author: Van Voorhis, J.

text:
    In the Matter of the Accounting of Bankers Trust Company, as Trustee under the Will of Isaac B. Hosford, Deceased, Respondent. James M. Engle et al., Appellants; Peter K. Engle et al., Respondents.
    Argued April 26,1955;
    decided June 10, 1955.

      Paul Bauman, Herman Goldman and Milton J. Levitt for James M. Engle, appellant.
    James M. Engle, a grandson of testator, having survived Bonita Shainwald, is one of testator’s “ remaining grandchildren ” to whom the principal of the trust created for her under subdivision (c) of paragraph Seventh of the will is distributable. (Livingston v. Ward, 247 N. Y. 97; Salter v. Drowne, 205 N. Y. 204; New York Life Ins. & Trust Co. v. Winthrop, 237 N. Y. 93; Matter of Crane [Battelle], 164 N. Y. 71; Matter of Watson, 262 N. Y. 284; Brussel v. Deitsch, 190 App. Div. 368; Matter of Bierhoff, 271 App. Div. 743, 297 N. Y. 694; Matter of Hosford, 26 N. J. Super. 412; Matter of Rooker, 248 N. Y. 361; Teed v. Morton, 60 N. Y. 502.)

      Butk Lewinson, special guardian, and Louis G. Fieland for Lani C. Engle, infant, appellant.
    I. James M. Engle, a grandchild born after testator’s death, is included in the class described by the testator as his “ remaining grandchildren ” in subdivision (c) of article Seventh of his will. (Seitz v. Faversham, 205 N. Y. 197; Matter of Trischett, 184 Misc. 599.) II. The literal meaning of testator’s words ‘ ‘ remaining grandchildren ’ ’ includes grandchildren born after his death. (Matter of Rumph, 205 Misc. 404; Matter of Pulis, 220 N. Y. 196; Matter of Coolidge [Lee], 85 App. Div. 295, 177 N. Y. 541.) III. The words “ remaining grandchildren ” describe a class of remaindermen which includes testator’s grandchildren born after his death. (Herzog v. Title Guar. & Trust Co., 177 N. Y. 86; Teed v. Morton, 60 N. Y. 502; Matter of Tousley, 205 Misc. 1053; Jenkins v. Freyer, 4 Paige Ch. 47; Bisson v. West Shore R. R. Co., 143 N. Y. 125; Matter of Bierhoff, 271 App. Div. 743; Matter of Doherty, 227 App. Div. 265; Brussel v. Deitsch, 190 App. Div. 368; Matter of Ackerman, 137 Misc. 910; Matter of Sheffer, 139 Misc. 519.) IV. The authority cited by the Surrogate is inapplicable. (Matter of Watson, 262 N. Y. 284; Matter of Bierhoff, 271 App. Div. 743.)

      Copal Mints, special guardian for June D. Brackett and others, infants, respondents, and for Barry S. Brackett, respondent.
    I. The courts below have correctly held that appellant James M. Engle, who was not in being at the date of testator’s death, was not one of testator’s “ remaining grandchildren ” in respect to the provisions for the distribution of principal upon the death of any of the grandchildren who were living at the date of his death. (Connelly v. O’Brien, 166 N. Y. 406; Stokes v. Weston, 142 N. Y. 433; Nelson v. Russell, 135 N. Y. 137; Matter of Krooss, 302 N. Y. 424; Healy v. Empire Trust Co., 276 App. Div. 305, 301 N. Y. 620; Matter of Montgomery, 258 App. Div. 64, 282 N. Y. 713; Matter of Watson, 262 N. Y. 284; Matter of Brown [Wing], 154 N. Y. 313; Safford v. Kowalik, 278 App. Div. 604; Matter of Watson, 201 Misc. 193, 279 App. Div. 840, 279 App. Div. 976, 304 N. Y. 990; Matter of Dillon, 200 Misc. 147; Allen v. White, 201 Misc. 1034; Matter of Steinhardt, 279 App. Div. 1055, 305 N. Y. 619.) II. It is doubtful that the appealed from order is appealable. (Brown v. Feek, 204 N. Y. 238; Webster v. Webster, 243 N. Y. 520; Maggi v. Sabatini, 250 N. Y. 296; City Bank Farmers Trust Co. v. Ernst, 261 N. Y. 82; Matter of Van Vliet, 224 N. Y. 545; Probolsky v. Probolsky, 219 App. Div. 792.)

      Hugh L. Thomson for Bankers Trust Company, trustee, respondent.
    The order of the Appellate Division finally determines a special proceeding and is appealable to this court as of right. (Matter of Hallock, 308 N. Y. 299; Matter of Fields, 302 N. Y. 262.)
   Van Voorhis, J.

This appeal is from an order affirming the Surrogate’s construction of a will. The problem arises due to the death of one grandchild and the birth of another after the death of testator. The residuary estate is given in trust for his wife during her lifetime, to be divided into three equal parts upon her death. One of these parts is to be subdivided ‘ ‘ into as many shares or portions as I may have grandchildren surviving me,” and the testamentary trustees are directed “ to pay the income from one such share unto each of such grandchildren for and during the term of its natural life and upon its death to pay the principal sum from which it has been receiving the income unto its issue, if any, and, if it leaves no such issue, unto my remaining grandchildren in equal shares or portions, the children of any such grandchildren who may be then dead to take the share or portion which their parent would have received had it lived.” (Italics supplied.) The question is whether the unqualified language, my remaining grandchildren ’ ’, encompasses afterborn grandchildren and thus all grandchildren who are alive when the contingency occurs, or whether it is limited by referring back to those grandchildren who were alive at the time of the death of testator and who have been previously designated as grandchildren surviving me ”. Testator could not establish a trust for the life of a grandchild not in being at the time of his death, for that would have violated the Buie against Perpetuities (Personal Property Law, § 11; Beal Property Law, § 42; Seitz v. Faversham, 205 N. Y. 197). But nothing stood in the way of his giving a remainder to afterborn grandchildren upon the termination of trusts for the benefit of those who had been born during his lifetime. It is manifest from the next paragraph of the will that testator wanted to provide for afterborn children of his daughter Faith, whom he seems to have considered to have been the child whose age rendered her the most likely to bear children in the future. When it came to distribution on the death of any of these secondary life beneficiaries, the Buie against Perpetuities did not interfere, and we find no difficulty in giving the language its full scope which directs distribution to my remaining grandchildren ”.

The order should be reversed, with costs to all parties appearing separately and filing separate briefs payable out of the estate, and the matter remitted to the Surrogate’s Court for further proceedings in accordance with the opinion herein.

Conwat, Ch. J., Desmond, Dye, Fuld, Froessel and Burke. JJ., concur.

Order reversed, etc.


source: Caselaw Access Project

author: Froessel, J. Dye, J.

license: Public Domain

text:
    Henry B. Wesselman et al., as Executors of Blanche Wesselman, Deceased, Respondents, v. The Engel Company, Inc., et al., Appellants, et al., Defendants.
    Argued February 23, 1955;
    decided June 10, 1955.

      Zenaida Drabkin and Mortimer H. Koenig for appellants.
    I. Plaintiffs’ flagrant loches, both in the institution and in the prosecution of this action, should have barred their recovery. (Mutual Life Ins. Co. v. United States Hotel Co., 82 Misc. 632; Becker v. Faber, 280 N. Y. 146; Brooklyn Sav. Bank v. Joseph Wechsler Estate, 259 N. Y. 9; Peoples Trust Co. v. O’Neil, 273 N. Y. 312; M. & C. Creditors Corp. v. Pratt, 172 Misc. 695; Feldman v. Metropolitan Life Ins. Co., 259 App. Div. 123; Chatham Nat. Bank v. Pratt, 135 N. Y. 423; Delaware Trust v. Calm, 195 N. Y. 231; Bloomquist v. Farson, 222 N. Y. 375; Lightfoot v. Davis, 198 N. Y. 261.) II. The neglect of plaintiffs diligently to foreclose the mortgage and collect the debt released the estate of George C. Engel and The Engel Company, Inc., of any liability for a deficiency judgment since the whole debt could have been collected from the land if plaintiffs had proceeded expeditiously. (National Sav. Bank of City of Albany v. Fermac Corp., 241 App. Div. 204, 266 N. Y. 443; Remsen v. Beekman, 25 N. Y. 552; Home Owners’ Loan Corp. v. Wood, 164 Misc. 215; White v. Wielandt, 259 App. Div. 676.) III. The order on the motion for a continuance and the affirmance of the order by the Appellate Division were not res judicata and did not establish the law of the case on the question of loches. (Matter of Lord, 78 N. Y. 109.) IV. On behalf of administrator appellant only: The Referee erroneously construed the guarantee sued on as a guarantee of payment instead of a guarantee of collection. (Bank of United States v. Andron, 155 Misc. 21; White v. Wielandt, 259 App. Div. 676; McMurray v. Noyes, 72 N. Y. 523; Craig v. Parkis, 40 N. Y. 181; Chatham Nat. Bank v. Pratt, 135 N. Y. 423; Northern Ins. Co. v. Wright, 76 N. Y. 445.) V. On behalf of administrator appellant only: The agreement of guarantee covers only principal and interest. (Equitable Life Assur. Soc. v. Toplits, 69 Misc. 457; Moyer v. Wilson, 248 App. Div. 5; Coudert v. Huerstel, 60 App. Div. 83; Riverhead Sav.

      Bank v. Carr, 119 Misc. 347; McConihe Realty Co. v. Henry Scharnberger, Inc., 240 App. Div. 861; White v. Wielandt, 259 App. Div. 676, 286 N. Y. 609; Central Hanover Bank & Trust Co. v. Roslyn Estates, 266 App. Div. 244, 293 N. Y. 680.)

      Francis 8. Bensel and Douglas A. Witschieben for respondents.
    I. The claim of loches in the prosecution of the action is not subject to review on this appeal, since appellants have not specified in their notice of appeal that they seek a review of the intermediate order granting a continuance. (O’Connor Long Is. Properties Corp. v. Bruckman, 288 N. Y. 23; Landmesser v. Hayward, 157 App. Div. 74; Matter of Flanagan, 271 App. Div. 1014; Coit v. Campbell, 82 N. Y. 509; Lyon v. Park, 111 N. Y. 350.) II. Plaintiffs were not guilty of loches in instituting or in prosecuting the action. Until administration was taken out on the estate of the guarantor, there was no one against whom the action could he continued. (Lyon v. Park, 111 N. Y. 350; Coit v. Campbell, 82 N. Y. 509; National Sav. Bank of City of Albany v. Fermac Corp., 241 App. Div. 204, 266 N. Y. 443; Remsen v. Beekman, 25 N. Y. 552; Newton v. Evers, 77 Misc. 619, 161 App. Div. 811, 215 N. Y. 198; Newcomb v. Hale, 90 N. Y. 326; Chatham Nat. Bank v. Pratt, 135 N. Y. 423; M. & C. Creditors Corp. v. Pratt, 172 Misc. 695.) III. The guarantee is one of payment, and not of collection. (Loos v. McCormack, 107 App. Div. 8; McMurray v. Noyes, 72 N. Y. 523.) IV. The guarantee covers taxes, assessments and water rates. (White v. Wielandt, 259 App. Div. 676, 286 N. Y. 609.)
   Froessel, J.

