source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    The People of the State of New York, Respondent, v. Louis Buchalter, Emmanuel Weiss and Louis Capone, Appellants.
    Submitted November 23, 1942;
    decided November 25, 1942.
   Per Curiam.

This court considered the refusal of the trial court to accord the defendant access to the records of the Police Department of the City of New York. The ruling was correct upon the facts presented. (See People ex rel. Lemon v. Supreme Court, 245 N. Y. 24.) The records in question were deposited with this court at the time of the argument of the appeal and were examined. The so-called surveillance amounted to very little. It was of the entrance and lobby of the office building and not of the floor upon which defendant Buchalter had his office. The reports established that the defendant could and did elude the police at will.

This court did not restrict its review to a mere determination that there was no abuse of discretion as a matter of law by the Justices of the Supreme Court in denying the motions for a change of venue. A majority of the court is of the opinion that the discretion was properly exercised.

This court examined and found no error in the rulings of the trial court upon the challenges for implied bias. On the motion for a special jury under the statute (Judiciary Law, art. 18-B; Cons. Laws, ch. 30) the defendants appeared by attorney and consented to be tried before such special jury. A majority of this court is of the opinion that they thereby consented also to the statutory provision (Judiciary Law, § 749-aa, subd. 7) that rulings of the trial court upon challenges for actual bias are final and. not appealable.

Motions denied. (See 289 N. Y. 181.)


author: Lotjghran, J.

text:
    Eleanor V. V. Brewster, Appellant, v. Kable News Company, Respondent.
    Argued October 7, 1942;
    decided December 3, 1942.

      Carl E. Peterson for appellant.
    There was no cessation in the use of the titles “ Motion Picture ” and “ Movie Classic.” Hence, the condition subsequent relieving respondent of liability for the weekly payments has not occurred. (Manson v. Curtis, 223 N. Y. 313; Cohen v. Bass, Inc., 246 N. Y. 270: Matter of Marchant v. Mead-Morrison M. Co., 252 N. Y. 284; Wilson & English Constr. Co. v. N. Y. C. R. R. Co., 240 App. Div. 479; Gillet v. Bank of America, 160 N. Y. 549; O’Neil Supply Co. v. Petroleum Heat & Power Co., 280 N. Y. 50.) Even if the publication of the magazines was discontinued, within the meaning of the contract, publication thereof was immediately resumed and continued by respondent’s successors or assigns. (Howell v. Leavitt, 90 N. Y. 238; Purdy v. Bennett, 68 Hun, 227; Watson v. Donnelly, 28 Barb. 653; American Surety Co. v. Campbell & Zell Co., 138 Fed. Rep. 531; Dille v. Plainview Coal Co., 217 Iowa, 827; International & G. N. Ry. Co. v. Smith County, 65. Tex. 21; Grand Canyon R. Co. v. Treat, 12 Ariz. 69; Glenn v. Caldwell, 74 Miss. 49.) The respondent’s moving papers on its motion for summary judgment wholly fail to establish a defense entitling it to a dismissal of the complaint. (Curry v. Mackenzie, 239 N. Y. 267; Lonsky v. Bank of United States, 220 App. Div. 194; Cohen v. Metropolitan Casualty Ins. Co., 233 App. Div. 340; Brescia Constr. Co. v. Watart Constr. Co., 238 App. Div. 360; Gellens v. Continental Bank & Trust Co., 241 App. Div. 591; Dwan v. Massarene, 199 App. Div. 872; Tompkins Haulage Corp. v. Roberts, 140 Misc. Rep. 80.)

      Samuel A. Fried for respondent.
    The order of the Appellate Division should be affirmed. (Hanna v. Florence Iron Co., 222 N. Y. 290; Fidelity Trust Co. v. Brooklyn Properties Corp., 229 App. Div. 544; Matter of Murray Realty Co., 35 Fed. Supp. 417; Niagara Fire Extinguisher Co. v. Hibbard, 179 Fed. Rep. 844.) The dismissal of the complaint should be affirmed. (Caponrigri v. Altiere, 165 N. Y. 255; Dodge v. Cornelius, 168 N. Y. 242; Brinckerhoff v. Farias, 170 N. Y. 427; People ex rel. N. Y. C. & H. R. R. Co. v. Public Service Comm., 208 N. Y. 589.)
   Lotjghran, J.

■ The plaintiff, Eleanor V. V. Brewster, sues as third party beneficiary of a contract made on November 14, 1934, between Motion Picture Publications, Inc., as seller, and the defendant Kable News Company, as buyer. The material words of this contract are these:

“ The Seller agrees and does hereby sell to the Buyer, and the Buyer agrees to and does hereby purchase the entire assets of the Seller * * *, including specifically the titles Motion Picture (magazine) and ‘ Movie Classic ’ (magazine) * * *.

As further consideration for the purchase herein, the Buyer agrees to assume and agrees to pay the obligation of the Seller * * * to * * * Mrs_ Eleanor V. Y. Brewster, for support money and/or maintenance, not in excess, however, under any circumstances, of the amount * * * of $40.00 (forty dollars) per week during her life, provided, also, however, that should the Buyer and/or its successors or assigns discontinue the publication of both of the magazines known as Motion Picture ’ (magazine) and ‘ Movie Classic (magazine), or any other movie fan magazine or magazines having any one or both of said magazines or titles as integral parts thereof or predecessors thereof, by reason of the same being unprofitable ventures, that then and under such circumstances any and all obligations to pay said weekly amounts shall cease and terminate during the cessation of such publications.”

With the consent of the plaintiff, all the assets covered by this contract were at once assigned to a new corporation organized by the buyer — this defendant. The new corporation continued to publish the Motion Picture ” and Movie Classic ” magazines as separate periodicals until March, 1937. In March and in April, 1937, a consolidated issue thereof was published by it under the title, Motion Picture Combined with Movie Classic.” Before the next issue was off the press, the new corporation was deprived of control of its affairs through an equity receivership instituted by its creditors in a District Court of the United States. The receiver published a combined issue of both magazines in May, in June, and in July, 1937, under the sanction of the District Court. Pursuant to its further order, all the assets of the new corporation were sold by the receiver as of June 26, 1937, to persons who have since continued the use of both magazine titles.

Whether these receivership proceedings ended the contract obligation of the defendant to pay forty dollars a week to the plaintiff during her life is the question to be determined on this appeal by her from a summary judgment in favor of the defendant granted by a majority vote of the Appellate Division after denial thereof by Special Term. For the purpose of our decision we shall assume that the purchaser at the receivership sale was in law a stranger to the defendant.

On the actual words of the contract the right of the plaintiff to be paid the weekly amounts was to cease and terminate only if the defendant or its successors or assigns should discontinue the publication of both magazines by reason of the same being unprofitable ventures. This precise contingency did not occur; neither the defendant nor its successor and assign (the new corporation) dicontinued the publication of either magazine. Consequently the defendant must abide by the text of its promise to the plaintiff, unless there are further circumstances which can justly be held to constitute an equitable defense to the legal liability thereon.

The new corporation engaged exclusively in the business of publishing the two magazines. From the start that operation resulted in a mounting money loss. The defendant none the less kept the enterprise on foot by purchasing debenture bonds issued by the new corporation, with the result that the weekly payments to the plaintiff were regularly made until March, 1937, when the receivership proceedings were initiated. Thus the defendant, for reasons of its own, took the risk of the event whereby its only stipulated means of arresting the plaintiff’s right was lost. We see no fair ground for escape by the defendant from the terms of its agreement with the plaintiff.

The judgment of the Appellate Division should be reversed, and the order and judgment of Special Term affirmed, with costs in this court and in the Appellate Division. (See 289 N. Y. 849.)

Lehman, Ch. J., Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Judgment accordingly.


author: Lewis, J.

text:
    Evelyn Frehe, an Infant, by Fred Frehe, Her Guardian ad Litem, et al., Appellants, v. Fred Schildwachter, Respondent.
    Submitted October 5, 1942;
    decided December 3, 1942.

      Benjamin H. Siff and Harold K. Baron for appellants.
    Tb9 Statute of Limitations is not a bar to infant’s cause of action and the dismissal of the complaint, was error. (Russo v. City of New York, 258 N. Y. 344.) That a release had been executed under a mistake of fact did not deprive the infant plaintiff of the benefits of section 60 of the Civil Practice Act. (Geibel v. Elwell, 91 Hun, 550; Caulston v. Rosenfeld, 175 Misc. Rep. 479.)

      Donald I. Peyser for respondent.
    Since there has been no rescission or attempt to rescind the prior settlement and releases knowingly entered into by the plaintiffs, such settlements and releases bar the instant action. (Gilbert v. Rothschild, 280 N. Y. 66.) Since an action on behalf of the infant was commenced and consummated by a settlement and release authorized and directed by the court in 1935, the infant-plaintiff is not entitled to the benefit of section 60 of the Civil Practice Act and the cause of action on behalf of the infant is barred by subdivision 6 of section 49 of the Civil Practice Act. (Matter of Becker, 28 Hun, 207; Brand v. Union Ry. Co., 173 Misc. Rep. 224.) The affidavits submitted in opposition to the motion to dismiss sufficiently set forth facts to justify its denial. (Barker v. Conley, 267 N. Y. 43; Dominicis v. U. S. Casualty Co., 132 App. Div. 553; Barry v. Lewis, 259 App. Div. 496; Farrington v. Harlem Sav. Bank, 280 N. Y. 1.)
   Lewis, J.

The infant-plaintiff suffered personal injuries on September 14, 1934, alleged to have been caused by the negligence of the present defendant. Thereafter an action in her behalf was instituted against the defendant in the Municipal Court of the City of New York. During the pendency of that action negotiations to compromise the demands made therein led to a settlement. On January 24,1935, the compromise figure which had been agreed upon was submitted to a justice of the court in which that action was pending. Upon the pleadings and proceedings theretofore had in that action, and upon the appearance in court of the guardian ad litem and the infant-plaintiff, the court made a formal order by which the settlement was approved and the guardian ad litem was authorized to execute and deliver to the defendant a release in behalf of the infant-plaintiff. The release was later executed and delivered by the guardian ad litem, who concededly received the amount which the court had approved in settlement.

