text:
    George A. Green, Respondent, v. City of Mechanicville, Appellant. Loretta Green, Respondent, v. City of Mechanicville, Appellant.

      (Argued October 18, 1935;
    decided November 19, 1935.)

      Patrick J. Keniry for appellant.
    The tracks are in the street lawfully and are not a public nuisance. (Hayes v. Brooklyn Heights Ry. Co., 200 N. Y. 183; Hollis v. Brooklyn Heights R. R. Co., 128 App. Div. 821; Brownell v. Town of Greenwich, 114 N. Y. 518; Petrogradsky M. K. Bank v. National City Bank, 253 N. Y. 23; People ex rel. City of New York v. New York Ry. Co., 217 N. Y. 310; People ex rel. Village of Chateauguay v. Public Service Comm., 255 N. Y. 232; City of New York v. Dry Dock, E. B. & B. B. B. Co., 135 Misc. Rep. 678; 225 App. Div. 794; 251 N. Y. 583; Davis v. New York, 14 N. Y. 506; Lambert v. Westchester Electric R. R. Co., 191 N. Y. 248; Bushnell v. Chicago, B. & Q. R. R. Co., 259 Ill. 391; People ex rel. H. R. & P. C. R. R. Co. v. Tax Commrs., 215 N. Y. 507; Paige v. Schenectady Ry. Co., 178 N. Y. 102; City of New York v. Hudson & M. R. R. Co., 229 N. Y. 141; People ex rel. City of Olean v. W. N. Y. & P. T. Co., 214 N. Y. 526.) In its dealings with the Hudson Valley Railway Company the city of Mechanicville assists the State in the exercise of a governmental function. (People ex rel. H. R. & P. C. R. R. Co. v. Tax Commrs., 215 N. Y. 507; City of New York v. Bryan, 196 N. Y. 158; Binninger v. City of New York, 177 N. Y. 199; City of Troy v. United Traction Co., 202 N. Y. 333; Matter of New York Central R. R. Co., 177 App. Div. 444; People ex rel. City of New York v. N. Y. Ry. Co., 217 N. Y. 310; City of Schenectady v. Schenectady Ry. Co., 118 Misc. Rep. 676.) The plaintiffs failed to prove any negligence on the part of the defendant. (McFarlane v. City of Niagara Falls, 247 N. Y. 340; Klein v. Town of Pittstown, 241 App. Div. 202; Lyman v. Village of Potsdam, 228 N. Y. 398; Kuhn v. Village of East Syracuse, 209 App. Div. 186; Taylor v. City of Yonkers, 105 N. Y. 202; Harrington v. City of Buffalo, 121 N. Y. 147; Blakeley v. City of Troy, 18 Hun, 167; Cohen v. City of New York, 204 N. Y. 424; Moran v. City of New York, 98 App. Div. 301; Dupont v. Village of Port Chester, 204 N. Y. 351; Mayor of New York v. Sands, 105 N. Y. 210; Lichtenstein v. Mayor, 159 N. Y. 500; Kaveny v. City of Troy, 108 N. Y. 571; Kinney v. City of Troy, 108 N. Y. 567.)

      Paul Windels, Corporation Counsel (Paxton Blair and Matthew J. Troy of counsel), for City of New York, amicus curice.

      John F. Doyle and James G. Heffernan for respondents.
    The evidence supports the verdict of the jury. (Ehrgott v. Mayor, 96 N. Y. 264; Ring v. City of Cohoes, 77 N. Y. 83; McNulty v. City of New York, 219 App. Div. 831; Lehmann v. City of Brooklyn, 30 App. Div. 305; McFarlane v. City of Niagara Falls, 247 N. Y. 340; Hogle v. Franklin Mfg. Co., 199 N. Y. 388.) The defendant is liable for injuries resulting from the presence of the abandoned rails in the street. (Village of Stillwater v. Hudson Valley Ry. Co., 255 N. Y. 144; Turnbull v. Longacre Bank, 249 N. Y. 159; Osgood v. Toole, 60 N. Y. 475; Callanan v.
      Gilman, 107 N. Y. 360; People v. Thompson, 98 N. Y. 6; Davis v. Mayor, 14 N. Y. 506; Astor v. N. Y. Arcade Ry. Co., 3 N. Y. St. Repr. 188; Village of Hempstead v. Ball Electric Co., 9 App. Div. 48; Koehler v. City of New York, 262 N. Y. 74; Metzroth v. City of New York, 241 N. Y. 470; Stern v. International Ry. Co., 220 N. Y. 284; Corcoran v. City of New York, 188 N. Y. 131; City of Rochester v. Campbell, 123 N. Y. 405; Matter of McCoy v. Apgar, 241 N. Y. 71; Village of Oxford v. Willoughby, 181 N. Y. 155; Wakeman v. Wilbur, 147 N. Y. 657; People ex rel. Hofeller v. Buck, 193 App. Div. 262; 230 N. Y. 608; Powers v. Village of Mechanicville, 163 App. Div. 138.) The presence of the ridges of ice constituted a nuisance growing out of negligence. (Rehberg v. Mayor, 91 N. Y. 137; Gillrie v. City of Lockport, 122 N. Y. 403; Pomfrey v. Village of Saratoge Springs, 104 N. Y. 459; Todd v. City of Troy, 61 N. Y. 506; Magid v. City of New York, 234 App. Div. 38; Lehmann v. City of Brooklyn, 30 App. Div. 305; Taylor v. City of Albany, 239 App. Div. 217; 264 N. Y. 539; Khoury v. County of Saratoga, 243 App. Div. 195; 267 N. Y. 384.)
   Loughran, J.

An automobile in which the plaintiffs were riding on Main street in the defendant city of Mechanicville left the roadway and collided with a nearby pole. There was evidence adequate to sanction a conclusion that the collision was caused by the skidding of or.e of the rear wheels of the vehicle over ice that had formed on the rails of a trolley track of the Hudson Valley Railway Company laid in the center of the street. No use had been made of the track for five years before the accident occurred on December 17, 1933. The city has been held to liability for the respective damages of the plaintiffs as for the results of unreasonable failure to abate an unnecessary and dangerous obstruction of the highway.

We are asked to affirm the judgments upon the broad ground that the mere existence in a highway of street railway tracks of any and every kind, irrespective of location or condition, is made unlawful solely by continued nonuser. If this contention is open to the plaintiffs upon the record, we have no hesitation in saying that in our opinion it would be neither just nor expedient to lay down so wide a legal doctrine. We have found no precedent for the proposition and the analogies of the law give no support to it.

It is said that the Appellate Division has here read our decision in Village of Stillwater v. Hudson Valley Ry. Co. (255 N. Y. 144, 151) as such a precedent. In that case it was held that, since a municipal license to the railway company had for sufficient cause been withdrawn, the tracks were thereafter in the street without authority, and, therefore, a public nuisance which the village could compel the company to remove. In that disposition of that case there was no element of novelty. (Milhau v. Sharp, 27 N. Y. 611; Fanning v. Osborne, 102 N. Y. 441; Village of Hempstead v. Ball Electric Co., 9 App. Div. 48.)

Here the municipal consent to the railway company had not been recalled. The grant was the act of the Board of Trustees of the village of Mechanicville, the corporate predecessor of the defendant city. It is thereby provided: “And in case said [railway] company shall fail to complete said road * * * or to operate the same at the time or times, and in the manner, herein provided; * * * then said Board of Trustees may, by resolution, annul and vacate this permit, consent and authority; and thereupon and thereafter all rights, privileges and authority granted herein and hereby shall cease and determine; * * * and thereupon said company, its successor and assigns shall forthwith remove all poles, wires, rails, tracks, ties and other appurtenances, and restore the surface of the street to its original condition.” To us the plain import of this provision is “ that the nonuser of the franchise is the breach of a condition subsequent, with the result that the privilege survives until revoked.” (People ex rel. Vil. of Chateaugay v. Public Service Comm., 255 N. Y. 232, 242. Cf. Matter of Brooklyn, etc., R. R. Co., 185 N. Y. 171; Manton v. South Shore Traction Co., 121 App. Div. 410.) In short, this track of the railway company at the time of the accident was not an unauthorized occupancy of the street, and the prnciple of the decision in the Stillwater Case (supra) is inapposite.

Concededly the track structure was not in fact a nuisance in itself. The street had been repaved in 1927, As part of that improvement, the railway company had then been required wholly to restore its way. This was done in accordance with approved modern methods,— the steel rails (supported by steel plates fixed upon steel ties) being geared flush with the surface of the new concrete and brick pavement. That construction was not without more a nuisance (See Reining v. N. Y.,L. & W. Ry. Co., 128 N. Y. 157; Hentz v. Long Island R. R. Co., 13 Barb. 646; Richards v. Washington Terminal Co., 233 U. S. 546, 551; cf. Brown v. Met. St. Ry. Co., 60 App. Div. 184; 171 N. Y. 699), and no claim was made of subsequent deterioration or displacement of any part of the trackage or of the roadway wherein it was embedded. (Cf. Wooley v. Grand St. & Newtown R. R. Co., 83 N. Y. 121; Schild v. C. P., N. & E. R. R. R. Co., 133 N.Y. 446.)

The city was not to answer for the accident on an argument that it would have been better judgment to have passed a resolution extinguishing the local rights of the railway company so as in any case to get its equipment out of the street. An error in the discharge of such a governmental or discretionary power does not subject a municipal corporation to liability at common law. (Wilson v. Mayor, 1 Den. 595; Rogers v. City of Binghamton, 101 App. Div. 352; 186 N. Y. 595; Edson v. City of Olathe, 81 Kan. 328, 331.) On the other hand, the city owed to the public the corporate duty of maintaining the street in a condition reasonably safe for the ordinary uses of travel, and the only question is whether the proof went the length of warranting a verdict that the damages resulted from neglect to perform that duty in this instance.