Defendants-appellants challenge only the deficiency provisions of the judgment entered against them in this foreclosure action. The facts are sufficiently outlined in the opinion of Judge Dye, with which we agree excepting as to the liability of the appellant estate for taxes and assessments (and interest thereon) totaling $24,442.40, under George C. Engel’s guarantee.

The brief, unacknowledged guarantee on which respondents rely was typewritten on the hack of the extension agreement dated October 14, 1922. By its provisions, George 0. Engel, who died in 1936, guaranteed ‘1 payment of [1] principal and [2] interest of said mortgage, [3] together with any and all expenses of foreclosure of said mortgage ”. The entire principal sum of the mortgage was $19,000. The Special Beferee found the total mortgage indebtedness, with interest, to be $67,251.69.

It is said that the afore-mentioned taxes and assessments are “ expenses of foreclosure of said mortgage ” within the terms of said guarantee, and reliance for this holding is placed on section 1087 of the Civil Practice Act. But that statute says nothing about “ expenses of foreclosure ”. It merely provides that taxes and assessments " which are liens upon the property sold * * * are deemed expenses of the sale within the meaning of that expression as used in any provision of this article.” (Emphasis supplied.) The purpose of this section is to protect, not the mortgagee, but the purchaser on a foreclosure sale, who is entitled to a clear title (Moyer v. Wilson, 248 App. Div. 5, mod. 276 N. Y. 161; Equitable Life Assur. Soc. v. Toplitz, 69 Misc. 457, affd. 143 App. Div. 929; Coudert v. Huerstel, 60 App. Div. 83). In short, it directs the referee to pay out of the proceeds of the sale unpaid taxes and assessments so that he can give title free of such then existing liens.

To put it otherwise, taxes and assessments which are no longer liens cannot be deemed “ expenses of the sale ”, and, in any event, the definition “ of that expression ” is limited to that statute. It cannot control the meaning of a different expression as used in a private guarantee. George C. Engel did not guarantee taxes or assessments, or a total mortgage indebtedness, which between the mortgagor and mortgagee may include any number of items they may agree on. All that Engel guaranteed was (1) principal ”, (2) “ interest ” and (3) “ expenses of foreclosure ” — not the expenses of sale ” as defined by and limited in section 1087 of the Civil Practice Act. “ Expenses of foreclosure ”, in plain, everyday language, simply means, to lawyer and layman alike, the customary foreclosure expenses, namely, costs and lawful disbursements, extra allowances, referee’s fees and publication charges, and that is all the parties here could have intended. The guarantor should not be bound beyond the express terms of his guarantee (see Flyer v. Elms Realty Co., 241 App. Div. 828, affd. 267 N. Y. 618). It would be wrong in any case; it would be shocking to do so on this thirty-two-year-old guarantee.

White v. Wielandt (259 App. Div. 676, 260 App. Div. 871, affd. 286 N. Y. 609) and Central Hanover Bank & Trust Co. v. Roslyn Estates (266 App. Div. 244, affd. 293 N. Y. 680) are not controlling here. These cases merely hold that in a standard form mortgage such items as taxes and assessments — and we might add insurance premiums and repairs — are frequently made a part of the entire “ mortgage debt ”, for which the obligor expressly agreed to be responsible, but these items do not therefore become the principal of the mortgage. In this case, the guarantor’s liability is limited by the scope of Ms agreement only, not the obligor’s. The Special Referee recognized this by including insurance premiums and repairs as part of the judgment against the obligor only. He should have done likewise with respect to the taxes and assessments. In that respect he fell into error by incorrectly construing section 1087 of the Civil Practice Act. Accordingly, there should be deducted from the amount of $63,276.98 in the last ordered paragraph of the Special Term judgment the sum of $24,442.40, representing the aforesaid taxes, assessments and interest.

The judgment of the Appellate Division should be modified, and the matter remitted to Special Term for further proceedings in accordance with this opinion, with costs in all courts to the appellant estate against plaintiffs-respondents.

Dye, J.

(dissenting in part). In this action to foreclose a mortgage and to enforce a guarantee of its payment, the defendants-appellants in the Appellate Division appealed from so much of the judgment of foreclosure and sale as directed (Civ. Prac. Act, § 1083) a judgment for deficiency against The Engel Company, Inc., as obligor, and the estate of G-eorge C. Engel, as guarantor. The Appellate Division affirmed by a divided court. The appeal is here as of right.

While the appellants concede that plaintiffs had a right to foreclose their mortgage, which was in default for nonpayment of interest, they nonetheless contend that plaintiffs’ delay of nearly seventeen years in prosecuting such action to judgment relieves appellants of liability for any deficiency, failing which the appellant guarantor makes the additional point that, in any event, he is not liable for a deficiency insofar as it includes amounts paid by the mortgagee for taxes with interest from time of payment, on the ground that such items were not covered by the guarantee.

Both of these contentions were rejected in the court below and we think properly so. Although an action to foreclose a mortgage is equitable in nature and, like other actions, is subject to limitations of time for commencement, the doctrine of loches is not available as a defense so long as the statutory period allowed for the commencement of foreclosure has not expired. Here, concededly, the suit was commenced within about six weeks of accrual which was within the twenty-year period then allowed (Civ. Prac. Act, § 47, prior to 1938; cf. § 47-a). While we have not heretofore considered this precise question, we are satisfied that the subsequent delays in prosecution afford no substantial ground for denying plaintiffs right to a deficiency. This is in harmony with generally accepted doctrine that a mortgagee’s alleged loches within an unexpired period of limitation for commencement of suit is no defense to a foreclosure action (2 Warren’s Weed on New York Beal Property [4th ed.], p. 511; Monroe Co. Sav. Bank v. Baker, 147 Misc. 522; Cross v. Allen, 141 U. S. 528; Riordan v. Ferguson, 147 F. 2d 983; Niagara Fire Ins. Co. v. Fitzsimmons, 101 N. J. Eq. 437; Wilson v. Stevens, 105 N. J. Eq. 377, 381).

We turn now to a consideration of the extent of appellant guarantor’s liability for a deficiency. The Special Beferee, in addition to the usual and customary items going to make up the expenses of sale, determined that the sums advanced by the mortgagee for taxes and assessments with interest from time of payment constituted proper expenses of sale ” for which the guarantor by the express terms of the instrument of guarantee and by virtue of this applicable provision of the Civil Practice Act [§ 1087] is liable for the payment”. The court below was unanimous as to this aspect of the case, the dissenting Judges having disagreed as to the availability of plaintiffs’ loches in prosecution as a defense.

The mortgage in suit was initially given in 1906 to the Union Trust Company of New York to secure a loan of $19,000 with interest at 4%% on premises at 121 Barclay Street, New York City. Subsequently the premises were conveyed to The Engel Company, Inc., subject to the lien of the mortgage. Later and in 1922, after the mortgage had been assigned to Blanche Wesselman, plaintiffs’ decedent, at the request of The Engel Company, Inc., she extended, the maturity of the mortgage for five years to October 2,1927. Coincident with the making of snch extension agreement and forming a part thereof, George C. Engel, now deceased, the treasurer and principal stockholder of The Engel Company, Inc., for the purpose of inducing the extension, executed a guarantee of payment which was indorsed on the back of the extension agreement, viz.: ‘ ‘ For and in consideration of the sum of one dollar and other valuable consideration to me in hand paid by Blanche Wesselman, the receipt whereof is hereby acknowledged, and in order to induce said Blanche Wesselman to take an assignment of said mortgage herein mentioned and extend the same for a period of five years at five and one half per cent, interest, I do hereby guarantee to said Blanche Wesselman the prompt and punctual payment of principal and interest of said mortgage together with any and all expenses of foreclosure of said mortgage.”

The appellant guarantor does not doubt that taxes and assessments when paid by the mortgagee may be added to the mortgage debt, but says that his guarantee did not extend to the mortgage debt, but was restricted to the payment of principal and interest.

There is no merit to this contention. Its mere assertion in light of the documentary evidence refutes its substance. The bond, mortgage and extension agreement are in standard form containing the usual covenants on the part of the mortgagor to pay the indebtedness and interest and also to pay taxes, assessments, water rates, make repairs and carry insurance (Beal Property Law, § 254). The guarantee recited that it was given to induce the extension of the mortgage which, by its terms, was then due and which The Engel Company, Inc., of which the guarantor was chief executive and principal stockholder, had not assumed or agreed to pay when it took title. Under such circumstances we are obliged to read the word “principal” as synonymous with the principal debt which it was given to secure. In' so ruling we follow well-established doctrine that a guarantee must be viewed in light of the nature of the transaction to which it relates and the purpose for which it was made (Catskill Nat. Bank v. Dumary, 206 N. Y. 550; Bennett v. Draper, 139 N. Y. 266; Powers v. Clarke, 127 N. Y. 417; Schwartz v. Hyman, 107 N. Y. 562; Schmitz v. Langhaar, 88 N. Y. 503; Herskovits Fur Co. v. Hollander, 138 Misc. 456, affd. 232 App. Div. 802, affd. 257 N. Y. 606). This principle underlies our holding in Flyer v. Elms Realty Co. (241 App. Div. 828, affd. without opinion 267 N. Y. 618). There the guarantee was given by the assignor of a mortgage in order to induce the assignment. By its express terms, the assignor guarantor’s liability was expressly limited to the amount of unpaid balance of principal which, in effect, was to say “ without recourse ” beyond the unpaid balance of principal and interest. Upon foreclosure we deemed the assignor guarantor’s liability for a deficiency had thereby been limited to the balance of unpaid principal.

Furthermore, any doubt of intent is removed by the guarantor’s further covenant expressly guaranteeing payment of “ all expenses of foreclosure ”.