On April 15, 1941 — more than six years after the settlement of the prior action — the same infant, by her father as guardian ad litem, instituted in Supreme Court the present action in which recovery is sought against the same defendant for the entire damage alleged to have been suffered by the infant-plaintiff and arising out of the same accident. Since the complaint herein was served the infant’s father has consented to a dismissal of the complaint in so far as it embodies a claim by him personally against the defendant.

At Special Term a motion by the defendant to dismiss the amended complaint, under rule 107, subdivisions 6 and 7, of the Rules of Civil Practice, was denied. At the Appellate Division the order of Special Term was reversed and the defendant’s motion was granted upon the ground that the plaintiff’s cause of action did not accrue within the time limited by law for the commencement of suit thereon. We agree with the result reached by the Appellate Division, but for a different reason.

In his affidavit, filed at Special Term, in opposition to defendant’s motion for a dismissal of the complaint, the guardian ad litem admits the settlement of the prior Municipal Court action and the execution and delivery of the release which that court had authorized. He asserts, however, that he has instituted the present action for the following reasons: That when the Municipal Court action was commenced in 1934, the infant’s injuries did not appear to be serious; that since the settlement of that action her condition has become progressively worse; that the guardian ad litem has been advised by physicians that the infant-plaintiff is suffering from a permanent impairment of health and that the accident of September, 1934, could be a competent producing cause ” of her present condition.

When the accident befell the infant-plaintiff in 1934 she had the legal right to delay any action to recover for consequent personal injuries until one year after she attained the age of twenty-one years. (Civ. Prac. Act, § 60.) However, until she became twenty-one years of age the law gave her the right, if she chose to exercise it, to maintain such an action by a guardian ad litem. (Civ. .Prac. Act, §§ 201, 202.) It was the latter course which was adopted by those charged with protecting the infant-plaintiff’s rights and interests. When, in 1934, an action was commenced in the Municipal Court to recover from the present defendant for alleged damages suffered by the infant-plaintiff, her guardian ad litem, acting under the authority of law (Civ. Prac. Act, §§ 201, 202), submitted her rights and claims, as asserted in that action, to be adjudicated by that court upon the law applicable to the case and according to procedure by which it is given effect. When the parties to that prior action agreed upon a settlement, certain prescribed procedure brought them into court. (Rules of Civ. Prac., rule 294.) The Municipal Court order of January 24, 1935, was made in the exercise of judicial authority which the guardian ad litem had chosen to invoke; it was entered with the knowledge and consent of the guardian ad litem; it approved the settlement' which the parties had agreed upon and authorized the guardian ad litem in behalf of the infant-plaintiff to execute and deliver to the defendant the release with which we are now concerned.

The record contains no allegation that either the settlement of the 1934 action, or the execution of the release as an incident to that settlement, was induced by fraud. Nor does the plaintiff claim that the release itself is void. It is in the usual form and is clearly so broad in scope as to discharge the defendant from the damages which the present action is intended to enforce. Nor is it suggested by the guardian ad litem that the release was limited by its terms to a portion only of the damages sustained by the infant for which portion no recovery is sought in the present action.

The guardian ad litem has framed his present complaint to plead an action at law without mentioning the prior action of 1934. He conceded at Special Term, upon the return of the defendant’s motion to dismiss the complaint, that an action in the infant-plaintiff’s behalf against the defendant had been commenced in Municipal Court in 1934; that such prior action had been settled, and that, as an incident to that settlement, a release, authorized by court order, had been given to the defendant. We do not find, however, in the affidavit submitted by the guardian ad litem in opposition to the defendant’s motion, an allegation of the rescission of the release.

In these circumstances the release is a complete bar to the present action against the defendant, unless rescinded. If, for reasons sufficient in law, the release is voidable — which problem is not now before us for decision — its rescission may be made effective only by returning or tendering back the consideration received therefor. (Gilbert v. Rothschild, 280 N. Y. 66, 72; Kamerman v. Curtis, 285 N. Y. 221, 226.)

The release, now unrescinded, affords a proper basis for the defendant’s present motion under rule 107, subdivision 7, of the Rules of Civil Practice, viz., that defendant should have judgment dismissing the complaint upon the ground that the demand set forth in the complaint has been released.

The judgment should be affirmed, with costs.

Lehman, Ch. J., Lottghran, Finch, Rippey, Conway and Desmond, JJ., concur.

Judgment affirmed.


author: Desmond, J.

text:
    In the Matter of the Claim of Nicholas Cretella, Appellant, against New York Dock Company et al., Respondents. State Industrial Board, Appellant.

      Argued October 6, 1942;
    decided December 3, 1942.

      John J. Bennett, Jr., Attorney-General (Roy Wiedersum of counsel), for State Industrial Board, appellant.
    The State Industrial Board properly rescinded the award of 1934 and awarded further compensation to the claimant. (Matter of Krevac v. 310 East 55th Street, Inc., 287 N. Y. 621; Neuman v. North River Garnet Co., 254 App. Div. 793; 279 N. Y. 702.)

      Francis R. Holmes and James F. Fouhy for New York Dock Company, respondent.
    The decision setting aside the lump sum award of 1934, was made upon a ground which was not an issue before the referee which was unsupported by any proof and was wholly improper under the Workmen’s Compensation Law (Cons. Laws, ch. 67). (Matter of Kolodick v. General Electric Co., 260 N. Y. 461.) The liability of the respondent, New York Dock Company, was ended by the lump sum settlement of 1934, and any award made after that time would of necessity have had to be made against the Special Fund for Reopened Cases under section 25-a of the Workmen’s Compensation Law. (Matter of Tipton v. Lang's Bakery, Inc., 250 App. Div. 696; 275 N. Y. 572; Matter of Miller v. Pierson & Williams, 227 App. Div. 675 ; 253 N. Y. 541; Matter of Kiriloff v. A. G. W. Wet Wash Laundry, Inc., 257 App. Div. 37; 282 N. Y. 466.)
   Desmond, J.

The Industrial Board has reopened this workmen’s compensation proceeding, has made a new award to claimant of $18.46 per week, based on a finding that he is totally and permanently disabled, and has rescinded in the interests of justice ” a “ lump sum settlement ” in the amount of $3,300 which the Board had approved in 1934. This full amount of $3,300 had been paid to claimant, part in a lump sum and part at the rate of $12 per week, all as ordered by the Board in 1934, and the Board has ordered that the self-insurer have credit for this sum of $3,300 against the new award which is made retroactive to September 1, 1937. Neither the total amount of the 1934 “ settlement ” nor the amount or number of the weekly installments in which it was paid bear any apparent relation to claimant’s wage rate before the accident, or to the actual or probable duration of his disability. In other words, the directions of the statute as to the computation of the amount to be awarded a claimant, based on previous wages and on character and extent of disability, were not complied with in the 1934 decision. The attempt was to compromise the injured worker’s claim by agreement, as if he were asserting a common-law cause of action. The Appellate Division, being of the opinion that this fully-executed “ settlement ” is binding and entitled to enforcement by the courts, has reversed the decision whereby the Board rescinded it.

The Workmen’s Compensation Laws of certain other states (see for example Revised Statutes of New Jersey, vol. 2, 1937, 34:15-40, and General Statutes of Connecticut, § 5247) contain provisions authorizing the compromise of claims under those laws. The New York State Workmen’s Compensation Law (Cons. Laws, ch. 67) does not so provide. Our statute does empower the Industrial Board, in certain situations, to “ commute ” periodical payments to one or more lump payments (§ 25). Such a commutation, however (although sometimes called a “ lump sum settlement ”), is not a determination of amount by agreement of the parties, but is a mathematical computation of the present value of a series of future payments, which future payments are fixed as to amount and fixed or calculable as to number or probable number. True it is that our Compensation Law does not in terms prohibit “ settlements,” but, in view of the obvious and well-known policy and intent of the whole statute and in view of sections 32 and 33, which forbid any waiver by a claimant of his right to compensation or any release by him of benefits due, such an express prohibition of “ settlements ” was probably thought by the drafters to be unnecessary. We hold that there can be no valid compromise of the amounts due a claimant under this law.

Even in the states which permit “ voluntary agreements ” compromising workingmen’s compensation claims, little finality is accorded to such treaties though approved by the official or body administering the law. The Connecticut Supreme Court of Errors recently held (Sugrue v. Champion, 128 Conn. 574) that the effect of any purported release ” of the employer from payment of the full amount due under the act “ is restricted within limits unknown to the common law ” and that an award based on such a settlement can be reopened and revised by the commissioner on a showing of increased incapacity, change in conditions or mutual mistake. In New Jersey, similarly, it is held (Stroebel v. Jefferson Trucking & Rigging Co., 125 N. J. L. 484) that a “ settlement,” though approved by the compensation bureau, does not prevent a later reopening of the claim if the amount paid was less than was due under the statute.

Procedural questions also are raised here by the self-insuring employer as to the power of the Industrial Board to reopen, in 1940, the 1934 “ settlement.” The employer asserts that there was no proof before the Board in 1940 of “ a change in condition ” of the claimant (see Workmen’s Compensation Law, § 15, subd. 6-a). But subdivision 6-a of section 15 permits reclassification of a disability also on proof “ that the previous classification was erroneous and not in the interest of justice ” and it is upon these latter grounds, and not on the ground of a change in condition, that the Board has based its new award and its rescission of the 1934 settlement.” This claimant had been injured in 1928, and in 1928 and 1929 had received from the Board a number of awards, each of which, from its amount and period of coverage, was obviously for a partial, temporary disability and each of which awards thus necessarily implied a finding of temporary partial disability. In 1930 the Board, after hearings, made a decision approving a lump sum settlement of $3,000 in addition to payments made,” but there was no finding at that time as to the extent or probable duration of claimant’s disablement, and no finding on those questions can be implied from the authorization of a lump sum settlement.” The same must be said as to the second “ lump sum settlement ” of $3,300, ordered by the Board in 1934, and directed by the Board to be paid: $810 cash down and the balance at $12 per week, the rescission of which “ settlement ” is here under review. Since neither of these attempted “ settlements ” involves any classification of claimant’s disability, the only classifications discoverable here are those of partial, temporary disability implicit in the 1928 and 1929 awards above referred to. Those 1928-29 classifications were erroneous and not in the interest of justice ” since the Board has now found on sufficient proof that claimant is permanently totally disabled as a result of the 1928 accident. In a situation like this, section 15, subdivision 6-a, of the Workmen’s Compensation Law permits reclassification at any time, without regard to the date of accident.”