On the day of the accident, and on occasion theretofore, rain froze on the unused rails in a greater degree than on the contiguous pavement. A chief reason for this was that steel is a more efficient conductor of heat than is brick or concrete. The trial judge told the jury that such a situation in the street was evidence on which the city could be found to have been negligent. We are unable to assent to that ruling.

It was not pretended that any unusually dangerous tendency of the rails, under the conditions at the time the plaintiffs were hurt, was manifest in the light of common experience. Indeed the proof of the plaintiffs was that the particular danger came from a combination of events to be interpreted only by an expert. The interpretation was supplied in these words: “ I assume that some rain fell that day. The report shows eighteen one-hundredths of an inch. It wasn’t cold enough to freeze. * * • * Coming in contact with the brick pavement, on which some ice had already formed, due to the fact that the brick was cold, a thin layer formed and there was not heat enough taken away from the water to freeze it immediately, and traffic, going by, probably splashed the water. * * * If it struck the bare rail, it would freeze * * * and ridges of ice would form over the rails * * * from half an inch to two inches, depending on how rapidly the water was thrown up onto the ridges and other factors that I cannot be absolutely certain about.” It is not urged that the city authorities were bound to know what could thus have been foreseen only by a specialist, but the contention is that, since much the same consequence had previously been observed from time to time when the rails were unused, enough was known to raise a duty to inquire as to the cause, or that so the jury could say. We cannot adopt that position. The presence of trolley rails in the streets of our cities has been a commonplace for a generation, and has continued to be accepted as a factor no more fraught with peril to motorists than some other obvious hazards of increasing traffic congestion. We are not prepared to say that a situation lawful in itself and long reckoned with as standard by users of the highways must be safeguarded by municipal corporations against the effects of varying weather conditions. Even less are we ready to decide these cases on such a theory. We think that the chance of this accident was not in the circumstances so appreciable that the man of ordinary prudence in maintaining the street would have taken steps to prevent it. (See Hunt v. Mayor, 109 N. Y. 134; Beliz v. City of Yonkers, 148 N. Y. 67; Kleng v. City of Buffalo, 72 Hun, 541; 156 N. Y. 700; Dupont v. Village of Port Chester, 204 N. Y. 351. Cf. Khoury v. County of Saratoga, 267 N. Y. 384.)

In each case, the judgment of the Appellate Division and that of the Trial Term should be reversed and the complaint dismissed, with costs in all courts.

Crane, Ch. J., Lehman, O’Brien, Hubbs and Finch, JJ., concur; Crouch, J., not sitting.

Judgments reversed, etc.


source: Caselaw Access Project

author: Hubbs, J.

license: Public Domain

text:
    Alfred G. Moritz, Individually and as Trustee of the United Brethrens Church on Staten Island, Appellant and Respondent, v. United Brethrens Church on Staten Island, Respondent and Appellant.

      (Argued October 15, 1935;
    decided November 19, 1935.)

      Lester L. Callan for plaintiff, appellant and respondent.
    No corporation may set apart any ground for cemetery purposes in Richmond county. (L. 1904, ch. 618, § 1; L. 1910, ch. 702, § 1; L. 1911, ch. 813, § 1; L. 1912, ch. 463, § 1; Horton v. Cantwell, 108 N. Y. 255; Matter of Washington Street Asylum & Park R. R. Co., 115 N. Y. 442; Lyddy v. Long Island City, 104 N. Y. 218; Schieffelin v. McClellan, 135 App. Div. 665; Matter of Mead, 74 N. Y. 216.) The Legislature has the constitutional right to prohibit taking or using land in Richmond county for cemetery purposes. (City of New York v. Kelsey, 158 App. Div. 183; People ex rel. Oak Hill Cemetery Assn. v. Pratt, 129 N. Y. 68; Wojtkowiak v. Evangelical Lutheran Church, 236 App. Div. 411; People ex rel. Durham Realty Carp. v. La Fetra, 230 N. Y. 429; People v. Griswold, 213 N. Y. 92; Palmer v. Hickory Grove Cemetery, 84 App. Div. 600; Laurel Hill Cemetery v. San Francisco, 216 U. S. 358.)

      Paul Windels, Corporation Counsel (Paxton Blair and Edmund L. Palmieri of counsel), for City of New York, amicus curice.

    Defendant is barred from taking any lands for cemetery uses by section 1539-a of the Charter of the City of New York (Laws of 1904, ch. 618, § 1, as amd.). (Dartmouth College v. Woodward, 4 Wheat. 519; Lawton v. Steele, 152 U. S. 133; Mugler v. Kansas, 123 U. S. 623; Matter of People [Title & Mortgage Guarantee Co.], 264 N. Y. 69; Charles River Bridge v. Warren Bridge, 11 Pet. [U. S.] 420; Noble State Bank v. Haskell, 219 U. S. 104; California Reduction Co. v. Sanitary Reduction Works, 199 U. S. 306; Laurel Hill Cemetery v. San Francisco, 216 U. S. 358; Wojtkowiak v. Evangelical Lutheran Church, 236 App. Div. 411; 261 N. Y. 656; City of New York v. Kelsey, 158 App. Div. 183; Jacobson
      v. Massachusetts, 197 U. S. 11; Price v. Illinois, 238 U. S. 446; Matter of Viemeister v. White, 179 N. Y. 236; Matter of Vasko, 238 App. Div. 128.)

      Frederic W. Lahr for defendant, respondent and appellant.
    The' charter of the defendant is a franchise or contract under which it has the absolute right to acquire and use lands for burial purposes and which right the State of New York cannot impair. (People ex rel. Sturges v. Keese, 27 Hun, 483; People v. O’Brien, 111 N. Y. 1; Church of Redemption v. Grace Church, 68 N. Y. 570; Burke v. Trinity Church, 63 Misc. Rep. 43; State Bank of Ohio v. Knoop, 57 U. S. 369; Hunter v. Trustees of Sandy Hill, 6 Hill, 407; Close v. Glenwood Cemetery, 107 U. S. 466; Richards v. North West Protestant Dutch Reformed, 20 How. Pr. 317; Grace v. Repose Mausoleums, Inc., 78 Misc. Rep. 213; First Presbyterian Church v. McKallor, 35 App. Div. 98; Hutchinson Land Co. v. Whitehead Bros. Co., 127 Misc. Rep. 558; Town of Pawlet v. Clark, 9 Cranch, 291; Dexter v. Gardner, 89 Mass. 243; Beatty v. Kurtz, 27 U. S. 566.) There is no irreconcilable conflict between the Religious Corporations Law (Cons. Laws, ch. 51), the Membership Corporations Law (Cons. Laws, ch. 35), the Real Property Law (Cons. Laws, ch. 50) and the Charter of the City of New York. (Davis v. Supreme Lodge, Knights of Honor, 165 N. Y. 159; Woods v. Supervisors, 136 N. Y. 403; Czaonowsky v. City of Rochester, 55 App. Div. 388; Matter of La Rocca v. Flynn, 257 N. Y. 5; Bush v. D., L. & W. R. R. Co., 166 N. Y. 210; Wojtkowiak v. Evangelical Lutheran Church, 236 App. Div. 411; 261 N. Y. 656; Baylis v. Rosemount Cemetery Assn., 134 App. Div. 251; Grace v. Repose Mausoleums, Inc., 78 Misc. Rep. 213; People ex rel. Fleming v. Dalton, 158 N. Y. 175.) The police power of New York State is not involved. (Morton v. St. Patrick’s R. C. Church Society, 56 Misc. Rep. 71; Matter of Jacobs, 98 N. Y. 98; Colon v. Disk, 15 N. Y. 188.)
   Hubbs, J.

In this action brought by a trustee of the defendant, a religious corporation, plaintiff seeks to enjoin the corporation from developing for cemetery purposes a tract of land adjoining its existing cemetery lands in Richmond county. The defendant corporation was organized in 1808, pursuant to the provisions of chapter 79 of the Laws of 1801. Under that law it was empowered to hold land for cemetery purposes and has maintained a cemetery for over one hundred years. In 1923 it bought adjoining land, known as the Adams property. On November 15, 1932, it adopted a resolution to develop that tract for cemetery purposes, plaintiff, a trustee, voting against the resolution on the ground that the church had no right to use the property for cemetery purposes. This action is based upon the adoption of that resolution.

The defendant’s answer contains a counterclaim praying for a declaratory judgment to the effect that the defendant is entitled to use the land in question for cemetery purposes. The Special Term dismissed the counterclaim and'granted an injunction restraining defendant from so using the Adams property. At the time when defendant was incorporated there were no statutes in this State regulating the use of land for cemetery purposes. Defendant contends that it has such right both under its charter and under section 7 of the Religious Corporations Law (Cons. Laws, ch. 51). When defendant was incorporated in 1808, the State did not reserve the right to alter, amend or repeal its charter and, therefore, defendant insists it has a constitutional right to hold and use the land in question for burial purposes. It also urges that it has the same right under section 7 of the Religious Corporations Law as other statutes which restrict that right as to other corporations do not have that effect as to religious corporations.

The trial court decided in substance that the defendant is prohibited by section 451 of the Real Property. Law (Cons. Laws, ch. 50), as in effect April 13, 1912, from using the lands in question for cemetery purposes without the consent “ of the board of aldermen of the city of New York.”