By statutory enactment all taxes and assessments which are a lien on the property sold are payable out of the proceeds as an expense of sale (Civ. Prac. Act, § 1087). The appellant would have us construe this provision as limited to taxes and assessments actually unpaid at the time of sale; that because the mortgagee paid the taxes accruing after default and before sale rather than leaving them open and unpaid, with the consequent liability for interest and excess penalties, and risk of forfeiture under delinquent tax statutes, they are not unpaid ” within the meaning of section 1087 and, accordingly, may not be considered as an expense of sale. Such contention is wholly lacking in merit. It would operate to penalize the diligent mortgagee, who acts promptly to preserve his security, and to favor the improvident. Nor can we believe the appellant is serious in advancing any such proposition for had such a course been followed the expenses of sale might well have been far in excess of what they now are and the guarantor’s liability greatly increased. Accordingly, when the language of the guarantee is read in light of the applicable statute, the sums advanced by the mortgagee for taxes and assessments with interest from the date of payment are properly charged as a part of the judgment for a deficiency (Civ. Prac. Act, §§ 1083, 1087; White v. Wielandt, 259 App. Div. 676, 260 App. Div. 871, affd. 286 N. Y. 609; Central Hanover Bank & Trust Co. v. Roslyn Estates, 266 App. Div. 244, affd. 293 N. Y. 680).

The judgment should be affirmed, with costs.

Upon appeal of defendant The Engel Company, Inc.: Judgment affirmed.

Conway, Ch. J., Desmond, Dye, Fuld, Froessel, Van Voorhis and Burke, JJ., concur.

Upon appeal by defendant estate of George C. Engel, deceased: Judgment modified, etc.

Conway, Ch. J., Fuld, Van Voorhis and Burke, JJ., concur with Froessel, J.; Dye, J., dissents in an opinion in which Desmond, J., concurs.


author: Conway, Ch. J. Desmond, J.

text:
    In the Matter of Hal C. Moore, Appellant, against James R. Macduff, as Commissioner of Motor Vehicles of the State of New York, Respondent.
    Argued March 10, 1955;
    decided June 10, 1955.

      George N. Meyl and Morris J. Zweig for appellant.
    I. The-action of the commissioner was without statutory authority and therefore void. (Regina v. Marks, O. W. N. [1952], No. 31; Matter of Goodwin v. Mealey, 173 Misc. 169; Matter of Cashion v. Harnett, 234 App. Div. 332; People v. Pardee, 202 Misc. 238; People v. Olah, 300 N. Y. 96; Logan v. United States, 144 U. S. 263; People v. Gutterson, 244 N. Y. 243; People v. De Renna, 166 Misc. 582; Matter of Howard v. Fletcher, 199 Misc. 521, 278 App. Div. 799; Regina v. Jacquin, [1951] Que. S. C. 459; Marcotte v. Fortin, [1952] Que. S. C. 449.) II. Section 71 (subd. 2, par. [b]) applies only to convictions in other States of the United States, and not to those in foreign countries. (Matter of Wignall v. Fletcher, 303 N. Y. 435; Regina v. McLean, 107 C. C. C. 32; People ex rel. Beaman v. Feitner, 168 N. Y. 360.)

      Jacob J. Javits, Attorney-General (Philip J. Fitsgerald and Henry 8. Manley of counsel), for respondent.
    I. The action of the commissioner was valid and in accordance with the statutory mandate. (Matter of Cashion v. Harnett, 234 App. Div. 332; Matter of Howard v. Fletcher, 199 Misc. 521, 278 App. Div. 799; Ballard v. State, 25 Ala. App. 457; People v. Dingle, 56 Cal. App. 445; Hart v. State, 26 Ga. App. 64; Wallace v. State, 44 Ga. App. 571; Klaser v. State, 89 Ind. App. 561; State v. Noble, 119 Ore. 674; Com. v. Buoy, 128 Pa. Super. Ct. 264; Com. v. Long, 131 Pa. Super. Ct. 28; State v. Hurd, 5 Wn. 2d 308; Danielson v. State, 155 Neb. 890.) II. The statute applies to convictions had outside the State. (Arc Eng. Corp. v. State of New York, 293 N. Y. 819, 294 N. Y. 656; Lindlots Realty Corp. v. County of Suffolk, 278 N. Y. 45; Colello v. Stevenson & Co., 284 App. Div. 805; Maryland Cas. Co. v. Brown, 131 Tex. 404.)
   Conway, Ch. J.

We have presented to us a question relating to a Canadian regulation of motor vehicles in a proceeding in which petitioner asserts that while parked in the city of Toronto, Canada, he was arrested and charged with operating a motor vehicle while his ability to drive was impaired by alcohol.

The Ontario Highway Traffic Act, as amended in 1953, adopted section 285 of the Criminal Code (Canada). Subdivision (4) of section 285 of the Canadian Criminal Code reads as follows: “ Every one who, while intoxicated, or under the influence of any narcotic, drives any motor vehicle or automobile, or has the care or control of a motor vehicle or automobile, whether it is in motion or not, shall be guilty of an offense ”. (Emphasis supplied.)

That section is followed by subdivision (4a), reading as follows : “ Everyone who, while his ability to drive a motor vehicle or automobile is impaired by alcohol or any drug, drives any motor vehicle or automobile, or has the care or control of a motor vehicle or automobile, whether it is in motion or not, is guilty of an offense ”. (Emphasis supplied.)

Clearly there is a distinction and difference between the acts proscribed by these two subdivisions of section 285. To determine to the contrary would be to ascribe to the legislature of a province of a neighbor country, the doing of a vain and useless act.

How we turn to our own Vehicle and Traffic Law (§ 71, subd. 2, par. [b]) which provides as follows:

§ 71. * * *
“ 2. Mandatory suspensions and revocations. Such licenses must be revoked and such certificates of registration may also be revoked where the holder is convicted. * * *
“(b) of * * * an offense consisting of operating a motor vehicle or motor cycle while under the influence of intoxicating liquor where the conviction was had outside this state; ’ ’ (emphasis supplied).

The sole competent evidence upon which the respondent Commissioner of Motor Vehicles of our State acted was the certificate of conviction reproduced below:

The petitioner pleaded guilty to a violation of subdivision (4a) of section 285 on June 29, 1953. On August 19th he was notified by the commissioner that pursuant to section 71 (subd. 2, par. [b]) of the Vehicle and Traffic Law his license to drive was revoked. That was without a hearing and is deemed “ an administrative act reviewable by the supreme court as such ’ ’ (Vehicle and Traffic Law, § 71, subd. 6).

The situation presented is important for a number of reasons: (1) The possession of a license to drive is a vested property right. As we said in Matter of Wignall v. Fletcher (303 N. Y. 435, 441, Froessel, J.): “We are here dealing with the exercise of power by the commissioner in the revocation of a driver’s license, and our decision will apply not only to this petitioner, but may affect any holder of a driver’s license in the State of Hew York. A license to operate an automobile is of tremendous value to the individual and may not he taken away except by due process.” (2) The petitioner alleges that he is a salesman and travels to outlying areas and towns, as well as large cities in various States and Canada and must carry a large number of samples; that train facilities are not available in some of the places he must periodically visit; that he has become subject to the loss of his employment of twenty-seven years with one company which depends solely upon the transportation facilities of an automobile. (3) Many of our residents motor into the province of Ontario as well as Quebec and section 335-a of the Code of Criminal Procedure does not apply to a situation such as this (in spite of the express provision for such application in the Vehicle and Traffic Law, § 71, subd. 6) since by its terms section 335-a is limited to an “ arrest in this state of a resident of this state ”. (4) Action is taken by the commissioner without opportunity to be heard.

Section 335-a of the Code of Criminal Procedure indicates the extent to which our Legislature has gone to protect the right to operate an automobile. It provides that prior to accepting a plea of guilt the court must instruct the defendant at the time of his arraignment in substance as follows: “A plea of guilty to this charge is equivalent to a conviction after trial. If you are convicted, not only will you be liable to a penalty, but in addition your license to drive a motor vehicle or motor cycle, and your certificate of registration, if any, are subject to suspension and revocation as prescribed by law.”

As one court pointed out in Matter of McCord v. Fletcher (182 Misc. 447, 449): Prior to the enactment of section 335-a of the Code of Criminal Procedure, frequent instances of mistakes and injustice occurred when violators of subdivision 5 of section 70 of the Vehicle and Traffic Law were lulled into believing that upon pleading guilty to operating a motor vehicle while under the influence of intoxicating beverage, the imposition of a small fine would be the sole penalty of such offense. Many such violators were rudely awakened from such belief when later informed that no longer might they operate upon the public highways their motor vehicle within the State of New York. To remedy such evil, section 335-a of the Code of Criminal Procedure was enacted and now a magistrate is compelled to inform the accused definitely, before accepting a plea of guilty, of all the consequences which may or will follow conviction, and, further, the magistrate must inform the accused that a plea of guilty is equivalent to a conviction after trial. ’ ’

The certificate of conviction, which we quoted above, when considered in connection with the disjunctive wording used in subdivision (4a) indicates clearly that petitioner could have been convicted under the Ontario statute on grounds other than the ones set forth in section 71 (subd. 2, par. [b]) of the Vehicle and Traffic Law. Thus he might have been convicted of:

(1) 66 * hoi * * * ability to drive * * * impaired by alco- [and] drives a motor vehicle * * * ”
(2) “ * hoi * * in motion * ability to drive * * * impaired by alco- [and] has the care or control of a motor vehicle
(3) “ * hoi * * * * * ability to drive * * * impaired by aleo- * * [and] has the care or control of a motor vehicle [not] in motion * * * ’ ’
(4) “ * * * ability to drive * * * impaired by * * * any drug * * * [and] drives a motor vehicle * * * ”
(5) “ * * * ability to drive * * * impaired by * * * any drug * * * [and] has the care or control of a motor vehicle in motion * * * ”
(6) “ * * * ability to drive * * * impaired by * * * any drug * * * [and] has the care and control of a motor vehicle [not] in motion * * * ’ ’

The portion of the Vehicle and Traffic Law (§ 71, subd. 2, par. [b]) involved provides that a license must be suspended and revoked when the holder has been convicted of “ operating a motor vehicle * # * while under the influence of intoxicating liquor where the conviction was had outside this state ”. Upon the competent evidence which was before the respondent, it was impossible to determine whether the petitioner did or did not come within the scope of the appropriate section of the New York law, and therefore the respondent was incorrect in revoking the license of the petitioner. It is true that one of the respondent commissioner’s exhibits is a letter from the Ontario Motor Vehicles Branch of the Department of Highways which characterized the conviction of the petitioner as one of 1 ‘ operating a motor vehicle while ability impaired by alcohol. ’ ’ It is also true that the opening sentence of the dissenting opinion is as follows: “ In June, 1953, appellant, a resident of New York State, pleaded guilty, as he himself alleges in his petition in this proceeding, in an Ontario Court, while represented by counsel, to the offense of operating a motor vehicle while ability impaired by alcohol’ (Ontario Highway Traffic Act; Canadian Criminal Code, § 285, subd. [4a]).” The same quotation is referred to on page 45 of the dissenting opinion. We do not read the quoted portion, which has been taken from paragraph 11 of the petition herein, as do the dissenters and it is better, we think, that the entire paragraph be quoted. It reads as follows: “11. That one evening while petitioner was parked in the City of Toronto, Canada, he was arrested and charged and thereafter pleaded to a charge of the offense of operating a motor vehicle while ability impaired by alcohol; that petitioner was unfamiliar with the laws of Canada and was not informed that his operator’s license would be revoked in the State of New York. Were it not for the fact that petitioner was a stranger in a foreign country, he would not have pleaded to this charge or any charge.” (Emphasis supplied.)

