otherwise, it is reasonable to suppose that it would have used language similar to that used in other statutes authorizing certifications for appointment generally in accordance with the Civil Service Law.

We are not privileged, by judicial construction, to legislate. If a change in the wording of the provision is desired, it must be made by the Legislature.

The orders appealed from should be reversed and the motion granted with costs in all courts.

Crane, Ch. J., Lehman, Hubbs, Loughran, Finch and Rippey, JJ., concur; O’Brien, J., taking no part.

Orders reversed, etc.