It also held that it was prohibited by section 1539-a of the charter of the city of New York (Laws of 1901, ch. 466; as amd. by Laws of 1904, ch. 618) from using the lands for such purpose even though such consent of the Board of Aldermen were to be first obtained.

Section 451 of the Real Property Law, as amended in 1912 (L. 1912, ch. 300), in effect April 13, reads as follows: Acquisition of lands for cemetery purposes in certain counties. It shall not be lawful for any person to take by deed, devise or otherwise or set apart or use any land or ground in any of the counties of Westchester, Kings, Queens, Richmond, Rockland, Suffolk or Nassau for cemetery purposes without the consent of the board of supervisors for such county, or of the board of aldermen of the city of New York, as the case may be, first had and obtained in like manner as provided for in the membership corporations law; and said board of supervisors or board of aldermen in granting such consent may annex thereto such conditions, regulations and restrictions as such board may deem the public health or the public good require.”

Section 1539-a of the charter, as amended in 1912, in effect April 18 (Laws of 1912, ch. 463), reads as follows: “ After this section as hereby amended takes effect no person, association or corporation shall take by deed, devise or otherwise any land in the counties of Queens or Richmond for cemetery purposes, nor set apart or use any ground for cemetery purposes in either such counties. Existing cemetery associations and corporations, however, shall have the right to use for cemetery purposes, land lawfully taken by recorded deed, or devise and set apart for cemetery purposes or for the purposes of the convenient transaction of their general business, prior to or used therefor, at the time this act takes effect, and all lands taken by a recorded deed and actually set apart for cemetery purposes prior to June twenty-fifth, nineteen hundred and ten.”

Each constitutes a prohibition against the use for cemetery purposes of the lands here involved, the former because the consent of the Board of Aldermen has not been obtained and the second as a negation of the right to devote the lands to the use proposed.

The question presented is whether religious corporations are excepted from the provisions of the city charter. Concededly, the defendant’s charter and section 7 of the Religious Corporations Law, and the laws from which that section was derived, grant to it the power and authority to hold and use land for cemetery purposes.

The section of the Real Property Law, and the provision of the city charter were enacted subsequent to the granting of defendant’s charter and the enactment of section 7 of the Religious Corporations Law. There is no express repeal of the right of a religious corporation to take and hold land for burial purposes.

A literal reading of the first sentence of section 1539-a of the New York City Charter discloses that it prohibits any person, association or corporation ” from using any land for cemetery purposes in Richmond county, which is included within the boundaries of New York city. The prohibition makes no distinction between a religious corporation and any other kind of a corporation.

The second sentence of section 1539-a contains a reservation in favor of cemetery associations and corporations,” under which they have the right to use lands for cemetery purposes provided they were acquired and used for such purpose prior to June 25, 1910. It is urged by defendant that the second sentence modifies and limits the prohibition contained in the first sentence and thereby restricts the prohibition exclusively to cemetery associations and corporations in the strict meaning of the term, so that the section as a whole has no application to religious corporations.

Statutes enacted to prevent the use of land for burial purposes are enacted under the police power of the State to conserve the public health. If the law-making authority, in enacting section 1539-a, enacted it for the purpose of protecting the public health, no reason exists why a distinction should have been made between a religious corporation and any other kind of a corporation. The use of land in Richmond county for burial purposes by one kind of corporation would be as injurious to public health as a like use by another kind of corporation. A few days prior to the time section 1539-a became effective, section 451 of the Real Property Law went into effect. That section prohibited the use of land in Richmond county for burial purposes without the consent of the local authorities. When the Legislature desired to except religious corporations from the effect of statutes affecting cemetery corporations it had no trouble in making its meaning clear. Thus, in section 71 of the Membership Corporations Law (Cons. Laws, ch. 35), it is expressly provided that the statute does not apply to a cemetery belonging to a religious corporation. If it had desired to except religious corporations from the effect of section 1539-a it would undoubtedly have done so by the use of similar language. Not having done so, courts must take the language as they find it and not endeavor to read into the statute a meaning not expressed by the Legislature.

Defendant contends that as section 7 of the Religious Corporations Law has not been expressly repealed, it should not be treated as repealed by implication. True it is that courts are reluctant to decide that statutes are repealed by implication. Section 1539-a, prior to the amendment of 1912, prohibited the use of land for burial purposes in certain portions of the city of New York. The only amendment to that section in 1912 was to add to those lands the county of Richmond.

There can be no mistaking the intent of the Legislature in making that amendment. It could have been made for only one purpose, namely, to prohibit absolutely the use of lands in Richmond county for cemetery purposes except such lands as were already being used for that purpose. Where the intent of the Legislature is clear, and a later local statute covers the whole subject as far as the local territory is concerned, the local statute is treated as intended as a substitute for and a repeal pro tanto of the earlier general statute. Section 1539-a, a local statute, is repugnant to section 7 of the Religious Corporations Law, a general statute, the restriction in section 1539-a as amended applying to Richmond county, while the general statute affects all the counties of the State. The intent by the amendment of the local statute to except Richmond county from the general provisions of the general law is unmistakable and such intent must be given effect by holding that the local statute excepts Richmond county from the general provisions of section 7 of the Religious Corporations Law.

The defendant, under its charter, is entitled to be protected against impairment of contracts under the principle announced in Dartmouth College v. Woodard (4 Wheat. [U. S.] 518). We entertain no doubt, however, that regardless of the provisions of its charter, the defendant is subject to the police power of the State. It has long been established that the State for the protection of public health may under the police power regulate and prohibit the use of land for burial purposes. (Corporation of Brick Presbyterian Church v. Mayor, 5 Cow. 538; Coates v. Mayor, 7 Cow. 585; People ex rel. Oak Hill Cemetery Assn. v. Pratt, 129 N. Y. 68; Laurel Hill Cemetery v. San Francisco, 216 U. S. 358; Wojtkowiak v. Evangelical Lutheran St. John’s Church, 236 App. Div. 411; affd., 261 N. Y. 656; 2 Dillon on the Law of Municipal Corporations [5th ed.], § 682.)

Courts are loathe to overthrow the action of a Legislature in the exercise of its police power, providing it acts reasonably. We cannot say that the Legislature acted unreasonably or in an arbitrary manner in prohibiting the further extension of the right to use lands for burial purposes within the boundaries of the great city of New York. (Noble State Bank v. Haskell, 219 U. S. 104.)

As the city of New York made a motion in this court for permission to file a brief as amicus curiae and a brief was filed by the Corporation Counsel, we deem it unnecessary to pass upon the question discussed in the opinion of the Appellate Division.

The judgment of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division to plaintiff-appellant.

Crane, Ch. J., Lehman, O’Brien, Loughran and Finch, JJ., concur; Crouch, J., not sitting.

Judgment accordingly.


text:
    Marguerite del Rio, Respondent, v. The Prudential Insurance Company of America, Appellant.

      (Argued October 7, 1935;
    decided November 19, 1935.)

      Ralph Earl Prime, Jr., and A. J. Prime for appellant.
    As named beneficiary plaintiff’s rights under the policy in suit were merely contingent. Assuming that she was a “ donee beneficiary,” her rights against the defendant were governed by the contract made with the insured. (Mallon v. Prudential Ins. Co., 5 Fed. Supp. 290; Stahel v. Prudential Ins. Co., 249 N. W. Rep. 713; Travelers’ Ins. Co. v. Healey, 25 App. Div. 53; Levy’s Estate v. Commissioner of Internal Revenue, 65 Fed. Rep. [2d] 412; Ruckenstein v. Metropolitan Life Ins. Co., 263 N. Y. 204.) Defendant had neither the power nor the duty to deduct from the “ contractual ” policy loan applied for by the insured on December 6, 1929, the quarterly premium falling due on December 9, 1929. (Silverman v. N. Y. Life Ins. Co., 66 Fed. Rep. [2d] 554; Massachusetts Mut. Life Ins. Co. v. Jones, 44 Fed. Rep. [2d] 540.; Guilford-Chester Water Co. v. Town of Guilford, 107 Conn. 519; Kansas City Life Ins. Co. v. Hislip, 154 Okla. 42; Rogers v. Columbia Nat. Life Ins. Co., 213 N. W. Rep. 757; Goodwin v. Massachusetts Mut. Life Ins. Co., 73 N. Y. 480; Tyson v. Equitable Life Assur. Society, 144 Ga. 729.) The right of the insured to a loan “ on the sole security ” of the policy was contractual. (Liptnan v. Equitable Life Assur. Society, 58 Fed. Rep. [2d] 15; Pequot Mfg. Carp. v. Equitable Life Assur. Society, 253 N. Y. 116.)