The award here appealed from was properly made payable by the self-insurer and not by the “ Special Fund for Reopened Cases ” described in section 25-a of the act. That section, as applied to the facts here, authorizes an award against the fund only when the proceedings are reopened more than three years after “ the date to which the amount paid in the lump sum settlement would extend if the award had been made on the date the lump sum payment was approved at the maximum compensation rate which is warranted by the employee’s earning capacity.” It can readily be demonstrated mathematically that the date to which the amount of the 1934 settlement ” here would carry periodical payments at the maximum rate applicable to claimant is within three years of the date when these proceedings were reopened in 1940.

The order of the Appellate Division should be reversed and the decision and award of the State Industrial Board affirmed, with costs in this court and in the Appellate Division. (See 289 N. Y. 848.)

Lehman, Ch. J., Lotjghran, Finch, Rippey, Lewis and Conway, JJ., concur.

Ordered accordingly.


author: Finch, J.

text:
    The People of the State of New York, Appellant, v. Thompson & Potter, Inc., Respondent.
    Argued October 19, 1942;
    decided December 3, 1942.

      William, C. Chanler, Corporation Counsel (Paxton Blair and Fred Iscol of counsel), for appellant.
    In proving that the untagged oysters were in defendant’s possession for five hours, so that defendant had a reasonable opportunity to discover the facts, the People proved all that was required to secure a conviction. (Bank v. People, 91 N. Y. 5; People v. Davis, 56 N. Y. 95; Matter of Cedar v. Judges of General Sessions, 240 App. Div. 182; 265 N. Y. 620; People v. Swift & Co., 286 N. Y. 64; State v. Chadbourne, 132 Me. 5; People v. Frudenberg, 209 N. Y. 218; People v. Nixon, 248 N. Y. 182.)

      Samuel M. Finkelstein and Simon H. Braunstone for respondent.
    The People failed to sustain the charge contained in the information. (People v. Timmerman, 79 App. Div. 565; People v. Foremost Butter & Egg Corp., 263 N. Y. Supp. 937.)
   Finch, J.

The defendant was convicted by the trial court of having in his possession three bags of oysters received from a shipper who was not registered with the Department of Health as an approved shipper of shellfish into the city of New York. (Sanitary Code of the City of New York, § 164, subd. 2.) The Appellate Division reversed, upon questions of law, and dismissed the information.

Section 164 (subd. 2) of the Sanitary Code of the City of New York (Baldwin’s New York Code of Ordinances, 1937 ed., p. 439) provides as follows: “ (2) No dealer in shellfish or other foods shall

purchase or have in his possession shellfish received from a dealer who is not the holder of a permit to sell shellfish at wholesale, or a shipper of shellfish registered in the manner hereinbefore referred to, for shipping shellfish into the City of New York.”

The purpose of this ordinance is to protect the consumer against the danger of disease involved in eating shellfish taken from sources which are not approved by the health authorities..

Defendant is a wholesale commission house dealing as a broker in shellfish and has its place of business in the Fulton Fish Market in New York city. On the day specified in the information herein, forty shipments of shellfish were delivered before 6:00 a. ,m. when defendant opens its place of business. The market watchman admitted the shipments into the premises. Defendant’s president and bookkeeper arrived about 6:00 a. m. but claim they had not completed their checking of these shipments by 11:00 o’clock because of the rush of business. An inspector for the Department of Health found two of the bags of oysters mentioned in the information at 9:45 a. m. and the third at 11:00 a. m. Preceding each inspection the inspector from the Health Department inquired in effect whether defendant had any shipments from unregistered sources and was told “ No.” Defendant had a list of approved shippers in his office with which it was his duty to compare the tags on the bags and return goods not on the approved list.

The trial court found that defendant had violated the ordinance through carelessness in checking. Although the memorandum opinion of the Appellate Division proceeds upon the ground that the guilt of defendant was not established beyond a reasonable doubt, the order states the reversal to be on the law. In the event of inconsistency the latter is, of course, controlling. (Code Cr. Pro., § 543-a; Spies v. Lockwood, 165 N. Y. 481, 483.) Only questions of law being open upon this appeal, we pass at once to a decisive point in the case, vis., the proper construction of the term “ possession,” as used in this ordinance.

Applying this ordinance to the subject-matter involved we find nothing unreasonable in construing the statute just as it is written, namely, that the mere receipt of shellfish into a dealer’s premises constitutes possession ” within the meaning of section 164 (subd. 2). A contrary holding would render the enforcement of the Sanitary Code almost impossible and expose the consuming public to the very danger from which the Legislature sought to protect it. The construction here held does not impose an undue burden upon the dealer. Each bag of shellfish contains a tag with a stub setting forth the name, address and registration number of the shipper as well as the name and address of the dealer to whom consigned. To discover that a bag of shellfish comes from an unapproved source requires a dealer merely to compare the tag attached to the outside of the bag against a Health Department list of approved shippers which every dealer is required to keep. To allow contaminated shellfish to be mingled with a dealer’s goods for any period of time involves the peril that the shellfish may be resold to the consuming public without detection by the health authorities, since it is shown that the turnover in this business is both large and immediate. This ordinance is a fair and appropriate exercise of the police power as applied to the subject-matter and is designed to protect the public health. (People v. Frudenberg, 209 N. Y. 218.)

It may be added that this succulent item of food demands especial care for its well being and to protect the health of the consuming public from unwholesomeness and from disease. What we said in People v. Swift & Co. (286 N. Y. 64, 70) applies with force here: “ Food laws are designed primarily, not for the punishment of the dealer, but for the protection of the consumer. In this field of law, the obligation to beware is on the seller rather than the buyer. Lack of proof of guilty intent does not satisfy that obligation.”

The action of the trial court in increasing the severity of the penalty imposed upon defendant, allegedly because he learned that defendant’s counsel contemplated taking an appeal, is urged upon us, but we do not find the record sufficiently clear to justify appropriate relief.

The order of the Appellate Division should be reversed and the judgment [of the Magistrate’s Court of the City of New York, sitting as a court of Special Sessions, affirmed.

Lehman, Ch. J., Loughran, Rippet, Lewis and Desmond, JJ., concur; Conway, J., taking no part.

Ordered accordingly.


author: Desmond, J. Finch, J.

text:
    Mary Lincoln Candies, Inc., et al., Respondents, v. Department of Labor of the State of New York et al., Appellants.

      Argued June 4, 1942;
    decided December 3, 1942.
    The following questions were certified:
    “ 1. Are provisions for minimum weekly wages such as those of that portion of Directory Order No. 3 governing minimum wages in the confectionery industry, designated III and entitled * guaranteed wages ’ authorized by and within the scope of Article 19 of the Labor Law?

      “ 2. Upon the record herein are the minimum weekly wages fixed by Directory Order No. 3 in that portion thereof designated III and entitled ‘ guaranteed wages ’ valid and reasonable?
    “ 3. Was remission of that portion of Directory Order No. 3 designated III entitled ‘ guaranteed wages ’ to the Board of Standards and Appeals for amendment by that body authorized by law?
    “ 4. Are the provisions of the Federal Fair Labor Standards Act of 1938, relating to wages and hours of employment, exclusive and controlling over the provisions of any order, rule or regulation of the Department of Labor enacted pursuant to Article 19 of the New York State Labor Law, in so far as New York State employers, engaged in interstate commerce, are concerned.”

      John J. Bennett, Jr., Attorney-General (Henry Epstein, John C. Crary, Jr., and Milton Kaplan of counsel), for appellants.
    The facts support the reasonableness of Directory Order No. 3 to effectuate the valid purpose of the Minimum Wage Law (Labor Law, art. 19; Cons. Laws, ch. 31). (West Coast Hotel Co. v. Parrish,
      300 U. S. 379; Townsend v. Yeomans, 301 U. S. 441.) Directory-Order No. 3 is a valid and proper order. (Hutchins v. Dept. of Labor, 173 Misc. Rep. 924; Slaughterhouse Cases, 16 Wall, 97; McCulloch v. Maryland, 4 Wheat. 360; Nebbia v. New York, 291 U. S. 502; West Coast Hotel Co. v. Parrish, 300 U. S. 379; N. Y. C. R. R. Co. v. White, 243 U. S. 188; Mountain Timber Co. v. Washington, 243 U. S. 219; Carmichael v. Southern Coal & Coke Co., 301 U. S. 495; Hegeman Farms Corp. v. Baldwin, 293 U. S. 163 Cotton Mills, Inc., v. Administrator, 312 U. S. 126.)

      J. A. A. Burnquist, Attorney-General for State of Minnesota, George F. Barrett, Attorney-General for State of Illinois, Frank R. Kenison, Attorney-General for State of New Hampshire, Alvin C. Strútz, Attorney-General for State of North Dakota and Grover A. Giles, Attorney-General for State of Utah, amici curise.

      Charles J. Wick and Edward J. Garono for respondents.
    Article 19 of the Labor Law governing minimum standards for women and minors in industry makes no provision, either directly or by intendment, for a guaranteed wage for part time employment irrespective of services actually rendered. (People ex rel. Scharff v. Frost, 198 N. Y. 110; Matter of State Industrial Comm. v. Newman, 222 N. Y. 363; Johanns v. Ficke, 224 N. Y. 513; Ewen v. Thompson-Starrett Co., 208 N. Y. 245; Flynn v. Prudential Ins. Co., 207 N. Y. 315; East v. Brooklyn Heights R. R. Co., 195 N. Y. 409; People v. Ahearn, 196 N. Y. 221; Cooper-Snell Co. v. State, 230 N. Y. 249; People ex rel. Steckler v. Warden of City Prison, 259 N. Y. 430; Schieffelin v. Lahey, 243 N. Y. 102; Matter of Doyle, 180 App. Div. 398; Sutliffe v. City of New York, 132 App. Div. 831.)
   Desmond, J.

There is open to us on this record one question only: May a minimum wage order under article 19 of the New York State Labor Law, validly fix a so-called “ Guaranteed Wage ” (for women and minors), that is, may such an order require employers not only to pay a minimum hourly rate to such employees, but also to pay that minimum hourly rate for a minimum number of hours per week? Although the Appellate Division certified to us a question, among others, as to the reasonableness of the hourly rate here fixed and of the number of hours for which that hourly rate is required by the order to be paid, we find that the courts below reached no such question, and we, therefore, cannot and do not answer it (Coatsworth v. Lehigh Valley Ry. Co., 156 N. Y. 451, 458.) For the same reason we return no answer to the certified question which inquires as to whether the Federal Fair Labor Standards Act of 1938 is controlling, as against article 19 of our Labor Law (Cons. Laws, ch. 31), in so far as New York State employers engaged in interstate commerce are concerned.