The preceding paragraph 10 might also be quoted and is as follows: 4110. That petitioner was not convicted in Toronto, Canada, or elsewhere for operating a motor vehicle while under the influence of intoxicating liquor.”

We think that the record does not disclose that the petitioner was represented by counsel in Ontario, Canada. As we shall point out later, the only evidence presented to the commissioner upon which he could legally act was the certificate of conviction reproduced in part {supra). That showed no representation by counsel. Paragraph “ 11 ” of the petition (quoted supra) is sufficient in itself to show lack of representation of the petitioner by counsel, if we were to consider evidence which was not before the commissioner when he acted. The commissioner in paragraph tenth ” of his separate and distinct defense to the petition certified and annexed thereto a transcript of record of proceedings herein.” The four papers so certified and annexed do not show any representation by counsel for petitioner, and since those were the only papers before the commissioner, by his own verified answer, they are conclusive. The claim by the commissioner which is adopted by the dissenting opinion is that because the commissioner alleged on infer-motion and belief that the “ petitioner was represented by counsel at said Magistrate’s Court ” in paragraph “ fifth ” of his separate and distinct defense, and petitioner failed to deny that allegation, it must be considered to be admitted. On this record we do not think that the commissioner is justified in his claim. Suffice it to say that no paper in this record indicates that petitioner had legal counsel in Ontario, nor does any paper disclose the name of any counsel.

To ascertain of what charge a person has been convicted we do not have resort to extrinsic documents which would have no force or effect upon the certificate of conviction itself. A voluntary characterization could have no more effect here than the 'act that “ Olah pleaded guilty to an indictment which recited Jhat the items stolen were worth over $200 ” (People v. Olah, 300 N. Y. 96, 98). We must refer to the indictment and the statute under which the indictment was drawn to determine what the operative and material facts were (People v. Love, 305 N. Y. 722), and then we must compare these operative and material facts to our own statute to ascertain whether or not it has application. Therefore the characterizations by the respondent and the petitioner must be ignored in the present case, not only for the same reason as in the Olah case, but also for the conclusive reason that such characterizations by the petitioner and respondent were not a basis upon which the respondent acted, and the courts may only consider such evidence as was presented to the commissioner (Matter of Newbrand v. City of Yonkers, 285 N. Y. 164, 177; see, also, Matter of Ogden v. Du Mond, 273 App. Div. 582, 583-584). We are limited in our present case to referring to the Ontario statute alone (there was no indictment and the conviction was for a violation of the section) and to ascertaining the operative and material facts. Upon doing so we are faced with the different possibilities set forth (supra). It can immediately be ascertained that items 4, 5 and 6 cannot come within section 71 (subd. 2, par. [b]) of the Vehicle and Traffic Law, for those items provide for a factual situation where the defendant is under the influence of drugs. Our section makes no mention of drugs, and refers only to intoxicating liquor. This alone is a sufficient ground to find that the petitioner is entitled to retain his license on this record (People v. Olah, 300 N. Y. 96, supra).

The case before us is analogous to that of People v. Love (supra) in that the offense of which the petitioner was convicted under the Ontario statute is uncertain, with the single exception that in the Love case we were able to resolve the apparent uncertainty of the precise criminal act by closely examining the indictment in relation to the statute. There is no indictment here upon which we can rely, and so the offense to which the petitioner pleaded remains doubtful and undetermined. Therefore it is clear that the respondent failed to meet the burden, which was his, to present proof in some admissible form which did not leave uncertain the precise offense of which the petitioner was convicted in Ontario. In the circumstances before us where the petitioner’s conviction was for a violation of subdivision (4a), the certificate of conviction failed to specify which of the different possible offenses was the one of which he was convicted and only one of which might have come within the scope of section 71 (subd. 2, par. [b]) of the Vehicle and Traffic Law. In view of this uncertainty, which clearly exists, this case comes within the rule which requires a court to give to the record “ ‘ that construction which operates in favor of life or liberty ’ ” (People ex rel. Carollo v. Brophy, 294 N. Y. 540, 545).

One word more need be said. As the Appellate Division properly pointed out: “ The Canadian Criminal Code is nationwide in application but each province is free to adopt its own motor vehicle regulations (Provincial Secretary of Prince Edward Island v. Eagan [1941] S. C. R. 396, 76 C. C. C. 227 [1941] 3 D. L. R. 305).” Not only is each province free to make its own motor vehicle regulations, but the regulations are to he construed by us as they are construed by the courts of the particular province in which they are enacted. Thus the Attorney-General cites a number of cases decided in Quebec affecting a regulation similar to the one under consideration here. They are not applicable here for the courts of the particular province are the proper tribunals to decide the intent of their own legislature (cf. Allard v. Charbonneau, 1953 O. W. N. 381). The only case called to our attention in the courts in Ontario is a County Court case in which there was a dismissal of the charge. In that case (Regina v. Marks [1952] O. W. N. 608, 612, 15 C. R. 47, 103 C. C. C. 368, 375) in discussing subdivision (4a) the court said: ‘ ‘ It fails to provide for definite tests or indications of driving impairment as the direct result of alcohol or drugs. It means that any decent citizen partaking of a glass of beer or wine with his luncheon, be he parliamentarian, professional man, clergyman, labourer, business executive, Judge or otherwise could, on stepping into his motor car, be apprehended by a police officer and subjected to all the usual indignities of examination, arrest and trial, all because there was a whiff of alcohol on his breath. * * * Even if the word ‘ visibly ’ were used immediately before the word ‘ impaired ’ the danger would be minimized and positive proof of actual impairment would be necessary. In my view there must be tangible physical evidence of actual driving impairment in the form of one or more of the usual obvious indications of such impairment from alcoholic or drug influence. ’ ’

This construction of subdivision (4a) by the Ontario court indicates quite clearly the contrast between subdivision (4a) and our own Vehicle and Traffic Law (§ 71, subd. 2, par. [b]).

We do not fhiuk that in determining whether or not petitioner should have his license revoked that there should be weighed in the scales of justice the number of licensed motor vehicles, the number of licensed drivers and the number of highway accidents in this State. Those matters are neither germane nor relevant under our system of administering justice under law. Petitioner had no accident in Ontario and he alleged under oath that he never had been convicted of driving a motor vehicle while intoxicated in Ontario, Canada, or anywhere else. There was no showing here that during his twenty-seven years as a salesman that he had ever had an accident. Cases must be decided upon the record presented.

The order of the Appellate Division should be reversed and that of Special Term reinstated, with costs in this court and in the Appellate Division.

Desmond, J.

(dissenting). In June, 1953, appellant, a resident of New York State, pleaded giiilty, as he himself alleges in his petition in this proceeding, in an Ontario court, while represented by counsel, to u the offense of operating a motor vehicle while ability impaired by alcohol ” (Ontario Highway Traffic Act; Canadian Criminal Code, § 285, subd. [4a]). A fine was imposed upon him by the Ontario court (with the alternative of fifteen days’ imprisonment) and he paid the fine. The Motor Vehicle Branch of the Ontario Department of Highways sent to respondent, the New York State Commissioner of Motor Vehicles, official notice of appellant’s conviction in Ontario. Respondent thereupon revoked appellant’s New York State automobile operator’s license. Such revocation was mandated, absolutely and beyond control of any public officer or court in this State, by paragraph (b) of subdivision 2 of section 71 of the New York State Vehicle and Traffic Law, as amended in 1943, which reads:

“ 2. Mandatory suspensions and revocations. Such licenses must be revoked * * * where the holder is convicted. * * *
(b) of * * * an offense consisting of operating a motor vehicle * * * while under the influence of intoxicating liquor where the conviction was had outside this state ”.

Appellant then brought this article 78 of the Civil Practice Act proceeding to set aside the revocation. The sole ground set forth in his petition for such relief (and in his brief to this court on this appeal) is a supposed difference in meaning between “ impaired by alcohol ” (Canadian statute, supra) and under the influence of intoxicating liquor ” (New York statute, supra). There is no such difference. They mean exactly the same thing.

This court, on quite a different ground, is nullifying the revocation. Citing People v. Olah (300 N. Y. 96), this court theorizes that appellant’s Ontario conviction might have been for one of the causes mentioned in the Ontario statute (supra) other than driving a motor vehicle while the driver’s ability to drive was impaired by alcohol. But the problem is not one of statutory exegesis. However many different offenses are proscribed by the Ontario law, we know the exact offense to which appellant pleaded guilty and of which he was convicted. He not only admits, but alleges to the New York courts in this very proceeding, that his guilty plea and conviction was for the offense of operating a motor vehicle while ability impaired by alcohol ”. The Olah holding (supra) has nothing whatever to do with it, since the Ontario charge and the Ontario operative fact were the same, and single and undivided. Appellant just simply confessed to, and was punished for, driving an automobile in Ontario while his ability to drive was impaired by alcohol.

New York State has 4,500,000 licensed motor vehicles, 6,000,-000 licensed drivers, and has 350,000 highway accidents a year. Public safety requires, at the least, that our mandatory statutes (few and insufficient as they are) be enforced.

The order should be affirmed, with costs.

Froessel, Van Voorhis and Burke, JJ., concur with Conway, Ch. J.; Desmond, J., dissents in an opinion in which Dye and Fuld, JJ., concur.

Order reversed, etc.


author: Desmond, J.

text:
    In the Matter of the Application of James Alfred Harvey, Jr., for Admission to Practice as an Attorney. James A. Harvey, Jr., Appellant; Committee on Character and Fitness, Tenth Judicial District, Respondent.
    Submitted May 25, 1955;
    decided July 8, 1955.