      Bern Budd and Kenneth C. Quencer for respondent.
    The statutory provision is mandatory and is conclusively deemed to have been written in the contract. (Cons. Laws, ch. 28, § 101; Bakker v. Ætna Life Ins. Co., 264 N. Y. 150; People v. Metropolitan Surety Co., 211 N. Y. 107; New York Life Ins. Co. v. Dodge, 246 U. S. 357; American Ins. Union v. Lowry, 62 Fed. Rep. [2d] 209; Hollin v. Essex Mut. Benefit Assn., 88 N. J. L. 204; Equitable Life Ins. Co. v. Borner, 182 N. E. Rep. 463; Federal Life Ins. Co. v. Relias, 185 N. E. Rep. 319; First Texas State Ins. Co. v. Smalley, 228 S. W. Rep. 550; Guardian Trust Co. v. Straus, 139 App. Div. 884; 201 N. Y. 546; New York Life Ins. Co. v. Cravens, 178 U. S. 389; Northwestern Life Ins. Co. v. Riggs, 203 U. S. 243.) The contractual provisions of the policy itself postulate the deduction of the current premium before making the loan. (Matter of Hayes, 252 N. Y. 148; Gerka v. Fidelity & Casualty Co., 251 N. Y. 51.) The plaintiff, the beneficiary under the policy in suit, has the right to an enforcement of the policy according to its terms.
      (Anderson v. Northwestern Mut. Life Ins. Co., 261 N. Y. 450; Brown v. Life Ins. Co. of Virginia, 114 S. C. 202; Deal v. Deal, 87 S. C. 395; Arnold v. Empire Ins. Co., 3 Ga. App. 685; Roberts v. N. W. Nat. Life Ins. Co., 143 Ga. 780; Indiana Nat. Life Ins. Co. v. McGinnis, 180 Ind. 9; Holder v. Prudential Ins. Co., 77 S. C. 299; Lloyd v. Royal Union Mut. Life Ins. Co., 245 Fed. Rep. 162; Sullivan v. Maroney, 76 N. J. Eq. 104.) The insured was misled by the appellant’s wrongful act in failing to deduct from the loan the overdue quarter-annual premium. (Ruckenstein v. Metropolitan Life Ins. Co., 263 N. Y. 204; Meyer v, Knickerbocker Life Ins. Co., 73 N. Y. 516; Wyman v. Phœnix Mut. Life Ins. Co., 119 N. Y. 274; Kenyon v. Knights Templar Masonic Mut. Aid Assn., 122 N. Y. 247; Insurance Co. v. Eggleston, 96 U. S. 572.)
   Hubbs, J.

This action is upon an ordinary life insurance policy issued by appellant upon the life of Raymond R. Del Rio for $5,000 and dated September 9, 1925. The respondent, his wife, was named as beneficiary. The insured died on March 1, 1930, as the result of an accident. The policy provided for the annual payment of a premium of $65.95 on or before September 9 of every year following its date until five full premiums had been paid. The date of premium payments was changed by consent so that thereafter premiums were to be paid $17.50 quarterly on or before the 9th day of September, December, March and June.

The defense relied upon by appellant is that the policy had lapsed prior to the death of the insured. The policy provided that it would -lapse and become void in case of any default in premium payment; also that payment of any premium shall not maintain [it] in force beyond the date when the next payment becomes due, except as to the benefits provided for herein after default in premium payment.”

Provisions were also contained in the policy entitling the insured, at his election in the event that the policy lapsed for non-payment of any premium, to a “ nonparticipating * * * term policy ” or to receive in cash the cash surrender value of the policy. The policy provided that the insured may borrow from the company, without the consent of the beneficiary ” upon the sole security of the policy.

On December 6, 1929, the insured made application in writing to the company for a loan on the policy for the maximum amount which could be loaned thereon. On December 11 the loan was made for $32, the full amount within a few cents of the then loan value of the policy •reserve. At that time the loan value of the policy reserve would have automatically put in force for 252 days a paid-up term policy as provided by the terms of the policy.

It is the contention of the appellant that the application of the full loan value and policy reserve to the cash loan made on the sole security of the policy, and the assignment of the policy to the company prevented any extended insurance beyond the grace period of thirty days which expired on January 9, 1930, and that, therefore, the policy had lapsed. In other words, that the insured, by receiving in cash the maximum loan value and reserve, received all that he could receive under the policy and nothing was left with the company which would constitute a consideration for an extended term insurance of 252 days or any other term, and that the policy had lapsed before the insured met his death on March 1, 1930.

The respondent bases her right to recover upon subdivision 7 of section 101 of the Insurance Law (Cons. Laws, ch. 28), as amended by Laws of 1922, chapter 275, in effect when the policy was issued. The statute provides for standard policies which must in substance contain: “A provision that after three full years’ premiums have been paid, the company at any time, while the policy is in force, will advance * * * a sum equal to, or at the option of the owner of the policy less than, the reserve at the end of the current policy year on the policy and on any dividend additions thereto * * *; and that the company will deduct from such loan value any existing indebtedness on the policy and any unpaid balance of the premium for the current policy year, and may collect interest in advance on the loan to the end of the current policy year; which provision may further provide that such loan may be deferred for not exceeding six months after the application therefor is made.” (§ 101, subd. 7.) Also, in the last paragraph,

“A policy * * * issued in violation of this section, shall nevertheless be held valid but shall be construed as provided in this section, and when any provision in such policy * * * is in conflict with any provision of this section, or of any other statutory provision, the rights, duties and obligations of the insurer, the policy holder and the beneficiary shall be governed by the provisions of this section.” (§ 101.)

Concededly, the insured did not pay the quarterly premium which became due on December 9, 1929, or within the thirty-day grace period thereafter, although due notice that the quarterly premium payment would fall due on December 9 was mailed to the insured by the company and received by him.

Thus far it has been decided that the statutory provision requiring the deduction of the current yearly premium from any amount loaned on a policy is conclusively deemed to have been a part of the insurance contract and. that the provision is mandatory; that as such provision of the statute was a part of the contract, the respondent, the beneficiary under the policy, has a right to the enforcement of the contract according to its terms and that insured was misled by the act of the company in failing to deduct from the loan the overdue quarterly premium which became due on December 9, 1929.

We think that an erroneous construction has been given the policy. At the time the loan was made, one quarterly payment of $17.50 had been made on the current yearly premium. The yearly premium was $65.95. The unpaid balance of the premium for the current policy year ” was, therefore, $52.50. The loan value of the policy at the time was $32, not sufficient in amount to pay the unpaid balance of the premium for the current policy year.” Under the construction thus far given the policy, the company was legally prevented from making any loan on the policy. The same section, by subdivision 7, provides “ that after three full years’ premiums have been paid, the company at any time, while the policy is in force, will advance * * * a sum equal to * * * the reserve at the end of the current policy year.” That reserve was $32. That amount the company by statute was bound to advance (less two and one-half per cent as stated in the subdivision). Of course, it could not advance it if it was required to deduct the unpaid balance of the current annual premium.

As the wording of the statute creates a situation in which all of its provisions cannot be complied with, we are required to give it such a construction as will, as nearly as possible, preserve the purpose for which it was enacted. We think that in cases where three full years’ premiums have been paid and an application is made for a loan for the maximum loan value of a policy, and the loan value is less than the unpaid balance of the premium for the current policy year,” the provision to the effect that “ any unpaid balance of the premium for the current policy year ” shall be deducted from the loan, is nugatory, and the company may make the loan for the maximum amount of the loan value of the policy, and the effect of making such a loan will not prevent the lapsing of a policy in the event that the premium is not paid, according to the terms of the policy.

The company was compelled to comply with the statute requiring it to make the loan after three full years’ premiums had been paid. The fact that it could not deduct from the loan value of the policy the “ unpaid balance of the premium for the current policy year,” because the loan value of the policy was less than the balance of the premium for the current year, did not excuse it from making the loan. It complied with the provisions of the statute as far as it was able to do so.

The respondent contends that, in any event, the company should have deducted the $17.50 quarterly payment due at the date of the loan from the amount of the loan, as such sum constituted an indebtedness to the company within the meaning of subdivision 7 of section 101 of the Insurance Law. If such sum had been deducted in payment of the quarterly payment due December 9, 1929, such payment would have kept the policy alive and in full force until March 9, 1930, which was after the death of insured and respondent would be entitled to recover. The words of the statute, any existing indebtedness on the policy,” refer to prior loans made by the company on the policy. A premium due on a life insurance policy is not an indebtedness. There is no legal binding obligation to pay it. (Goodwin v. Massachusetts Mut. Life Ins. Co., 73 N. Y. 480; Worthington v. Charter Oak Life Ins. Co., 41 Conn. 372, 416; Richards on The Law of Insurance [4th ed.], p. 574; Vance on The Law of Insurance, p. 260.)

The policy contains the following provision:

“ Payment of premiums. This policy is based upon the payment of premiums annually in advance, but if premiums be made payable quarterly or semi-annually, any unpaid premiums required to complete payment for the current insurance year in which death occurs shall be considered an indebtedness to the Company on account of this Policy.”

It will be noted that the word “ indebtedness ” refers to “ any unpaid premiums required to complete payment for the current insurance year,” not to any unpaid premium to be paid quarterly.

The insured received from the company in cash the amount which he applied for; he had, thereafter, until the expiration of the grace period within which to pay the quarterly premium which fell due on December 9; his failure to pay that premium caused the policy to lapse according to its terms. Prior to the due date of the quarterly payment, December 9, he had received the written notice from the company calling his attention to the fact that a quarterly payment would be due on December 9. After receiving that notice he made the written application for the loan for the maximum amount which could be loaned on the policy, and he received that amount. He was in no way misled by the company. As to him the policy had lapsed.

As the policy by its terms gave the insured the right without notice to the beneficiary to obtain a loan on the policy for the maximum amount which could be loaned thereon, the company in making the loan did not violate any rights of the beneficiary and as to her the policy lapsed and she cannot recover thereon.

The judgment of the Appellate Division and that of the Trial Term should be reversed and the complaint dismissed, with costs in all courts.

Crane, Ch. J., O’Brien and Crouch, JJ., concur; Loughran and Finch, JJ., dissent; Lehman, J., not sitting.

Judgments reversed, etc.


text:
    In the Matter of Sol Douglas, Appellant, against Frank F. Adel, a Justice of the Supreme Court of the State of New York, Respondent.
    (Argued October 2, 1935;
    decided November 19, 1935.)