Directory Order No. 3, here under scrutiny, requires the payment of a minimum of ten dollars to any minor employee of either sex, or any adult female employee, who works three days or less in any week, during the peak period ” in the confectionery industry, and a minimum of seven dollars per week to any such employee who works two days or less in any week during the dull period in that industry. Directory Order No. 3 was promulgated by the Industrial Commissioner after full compliance with the elaborate statutory procedures as to investigation, hearings, wage board recommendations, etc. The manufacturers thereupon petitioned the Board of Standards and Appeals for a review, and that Board held the order to be valid and reasonable in all its parts. Then followed this suit against the State Department of Labor, under section 111 of the Labor Law to determine the validity and reasonableness ” of the order. While in form a suit against the State Labor Department, this litigation is in substance an appeal from the determination of the Board of Standards and Appeals. (Labor Law, § 111, subd. 2.)

Special Term upheld various provisions (not here in question) of Order No. 3 but struck down the provisions for “ Guaranteed Wages ” as “ not reasonable and in reasonable compliance with the statute.” (175 Misc. Rep. 399, 402.) The opinion in that court makes clear that the reasonableness of the cents per hour ” and minimum hours to be paid for ” directions of the Order were not passed on by Special Term, but only the validity under article 19 of the Labor Law, of any provision at all for a “ Guaranteed wage.” The Appellate Division affirmed.

The constitutionality of article 19 itself is, of course, not in question. (West Coast Hotel Co. v. Parrish, 300 U. S. 379.) But plaintiffs say this “ Guaranteed Wages ” feature of Directory Order No. 3 is not within the authorizations of article 19 since, they say, the Order requires payment to employees for services not rendered at all. Thus, again according to plaintiffs, the Order flouts section 555 of the Labor Law which requires that the commissioner and the wage board take into account the value of the service or class of service rendered.” We agree with plaintiffs that the phrase may take into account ” in section 555 means “ must take into account ” but we do not forget that the section calls upon the Wage Board and the Commissioner to take into account not only the worth of the labor, but also “ the amount sufficient to provide adequate maintenance and to protect health.” After computing both these amounts, the Board or Commissioner must arrive at a resultant. If they find that the amount required for decent maintenance is higher than the going market value of the work, are they to be limited to the latter? If the answer to that question must be yes,” then the statute accomplishes little or nothing as to the evils against which it was written. Recognizing this, the United States Supreme Court, in West Coast Hotel Co. v. Parrish, expressly overruled in 1937 its former holdings in Adkins v. Children’s Hospital (261 U. S. 525), and similar cases, and held unobjectionable a minimum wage law (Session Laws of Washington, 1913, ch. 174, §§ 10, 11) which authorized the fixation of a wage “ adequate in the occupation or industry in question to supply the necessary cost of living, and maintain the workers in health.” The Supreme Court did say in the West Coast opinion that it might be assumed that minimum wages in the State of Washington are fixed in consideration of the services that are performed in the particular occupations under normal conditions.” (p. 396.) But the Washington statute in fact specified only one test of the minimum wage, the test of its adequacy to cover the cost of living of the female or minor employee.

The very concept of minimum wage legislation necessarily involves the determination of the cost of living and the fixing of a wage that will reasonably cover, or approach, that cost. The idea of a “ living wage is the heart and core of all such legislation. The earliest of the State minimum wage laws (Massachusetts, L. 1912, ch. 706) called upon the wage boards of that State to take into consideration “ the. needs of the employees ” as well as the effect on the industry of any increase in wages. The District of Columbia statute (40 Stat. 960) frowned upon by the Supreme Court in the Adkins case (supra), authorized the establishing of minimum wages adequate to supply the necessary cost of living to * * * women workers.” That statute passed upon in the Adkins case said nothing about value of services, or going rates, or anything of the sort, and it was held invalid for that reason, principally. In 1936 the original New York State minimum hour law (L. 1933, ch. 584) was similarly rejected by the Supreme Court (Morehead v. New York, 298 U. S. 587) because it apparently required the minimum wages fixed thereunder not only to be equal to the value of the services rendered but also to be sufficient to meet the minimum cost of living (see §§ 551 and 552 of that statute and this court’s opinion in the Morehead case, 270 N. Y. 233, 238). When, finally, the Supreme Court took a different view of such statutes and decided that they were not unconstitutional (West Coast Hotel Co. v. Parrish, supra) it observed (300 U. S. p. 396) that the statutes in the Adkins, Morehead and West Coast cases, were all alike in so far as they all failed to make the value of the services a controlling test. It cannot be doubted that our Legislature had these rulings in mind when it passed in 1937 the minimum wage statute which we are here construing. And when it directed the Wage Board and the Commissioner to take into account the cost of adequate maintenance and health as well as the value of the services and the wages paid in the State for like work, the Legislature of course realized that a wage sufficient to provide a decent standard of living would sometimes exceed the strict bargain- and-sale value of the worker’s services.

In reciting the factual background ” of our present minimum wage law, the Legislature declared that its purpose was “ to secure wages sufficient to provide adequate maintenance and to protect the health of women and minors.” (Labor Law, art. 19, § 550, added L. 1937, ch. 276.) It is fairly to be assumed that the Legislature, bent on seeing to it that women and minors should, so far as possible, receive subsistence wages for their work, appreciated that no hourly rate of wages could achieve that result unless it were multiplied by some appropriate number of hours. Plaintiffs’ argument seems based on an assumption that article 19 set up only a system for determining hourly rates of wages. The word “ hour ” or “ hourly ” appears nowhere in the law. Its heading reads: “ Minimum Wage Standards for Women and) Minors.” The Legislature, driving toward its plainly marked goal, would have stopped far short of that goal if it had provided for minimum hourly wages only. The accomplishment of its high social purpose required a grant of authority to the Labor Department to make such orders as would in fact be directed toward providing a living wage, not merely an hourly rate which, in most industries, would not produce a living income, unless ordered paid for a sufficient minimum number of hours.

The words “ Guaranteed Wages ” mean no more than required or ordered wages. Directory Order No. 3 guarantees no work or wages to anyone. It requires no employer to hire or pay anyone. It fixes the minimum amount an employee is to get in any week wherein her services are needed and requested by the employer. Having called her into service, the employer, says the order, must pay her no less than ten dollars (in the rush season) or seven dollars (in the slack season). Plaintiffs say that at times they need less than three (or two) days work per week but that, under this order, they must either pay for services they do not need and camiot use or go without the workers’ services entirely. Assuming that this is factually correct as to their industry, we still conclude that the order does not, for that reason, fail to stand the tests of section 555. We hold that a minimum wage order, to be valid under our statute, need not be consistent with the actual market value of the work actually done in every period of employment however short. The contrary argument, applied to extreme situations, leads to impossible results. If it be a valid objection to a minimum, wage order that it requires, or may require, payment for work not actually needed or done, then an order mandating a thirty-five cents per hour wage would be illegal because the employer might need the worker for only a half hour, or ten minutes. Invalidating an order for such a reason would wipe the statute off the books. We do not agree, on this record, that this Wage Board paid no attention at all to the value of services or to the wages currently being paid in the industry. Both these subjects were inquired into and there are findings as to each. In fact, the Wage Board report says that, because of conditions in the industry, it has in this order fixed wages which are not high enough for the proper maintenance of the workers. Certainly it does not appear as matter of law that in writing the terms of this order, the value of the services was entirely disregarded.

We do not hold that the Wage Boards have unlimited authority to make any extraordinary or whimsical requirements, as to hours and wages, that suit their fancy. The provisions of any such order must be reasonably fit for enforcement of the policy of the statute under the circumstances of the particular employment. We see nothing strange or startling about the requirements here. A week is not an unusual unit of wages or employment. Requiring payment, in a week where any work is done, for two-sevenths or three-sevenths of the days of that week, is not so plainly arbitrary as to offend against the statute itself. In this connection we take notice of the orders current in other States, as referred to in the brief filed here, in support of the Labor Department’s position, by the Attorneys-General of Minnesota, Illinois, New Hampshire, North Dakota and Utah, as amid curiae. All those states have Minimum Wage Acts which differ in no important way from article 19 of our Labor Law. Each of the Attorneys-General informs us that his state promulgates orders for “ fixed or established weekly wages.” Plaintiffs say that no order promulgated in any of those five states “ goes so far as to guarantee wages for the whole week or part of a week,” but plaintiffs’ own analysis of various orders in effect in those other states shows, we think, the contrary. In three of the states (Illinois, New Hampshire and Utah) there are found orders which in effect guarantee ” a worker at least four hours pay on any day she is called to work. Other orders, in those three and the other two states, fix a higher rate of wage per hour in any week where less than a minimum number of hours employment is furnished. It is our view that all these orders proceed on the same theory as does the order under attack in this suit,' the theory that part time employment must, by the application of some formula, produce more money return to the worker than she would receive if her pay envelope contained only an amount arrived at by multiplying the market value of her hourly service by the exact number of actual hours work which the employer had made available to her. The differences between these various orders are differences of detail, approach and formulation. The theory, the objective and the general method are the same in every instance.

The judgments should be reversed and the action remitted to the Special Term for proceedings not inconsistent with this opinion with costs in all courts to the appellants to abide the event. The first question certified should be answered in the affirmative and the third in the negative. The second and fourth questions certified are not answered.

Finch, J.

(dissenting). The primary question presented for

decision on this appeal is whether article 19 of the Labor Law authorizes a directory order issued to the confectionery industry by the Department of Labor providing for a so-called guaranteed wage for part time employment. Such a guaranteed wage is based solely upon an amount considered sufficient to provide adequate maintenance and to protect health without regard to the value of the services rendered. Directory Order No. 3, the Order in question, besides providing for a basic hourly rate of thirty-five cents an hour, requires that employees must be paid a minimum of ten dollars for three days or less during the peak period and seven dollars for two days or less during the slack period irrespective of the amount of time actually worked. It is conceded that these provisions of this order mean that: “if an experienced employee works for any period whatever (e. g., ten minutes) in a week during which the employer’s establishment is in operation for the given two days or three (according as the industry is sluggish ’ or ‘ at peak ’), then the so-called guaranteed weekly minimum wage is to be paid. (This construction is not disputed.) ” By this regulation no attempt has been made to compensate short periods of employment at an increased rate per hour, but a flat rate of ten dollars or seven dollars is fixed for a work period, however short, and hence without taking into account the value of the service rendered. This order in effect outlaws part time employment with the result that the only alternative for an employee or an employer is either for the latter to pay for labor that is not used or for both to be deprived of part time labor that is necessary for both.