      Samuel Lawrence Brennglass for appellant.
    Petitioner-appellant comes within the letter and spirit of subdivision 1 of rule II of the Buies of the Court of Appeals. (Matter of Lerch, 280 N. Y. 74.)
    No appearance for respondent.
   Desmond, J.

We granted leave to appeal in this proceeding so that we might again canvass the meaning and application of former rule II of this court for the admission of attorneys, and Matter of Lerch (280 N. Y. 74). Former rule II, in effect until June 15, 1955, was, in applicable part, as follows:

Bule II. Admission without examination. The following classes of persons may, in the discretion of the Appellate Division, be admitted and licensed without examination:
“ 1. Any person who has been admitted to practice in the highest law court in any other State or territory of the American Union or in the District of Columbia and who has actually practiced at least five years in such court or in the highest court of original jurisdiction.”

On June 15, 1955, after this appeal had been argued, there went into effect a revised set of rules but our new rule VII-1 (see, also, new rules VTI-2, VII-3 and VII-4) is not intended to have any meaning or effect different from former rule II, as heretofore construed and applied.

Petitioner was admitted to the Georgia Bar in 1935 and has resided in New York State since 1947. His application to the Appellate Division, Second Department, for admission to the New York Bar was denied by that court on recommendation of its Committee on Character and Fitness. The adverse report of the committee was based on the conceded fact that, during the period claimed by petitioner as his “ at least five years ” of practice in Georgia, he had spent at least half his time, in each year, working and living in southern States other than Georgia. Employed by a liability insurance company as a “ Claims Attorney ’ he, while retaining a domicile in Atlanta, Georgia, traveled about in other States in his employer’s business. It is unnecessary to decide whether his activities amounted to the practice of law since, as we hold, the Appellate Division acted within its discretionary powers in ruling that petitioner did not show compliance with the residence requirements laid down by this court in Matter of Lerch (280 N. Y. 74, supra), on which decision the Appellate Division relied.

At the time Matter of Lerch (supra) was decided (and until June 15,1955) our rule II contained no requirement of residence in the foreign State in which a petitioner claimed five years of practice. But the Lerch decision wrote that condition into the rule, and our new rule VTI-1 includes it in terms.

In a sense, everything in the Lerch opinion (supra) was a dictum except the holding, applicable to the Lerch facts, that one cannot get credit for out-of-State practice while a resident of New York State. But the Lerch dicta, if such they were, have been followed ever since by the Appellate Division and by this court. One who seeks admission to our Bar without examination because he has been a member of the Bar of another State (or the District of Columbia) must have resided, continuously or substantially so, in that other jurisdiction for the five years. As to the five years of “ practice ” in the foreign jurisdiction, that means admission to the Bar with the right to practice in that jurisdiction’s highest court. Just how much or what kind of “ practice ” such an applicant must show is for the broad, inclusive discretion of the Appellate Divisions, which in the end must determine professional “ fitness ” as well as good character (see old rule II, subd. 2, second par., and new rule VII-3).

The order should be affirmed, without costs.

Conway, Ch. J., Dye, Fuld, Froessel, Van Voorhis and Burke, JJ., concur.

Order affirmed.


author: Dye, J.

text:
    Mae Kelly et al., Appellants, v. Watson Elevator Co., Inc., Respondent.
    Argued April 21, 1955;
    decided July 8, 1955.

      Bernard Meyerson and Herman E. Hoberman for appellants.
    I. The Official Referee found as a matter of fact that plaintiffs were misled by a false assurance of safety and, in view of the affirmance of the findings of fact by the Appellate Division, the reversal of the judgment and the dismissal of the complaint was error. (Beinhocker v. Barnes Development Corp., 296 N. Y. 925; Kirshenbaum v. General Outdoor Adv. Co., 258 N. Y. 489.) II. Plaintiffs adequately proved that the accident was caused by defendant’s negligence in the maintenance and repair of the elevator. (Beinhocker v. Barnes Development Corp., 296 N. Y. 925; Ames v. Watson Elevator Co., 303 N. Y. 732.)

      Samuel E. Swiggett for respondent.
    The judgment entered on the order of the Appellate Division is correct because plaintiffs failed to prove any negligence on the part of defendant. (Murray v. Usher, 117 N. Y. 542; Van Antwerp v. Linton, 89 Hun 417, 157 N. Y. 716; Greenauer v. Sheridan-Brennan Realty Co., 224 App. Div. 199; Mollino v. Ogden & Clarkson Corp., 243 N. Y. 450; Zurich Gen. Acc. & Liability Ins. Co. v. Watson Elevator Co., 253 N. Y. 404; Currie v. International Mag. Co., 256 N. Y. 106; Beinhocker v. Barnes Development Corp., 296 N. Y. 925; Ames v. Watson Elevator Co., 303 N. Y. 732.)
   Dye, J.

This is a suit to recover damages for personal injuries and incidental expenses allegedly caused by defendant’s negligent failure to properly service, maintain and repair a self-service elevator. Following a nonjury trial of the issues, the plaintiffs had a judgment, which has been reversed and their complaint dismissed in the court below, on the ground that, as a matter of law, there was no proof of defendant’s negligence and that its negligence caused the injuries complained of. All findings of fact implicit in the Eeferee’s decision were affirmed. The plaintiffs have appealed as of right.

There is evidence establishing that the plaintiff, as she was entering the self-service elevator in question, tripped and fell to her injury when her foot caught on the floor of the elevator which, though she had not noticed it, was some three or more inches above the level of the landing. Two days prior to the accident the husband — who, with his wife’s part-time assistance, performed the duties of superintendent of the apartment building in which the elevator was located — notified the defendant that the elevator was not leveling properly. The defendant thereupon sent a mechanic, who ostensibly corrected the defect, and advised the husband in the presence of his wife that everything was “ O. K.”, an assurance on which she had the right to rely (Kirshenbaum v. General Outdoor Adv. Co., 258 N. Y. 489). Two days later she had the accident. Her testimony at the trial that on the day before the accident — which was subsequent to the repair work — the elevator was ‘‘ all right” (what she meant thereby does not appear), is not such an admission against interest as to destroy the probative effect of other affirmative testimony that the elevator was not leveling properly. According to her husband, the elevator stopped three or more inches above the landing level and by the testimony of defendant’s own mechanic, some one and one-half inches. The latter witness could not remember whether he had corrected such condition, even though he considered it advisable to make an adjustment whenever the difference was an inch above or below the landing level.

Upon such a state of the record, a question of fact was raised as to whether such failure to level properly was due to negligent maintenance and if so, whether such defect was the proximate cause of the plaintiff’s injuries. It is axiomatic that where there is a conflict in the evidence as to the issues controverted, matters of credibility and weight are for the jury to determine or, if the trial be without a jury, for the trier of the facts. On this record it cannot reasonably be said that the fact of negligence and proximate cause as found by the Referee is, as a matter of law, without support in the evidence.

We agree with the learned Referee that the facts of this case bring it within the principle of Beinhocker v. Barnes Development Corp. (296 N. Y. 925) and Ames v. Watson Elevator Co. (303 N. Y. 732).

The judgment appealed from should be reversed and that of the Trial Term reinstated, with costs in this court and in the Appellate Division.

Conway, Ch. J., Froessel and Burke, JJ., concur with Dye, J.; Desmond, Fuld and Van Voorhis, JJ., dissent and vote to affirm upon the ground stated in the memorandum of the Appellate Division.

Judgment reversed, etc.


author: Burke, J.

text:
    In the Matter of Hans Weiss, Appellant, against Franklin Square and Munson Fire District of the Town of Hempstead, New York, Respondent.
    Argued April 26, 1955;
    decided July 8, 1955.

      Fred A. Williams and Jules Martin for appellant.
    I. A denial of recovery under section 10 of the Workmen’s Compensation Law is not res judicata in this proceeding under section 205 of the General Municipal Law since section 10 is narrower in scope then section 205. (Matter of Slattery v. Board of Estimate & Apportionment, 271 N. Y. 346; Ogino v. Black, 304 N. Y. 872.) II. It is the law of the case as between the parties that the Workmen’s Compensation Law is narrower than the General Municipal Law.

      William E. Stieglits, Bernard Katsen and Earry Schechter for respondent.
    I. Where the volunteer fireman made application for workmen’s compensation to the Workmen’s Compensation Board pursuant to section 10 of the Workmen’s Compensation Law resulting in a dismissal of the claim on the merits, the board’s determination was res judicata in a proceeding brought in the County Court to recover benefits pursuant to subdivision 3 of section 205 of the General Municipal Law based upon the same provable facts between the same parties. (United States v. Grunstein & Sons Co., 127 F. Supp. 907; Commissioners of State Ins. Fund v. Low, 285 App. Div. 525; Matter of Knapp v. Syracuse Univ., 308 N. Y. 274; Matter of Brown v. Towns of Gates & Chili, 266 App. Div. 640, 292 N. Y. 663; Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304.) II. The provisions of the Workmen’s Compensation Law being broader and more comprehensive than the provisions of the General Municipal Law, the determination of the facts in a compensation claim by the Workmen’s Compensation Board that respondent has no claim under the Workmen’s Compensation Law is res judicata and binding upon the County Court upon an application for benefits under section 205 of the General Municipal Law, based on the same facts. (Matter of Slattery v. Board of Estimate & Apportionment, 271 N. Y. 346; Matter of Connelly v. Samaritan Hosp., 259 N. Y. 137; Fitzgerald v. Clarke & Son, [1908] 2 K. B. 796; Matter of Young v. Town of Kortright, 148 Misc. 431, 241 App. Div. 188; Matter of Post v. Burger & Gohlke, 216 N. Y. 544; Matter of Bennett v. Marine Works, 273 N. Y. 429; Matter of Bowen v. Saratoga Springs Comm., 267 App. Div. 928; Matter of Fagan v. Albany Evening Union Co., 261 App. Div. 861; Matter of Holst v. New York Stock Exch., 252 App. Div. 233; Matter of Kenny v. Lord & Taylor, 254 N. Y. 532; Cardillo v. Liberty Mut. Co., 330 U. S. 469; Cudahy Co. v. Parramore, 263 U. S. 418; Matter of Heitz v. Ruppert, 218 N. Y. 148; Tedesco v. General Elec. Co., 305 N. Y. 544.) III. The provisions of the Workmen’s Compensation Law and the General Municipal Law have been integrated so that the volunteer fireman may invoke the jurisdiction under either law and the determination thereunder will be binding in any proceeding under the other. (Bauman v. Town of Irondequoit, 204 Misc. 494; Merkle v. 110 Glen St. Realty Corp., 282 App. Div. 617.)
   Burke, J.