      Sol Douglas, in person, Julius Hochfelder, Samuel Douglas and Henry Cron for appellant.
    The order adjudging the petitioner in criminal contempt for conduct alleged to have occurred in the immediate view and presence of the court is reviewable by certiorari. (Matter of Teitelbaum, 84 App. Div. 351; 185 N. Y. 540; People ex rel. Taylor v. Forbes, 143 N. Y. 219; People ex rel. Munsell v. Court of Oyer & Terminer, 101 N. Y. 245; People ex rel. Choate v. Barrett, 56 Hun, 351; Matter of Waldman v. Churchill, 262 N. Y. 247; People ex rel. Bernstein v. La Fetra, 171 App. Div. 269; People ex rel. Palmieri v. Marean, 86 App. Div. 278; People ex rel. Barnes v. Court of Sessions, 147 N. Y. 290; Matter of Cochran, 237 N. Y. 336; Matter of Jones, 181 N. Y. 389.)

      Harold M. Kennedy for respondent.
    Since the commitment was not summary and the contempt order grew out of a civil proceeding, it is reviewable by appeal, and by appeal only. (Matter of Hanbury, 160 App. Div. 662; Eastern Concrete Steel Co. v. Bricklayers’ & Mason Plasterers’ Union, 200 App. Div. 714; People ex rel. Negus v. Dwyer, 90 N. Y. 402.)
   Hubbs, J.

Appellant is an attorney who was adjudged guilty of criminal contempt during the trial of a civil action in the immediate hearing and presence of the court.

He applied to the Appellate Division for an order of certiorari directed to the trial justice requiring him to certify and return his acts and proceedings adjudging the petitioner in criminal contempt. The application was denied by the Appellate Division, apparently on the ground that the proper method of reviewing the order made by the trial court was by appeal and not by an order of certiorari. That presents the only question for decision by this court.

Under the common law of England, courts had inherent power to punish summarily for contempt of court. That principle became a part of our common law and constitutes the source of our early statutes upon the subject. (Matter of Barnes, 204 N. Y. 108.)

The duty resting upon courts to preserve order, to prevent the interruption of their proceedings, to maintain the respect and authority due the court, and prevent disorderly, contemptuous or insolent behavior, is now embodied in article 19 of the Judiciary Law (Cons. Laws, ch. 30) (Laws of 1909, ch. 35). That statute enumerates the acts which constitute criminal contempt and prescribes the procedure for punishing and the nature and extent of the punishment,

The conduct of appellant set forth in the order of commitment constituted criminal contempt of court during'the trial of a civil action within the provisions of the-Judiciary Law, section 750. •

The- proceeding to punish for a criminal contempt of court arising during the trial of a civil action constitutes a civil special proceeding. (General Construction Law [Cons. Laws, ch. 22], § 46-a; Civ. Prac. Act, §§ 4 and 5; People ex rel. Negus v. Dwyer, 90 N. Y. 402; Eastern C. S. Co. v. B. & M. P. I. U. Local, No. 45, 200 App. Div. 714.)

Ordinarily, an order made in a civil special proceeding is reviewed by appeal and not by certiorari. (Civ. Prac. Act, § 631; People ex rel. Negus v. Dwyer, supra; Matter of Hanbury, 160 App. Div. 662.)

A criminal contempt in the “ immediate view and presence ” of the court may be punished summarily if the acts constituting such contempt are seen or heard by the presiding judge so that he can assert of his own knowledge the facts constituting the contempt in the mandate of commitment. In that case, no proof need be given. The knowledge of the judge takes the place of proof and his recital in the mandate of commitment of the facts upon which the adjudication of contempt is based is sufficient. (People ex rel. Barnes v. Court of Sessions, 147 N. Y. 290; Judiciary Law, § 755.)

If, however, the acts constituting the contempt are not committed within his hearing or he does not see them and is, therefore, unable to so state in the mandate of commitment, it is necessary that the offender be given an opportunity to be heard after notice. (Judiciary Law, § 751; People ex rel. Choate v. Barrett, 56 Hun, 351; affd., 121 N. Y. 678.)

In the first case, the judge acts upon his own knowledge to vindicate the dignity of the cotut. In the other, he acts upon proof submitted after an opportunity has been given the offender to answer.

In the first case, no record can be made, as the judge decides upon his own knowledge, taking into consideration the effect which the conduct of the offender produced in his own mind. In the second case, a record is made, consisting of the proof offered to sustain the charge and the proof if any, offered by the offender. In the second case, the mandate of commitment should be reviewed by an appeal. In the first place, the only method of review which could present a question for determination on appeal is by an order of certiorari. In the case-of an adjudication of criminal contempt in a civil case, the particular circumstances of the offense must be set forth in the mandate of commitment. (Judiciary Law, § 752; Matter of Waldman v. Churchill, 262 N. Y. 247.)

A failure to comply with the statute in that respect renders the commitment totally defective. (Briddon v. Briddon, 229 N. Y. 452.)

Where an order of certiorari is directed to a judge who has made a summary adjudication and issued a mandate of commitment in a criminal contempt proceeding in a civil case, he is obliged to make and file a return which shall set forth the facts within his knowledge upon which he acted in making the adjudication. The return thus made is conclusive. (People ex rel. Fordham M. R. Church v. Walsh, 244 N. Y. 280, 290; Matter of Waldman v. Churchill, supra.)If a return is defective, the court may direct a further return.” (Civ. Prac. Act, § 1298.)

The hearing in the certiorari proceeding is limited to the order and the return and the papers upon which the order was granted. (Civ. Prac. Act, § 1300.)

It is provided by section 1312 of the Civil Practice Act that an order of certiorari is available to review a criminal contempt of court. Section 1286 provides that a certiorari order cannot be granted Where the determination can be adequately reviewed by an appeal to a court or to some other body or officer.” (Subd. 2.)

In the case at bar the determination cannot be adequately reviewed by an appeal as the commitment recites that the appellant was guilty of a criminal contempt in a civil case in the immediate presence and hearing of the court, and it appears that the trial justice saw and heard the whole affair. The summary adjudication was based, therefore, upon the personal knowledge of the trial justice.

In Matter of Teitelbaum (84 App. Div. 351) the defendant was adjudged guilty of a criminal contempt in the immediate view and presence of the court during the trial of a civil action. He was charged with abstracting and secreting the contract which was the subject of investigation on the trial. He was summarily adjudged guilty and the mandate of commitment recited that the trial justice saw the transaction.

The adjudication was based in part upon the observar tians of the trial justice of the act committed in his immediate presence. Summary punishment was, therefore, within the power of the court. (Judiciary Law, § 751.)

The offender appealed to the Appellate Division. That court decided that there was nothing before that court to review. It said: “No court would be authorized to review the proceeding unless a record was made up, properly authenticated, and thereby enable the reviewing court to see what the actual case was upon which the court acted in adjudging the defendant guilty of contempt” (p.353).

The court observed that an affidavit submitted by the appellant could not be treated as taking the place of a properly authenticated return made by the trial justice. It decided that the proper method of review was not by appeal but by certiorari, and dismissed the appeal. This court modified the order of the Appellate Division dismissing the appeal and affirmed the order of the Trial Term (185 N. Y. 540), thereby deciding that as the appeal did not present any question for review, the order of the Trial Term should be affirmed and that the appeal should not have been dismissed.

The decision has always been treated as a definite holding that the proper method of reviewing a mandate committing a person for a criminal contempt during the trial of a civil case in the immediate view and presence of the court where the trial judge personally observed the conduct adjudged to be a criminal contempt is by certiorari. While the Appellate Division reached the right conclusion as to the proper method of review, the case of People ex rel. Taylor v. Forbes (143 N. Y. 219), which it cited as sustaining its conclusion, is not applicable as that case grew out of a proceeding in criminal court. The review in a criminal case is by certiorari. (People ex rel. Taylor v. Forbes, supra; People ex rel. Negus v. Dwyer, supra.)

While the question has not been raised directly in this court since the decision of the Teitelbaum case, it has apparently been assumed that the decision in that case settled the practice and required a review by certiorari. (Matter of Waldman v. Churchill, supra.)

The order of the Appellate Division should be reversed and the motion granted, without costs.

Crane, Ch. J., Lehman, O’Brien, Crouch, Loughran and Finch, JJ., concur.

Order reversed, etc.


text:
    In the Matter of the Claim of Louise Bergman against Buffalo Dry Dock Company, Respondent. State Industrial Board, Appellant.

      (Argued October 1, 1935;
    decided November 19, 1935.)

      John J. Bennett, Jr., Attorney-General (Boy Wiedersum of counsel), for appellant.
    The accident to the decedent arose out of and in the course of the employment. (Matter of Miles v. Gibbs & Hill, Inc., 250 N. Y. 590; Matter of Monaco v. Kesselman’s Baby Stores, Inc., 240 App. Div. 930; Matter of Regan v. Robins Dry Dock & Repair Co., 218 App. Div. 806; Matter of Corrina v. Debarbieri, 247 N. Y. 357; Matter of Wickham v. Glenside Woolen Mills, 252 N. Y. 11; Matter of Buppert v. Platte deutsche Volksfest Verein, 263 N. Y. 338; Matter of Pendl v. Haenel, 229 App. Div. 52; 234 App. Div. 643.)