While it is not contested in fact or in principle that article 19 authorizes a guaranteed minimum weekly wage in return for a full week’s work, it is submitted that no authority is conferred by this statute, either directly or by fair intendment, permitting the establishment of guaranteed wages for part time employment irrespective of services rendered. Concededly there exists no provision in article 19 expressly providing for the fixing of wages based solely upon an amount considered adequate to provide maintenance and protect health without regard to the value of the services rendered. Under other circumstances the question might arise whether such authority is conferred by fair implication or intendment. But in the case at bar we have a principle of statutory construction that, in the absence of a clear expression of legislative intent, it will not be inferred that the statute was intended to abolish traditional common law concepts or outlaw recognized common law relationships. Certainly up to the time of the enactment of article 19 there had not been established in New York State the principle that wages may be fixed wholly on the basis of what the Wage Board or the Commissioner may deem sufficient to provide adequate maintenance and to protect health. Therefore, since the order in question in fact outlaws part time employment and changes the traditional concept of wages ” as a return for services actually rendered, we must find clear and unambiguous language in the statute to authorize such administrative action.

A reading of the statute shows that it is implicit therein, when read both as a whole and with emphasis on the particular language used, that the Wage Board and the Commissioner are not authorized to fix a guaranteed wage for part time employment irrespective of service actually rendered. The introductory section (550), denominated Factual background,” expressly states that the mischief to be remedied is the employment of women and minors at wages insufficient to provide adequate maintenance and to protect health and unreasonably low and not fairly commensurate with the value of the services rendered. Such a condition is contrary to public interest and public policy commands its regulation.”

Thus the evil complained of is expressly stated to be comprised of two attributes, namely, wages insufficient to provide adequate maintenance and to protect health, and at the same time unreasonably low and not fairly commensurate with the value of the services rendered. In section 555 of this same article 19, captioned Basis of Minimum Wage,” the Legislature has enacted in similar language not only that the Commissioner take into account an amount sufficient to provide adequate maintenance and to protect health, but “ the value of the service or class of service rendered * * *,” and the wages paid in the state for work of like or comparable character.” Surely the express coupling of the factors of value of services and the wages paid in the State for work of like character with the factor of amount sufficient for maintenance and protection of health would lead to a strong inference that power has not been conferred to fix wages irrespective of the value of the services rendered.

In addition, in section 556 the statute is very specific and detailed in providing that the regulations adopted by the Wage Board: may among other things define and govern learners and apprentices, their rates, number, proportion or length of service, piece rates or their relation to time rates, overtime or part-time rates, bonuses or special pay for special or extra work, deductions for board, lodging, apparel or other items or services supplied by the employer, and other special conditions or circumstances.”

Where the statute is so exact in defining the minute powers which the Board possesses, and at the same time makes no mention whatever of the extraordinary power to fix guaranteed wages irrespective of services rendered, and in some instances where no services at all are rendered, it would seem a fair inference that the Legislature did not intend to give such power to the Board. If such had been the intention of the Legislature, it could very easily have included a provision to that effect. To find so great and novel a power conferred upon the Wage Board and the Commissioner in the absence of clear legislative expression, is to fly in the face of the settled principle of statutory construction, that a grant of such power will not be inferred from what is at best ambiguous language.

On the contrary, the statute prescribes that the Wage Board is to recommend “ Minimum Wage Bates ” and such regulations as may be deemed appropriate to safeguard the minimum wage standards recommended without departing from such basic minimum rates. Thus, the statute as a whole talks about and deals with wages and wage rates. Wage ” has always been construed by the courts in New York to mean compensation for services rendered. (Walsh v. City of New York, 143 App. Div. 150; Shane v. City of New York, 135 App. Div. 218.) The term rate ” is defined as the amount or degree of a thing measured per unit of something else. Thus, when used in conjunction with “ wage,” the term connotes compensation measured by the hour, day or week actually worked.

Looked at realistically, a distinction exists between wages sufficient to meet a minimum cost of living necessary for health, when an employee is working on a full time basis, and wages sufficient to meet adequate maintenance necessary for health when an employee, through no fault of the employer, can find only part-time employment. The principle involved is not inconsequential.. If, as advocated by appellant, it is held that by intendment the Legislature empowered the establishment of a minimum guaranteed wage for part time employment irrespective of services, rendered, then it follows that wages may be guaranteed on a monthly or yearly basis irrespective of services rendered. This follows as a necessary corollary to the contention of appellant that the Legislature intended to confer such power in relation to part time employment.

Starting with a laudable effort to raise wages which were not - commensurate with the value of the services rendered through employment of the police power in aid of adequate maintenance for women and minors, the Wage Board and the Commissioner have swung to the other extreme and interpreted the statute to provide for a wage rate for part time employment without any regard to the value of the services rendered.

Since this appeal may rest upon the decision of the construction of article 19, it becomes unnecessary to consider the constitutional questions involved.

It follows that the judgment appealed from should be affirmed, the first question certified answered in the negative, the third question in the affirmative, and the other questions not answered, without costs of this appeal to any party.

Lehman, Ch. J., Loughran and Rippey, JJ., concur with Desmond, J.; Finch, J., dissents in opinion in which Lewis and Conway, JJ., concur.

Judgments reversed, etc.


author: Finch, J. Lewis, J.

text:
    Leopold D. Stern, Doing Business as L. D. Stern & Co., Respondent, v. Gepo Realty Corporation, Appellant, Impleaded with Another.
    Submitted October 5, 1942;
    decided December 3, 1942.

      The following questions were certified:
    “1. Does the complaint herein set forth facts sufficient to constitute a cause of action?
    “ 2. Should defendant’s motion for judgment on the pleadings and for summary judgment under rules 112 and 113 of the Rules of Civil Practice have been granted?”

      Albert W. Clurman and Jacob J. Sachs for appellant.
    A waiver of the condition precedent to the earning of commissions has not been established. (Couper v. O’Neill, 53 Misc. Rep. 319; Gepo Realty Corp. v. Pierce, 25 N. Y. Supp. [2d] 25; 260 App. Div. 1041; 286 N. Y. 641.) A sale of real property is consummated only when title passes. (Amies v. Wesnofske, 255 N. Y. 156; Reis Co. v. Zimmerli, 155 App. Div. 260.)

      Meyer Halpern, Gerald Mayer and Saul Pearce for respondent.
    Title having been rejected because of unmarketability, plaintiff is entitled to commissions, and the complaint is sufficient. (Colvin v. Post Mortgage & Land Co., 225 N. Y. 510; .Van Vliet & Place Inc., v. Gaines, 249 N. Y. 106; Windsor Investing Corp. v. McLaughlin’s Sons, 130 Misc. Rep. 730; Weiner v. Infeld, 116 Misc. Rep. 323; O’Connell v. Ryan, 127 Misc. Rep. 350; Goodman v. Marcol, Inc., 261 N. Y. 188; Sibbald v. Bethlehem Iron Co., 83 N. Y. 378; Sesky v. Jolrane Realty Corp., 166 Misc. Rep. 564.) A proposed sale of realty is consummated when a contract of sale is signed, not when title passes. (Watson v. Muskegon S. S. Corp., 208 App. Div. 158.)
   Finch, J.

This action was brought to recover a brokerage commission from a vendor of real property whose title was rejected at the closing as unmarketable. In a previous suit wherein the vendee sought to recover the amount of his down payment from the defendant vendor, this court affirmed a determination in favor of the vendee which held that the vendor’s title had been properly rejected. (Gepo Realty Corp. v. Pierce, 286 N. Y. 641.) The present case comes here upon two certified questions, first, the sufficiency of the complaint, and, second, should defendant’s motion for summary judgment and for judgment on the pleadings have been granted?

A written contract governing the payment of commission was entered into by plaintiff broker, his copartner and defendant, on the same day that the latter made its contract of sale with its vendee. This brokerage contract, which is annexed to the complaint herein, provides for the payment of a commission to the plaintiff and his co-broker in connection with the sale, when and if consummated, of hotel property in the City of Long Beach * * * of which Gepo Realty Corp. is now the owner and contemplates making sale to our proposed client.”

The plaintiff’s copartner refused to. become a party plaintiff and therefore has been joined as a defendant.

Since the actual contract between the parties has been made a part of the complaint its provisions are, of course, controlling, and the sufficiency of the allegations in the complaint must be determined in-the light of these provisions.

Two causes of action are set forth in the complaint. The first cause of action proceeds upon, the theory that the commission was earned when the contract of sale was concluded between defendant vendor and its vendee. This theory is inconsistent with the express proyision in the contract of brokerage that the commission was payable when and if the sale was consummated. Such language created a condition precedent to the vendor’s liability to pay. (Amies v. Wesnofske, 255 N. Y. 156, 161.) Since the contract of brokerage is of even date with the contract of sale, this express condition in the contract would be deprived of all significance if it were deemed to refer to the making of the contract of sale. Consequently this phrase in question must be deemed to have the same legal effect as similar language which, as this court held in Amies v. Wesnofske (supra), makes the liability of the vendor to his broker contingent upon the closing of title. Therefore, the cause of action based on the untenable premise that plaintiff’s commission was earned when the contract of sale was made, is clearly insufficient.

• In his second cause of action plaintiff alleges that the closing of title did not take place because certain taxes and assessments, being wholly or partially "unpaid, constituted liens against the property and that certain of these liens the defendant vendor had failed and refused tó pay. The theory of this second cause of action is that, although the condition precedent to the vendor’s liability was never performed, the vendor cannot urge that fact as a bar to plaintiff’s recovery because the vendor itself rendered performance impossible.