This appeal tenders only the issue as to whether a proceeding under the Workmen’s Compensation Law by this petitioner is res judicata in a subsequent proceeding brought by him under section 205 of the General Municipal Law. The facts which present the issue are not in dispute.

The petitioner, a volunteer fireman, suffered injuries while attending a parade and competitive drill in which his fire department was engaged. Thereafter he applied for compensation pursuant to the provisions of the Workmen’s Compensation Law. An award was made by the referee to the petitioner and, upon review therefrom by the Workmen’s Compensation Board, the determination of the referee was reversed and the claim dismissed. No appeal was taken. The board held that the petitioner’s participation in the tournament was voluntary and, hence, did not arise out of and in the course of employment. The petitioner thereafter brought a proceeding in the County Court of Nassau County for the benefits and medical disbursements provided for volunteer firemen injured while performing fire-manic duties under section 205 of the General Municipal Law. The respondent stipulated that if testimony were taken on the petition, the petitioner could sustain the allegations set forth in the petition and that the only issue before the County Court for determination was the validity of the affirmative defense contained in the answer to the petition, which defense alleged that the determination of the Workmen’s Compensation Board was res judicata in a proceeding to recover benefits pursuant to section 205 of the General Municipal Law. The County Court granted judgment in favor of the petitioner. The Appellate Division reversed.

The rule in determining whether a judgment or determination under one statute is a bar to another proceeding under a different statute was reviewed in Matter of Slattery v. Board of Estimate & Apportionment (271 N. Y. 346). This court held that unless cases may be postulated where injuries are not covered by the compensation statute but are covered by the broader provisions of another statute, the determination of the board is binding.

In this case, the rule of finality does not apply. There are essential differences between the two statutes. Section 205 of the General Municipal Law is a broader statute and not substantially identical with section 10 of the Workmen’s Compensation Law. The legislative intent that the statutes were to serve different purposes insofar as they protect volunteer firemen is evident from the enumeration in the General Municipal Law (§ 205, subd. 3) of activities other than those which might be designated solely as employment as a fireman. It specifically provides for compensation to a volunteer fireman injured in the performance of his duties ‘ ‘ while attending any drill or parade or inspection in which his company or department is engaged ”. Such activities are not referred to in the Workmen’s Compensation Law.

Compulsion is not the test as a volunteer fireman is not subject to the usual restraints imposed as conditions of employment. We have decided that the Legislature intended that if a volunteer fireman was injured in performing a voluntary firemanic act which was authorized, permitted or approved by a competent authority within his department, he should be compensated within the limits prescribed by section 205 of the General Municipal Law (L. 1951, ch. 836). (Matter of Brown v. Towns of Gates & Chili, 266 App. Div. 640, affd. 292 N. Y. 663.) Thus an adjudication against a volunteer fireman in a compensation proceeding does not include an adjudication that all factors are present which would constitute a valid claim for benefits under the General Municipal Law.

Here we have an instance where the fireman is covered by the provisions of section 205 of the General Municipal Law and not by the provisions of the Workmen’s Compensation Law. The determinations of the Workmen’s Compensation Board are final and conclusive upon the parties only as to issues within its jurisdiction. (Ogino v. Black, 304 N. Y. 872.) The issue submitted for disposition now was not within the jurisdiction of the board. Therefore the determination of the board does not constitute a bar to this proceeding.

The order of the Appellate Division should be reversed and that of the County Judge reinstated, with costs.

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

Order reversed, etc.


text:
    In the Matter of Mortimer M. Ross, Respondent, against James R. Macduff, as Commissioner of Motor Vehicles of the State of New York, Appellant.
    Argued April 12, 1955;
    decided July 8, 1955.

      Jacob K. Javits, Attorney-General (Abe Wagman and Henry S. Manley of counsel), for appellant.
    I. The Appellate Division erred in holding that the commissioner did not have the power to consider the two New York City speeding offenses in the chain of violations. (Matter of Johnston v. Fletcher, 300 N. Y. 470; Matter of De Martino v. Mealey, 284 N. Y. 231; Matter of De Lynn v. Macduff, 305 N. Y. 501; Matter of Long v. Macduff, 284 App. Div. 61.) II. The commissioner was justified in suspending respondent’s license.

      Wilford E. Neier for respondent.
    I. The appeal should be dismissed. II. Section 71 (subd. 3, par. [d]), is unconstitutional and void. (Matter of Seignious v. Rice, 273 N. Y. 44; Noyes v. Erie & Wyoming Farmers Co-op. Corp., 170 Misc. 42; Matter of Small v. Moss, 279 N. Y. 288; Packer Collegiate Inst. v. University of State of N. Y., 298 N. Y. 184; Matter of Fink v. Cole, 302 N. Y. 216.) III. The findings, determination and order of appellant are devoid of any findings that the convictions upon which he based his determination were obtained in conformity with the provisions of section 335-a of the Code of Criminal Procedure. (Matter of De Lynn v. Macduff, 305 N. Y. 501.) IV. The decision of appellant contains no findings sufficient to afford the court an intelligent basis for judicial review. (Matter of Page v. Fletcher, 279 App. Div. 847.) V. Despondent, as a matter of law and fact, is not an habitual violator of the Vehicle and Traffic Law. VI. The determination of appellant was arbitrary, capricious, and an abuse of discretion and wholly without foundation in fact or in law.
   Dye, J.

We now review the propriety of a determination of the Commissioner of Motor Vehicles, suspending for fifteen days the petitioner’s license to operate a motor vehicle, pursuant to statutory authority permitting such suspension “ for habitual or persistent violation ’ ’ of the traffic laws and ordinances (Vehicle and Traffic Law, § 71, subd. 3, par. [d]). Such determination has been annulled in an article 78 proceeding on the ground that the commissioner should not have counted two of the speeding convictions on which he relied in making his determination for the reason that the proof failed to show that the petitioner, when he pleaded guilty to the two speeding charges, had been warned of the consequences with respect to his operator’s license in conformity with section 335-a of the Code of Criminal Procedure, with the result that, under the point system procedure adopted by the hearing commissioner, the minimum points required to constitute an habitual and persistent violator were not met.

Upon this record such ruling is erroneous. At the statutory hearing, held after due notice, the petitioner appeared in person and by attorney. When asked to explain why his license should not be suspended for habitual and persistent violation of the Traffic Law, he readily admitted six prior convictions for traffic violations, viz.:

The first on April 22, 1947, for speeding in Manhattan, which he could not explain; the second, third and fourth convictions on October 4,1950, for passing three red lights in Hempstead, Long Island, which he explanied were ‘ ‘ Bight together ” — “I must have missed one and gone through the three”; the fifth on November 19,1950, for speeding in The Bronx and for which no explanation was offered, and a sixth on July 11,1952, for speeding in Johnsburg, New York, which he explained by saying that he had failed to see a reduced speed zone sign in time to reduce his speed from fifty-five miles per hour at which he was then traveling, to thirty-five miles per hour as required.

In reaching the determination, the hearing commissioner applied the point system which, to explain briefly, allots two points for a speeding violation and one point for passing a red light. A person who has six points in two years or eight points in any period of time is considered to evidence persistent or habitual violation.

The petitioner attacks the determination on various grounds, principal of which is the alleged unconstitutionality of section 71 (subd. 3, par. [d]) of the Vehicle and Traffic Law, in that legislative functions have been delegated to an administrative body without providing any criteria or standards defining the words habitual ” or “ persistent ”. This is wholly without substance and must be rejected, as such a requirement in respect to the administration of the traffic rules should be left to the reasonable discretion of the administrative official (see Matter of Marburg v. Cole, 286 N. Y. 202; American Power Co. v. S. E. C., 329 U. S. 90).

The circumstances under which a licensee may be deemed guilty of habitual or persistent violation ” vary with the changes in highway conditions, amount of traffic, type of control, power and speed of vehicles, changes in local traffic regulations and ordinances and a myriad of other elements which necessitate the delegation of the formulation of specific rules to administrative officials (cf. Matter of Mandel v. Board of Regents, 250 N. Y. 173).

Section 335-a of the Code of Criminal Procedure does not require any warning’ where there is involved a first or second charge of speeding or going through a red light in violation of local ordinances. The warning required is upon the third violation under the Vehicle and Traffic Law (§ 71, subd. 2, par. [c]). (Matter of Johnston v. Fletcher, 300 N. Y. 470; Matter of De Martino v. Mealey, 284 N. Y. 231; Matter of De Lynn v. Macduff, 305 N. Y. 501). Accordingly, when respondent was arraigned in 1947 for the first of six speeding convictions, the Magistrate had no duty to comply with section 335-a. Thereafter the three red light violations occurred on October 4, 1950, which, to give the respondent the benefit of the doubt, might be considered as one violation because of the proximity of the lights and this required no warning. Then there was the speeding violation of November 19, 1950, which, for all intents and purposes, may be considered respondent’s third violation. Thereupon, under the commissioner’s point system, there were seven points against the petitioner and, accordingly, one point short of finding him an habitual offender by the commissioner’s own definition. With the July 11, 1952, speeding violation, respondent accrued enough points to fall within the commissioner’s definition of “ habitual ” or “ persistent ” and, accordingly, the Magistrate had the discretion to suspend or revoke the respondent’s license. At that point, it was necessary that the convicting Magistrate apprise respondent of the provisions of section 335-a which, according to the certificate of conviction, was done. Upon such a record, the determination of the commissioner was neither arbitrary nor capricious. The suspension was justified.

The order of the Appellate Division should be reversed and the determination of the Commissioner of Motor Vehicles reinstated, without costs.

Conway, Ch. J., Desmond, Fuld, Fkoessel, Van Voorhis and Burke, JJ., concur.

Order reversed, etc.


author: Fuld, J.

text:
    In the Matter of Delmar Box Co., Inc., Appellant. Ætna Insurance Company et al., Respondents; National Commercial Bank and Trust Company, Respondents, et al., Defendants.
    Argued June 7, 1955;
    decided July 8, 1955.

      Roland Ford for appellant.
    I. Under the arbitration law as amended in 1952 an appraisal is now arbitrable. (Hurst v. Litchfield, 39 N. Y. 377; Finucane Co. v. Board of Educ. of City of Rochester, 190 N. Y. 76; Greason v. Keteltas, 17 N. Y. 491; People ex. rel. Union Ins. Co. v. Nash, 111 N. Y. 310; Miller v. President of Junc. Canal Co. 53 Barb. 590, 41 N. Y. 98; Silver v. Western Assur. Co., 164 N. Y. 381; Bishop v. Agricultural Ins. Co., 130 N. Y. 488; Yendel v. Western Assur. Co., 21 Misc. 348; United States v. Robeson, 9 Pet. [U. S.] 319; President of D. & H. Canal Co. v. Pennsylvania Coal Co., 50 N. Y. 250.) II. The arbitration law can be adapted to appraisals. (Matter of American Ins. Co. [Wasserman], 208 App. Div. 168.) III. Since the contract of insurance was valid when made, subsequent events or defenses are immaterial in respect to an appraisal arbitration. (Matter of Kahn [National City Bank], 284 N. Y. 515; Wilcox v. American Tel. & Tel. Co., 176 N. Y. 115.)