      Gerard John Hernon for respondent.
    The accident did not arise out of or in the course of the decedent’s employment. (Matter of Heitz v. Ruppert, 218 N. Y. 148; Matter of Daly v. Bates & Roberts, 224 N. Y. 126; Matter of Lebeda v. Pongracz, 256 N. Y. 560; Matter of Luce v. Beiter, 239 App. Div. 23; Van Gee v. Korts, 252 N. Y. 241; Matter of Gifford v. Patterson, Inc., 222 N. Y. 4; Matter of King v. Standard Oil Co., 184 App. Div. 453; Matter of Smith v. Northport Water Works Co., 252 N. Y. 521; Matter of Harris v. Cheney Hammer Corp., 221 App. Div. 199; Matter of Hyatt v. U. S. Rubber Reclaiming Co., 256 N. Y. 571; Matter of Commissioner of Taxation & Finance v. Fure, 264 N. Y. 678; Matter of Berresi v. Ryan, 242 App. Div. 279.)
   Hubbs, J.

Otto Bergman, the deceased employee, was a night watchman employed by the Buffalo Dry Dock Company. His hours of duty were from six p. m. to midnight. He was one of two watchmen employed to work during those particular hours. He had been working about a week prior to the time of the accident. Each watchman was required to make three rounds of the plant every night. These rounds were made every hour and the watchmen alternated so that each man made one round every two hours. On alternate nights one watchman would start on his rounds at six, eight and ten o’clock and on the other nights at seven, nine and eleven o’clock. While one watchman was making the round, the other watchman remained in the office to attend to incidental duties there. In making the rounds of the premises of the employer the watchman was required to .punch two series of signal boxes, using keys supplied by a local telegraph company which maintained the signal system. The signal boxes were arranged in series of ten. The boxes in each series could only be punched by doing so in the numerical order of the boxes and when the tenth box of each series was punched a signal was transmitted to the telegraph company’s office. The telegraph company observed the signals and in the event that none was received would telephone the plant or send a man to ascertain the trouble or the reason for the failure of signals.

On the night deceased received the injuries which caused his death, his co-watchman, who made his last round commencing at ten o’clock in the evening, finished his round at about ten-forty and went home carrying a set of keys with him instead of leaving them with deceased. Deceased required those keys to make a round at eleven o’clock and discovering that his co-watchman had taken the keys decided that he had time enough to procure the keys from the home of his co-watchman. He thereupon started, at about twenty minutes to eleven, to walk to the home of the co-watchman for the purpose of obtaining the keys and while on the way was struck by an automobile, receiving the injuries which caused his death. The time required to walk from the plant of the employer to the home of the co-watchman was variously stated by the witnesses at from ten to twenty minutes.

It was the custom for the man who made the round which began at ten o’clock to leave the plant for the night after he finished that round. That apparently resulted in leaving the office of the employer unattended from the time when the watchman making the ten o’clock circuit began his round until such time as the watchman of a later shift arrived at the plant. Witnesses for the claimant testified that it was the custom for the man making the ten o’clock round to leave when he finished his round, and the employer failed to show any specific instructions or rules to the contrary. In any event, it does not appear that the deceased employee was in any wise responsible for the act of the co-watchman in leaving the plant when he did. Upon the evidence, the Industrial Board found as a fact that the deceased employee was injured while engaged in the regular course of his employment and while working for his employer, and while on his way to the house of his partner, one Michael Donovon, to get the keys which were used to punch the time clocks in the employer’s premises, and which keys were necessary for the said Qtto Bergman to continue his regular duties.”

The Industrial Board also found that the injuries sustained by Bergman which resulted in his death were accidental injuries and arose out of and in the course of his employment. Upon these findings an award was made in favor of the claimant. The Appellate Division, by a divided court, reversed and in its decision stated that it was apparent that the deceased had abandoned his employment.

Leaving the premises of an employer in an effort to further the interest of the employer is not always an abandonment of the employment. (Matter of Ruppert v. Plattdeutsche Volksfest Verein, 263 N. Y. 338.)

Neither is the exercise of poor judgment in what constitutes furtherance of the interest of the employer an insuperable bar to recovery of compensation. (Matter of Ruppert v. Plattdeutsche Volksfest Verein, supra.)

While the deceased employee might have remained in the office and might, by notifying the telegraph company, have obtained the other keys, it cannot be said as a matter of law that he was outside the general duties of his employment in proceeding to the home of his co-watchman to get the keys which the co-watchman was supposed to have delivered to him.

We think, under the facts disclosed by the record, that the Industrial Board reached the correct conclusion.

The order of the Appellate Division should, therefore, be reversed and the award of the State Industrial Board reinstated, with costs in this court and in the Appellate Division.

Crane, Ch. J., Lehman, O’Brien, Crouch, Loughran and Finch, JJ., concur.

Ordered accordingly.


author: Per Curiam.

text:
    Edgar J. Treacy, as Receiver of Acorn Mill Supply Co., Inc., Appellant and Respondent, v. Melrose Paper Stock Co., Inc., Respondent and Appellant.
    (Argued October 16, 1935;
    decided November 19, 1935.)

      Jacob Goldberg for plaintiff, appellant and respondent.
    The alleged counterclaims in the answer could not interfere with the granting of partial or summary judgment. (Smith v. Cranleigh, Inc., 224 App. Div. 376; Dodwell & Co., Ltd., v. Silverman, 234 App. Div. 362.) Error was committed in not awarding double the amount of the admitted indebtedness. (People v. Bryant Co., 114 Misc. Rep. 133; City of New York v. Union Ry. Co.,
      206 App. Div. 472; Matter of N. J. Fidelity & P. G. Ins. Co. v. Van Schaick, 236 App. Div. 223; 261 N. Y. 521; Loucks v. Standard Oil Co., 224 N. Y. 99.)

      Stanley Osserman and Jerome H. Brill for defendant, respondent and appellant.
    There is a triable issue, which cannot be disposed of by a motion for summary judgment. (Ætna Life Ins. Co. v. National Dry Dock & Repair Co., 230 App. Div. 486; Dairymen’s League Cooperative Assra., Inc., v. Egli, 228 App. Div. 164; Reliable Loan & Investment Co. v. Delgus Co., 223 App. Div. 94; Dietz v. Glynne, 221 App. Div. 329; Bank of United States v. Slifka, 148 Misc. Rep. 60; Curry v. Mackenzie, 239 N. Y. 267; General Investment Co. v. Interborough R. T. Co., 235 N. Y. 133; Gravenhorst v. Zimmerman, 236 N. Y. 22; Piedmont Hotel Co. v. Nettleton, 263 N. Y. 25.)
   Per Curiam.

The facts shown by defendant were sufficient to warrant trial of the issues raised by the counterclaims pleaded in the answer. Judgment was sought by defendant for a sum in excess of its admitted indebtedness to the corporation of which plaintiff is receiver. Thus the effect of section 176 of the General Corporation Law (Cons. Laws, ch. 23) was a question not presented. On this record plaintiff was not entitled to any summary judgment.

The judgment of the Appellate Division and that of the Special Term should be reversed and the motion denied, with costs in all courts to the defendant-appellant.

Crane, Ch. J., Lehman, O’Brien, Hubbs and Lough-ran, JJ., concur; Crouch and Finch, JJ., not sitting.

Judgments reversed, etc.


author: Crouch, J.

text:
    In the Matter of the County of Suffolk, Appellant, against The Water Power and Control Commission et al., Respondents.

      (Argued October 3, 1935;
    decided November 19, 1935.)

      M. E. Harby for appellant.
    The Commission was without power to make its determination. The statute authorizing the Commission’s determination was void. (N. Y. Const, art. 3, § 1; Matter of Butler, 101 N. Y. 307; Stevenson v. Diamond Fuel Co., 198 App. Div. 345; Straus v. Guilhou, 80 App. Div. 50; Matter of Equitable Trust Co. v. Hamilton, 226 N. Y. 241; People ex rel. Hotchkiss v. Supervisors, 65 N. Y. 222; Matter of Eiss v. Summers, 205 App. Div. 691; People ex rel. Irwin v. Sawyer, 52 N. Y. 296; People ex rel. Yawger v. Allen, 52 N. Y. 538; People ex rel. Bodine v. Goodwin, 5 N. Y. 568; City of Long Beach v. Public Service Comm., 249 N. Y. 480; Panama Refining Co. v. Ryan, 293 U. S. 388; Darweger v. Staats, 243 App. Div. 380; 267 N. Y. 290; Schechter Poultry Corp. v. United States, 295 U. S. 495; Wichita R. R. & Light Co. v. Public Utilities Comm., 260 U. S. 48.) Section 4 of chapter 847 of the Laws of 1934 is inhibited by section 10 of article 8 of the New York Constitution. (Deady v. Village of Lyons, 39 App. Div. 139; Village of Kenmore v. County of Erie, 252 N. Y. 437.)

      John J. Bennett, Jr., Attorney-General {Henry Epstein and Charles E. McManus of counsel), for The Water Power and Control Commission, respondent.
    Chapter 847 of the Laws of 1934 is a valid constitutional enactment of the Legislature. (People ex rel. Doscher v. Sisson, 222 N. Y. 387; People ex rel. Unger v. Kennedy, 207 N. Y. 533; People v. Kaye, 212 N. Y. 407; Matter of La Rocca v. Flynn, 257 N. Y. 5; People v. Oneida County, 170 N. Y. 105; Matter of Bronx Parkway Comm. v. Hylan, 119 Misc. Rep. 785; 206 App. Div. 688; 236 N. Y. 593.) The Commission did not assume legislative power in violation of section 1 of article 3 of the State Constitution. (Matter of Eiss v. Summers, 205 App. Div. 691; 236 N. Y. 638.) The act does not violate section 10 of article 8 of the State Constitution, in that it pledges the credit of the county for a non-county purpose. (People ex rel. Simon v. Bradley, 207 N. Y. 592; Sun Printing & Pub. Assn. v. Mayor, 152 N. Y. 257; City of Rochester v. Town of Rush, 80 N. Y. 302; People ex rel. Farley v. Winkler, 203 N. Y. 445; Matter of Village of Massena v. St. Lawrence Water Co., 126 Misc. Rep. 524; Milheim v. Moffat Tunnel District, 262 U. S. 710.)