A vendor of real property is under a duty to take affirmative action to convey a marketable title according to his contract of sale (Smith v. Browning, 225 N. Y. 358), and, therefore, under the usual contract of sale, undertakes to pay off items which are concededly hens upon the property, and in case it is disputed whether a particular item is a hen, to pay such item under protest, deposit in escrow a sum sufficient to discharge the hen if held vahd, or otherwise make an adjustment with the vendee. An allegation, therefore, that title did not close because of the vendor’s neglect and refusal to discharge hens against the property is sufficient to avoid the defense of nonperformance of a condition precedent under the well-established rule that one may not take advantage of a condition precedent, the performance of which he himself has rendered impossible. (Sibbald v. Bethlehem Iron Co., 83 N. Y. 378, 384; Vandegrift v. Cowles Engineering Co., 161 N. Y. 435, 443.)

This court’s decision in Amies v. Wesnofshe (supra) is not controlling on this point in the case at bar. There it was decided that where title is not closed because of default by the vendee, a vendor is not hable to his broker unless affirmative action on the vendor’s part has contributed to the vendee’s default. Specifically we held that the vendor was under no duty to pursue an unwilling purchaser with an action for specific performance. However, where a vendor refuses to perform his obligations under the contract of sale, the default is his and he cannot take advantage of the failure to close title as a shield against his broker’s claim to a commission.

The denial of the motion for summary judgment affords to the plaintiff an opportunity to present at a trial the issue which he raises in his complaint.

It follows that the order appealed from should be affirmed, with costs, the first question certified answered in the affirmative and the second in the negative.

Lewis, J.

(dissenting). By the decision about to be made the respondent is to be paid real estate commissions as to which its agreement was We the undersigned licensed brokers, do hereby agree to accept jointly the sum of Twelve hundred fifty ($1250.00) dollars as and for our commissions in connection with the sale, when and if consummated, * * (Emphasis supplied.) It is thus made clear that the writing upon which rests the respondent’s right to commissions is an agreement burdened with a condition. As I view the present record, the fact that the condition was never fulfilled defeats the respondent’s right to recover herein. (Aimes v. Wesnofske, 255 N. Y. 156, 162.)

I accept the Appellate Division’s construction of the phrase when and if consummated-” as expressing the respondent’s understanding that commissions were to be paid only if the agreement of purchase and sale was completely performed and title to the property involved actually passed. Concededly title never did pass — the sale never was consummated.” Furthermore, upon this record it cannot be said that failure to consummate the sale was due to any affirmative act by the seller. The single reason why the property was not conveyed was the presence on the law date of tax liens against the title, the validity of which liens was challenged by the seller. True, the seller was unsuccessful in his challenge. (Gepo Realty Corp. v. Pierce, 25 N. Y. Supp [2d] 25; affd., 260 App. Div. 1041; affd. [on appeal, by permission], 286 N. Y. 641.) But, on the agreed date for closing, the seller had offered to pay certain school taxes and water rents which had become liens upon the property, and to that end had offered to deposit in escrow a sum sufficient to pay not only those taxes, with any interest and penalties, but also a tax for a local improvement assessed against the property.

In the circumstances disclosed by this record the decisive rule has been stated by this court in Aimes v. Wesnofske (supra, p. 163): “* * * the duty of a vendor to his broker is fulfilled if he remain passive and neutral; the condition, upon which the payment of commissions is made to depend, is waived only where the vendor is active to prevent or hinder its performance.”

Here the express condition — accepted by the respondent at the time of hiring — upon which payment of commissions was to depend, was concededly not fulfilled. In the absence of proof that the sale failed of consummation by reason of some active, affirmative conduct by the appellant, as seller, there is no legal basis for recovery of commissions by the respondent.

The order of the Appellate Division should be reversed and the judgment of the Trial Term affirmed, with costs in the Appellate Division and in this court. The first certified question should be answered in the negative and the second in the affirmative.

Rippey, Conway and Desmond, JJ., concur with Finch, J.; Lewis, J., dissents in opinion in which Lehman, Ch. J., and Lough-ban, J., concur.

Order affirmed, etc.


text:
    Robert T. Wood, Appellant, v. City of Salamanca, Respondent.
    Argued October 20, 1942;
    decided December 3, 1942.

      John W. Ellis and Orla E. Black for appellant.

      J. M. Seymour for respondent.
   Lewis, J.

In a submitted controversy upon an agreed statement of facts a taxpayer, as plaintiff, and the city of Salamanca as the sole defendant, seek a declaratory judgment determining the following questions: (1) Did the Legislature have the power under the State and Federal Constitutions to pass chapter 231 of the Laws of 1942? (2) If the act is declared constitutional, has the Legislature the power to declare to be a local tax the rent reserved in leases between the Seneca Nation of Indians and lessees of lands within the corporate limits of the city of Salamanca and on the Allegany Reservation, and to authorize the city to levy said rent as such tax and pay the same to the Seneca Nation of Indians? Each of the above questions was answered in the affirmative by the Appellate Division, one justice dissenting.

Upon the present appeal by the plaintiff the following facts are among those stipulated: The city of Salamanca, in Cattaraugus county, is located on the Allegany Indian Reservation — a tract of 30,000 acres reserved to the Seneca Nation of Indians by the treaty by Robert Morris made at “ Big Tree ” on September 17, 1797. Due to its favorable location at the junction of several railroads, Salamanca in its early history enjoyed more than normal growth. In 1875 it was a community of 2,000 inhabitants most of whom lived on land then claimed to have been leased under the sanction of the Seneca Nation or from individual Indians who claimed allotments from that nation. When the legality of those leases. was challenged the Congress enacted a statute (18 Stat. 330 [1875]) which was designed to validate certain existing leases but only for a period of five years. At the end of that term possession of lands within an area comprising 3,000 acres reverted to the Seneca Nation which in turn was authorized to lease the same for terms not exceeding twelve years. During the ten years following 1875 the population of Salamanca increased until it reached 4,000. Meantime, however, it was found that the growth of the community and its ability to attract industry were handicapped by the short terms of the leases mentioned above which prevented the obtaining of loans upon real estate. In 1890 an act of Congress (26 Stat. 558, ch. 1132) authorized the Seneca Nation to renew leases of its reserved lands for a term not exceeding ninety-nine years. Under long-term leases thus authorized the community’s growth continued until, in 1939, its population approached 10,000; its assessed valuation of real property, franchises and public utilities was in excess of $6,000,000; it raised annually by taxation more than $300,000 and it had a bonded debt of more than $330,000.

In the year 1939 the holders of a large number of long-term leases of Indian lands had failed to pay the annual rentals due thereunder It was because of these defaults that on March 4, 1939, the Seneca Nation, by resolution of its Council, forfeited all leases it had granted upon which annual rentals were then in arrears. The resolution of forfeiture was adopted without notice to or demand upon the lessees and with no opportunity given them to tender the rentals then past due, with interest. When, after the adoption of the resolution of forfeiture, such tenders were made to the United States Indian Agent, they were refused and thereafter the legality of such refusals was given judicial approval. (United States v. Forness, 125 Fed. Rep. [2d] 928.) Since 1939 the Council of the Seneca Nation has annually adopted a resolution forfeiting, without notice or demand, all leases upon which there were defaults in the payment of annual rentals due on or before February nineteenth of each year. As the result of such action the forfeiture of many leases has been declared, and due to such forfeitures the leased land involved has in each instance reverted to the Seneca Nation and is thus beyond the power of the city to tax. (18 Stat. 330, ch. 90, § 8.)

These forfeitures and consequent reversions — now 800 in number — involving as they do the withdrawal from the list of taxable property of each parcel of leased land thus affected, have created for the city a critical situation. Under the provisions of its present Charter and by reason of defaults in the payment of taxes, the city sells each year parcels of such leased land, and, in the absence of other bidders, the city Comptroller bids in for the city the property involved. The city, claiming to be the owner of more than 200 parcels of land thus sold for taxes, is without knowledge as to whether the rentals reserved on the leases have been paid to the Seneca Nation. It is said that if such rentals are in default a purchaser at a tax sale, including the city, cannot protect a tax title because of the forfeiture of the lease for nonpayment of rentals and the refusal of the United States "Indian Agent to accept rentals due after February nineteenth of each year.

By reason of the foregoing facts and the alleged danger that the city may from year to year lose more of its assessable property as a result of the forfeiture of leases by the Seneca Nation; because of the alleged necessity placed upon the city to preserve upon its assessment rolls all remaining valid leases; because of what is said to be the probable inability of the city under present conditions to market issues of its bonds, and believing that its corporate existence is threatened, the. city was instrumental in procuring the passage of chapter 231 of the Laws of 1942. Without analyzing the statute in detail it may be said that in general it declares all rentals reserved to the Seneca Nation of Indians in what are termed “ Indian leases ” of lands within the city of Salamanca to be a lien in favor of the city, so long as said leases or renewals thereof are in force. The statute also purports to authorize the city, prior to February nineteenth of each year, to pay the aggregate sum of all rents reserved in such leases and to levy a tax against the property affected to reimburse the city for rentals thus paid.

We cannot say that the two questions before us upon this appeal, upon which a declaratory judgment is sought, do not involve property rights of the Seneca Nation of Indians, which Nation, although the owner of the leased lands involved, has not been made a party to the present action. Nor can we say that the enforcement of chapter 231 of the Laws of 1942 will not affect legal relations which might arise from that ownership. Indeed, the following excerpt from the brief filed with us by the appellant indicates his own conclusion that property rights of the Seneca Nation and legal relations affecting it, are involved in the present controversy: “ The leases granted by the Seneca Nation are contracts with individuals. The city is not a party to those leases. It cannot volunteer to pay the rental for an individual and advance its credit for that purpose. Certainly it cannot do this without the consent of the owner of the lease. There is no provision in the act for such consent. It merely states that the city shall have authority to pay these rentals, whether the property owner wishes it or not.”

We do not consider whether the appellant’s statement, last quoted above, is either factually or legally correct. We are mindful, however, that a judgment is a determination of the rights of the parties to an action (Civ. Prac. Act, § 472) and that a declaratory judgment, which has the force of a final judgment (§ 473 id.), “ serves a legitimate purpose where all persons who are interested in or might be affected by the enforcement of * * * ‘ rights ’ and ‘ legal relations ’ and who might question in a court the existence and scope of such rights, are parties to the action and have opportunity to be heard. As to persons who are not parties a declaratory judgment would be a mere academic pronouncement without juridical consequence, but which might be embarrassing if attempt is made thereafter to enforce these rights in legal proceedings to which they are parties. A court may, and ordinarily must, refuse to render a declaratory judgment in such case.” (Lehman, Ch. J., in Manhattan Storage & Warehouse Co. v. Movers & Warehousemen’s Ass’n, 289 N. Y. 82, 88.)