      F. Walter Bliss, Warner M. Bouch and Francis J. Holloway for respondents.
    I. The statutory provisions for appraisal of loss under a standard fire insurance policy may not be enforced as a compulsory arbitration under the arbitration law. (Matter

      of American Ins. Co. [Wasserman], 208 App. Div. 168; Matter of Fitzgerald [Continental Ins. Co.], 275 App. Div. 453; Syracuse Sav. Bank v. Yorkshire Ins. Co., 301 N. Y. 403; Matter of Sigelman v. Travelers Fire Ins. Co., 279 App. Div. 771; Matter of Keppler v. Nessler, 225 App. Div. 99.) II. Assuming, arguendo, but not admitting that compulsory arbitration is a proper remedy in some circumstances, the order of the Special Term was erroneously granted because the policies under their own terms had been rendered entirely void and unenforcible by the fraudulent acts of appellant. (Matter of Behrens [Feuerring], 296 N. Y. 172; Matter of Lipman [Haeuser Shellac Co.], 289 N. Y. 76; Matter of Kallus [Ideal Novelty & Toy Co.], 292 N. Y. 459; Matter of Zimmerman v. Cohen, 236 N. Y. 15; Alpert v. Admiration Knitwear Co., 304 N. Y. 1; Matter of Kramer & Uchitelle, Inc., 288 N. Y. 467; Matter of Kahn [National City Bank], 284 N. Y. 515; Wilcox v. American Tel. & Tel. Co., 176 N. Y. 115.)
   Fuld, J.

Whether the insured under a standard New York fire insurance policy may compel the insurer to comply with the provision for appraisal contained in such a policy, is the question for decision.

Delmar Box Company, doing business in a frame building situated on land leased from the New York Central Railroad in New Scotland, New York, carried insurance in the aggregate amount of about $23,000, issued by a number of insurance companies. On April 13, 1954, a fire occurred, the alleged loss amounting to some $33,000. In each of the policies was a provision for appraisal in the event of loss — in the form required by subdivision 6 of section 168 of the Insurance Law — which reads in this way:

Appraisal. In case the insured and this Company shall fail to agree as to the actual cash value or the.amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within twenty days of such demand. The appraisers shall first select a competent and disinterested umpire; and failing for fifteen days to agree upon such umpire, then, on request of the insured or this Company, such umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this Company shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him and the expenses of appraisal and umpire shall be paid by the parties equally.”

After the insurance companies, respondents herein, had refused to consent to an appraisal, Delmar initiated this proceeding, pursuant to section 1450 of the Civil Practice Act, for an order compelling them to comply with the policies’ appraisal provisions. At the same time, it commenced a separate action at law, upon the policies, to recover the amount of the fire loss. In opposition to the petition, respondents, by answer and affidavit, set forth their reasons for rejecting the appraisal demand. They claimed that petitioner had misrepresented and concealed material facts, had sworn falsely in relation to the subject matter of the loss and, in addition, had no insurable interest in the building since it was situated on land leased from the New York Central Railroad under a lease which had expired.

The Appellate Division, reversing the court at Special Term, dismissed the petition on the ground that the provisions for appraisal ‘1 do not constitute enforcible agreements to arbitrate controversies arising thereunder,” and with that disposition we agree.

A number of basic distinctions have long prevailed between an appraisement under the standard fire policy and a statutory arbitration. An agreement for arbitration ordinarily encompasses the disposition of the entire controversy between the parties, upon which judgment may be entered after judicial confirmation of the arbitration award (Civ. Prac. Act, § 1464), while the agreement for appraisal extends merely to the resolution of the specific issues of actual cash value and the amount of loss, all other issues being reserved for determination in a plenary action. (See Matter of American Ins. Co., 208 App. Div. 168, 170-171.) Appraisal proceedings are, moreover, attended by a larger measure of informality (see Strome v. London Assur. Corp., 20 App. Div. 571, 573, affd. 162 N. Y. 627), and appraisers are 6 6 not bound to the strict judicial investigation of an arbitration.” (See Matter of American Ins. Co., supra, 208 App. Div. 168, 171.) Arbitrators are required to take a formal oath (Civ. Prac. Act, § 1455), and may act only upon proof adduced at a hearing of which due notice has been given to each of the parties (Civ. Prac. Act, § 1454). They may not predicate their award upon evidence garnered through an ex parte investigation of their own, at least unless so authorized by the parties. (See Berizzi Co. v. Krausz, 239 N. Y. 315.) Appraisers, on the other hand, are not required to take an oath. (See Syracuse Sav. Bank v. Yorkshire Ins. Co., 301 N. Y. 403, 411; Wurster v. Armfield, 175 N. Y. 256, 264; Williams v. Hamilton Fire Ins. Co., 118 Misc. 799.) They are likewise “ not obliged to give the claimant any formal notice or to hear evidence ’ ’; and they may apparently proceed by ex parte investigation, so long as the parties are given an opportunity to make statements and explanations to the appraisers with regard to the matters in issue. (See Kaiser v. Hamburg-Bremen Fire Ins. Co., 59 App. Div. 525, 530, affd. 172 N. Y. 663; Townsend v. Greenwich Ins. Co., 86 App. Div. 323, 326-327, affd. 178 N. Y. 634; Matter of American Ins. Co., supra, 208 App. Div. 168,171.)

Furthermore, in an arbitration, all the arbitrators, if there be more than one, “must meet together and hear all the allegations and proofs of the parties ” (Civ. Prac. Act, § 1456). The standard appraisal clause, in contrast, specifically recites that the umpire is not to participate in the appraisal in all cases, but is only to pass on such differences as there may be between the appraisers designated by the respective parties. In addition, the vacatur of an arbitration award invariably results in a new arbitration (Civ. Prac. Act, § 1462; see Matter of Fletcher, 237 N. Y. 440, 449), whereas after an appraisal award has been set aside without any fault on the part of the insured, he is not required to submit to any further appraisement but is free to litigate the issues in an action at law on the policy. (See Gervant v. New England Fire Ins. Co., 306 N. Y. 393, 400.)

And, at least until 1941, the decisions were uniformly to the effect that the standard provision in a fire insurance policy for appraisal did not constitute an agreement for arbitration and was not specifically enforcible under the statutory procedure applicable to contracts for arbitration. (See Matter of American Ins. Co., supra, 208 App. Div. 168; see, also, Wurster v. Arm field, supra, 175 N. Y. 256, 264; Strome v. London Assur. Corp., supra, 20 App. Div. 571, 572, affd. 162 N. Y. 627; Townsend v. Greenwich Ins. Co., supra, 86 App. Div. 323, 326-327, affd. 178 N. Y. 634.) The appraisal provisions were recognized and enforced by the courts only to the extent that the insured was prevented from maintaining an action on the policy in the event of his failure to comply therewith. (See, e.g., Silver v. Western Assur. Co., 164 N. Y. 381.) If the defaulting party happened to be the insurance company, the insured could disregard the appraisal provisions and present all the issues for determination in an action at law upon the policy. (See Uhrig v. Williamsburgh City Fire Ins. Co., 101 N. Y. 362.) The insured, however, had no remedy available to compel the insurance company specifically to comply with the appraisal provisions. (Cf. Matter of Fletcher, supra, 237 N. Y. 440.)

In 1941, section 1448 of the Civil Practice Act, the opening section in the article governing arbitration proceedings, was amended by adding thereto the following (L. 1941, ch. 288): “ Such submission or contract [for settlement by arbitration of a controversy between the parties] may include questions arising out of valuations, appraisals or other controversies which may be collateral, incidental, precedent or subsequent to any issue between the parties.”

The Appellate Division for the third department — the same court which made the determination here — held in 1949 that the amendment effected an extension of the provisions governing arbitration to an agreement for appraisal under a fire insurance policy. (See Matter of Fitzgerald [Continental Ins. Co.], 275 App. Div. 453.) However, that decision was short-lived, for, in the very next year, this court expressed a contrary view in the case of Syracuse Sav. Bank v. Yorkshire Ins. Co. (supra, 301 N. Y. 403). “We see nothing in section 1448 of the Civil Practice Act as amended in 1941,” Judge Dye there wrote (301 N. Y., at pp. 410-411), “ requiring the appraisal authorized by section 168 of the Insurance Law to be treated as an arbitration proceeding. * * * There is nothing in the policy provision relating to appraisal which gives an appraiser the status of an arbitrator * * *. It is well established that the determination of a fire loss is not an arbitration proceeding ”. (See, also. Matter of Sigelman [Travelers Fire Ins. Co.], 279 App. Div. 771.)

It is clear, therefore, that the 1941 amendment to section 1448,. while authorizing the inclusion of questions arising out of valuations or appraisals in a contract “ to settle by arbitration ’ ’ a controversy /between the parties, did not have the effect of converting the informal appraisal provided for by the standard fire policy into an arbitration proceeding.

It is urged, however, that the extension of the arbitration statute to fire insurance appraisals has been accomplished by a further amendment to section 1448, enacted in 1952, which inserted the words “ or independent of ” in the sentence added in 1941, so that the latter now reads as follows (L. 1952, ch. 757): “ Such submission or contract may include questions arising out of valuations, appraisals or other controversies which may be collateral, incidental, precedent, subsequent to, or independent of any issue between the parties.” But it is manifest that the new words “ independent of ” add nothing, as respects the problem here presented, to the words collateral ” or “ incidental,” and that, consequently, no greater effect can be given to the 1952 change than has been accorded to the 1941 modification. Neither amendment discloses any legislative design to alter the settled rule that the determination of a fire loss [by appraisal] is not an arbitration proceeding ”. (See Syracuse Sav. Bank v. Yorkshire Ins. Co., supra, 301 N. Y. 403, 411.)

It is a cardinal principle of statutory interpretation that the intention to change a long-estáblished rule or principle is not to be imputed to the legislature in the absence of a clear manifestation. (See Homnyack v. Prudential Ins. Co., 194 N. Y. 456, 460; Seligman v. Friedlander, 199 N. Y. 373, 376.) The consequence of applying the statute governing arbitration to fire insurance appraisals would entail, not only radical alteration of the settled practice in appraisal proceedings, but actual abrogation of the greater informality which has long prevailed therein. There is no doubt that the legislature may make such changes if it sees fit, but no such design may be ascribed to that body in the absence of a clearer showing than is to be found in this amendatory statute.