      Edwin R. Lynde, Charles H. Stoll and H. Wilford Leavy for Mortimer D. Metcalfe et al., individually and constituting the Suffolk County Water Authority, intervening respondents.
    Chapter 847 of the Laws of 1934 is not in conflict with section 1 of article 3 of the State Constitution. It does not attempt to delegate legislative power to county Boards of Supervisors and the State Water Power and Control Commission. The statute is general, complete in itself, and takes effect immediately. (Matter of N. Y. El. R. R. Co., 70 N. Y. 327; People v. Board of Supervisors, 35 Barb. 408; Matter of La Rocca v. Flynn, 257 N. Y. 5; Cleveland v. City of Watertown, 222 N. Y. 159; People v. Kaye, 212 N. Y. 407; Bellows v. Raynor, 207 N. Y. 389; Polinsky v. People, 73 N. Y. 65; McEntee v. Kingston Water Co., 165 N. Y. 27; People v. Ulster & Delaware R. R. Co., 128 N. Y. 240; Matter of City of Long Beach v. Public Service Comm., 249 N. Y. 480; New York & O. W. Ry. Co. v. Griffin, 235 N. Y. 174; Isaac v. Marcus, 258 N. Y. 257; City of Mt. Vernon v. Best Development Co., 268 N. Y. 327; Adler v. Deegan, 251 N. Y. 467; Robertson v. Zimmermann, 268 N. Y. 52; New York Steam Corp. v. City of New York, 268 N. Y. 137; People ex rel. Unger v. Kennedy, 207 N. Y. 533; Corning v. Greene, 23 Barb. 33; People ex rel. Baird v. Nixon, 158 N. Y. 221; Drew v. Village of White Plains, 157 App. Div. 394.) The alleged rescinding resolution of the Suffolk county Board of Supervisors is void. Power to reconsider or rescind is not authorized by the statute. Power to repeal is lacking as no legislative power is vested in county boards thereunder. (Matter of Davidson v. Walker, 248 N. Y. 357; People ex rel. Devery v. Coler, 173 N. Y. 103; Matter of Santa Clara Lumber Co. v. Commissioners of Land Office, 209 App. Div. 705; Matter of Long Island R. R. Co. v. Hylan, 240 N. Y. 199; City of Jackson v. Shlomberg, 70 Miss. 4; Huntington Traction Co. v. Walker, 209 App. Div. 904; People ex rel. Thomson v. Board of Supervisors, 35 Barb. 408; People ex rel. Smith v. Clarke, 174 N. Y. 259; People ex rel. McCabe v. Matthies, 179 N. Y. 242; Osterhoudt v. Rigney, 98 N. Y. 222; People ex rel. Hotchkiss v. Supervisors, 65 N. Y. 222; Matter of Equitable Trust Co. v. Hamilton, 226 N. Y. 241; People ex rel. Chase v. Wemple, 144 N. Y. 478; Matter of Scheidecker v. Department of State, 242 App. Div. 119; People ex rel. Tishman & Son v. Cantor, 109 Misc. Rep. 495; Bandler v. Hill, 84 Misc. Rep. 359; 163 App. Div. 970; 220 N. Y. 736; Ashton v. City of Rochester, 60 Hun, 372; 133 N. Y. 187; Matter of Fitzgerald, 88 App. Div. 434.) Chapter 847 of the Laws of 1934 does not contravene the provisions of section 10 of article 8 of the State Constitution. (Robertson v. Zimmermann, 268 N. Y. 52; Farmers Bank v.
      Hale, 59 N. Y. 53; People ex rel. McLean v. Flagg, 46 N. Y. 401; People v. Ingersoll, 58 N. Y. 1; Rosalsky v. State, 254 N. Y. 117; Matter of Village of Booneville v. Maltbie, 156 Misc. Rep. 6; Curtis v. Leavitt, 15 N. Y. 9; Savage v. Burnham, 17 N. Y. 561; Merrill v. Agricultural Ins. Co., 73 N. Y. 452; Brennan v. City of Buffalo, 162 N. Y. 491; Chemung Canal Bank v. Payne, 164 N. Y. 252; People v. Cooke, 197 App. Div. 155.) The Legislature may create or provide for the creation of an authority with limited powers and for temporary purposes to construct and administer self-liquidating public improvements or a water supply system in the various counties where such authority is not vested with general cowers of local government similar to those granted to pounties, towns, cities and villages. (Robertson v. Zimmermann, 268 N. Y. 52; Koenig v. Flynn, 258 N. Y. 292; Wattack v. City of New York, 3 Hun, 84; 67 N. Y. 23; Village of Kensington v. Town of North Hempstead, 261 N. Y. 260.) The county water authority act is valid and constitutional in all respects and the Suffolk County Water Authority is a de jure public benefit corporation. (People v. Kaye, 212 N. Y. 407; Matter of City of Long Beach v. Public Service Comm., 249 N. Y. 480; N. Y., O. & W. Ry. Co. v. Griffin, 235 N. Y. 174; Parfitt v. Furguson, 159 N. Y. 111; Ely v. Holton, 15 N. Y. 595; Matter of Miller, 110 N. Y. 216; American Laundry Machine Co. v. Union Trust Co., 153 Misc. Rep. 55; Matter of Byrne, 260 N. Y. 465; Matter of Bristol v. Buck, 201 App. Div. 100; Browne v. City of New York, 241 N. Y. 96; People ex rel. Wood v. Draper, 15 N. Y. 532; Horton v. Andrus, 191 N. Y. 231; People ex rel. Hon Yost v. Becker, 203 N. Y. 201; Canavan v. Village of Mechanicville, 229 N. Y. 473; Matter of Village of Boonville v. Maltbie, 156 Misc. Rep. 6; Schieffelein v. Goldsmith, 253 N. Y. 243; People v. Mancuso, 255 N. Y. 463; People v. Nebbia, 262 N. Y. 259; 291 U. S. 502; Atkins v. Hertz, 261 N. Y. 352; 291 U. S. 641; Cleveland v. City of Watertown, 222 N. Y. 159.)
   Crouch, J.

Chapter 847 of the Laws of 1934 is an act authorizing the Board of Supervisors of any county to create a county water authority. Section 1 provides that: “ The board of supervisors of any county may, by resolution, with the consent of the water power and control commission of the state of New York, create a county water authority which shall be known as.............. ............county water authority, inserting the name of such county creating such authority. Such authority shall be a body corporate and politic constituting a public benefit corporation. It shall consist of three members who shall be appointed by the board of supervisors. * * * The corporate existence of such authority shall continue for five years and thereafter until all its liabilities have been met and its bonds have been paid in full. Upon ceasing to exist, all its rights and properties shall pass to the county for which it was created.”

The act prescribes at length the powers and duties of the authority, including, among others, the power to acquire, hold and dispose of, in the name of the authority, by purchase or condemnation, real estate necessary for its corporate purposes; to acquire, construct, maintain, develop and operate a water supply system; to sell surplus water outside of the county; and from time to time to issue its own negotiable bonds in the form and manner provided. The Board of Supervisors upon the creation of the authority is required to provide funds for preliminary expenses. The act also provides that nothing therein contained shall be held to alter or abridge the powers and duties of the State Department of Health or of the Water Power and Control Commission over water supply matters.

On June 25, 1934, the Board of Supervisors of Suffolk county passed a resolution pursuant to the provisions of the statute, purporting to create a county water authority to be known as Suffolk County Water Authority.” It named three persons as members of the authority, fixed their terms of office, appropriated a sum for preliminary expenses and directed the Clerk of the Board to forward a certified copy of the resolution to the Water Power and Control Commission with a request that the Commission consent to the creation of the authority pursuant to the provisions of the statute. Under date of November 5, 1934, a formal petition was made by the Board of Supervisors to the Commission praying for the requisite consent. Thereafter the Commission acting in accordance with its usual procedure in relation to water supply under the provisions of article XI of the Conservation Law (Cons. Laws, ch. 65), held hearings, investigated what it deemed to be the relevant and material matters connected with the proceeding, and on January 23, 1935, rendered a decision consenting to the creation of the authority.

Before that decision was made and under date of December 27, 1934, the Board of Supervisors for some reason which does not appear, adopted a resolution which in terms rescinded the resolution of June 25, 1934, creating the authority, and provided that the Commission be notified that Suffolk County wished to withdraw the application for consent to create such Water Authority at this time.”

The Commission having rendered its decision on the merits without regard to the rescinding resolution of December 27, 1934, this certiorari proceeding was brought to review its action. It is the contention of the county that the Water Power and Control Commission was without power to act, first, because the act of 1934 is unconstitutional and wholly void; and second, because even though the act were valid, the rescinding resolution of December 27, 1934, had deprived the Commission of jurisdiction.