In the circumstances disclosed by the agreed statement of facts — as to the legal consequences of which we make no determination — we conclude that the declaratory judgment sought in the present action, to which the Seneca Nation of Indians is not a party, should not be granted.

The judgment of the Appellate Division should be reversed and the submission dismissed, without costs.

Lehman, Ch. J., Loughran, Finch, Rippey, Conway and Desmond, JJ., concur.

Judgment reversed, etc.


text:
    Maria L. Flynn, as Administratrix of the Estate of John E. Flynn, Deceased, Appellant, v. Long Island Railroad Company, Respondent.

      Argued October 21, 1942;
    decided December 3, 1942.

      Samuel Sumner Goldberg for appellant.
    It was error to dismiss the complaint as there was no evidence to sustain the holding that decedent was guilty of contributory negligence. Plaintiff’s prima jade case required submission to the jury. (Faber v. City of New York, 213 N. Y. 411; Baker v. Lehigh Valley R. R. Co., 248 N. Y. 131; Chamberlain v. Lehigh Valley R. R. Co., 238 N. Y. 233; Massoth v. Delaware & Hudson Canal Co., 64 N. Y. 524; Rague v. Staten Island Coach Co., 288 N. Y. 206; Stackus v. N. Y. C. & H. R. R. R., Co., 79 N. Y. 464; Seyford v. Southern Pacific Co., 216 N. Y. 613; Hamilton v. Erie R. R. Co., 219 N. Y. 343; Horton v. N. Y. C. R. R. Co., 237 N. Y. 38; Nicholson v. Greeley Square Hotel Co., 227 N. Y. 345; Cooperstein v. Eden Brick & Supply Co., 238 N. Y. 200; Kettle v. Turl, 162 N. Y. 255; Smith v. N. Y. C. & H. R. R. R. Co., 177 N. Y. 224; Lent v. N. Y. C. & H. R. R. R. Co., 120 N. Y. 467.)

      Ralph E. Hemstreet and Louis J. Carruthers for respondent.
    The decedent was guilty of contributory negligence as a matter of law. (McCall v. N. Y. C. R. R. Co., 54 N. Y. 642; Brickell v. N. Y. C. & H. R. R. R. Co., 120 N. Y. 290; Crough v. N. Y. C. R. R. Co., 260 N. Y. 227; Allen v. Erie R. R. Co., 244 N. Y. 542; Schrader v. N. Y. C. & St. L. R. R. Co., 254 N. Y. 148; Horton v. N. Y. C. R. R. Co., 237 N. Y. 38; Barnasky v. N. Y., O. & W. Ry. Co., 226 N. Y. 435.)
   Finch, J.

This is an action for wrongful death of plaintiff’s ntestate resulting from a railroad crossing accident. The complaint was dismissed at the close of plaintiff’s case,- presumably upon the ground of contributory negligence on- the part of the intestate, and the Appellate Division has -unanimously affirmed.

On the morning of September 29, 1939, John E. Flynn, the deceased, was driving his employer’s truck westward along Long Island avenue or Brentwood road, as it is also known, near Bay-shore, Long Island. This road runs parrallel to a track of the Long Island Railroad, easterly and westerly, for about one mile, and then turns at an angle of about ninety degrees and crosses the track. In the truck with the deceased was his helper, one Scheer, who was sitting on the deceased’s right, which was the side nearest the track. The truck was twenty-seven feet long. The cab of the truck was smaller than the body, so that the body of the truck overhung the cab by about twenty inches'. When deceased began to make the turn, his truck was only fifty feet from the center of the track. Eyewitnesses to the accident testified that as the deceased’s truck proceeded westerly along Brentwood road and came near to the turn, a westbound train approached, going at a very fast rate of speed. Defendant’s engineer had failed to signal at the whistling post, located more than 1,300' feet east of the crossing. There is testimony that the engineer did not sound the whistle until the train was only 400 feet from the crossing, at which time the deceased’s truck was already at the crossing. Both occupants of the truck were killed in the resulting collision.

The deceased has been held guilty of contributory negligence as a matter of law upon the ground that, as he approached the crossing, he had an unobstructed view of the track' at least as far east as the whistling post and that, if he had looked, he would have seen the approaching train in time to avoid the accident. Since the burden of proving contributory negligence in a death action is upon the defendant, and the complaint herein was dismissed at the end of plaintiff’s case, we must reverse if any possible hypothesis, based upon plaintiff’s evidence, forbids the imputation • of fault to the deceased as a matter of law. (Chamberlain v. Lehigh Valley R. R. Co., 238 N. Y. 233, 235).

After the truck had made the turn, its occupants, to be sure, had an unobstructed view of the track. But then there was'-a distance of only about fifty feet in which the driver could stop Ms twenty-seven, foot truck short of danger. Before the truck made the .turn, its occupants could not see a train approacMng from the rear because of the overhang of the body of the truck. There is evidence that, as the truck approached the bend in the road and turned at right angles to the track, it was going “ very, very, very slow.” From this it might be inferred that the occupants of the truck were attempting to ascertain the presence of danger. That they did not take more extraordinary precautions may have been due to the fact that they received no warning of the approach of the train until they had already made the turn. The failure of defendant’s engineer to give a timely signal may have justified such a relaxation of watchfulness on the part of the deceased. (Carr v. Pennsylvania B. B. Co., 225 N. Y. 44, 47.) It may well be that, having heard no signal at the wMstling post, the driver of the truck felt justified in making the turn and, having done so, could not avoid the oncoming train which was proceeding, according to the testimony, at a very fast rate of speed. From this evidence as to the speed of the train, it may be inferred that the train covered the 400 feet between the place where it first sounded its wMstle and the crossing in less than five seconds. If the wMstle had blown at the whistling post, placed more than tMrteen hundred feet distant from the crossing, an appreciable time of apparently fifteen seconds would have elapsed between the time of the warning and the arrival at the crossing, and with such warning the driver might not have made the turn at all. It may not be said as a matter of law that the driver of the truck, confronted with such imminent peril as was present in the case at bar, was negligent in failing to avoid disaster.

Since it is at least reasonably possible to infer from plaintiff’s evidence that the deceased met Ms death despite the exercise of due care on Ms part, the complaint was improperly dismissed at the close of plaintiff’s case.

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

Loxtghran, Rippey, Conway and Desmond, JJ., concur; Lehman, Ch. J. and Lewis J., dissent.

Judgments reversed, etc.


text:
    In the Matter of the Estate of Eudora L. Crump, Deceased. State Tax Commission, Appellant. Walter G. Crump, Jr., as Executor of Eudora L. Crump, Deceased, Respondent.
    Argued October 7, 1942;
    decided December 3, 1942.

      Jerome M. Hirsch for appellant.
    The order of the Surrogate erroneously directed the appraiser to receive evidence of the alleged transfer of the stock, and the admission of such evidence by the appraiser over the objection was contrary to section 278 of the Tax Law (Cons. Laws, ch. 60.) (Matter of Cleveland, 158 N. Y. Supp. 1099, 171 App. Div. 908; Matter of Ball, 161 App. Div. 79; Matter of Borst, 129 Misc. Rep. 424; 222 App. Div. 707; 248 N. Y. 556.)

      Homer I. Harris for respondent.
    The Tax Commission had the burden of proving that the stock was subject to tax. There is no evidence to sustain a finding that the shares of stock were the property of the decedent at the time of her death. (Matter of Enston, 113 N. Y. 174; Matter of Cochrane, 117 Misc. Rep. 18; 202 App. Div. 807; Matter of Wadsworth, 100 Misc. Rep. 439; 185 App. Div. 944; Matter of Burnhans, 100 Misc. Rep. 646; Matter of Miller, 77 App. Div. 473; Matter of Vassar, 127 N. Y. 1; Matter of Enston, 113 N. Y. 174; Matter of McPherson, 104 N. Y. 306; Bean v. Flint, 204 N. Y. 153; Matter of Barnes, 83 Misc. Rep. 272; Matter of Mills, 172 App. Div. 530; 219 N. Y. 642; Rogers v. Ballenberg, 68 Fed. Rep. [2d] 730.)
   Finch, J.

This appeal determines an effect of the failure to annex stamps to a stock certificate pursuant to' the Tax Law, § 278 (Cons. Laws, ch. 60). The decedent, Mrs. Crump, died a resident of the State of New York. In proceedings to fix the estate tax, the executor filed in the office of the estate tax appraiser a return and schedules setting forth a statement of two inter vivos transfers made by the decedent (1) of 1,600 shares of Eastman Kodak common stock approximately seven years prior to her death, to her son Walter Gray Crump, Jr., the executor herein, and (2) 1,524 shares of Eastman Kodak common stock two years prior to her death to her husband, Walter Gray Crump. ’ Supplementing these schedules the attorney for the executor filed affidavits of several persons relating particularly to the transfer of the 1,524 shares, of stock to the husband. Upon this appeal we are concerned only with the exclusion by the appraiser from the gross estate of decedent of the sum of $173,676, representing the value of 984 shares of the 1,524 shares of Eastman Kodak stock alleged to have been transferred by the decedent to her husband on September 27, 1934. Prior to September 27, 1934, it is conceded that the decedent was the owner of 1,524 shares of Eastman Kodak stock issued in her name, she receiving the dividends and paying income taxes thereon. Concededly, decedent was the legal and beneficial owner of this stock at the time of her death and the value thereof would be properly included in her gross estate unless it could be shown that a valid gift or transfer inter vivos had been made by the decedent to her husband. On May 10, 1940, a hearing was held before the estate tax appraiser in respect to the alleged transfer of these 1,524 shares of stock by the decedent to her husband. It was then adduced for the first time from the testimony of the husband that stock transfer tax stamps were not affixed to 984 shares of the 1,524 shares, nor were stamps affixed to any memorandum of sale or any other document evincing such sale or transfer at the time of the alleged transfer. Thereupon on motion of the attorney for the State Tax Commission, the appraiser struck out all testimony offered by the executor concerning the alleged transfer of 984 shares of stock from decedent to her husband. The attorney for the executor submitted no further proof, and requested that the report of the appraiser be filed. Based upon a report of the appraiser, which included in the gross estate the 984 shares, an order was entered fixing and assessing a tax on the estate of the decedent. From this order the executor appealed to the Surrogate. The appeal was sustained, and an order was entered by the Surrogate remitting the proceedings to the appraiser for the purpose of receiving evidence of title as to these shares of stock. A hearing was subsequently held before the appraiser and evidence was admitted over the objection of the State Tax Commission with respect to the ownership of these 984 shares of Eastman Kodak stock. In a supplemental report, the appraiser fixed the estate tax, excluding the 984 shares of stock from the estate. The State Tax Commission again appealed to the Surrogate, who denied such appeal. Upon appeal to the Appellate Division, the order of the Surrogate was unanimously affirmed. We allowed this appeal.