There is thus no indication whatever that the legislature intended to make applicable to fire insurance appraisals the more formal practice prevailing in arbitration with regard to such matters as oaths, notice and hearing, the sittings of the arbitrators, the entry of judgment upon confirmation of an award or the consequences following upon the vacatur of an award. (Cf. Matter of Fletcher, supra, 237 N. Y. 440, 449.) Reliance is placed upon the views expressed by the assemblyman who introduced the bill in 1952, but those views cannot serve as a reliable index to the intention of the legislators who passed the bill. It is sufficient to note that they were stated, not in the course of debate on the floor of the legislature, but in a memorandum submitted to the governor after the passage of the bill, and there is no showing that the other legislators were aware of the broad scope apparently intended for the bill by its sponsor. (Cf. Matter of Morse [Bank of America], 247 N. Y. 290, 302-303; Woollcott v. Shubert, 217 N. Y. 212, 221-222; 2 Sutherland on Statutory Construction [3d ed., Horack, 1943], § 5011.)

It may, perhaps, be desirable to provide a procedure whereby the insured may obtain specific enforcement, as against the insurance company, of the agreement for appraisal. If such be its aim, the legislature may accomplish it by a statute clearly and specifically drawn for that purpose. A court cannot, however, read that design into the statute here involved, particularly when the result would be, not merely to permit the enforcement of such appraisal provisions, but to effect the wholesale importation, into appraisement practice, of the entirely different procedure governing arbitration.

The order should be affirmed, with costs.

Conway, Ch. J., Desmond, Dye, Froessel, Van Voorhis and Burke, JJ., concur.

Order affirmed.


text:
    Alper Blouse Company, Inc., Appellant, v. E. E. Connor & Co., Inc., Respondent.
    Argued April 14, 1955;
    decided July 8, 1955.

      Myron Kommel for appellant. I.
    Plaintiff was deprived of its day in court. (People v. Faber, 199 N. Y. 256; Wilkins v. Abbey, 168 Misc. 416; McCarthy v. Odell, 202 App. Div. 784; Green v. Telfair, 11 How. Prac. 260.) II. Jurors’ affidavits may properly be considered. (Schrader v. Joseph H. Gertner, Jr., Inc., 282 App. Div. 1064.) III. There is no competent evidence to sustain the verdict. IV. The court erroneously charged as to what the issue was. V. The blouse was improperly admitted into evidence. VI. There is more than sufficient doubt about this verdict to warrant a new trial.

      William H. West, Jr., for respondent.
    I. The remarks of the trial judge, in his charge and instructions to the jury prior to verdict, were not in any way coercive. (Green v. Telfair, 11 How. Prac. 260; Conners v. Walsh, 131 N. Y. 590; White v. Calder, 35 N. Y. 183; People v. Faber, 199 N. Y. 256; McCarthy v. Odell, 202 App. Div. 784; People v. Sheldon, 156 N. Y. 268.) II. Affidavits and statements of jurors in this case may not be used to impeach their verdict. (People v. Sweetland, 298 N. Y. 899; People v. Sprague, 217 N. Y. 373; Jackson v. S. & D. Motor

      Lines, 272 App. Div. 990; Davis v. Lorenzo’s, Inc., 258 App. Div. 933; Payne v. Burke, 236 App. Div. 527, 262 N. Y. 630; Wilkins v. Abbey, 168 Misc. 416; Williams v. Montgomery, 60 N. Y. 648; Schrader v. Joseph H. Gertner, Jr., Inc., 282 App. Div. 1064.) III. The manner in which the jurors’ affidavits were obtained in this case should preclude their use, regardless of any question of competency. IV. Plaintiff-appellant’s failure to note an exception to the portion of the charge now complained of precludes its review at this time. (Thomas v. First Nat. Bank of Lisbon, 263 App. Div. 476.) V. The facts of this case have been found by a jury, whose verdict was affirmed by the Appellate Division below, and they cannot be reviewed by this court. (Fritz v. Tompkins, 168 N. Y. 524; Wellisch v. John Hancock Mut. Life Ins. Co., 293 N. Y. 178; Frankenberger v. Schneller, 258 N. Y. 270; Metzroth v. City of New York, 241 N. Y. 470; City of New York v. Wilson & Co., 278 N. Y. 86.) VI. The court correctly charged the jury as to the issues. (Alper Blouse Co. v. Connor & Co., 282 App. Div. 123; Owen v. Rochester-Penfield Bus Co., 304 N. Y. 457.) VII. The blouse was properly admitted into evidence. VIII. There is no doubt about the verdict herein which warrants a new trial.
   Fuld, J.

This action was brought by Alper Blouse Company to recover the purchase price paid to E. E. Connor & Co. for some nylon cloth, which plaintiff refused to accept because of its allegedly defective quality. Although the case has been twice tried, this is the first time it has been before this court. The first trial ended at the conclusion of plaintiff’s case upon defendant’s motion for a nonsuit; the Appellate Division, however, reversed and directed a new trial on the ground that plaintiff had made out a prima facie case. The second trial resulted in a verdict for defendant and the ensuing judgment has been affirmed, by a three to two vote, in the Appellate Division. It is our view that there must be a new trial for the reason that there is a lack of evidence to support the verdict in defendant’s favor.

In January of 1951, Alper ordered from Connor some 5,000 yards of certain goods, described as nylon tricot, for use in the manufacture of blouses, paying, at the agreed price of $1.50 a yard, a total of $7,654.50. The buyer received the goods and discovered, when it started to cut them preparatory to manufacture, that they ‘ ‘ curled instead of lying flat. ’ ’ This defect, it was established, rendered the material unsuitable for use in the large-scale manufacture of blouses, since it seriously increased the difficulty and costliness of the cutting and sewing operations. The seller, recognizing the defective condition of the material, advised Alper to return the goods to the seller’s dyer and finisher and agreed that it would send Alper a second sample subject to its approval. The purchaser returned the goods and sometime thereafter received the second sample. That sample was, concededly, never approved; Alper found it unsatisfactory and so advised Connor. Although Connor’s president counseled patience and said that he would later contact Alper, he did nothing, except that, some weeks later, he telephoned to insist that the second sample was “ good,” that all of the merchandise had been refinished in accordance with that sample and that it was being shiioped to Alper. The latter, however, refused to accept the refinished material and commenced this suit to recover its purchase price.

It is undisputed that the goods, when first delivered, were unsatisfactory and quite unsuitable for the mass production of blouses, the purpose for which, it was known, they were to be used. The buyer was at that time privileged to return them and receive back the purchase price which it had paid. However, instead of insisting upon its full rights, Alper elected, so to speak, to enter into a special kind of contract whereby the seller agreed to take back the goods, refinish them, and then submit a new sample for its purchaser’s approval.

That the second sample was sent “ for approval ” was admitted by defendant Connor, as was plaintiff Alper’s dissatisfaction with the sample and defendant’s subsequent delivery of the remainder of the goods despite plaintiff’s failure to give its approval. Where a sale is thus made subject to the buyer’s satisfaction, his approval becomes a condition precedent to his obligation to accept the merchandise. (See, e. g., Doll v. Noble, 116 N. Y. 230; Duplex Safety Boiler Co. v. Garden, 101 N. Y. 387; Atlas Shoe Co. v. Lewis, 202 App. Div. 244, 248; see, also, 1 Williston on Sales [1948], §§ 191, 191a, pp. 483-488). While the power to withhold approval is an untrammelled one where the object of the contract is “to gratify taste, serve personal convenience, or satisfy individual preference ” (Duplex Safety Boiler Co. v. Garden, supra, 101 N. Y. 387, 390), a different rule ordinarily prevails, in this state, for commercial contracts where the suitability of the goods is a matter of “ mechanical fitness, utility, or marketability ” (3 Williston on Contracts [1936], p. 1946); in such a case, the contract is “ construed as imposing upon the seller the requirement only that a reasonable man * * * be satisfied with the performance. ’ ’ (1 Williston on Sales, op. cit., § 191, p. 485; see, also, Duplex Safety Boiler Co. v. Garden, supra, 101 N. Y. 387; Hummel v. Stern, 21 App. Div. 544, affd. 164 N. Y. 603; 1 Restatement, Contracts, § 265, p. 380.)

The contract before us in no way involves personal taste or preference, and, therefore, if the sample depicted goods suitable for the purpose of large-scale blouse manufacture, plaintiff was under the necessity of approving it. However, even if defendant established that the sample was satisfactory (cf. Doll v. Noble, supra, 116 N. Y. 230, 232-233; Bowery Nat. Bank v. Mayor, 63 N. Y. 336, 339) and, by that token, that plaintiff was not privileged to refuse approval, that does not dispose of this appeal. In a case of sale by sample, “ There is an implied warranty that the bulk shall correspond with the sample in quality ” (Personal Property Law, § 97), placing upon the seller the burden of demonstrating that the goods subsequently shipped actually matched the sample exhibited. (Cf., e. g., Frankel v. Foreman & Clark, 33 F. 2d 83, 86 [applying the law of New York]; also, 1 Williston, op. cit., § 255, p. 677.) Consequently, if the seller failed to prove that fact, he could not insist upon acceptance by the buyer. (See, e. g., Henry & Co. v. Talcott, 175 N. Y. 385, 390; see, also, 4 Williston on Contracts, op. cit., § 1002, p. 2762.)

The record before us is searched in vain for any evidence that the bulk of the goods was similar to the sample. Indeed, the testimony of witnesses, including those called by defendant itself, indicates that it was not similar — that the piece representing the bulk had a stiffer finish, was less soft than the sample and more difficult to handle. At any rate, and quite apart from such testimony, it is clear that in the absence of proof that the goods shipped to plaintiff corresponded with the sample in quality, plaintiff was not obligated to accept them. .

Since we are reversing and directing a new trial for the reason stated above, there is no need to discuss plaintiff’s further contention that certain of the trial judge’s remarks to the jurors, after they had announced their inability to agree, induced them to return with a hasty and ill-considered verdict. It is enough to say that, while the challenged statements were certainly not so designed or intended, they may unfortunately have had a coercive and propulsive effect.

The judgment of the Appellate Division and that of the Trial Term should he reversed and a new trial granted, with costs to abide the event.

Conway, Ch. J., Desmond, Dye, Fboessel, Van Voobhis and Bubke, JJ., concur.

Judgments reversed, etc.