Upon this appeal the State Tax Commission contends that, since it appears affirmatively that no transfer tax stamps were affixed to the alleged transfer of the assignment of the 984 shares of stock, and proper objection having been made to the introduction of testimony relating to the transfer, the appraiser erroneously received proof of such alleged transfer contrary to the provisions of the Tax Law (§ 278).

It being admitted that at the time of the alleged transfer, namely on September 27, 1934, of the 984 shares of stock, there were not any stock transfer stamps affixed to the certificate or any payment made by the decedent on said stock transfers as provided for in the Tax Law (§§ 270, 270-a) we must consider the effect of the failure to pay the tax, as provided for in section 278 of the Tax Law. This section is as follows: §. 278. Effect of failure to pay tax. No transfer of certificates taxable under this article made after June first, nineteen hundred and five, on which a tax is imposed by this article, and which tax is not paid at the time of such transfer shall be made the basis of any action or legal proceedings, nor shall proof thereof be offered or received in evidence in any court in this state.”

A reading of the above section shows two distinct penalties prescribed for failure to attach stock transfer stamps at the time of the transfer (1) no transfer of certificates shall be made the basis of any action or legal proceeding, and (2) proof relating to the transfers shall not be offered or received in evidence in any court in this State. It is the second provision which applies to the issue involved on this appeal. The situation in this litigation is as follows. At the date of the death of decedent, 984 shares of stock were in her name as the last owner. The value of these certificates is included properly in the gross estate of this decedent, upon which the estate tax will be measured unless the executor can establish by competent proof the transfer of these certificates to the husband of decedent prior to her death. In an effort to establish this transfer, there were offered in evidence before the appraiser several affidavits which were objected to by the State Tax Commission as coming directly within the penalty provided for under the Tax Law (§278).

In the case at bar the executor stands in the same position as the transferor, the decedent herein, who has violated the provisions of the Tax Law (§ 278) and accordingly cannot establish by competent proof the alleged transfer of the stock certificates for the purpose of showing that title to this certificate had passed out of the estate. As appears in the record herein, at the date of the death of the decedent, the securities were held in the name of the decedent as a stockholder of record on the books of the company, and she received the dividends and paid income taxes thereon. Concededly the decedent was the legal and beneficial owner of the stock at the time of her death, and the value should be properly included in the gross estate of decedent, unless there is competent evidence that it is not a part of the estate. The Tax Law applying to the case at bar for the purpose of fixing a tax on the estate of decedent provides (§ 249-r): The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property * * * to the extent of the interest therein of the decedent at the time of his death.” The meaning of this statute is not ambiguous. The State Tax Commission has a right, for the purpose of fixing a tax on the estate, to include in the gross estate all which is the property of decedent at the time of her death. At the date of the death of decedent, the fact that she appeared as a stockholder of record on the books of the company, received dividends thereon, and accounted for their receipt and ownership for the income tax, at least permitted an inference of legal and beneficial ownership sufficiently strong to require a rebuttal by those who claim otherwise. The burden of establishing a change of ownership by the alleged transfer is upon the executor of the estate. The State Tax Commission has a right to rely upon what appears to be the property of the estate, and if proof is to be adduced to show ownership otherwise than as appears, this must be submitted by the representatives of the estate. By section 278 of the Tax Law the executor is prohibited from offering any proof thereof when there has been a failure to pay the tax and affix the stock transfer tax stamps to the certificate at the time of the transfer. It is urged by the executor that the burden is not upon him but upon the State Tax Commission to prove that the property, which it claims belongs to the estate, is subject to the tax. This the State Tax Commission has done when it shows that at the date of the death of the decedent, she appeared of record on the books of the company as the owner and had received the dividends and paid an income tax thereon. Upon such a showing it was the duty of the executor, if he relied upon a transfer of title, to prove the same, and of this he is prohibited from offering proof by reason of section 278 of the Tax Law because the transferor, whose representative he is, has failed to comply with the tax imposed by sections 270 and 270-a of the Tax Law.

Respondent cites no authority for the holding that the transferor or the representative of the estate of the transferor may fail to pay the tax by attaching the stock transfer stamps, and still offer proof and have it received in evidence as sustaining the transfer.

Matter of Borst (248 N. Y. 556) did not involve a dispute between the State Tax Commission and the representatives of an estate, but a dispute between the estate of a transferor and a transferee in which the estate was seeking to invoke the statute against the transferee and take advantage of the transferor’s failure to affix the stamps to a transfer and so recover the property. Attention was specifically called by the learned Surrogate to the fact that it was the duty of the transferor to affix the stamps and not the duty of the transferee. This is in accordance with the provision of the statute which provides: It shall be the duty of the person or persons making or effectuating the sale or transfer to procure, affix and cancel the stamps and pay the tax provided by this article.” (Tax Law, § 270).

In Matter of Mills (219 N. Y. 642) there was no evidence as to the fixation of transfer stamps before the appraiser and no objection on this ground was made before him. Hence, upon appeal to the Appellate Division, it was held that the motion to strike out all evidence as to the gifts inter vivos upon the ground that no stock transfer stamps were affixed at the time of the gift was properly denied, and the only question involved on presentation to this court was whether title to this property came to the son and daughter under the will or by gift inter vivos. The decision in Wylie v. Addoms (268 N. Y. 160) is not inconsistent with the decision in the case at bar. Bean v. Flint (204 N. Y. 153) and Rogers v. Ballenberg (68 Fed. Rep. [2d] 730) are also not to the contrary.

It follows that the order of the Appellate Division dated February 6, 1942, and the order of the Surrogate’s Court dated October 20, 1941, denying the appeal of the State Tax Commission from the order fixing the tax dated June 27,1941, should be reversed, and the order of the Surrogate’s Court entered June 3, 1940, which included as taxable the value of the 984 shares of Eastman Kodak Company stock should be affirmed, with costs in this court and in the Appellate Division payable out of the estate.

Lehman, Ch. J., Lewis and Desmond, JJ. concur; Loughran, Rippey and Conwat, JJ., dissent.

Ordered accordingly.


text:
    Johanna Neuhoff, Respondent, v. Retlaw Realty Corporation, Appellant.
    Submitted October 22, 1942;
    decided December 3, 1942.

      William B. Shelton and William J. McArthur for appellant.
    The plaintiff failed to prove any negligence on the part of the defendant which was the proximate cause of the accident. (Foltis, Inc., v. City of New York, 287 N. Y. 108; Sandler v. Garrison, 249 N. Y. 236; Hardie v. Boland Co., 205 N. Y. 336; Plumb v. Richmond Light & Railroad Co., 195 App. Div. 254; Stasiukiewicz v. Marcus Contracting Co., 225 App. Div. 54; Gildea v. Harris Fine Realty & Constr. Co., 249 App. Div. 775; Wolf v. American Tract Society, 164 N. Y. 30; Dittiger v. Isal Realty Corp., 264 App. Div. 279; Slater v. Barnes, 241 N. Y. 284; Silverberg v. Schweig, 288 N. Y. 217.)

      George Ginsburg for respondent.
    Plaintiff has made out a prima facie case. Hardie v. Boland Co., 205 N. Y. 336; Griffen v. Manice,
      166 N. Y. 188; Slater v. Barnes, 241 N. Y. 284; Gailbraith v. Busch, 267 N. Y. 230; Foltis, Inc., v. City of New York, 287 N. Y. 108.)
   Finch, J.

This is an action for personal injuries. The issue is whether or not the doctrine of res ipsa loquitur is applicable.

The plaintiff was a tenant in defendant’s six-story apartment house. For about three weeks before the accident painters had been engaged in painting the building. The painting had been ordered by the management. On the afternoon of the accident, the plaintiff left the house to do some shopping. Just as she reached the sidewalk, she was struck on the thigh by a paint pail which fell from the apartment house. She picked up the pail and saw that there was dry white paint inside of it. She did not see any label on the pail. Immediately after the accident the superintendent of the building came upon the scene, took the paint pail from the plaintiff and carried in into the apartment house. This pail was not produced at the trial. Subsequently the superintendent told plaintiff that a boy had thrown the pail from the roof but, upon examination before trial, admitted that he did not know where the pail fell from. So far as this record shows, the pail may have fallen from any portion of the apartment house, even from a vacant apartment in which painting had been done.

After plaintiff had put in the foregoing evidence and proved the extent of her injuries, both sides rested and moved for judgment. The trial court gave judgment for the plaintiff, holding that the doctrine of res ipsa loquitur was applicable. The Appellate Division has affirmed, two justices dissenting.

In Foltis, Inc., v. City of New York (287 N. Y. 108), this court stated the principle governing the application of the res ipsa loquitur rule as follows: “ Where the agency which produces the injury is not within the control of the person charged with negligence, or where the occurrence is one which naturally might occur from causes other than his negligence, the inference of his negligence is not fair and reasonable; but wherever there is a combination of those two conditions, viz., control by the person charged with negligence and improbability of the occurrence having happened if he had been reasonably careful, the doctrine applies.” ■ (p. 117.)

The two conditions upon which the applicability of the res ipsa loquitur doctrine depends, are present in the- case at bar. First, defendant had had painters working in the building during the preceding three weeks; immediately after the accident, defendant’s superintendent took possession of the pail that had struck plaintiff and brought it back into the building. From this evidence, the trier of the facts might infer that, at the time when this pail fell from defendant’s house, it belonged to defendant or was under the latter’s control. Second, the trier of the facts might also infer that if defendant had exercised due care in handling or in storing its paint pail, the pail would not have fallen into the street. Upon these facts it would seem that the plaintiff made out a prima facie case of negligence and that the defendant should thereupon have come forward with its explanation.

It follows that the judgment appealed from should be affirmed, with costs,

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

Judgment affirmed.