If the statute is void in toto upon constitutional grounds, the Commission was doubtless without authority to act. The main point of attack is under section 1 of article III of the State Constitution. It is said that the act was an attempt to delegate legislative power to County Boards of Supervisors and to the Water Power and Control Commission. The act is a general statute complete in itself and presently effective dealing with a subject-matter of state-wide concern over which the Legislature has full control. It leaves to the County Board as a local matter and to the State Commission as a State matter, the power to determine the necessity and desirability of creating an authority under its provisions. If an authority is created, nothing is added to or taken from the express provisions of the act. Within the ruling of many analogous cases there is no unlawful delegation of legislative power. (People ex rel. Unger v. Kennedy, 207 N. Y. 533; Cleveland v. City of Watertown, 222 N. Y. 159; People ex rel. Doscher v. Sisson, 222 N. Y. 387; Matter of LaRocca v. Flynn, 257 N. Y. 5.) Nor is there any substance to the attack under section 10 of article VIII of the Constitution. (Robertson v. Zimmermann, 268 N. Y. 52.) Moreover, there can be no doubt that the Legislature may create or provide for the creation of an authority for various purposes where there is no attempt to grant it general powers of local government. (Robertson v. Zimmermann, supra; Gaynor v. Marohn, 268 N. Y. 417.) The other constitutional criticisms need not be specifically referred to. Some of them are purely academic and the others are without merit.

As to the effect of the rescinding resolution of December 27, 1934, upon the jurisdiction of the Commission, we agree with the Appellate Division. The Commission’s power to act in the matter, once invoked, rested not alone upon the statute here in question, but was to be found also in the jurisdictional provisions of article XI of the Conservation Law. Having been set in motion and having investigated the whole situation at a considerable expenditure of time and effort, it could render its decision without reference to the controversy which had arisen between the Board of Supervisors and the Water Authority. If, after the adoption of the rescinding resolution, the Water Authority continued legally to live, the consent of the Commission would be presently operative. If the Water Authority had never achieved a legal existence, then the consent would be operative if and when another authority was legally created. The right of the State to determine from its own point of view the question of the necessity and desirability of creating an authority, was not affected by the veering winds of local opinion.

The contention of the Board of Supervisors with respect to the jurisdiction of the Water Power and Control Commission incidentally involved an attack upon the legal existence of the Water Authority. Upon application the latter was permitted to intervene in the certiorari proceeding and filed an answer to the petition. The Appellate Division seems to have been of the opinion that the issues involved in that controversy were not before it, since the Commission had no jurisdiction to deal with them and did not do so. Accordingly, the point was left open. The parties have fully presented their arguments and ask a present decision. We think we may deal briefly with the question as an incident of the main controversy. As the statute stood when the resolution of June 25, 1934, was adopted, there was nothing in its language to indicate with certainty that the consent of the Water Power and Control Commission should precede a resolution by the Board of Supervisors in terms creating a county Water Authority. (Cf. Laws of 1935, ch. 176, amending Laws of 1934, ch. 847, so as to require prior consent.) It is entirely clear, however, that until there was concurrent action by the Board and the Commission, no Water Authority could come into existence as a body corporate. Without attempting the refinement of determining whether the action of the Board was in its nature legislative, administrative or quasi-judicial, the plain fact is that the county set out to incorporate a public benefit corporation under a statute permitting it to do so; and that before the proceedings to incorporate were completed, it chose to discontinue them. That is a privilege which any body of private persons seeking to incorporate may exercise, and we know of no good reason why a county should not have the same privilege.

The conclusion is that while the act of the county in discontinuing the proceedings to incorporate did not affect the jurisdiction of the Water Power and Control Commission, it did effectually prevent the coming into legal existence of the proposed authority as a body corporate.

The determination of the Appellate Division should be modified by holding that the Suffolk County Water Authority never became a de jure public benefit corporation.

The order of the Appellate Division should be modified in accordance with this opinion and as so modified affirmed, without costs.

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

Ordered accordingly.


text:
    Louis Tortora, Respondent, v. The State of New York, Appellant.
    (Claim No. 21971.)

      (Argued October 11, 1935;
    decided November 19, 1935.)

      John J. Bennett, Jr., Attorney-General {Leon M. Layden of counsel), for appellant.
    The doctrine of res ipso loquitur has no application. (Marceau v. Rutland R. R. Co., 211 N. Y. 203; Hardie v. Boland Co., 205 N. Y. 336; Francey v. Rutland R. R. Co., 222 N. Y. 482; Whitcher v. Board of Education, 233 App. Div. 184; 236 App. Div. 293; Plumb v. Richmond Light & R. R. Co., 233 N. Y. 285; Galbraith v. Busch, 267 N. Y. 230; Slater v. Barnes, 241 N. Y. 284.)

      James A. Leary and Walter A. Fullerton for respondent.
    Claimant is entitled to the most favorable view of the evidence. (Quinlan v. Welch, 141 N. Y. 158; Crapo v. City of Syracuse, 183 N. Y. 395; People v. Journal Co., 213 N. Y. 1; Jerome v. Queen City Cycle Co., 163 N. Y. 351; Fealey v. Bull, 163 N. Y. 397; King v. Village of Fort Ann, 180 N. Y. 496; Koehler v. New York Steam Co., 183 N. Y. 1; Rush v. Bauland Co., 82 App. Div. 506; World Exchange Bank v. Commercial Casualty Ins. Co., 255 N. Y. 1; Haber v. Paramount Ice Corp., 264 N. Y. 98.) The State was negligent. (Stubbs v. City of Rochester, 226 N. Y. 516; Burd v. Bleischer, 208 App. Div. 499; Hancock v. Steber, 208 App. Div. 455; Schwier v. N. Y. C. & H. R. R. R. Co., 90 N. Y. 558; Koehler v. New York Steam Co., 183 N. Y. 1; Hart v. Hudson River Bridge Co., 80 N. Y. 622; Henry & Co. v. Talcott, 175 N. Y. 385; Conway v. Naylor, 222 N. Y. 437; Warner v. N. Y., O.

      & W. Ry. Co., 209 App. Div. 211; Barrett v. Lake Ontario Beach Imp. Co., 174 N. Y. 310; Condran v. Park & Tilford, 213 N. Y. 341; Meisle v. N. Y. C. & H. R. R. R. Co., 219 N. Y. 317; Robert v. U. S. S. B. Emergency Fleet Corp., 240 N. Y. 474; Parnell v. Holland Furnace Co., 234 App. Div. 567; 260 N. Y. 604; Munsey v. Webb, 231 U. S. 150.) The principle of res ipso loquitur applies. (Breen v. N. Y. C. & H. R. R. R. Co., 109 N. Y. 297; Griffen v. Manice, 166 N. Y. 188; Marcean v. Rutland R. R. Co., 211 N. Y. 203; Galbraith v. Busch, 267 N. Y. 230; Webster v. Richmond Light & R. R. Co., 158 App. Div. 210; Ward v. Iroquois Gas Corp., 233 App. Div. 127; 258 N. Y. 124; Whitcher v. Board of Education, 236 App. Div. 293.)
   Crouch, J.

The claim of the respondent as claimant in the Court of Claims was dismissed at the close of his case; the Appellate Division reversed and ordered a new trial, from which appeal was taken on a stipulation for judgment absolute.

The claimant, while an inmate of Sing Sing Prison, started a fire in a stove which had been supplied and installed by the prison authorities for his use in warming a small fire house. The stove, previously used in the warden’s garage, had been there connected with a hot water tank by two pipes running up the back of the stove, which were still attached. It had not been actually in use for some four months previously.

After the fire was fairly going, the claimant returned to put on more coal. The stove then exploded, seriously injuring him. He testified that before it blew up he saw smoke ” issuing from the pipes in the rear. A heating engineer testified that unless the stove had been turned upside down and drained, water would remain in it, and if confined by an obstruction of the pipes would explode when a fire was started. From these facts the Appellate Division has inferred that steam was the explosive force. It is argued by appellant that the doctrine of res ipso loquitur does not apply to the case, because the explosion might have been caused by some other agency or some latent defect in the stove, as in Galbraith v. Busch (267 N. Y. 230).

When an automobile swerves and leaves the road for no definitely assignable reason, it is altogether possible that the accident waS due to either of several causes, the failure of the steering gear or a lapse on the part of the driver. Both frequently happen. When a cable parts, as in Duhme v. Hamburg-American Packet Co. (184 N. Y. 404) or Anderson v. International M. M. Co. (238 App. Div. 509; affd., 264 N. Y. 425), it may with fair likelihood be the result either of a defect in the cable or a sudden strain applied to it. In all such cases the balance of probabilities between causes which entail liability and others which do not is equal enough so that an inference of fact which entails liability is the result of mere speculation.

Inference is never certainty, but it may be plain enough to justify a finding of fact. (Hart v. Hudson River Bridge Co., 80 N. Y. 622.) The operation of a stove cannot cause it to explode, if it does not contain confined water or some other explosive. It is conceivable that there might have been some other explosive in the stove, but it is so far unlikely that no definite hypothesis of this is even suggested by the appellant. The only reasonable conclusion is that this was attributable to the cause assigned by claimant’s witnesses, and the inference from this is that it was due to negligence on the part of the appellant, for the result was predictable and the condition one which could easily be ascertained.

The order should be affirmed and judgment absolute ordered against the appellant on the stipulation, with costs in all courts, the damages to be fixed by the Court of Claims.

Crane, Ch. J., Lehman, O’Brien, Loughran and Finch, JJ., concur; Hubbs, J., not sitting. .

Ordered accordingly.


author:
Finch, J.
      Lehman, J.

text:
    Yonkers Builders Supply Company, Appellant, v. Petro Luciano & Son, Inc., et al., Defendants, and Globe Indemnity Company, Respondent. (Actions Nos. 1 and 2.)

      (Argued October 10, 1935;
    decided November 19, 1935 )

      William A. Walsh and Joseph J. McCann for appellant.
    The appellant did not release and discharge the defendant-respondent by accepting the notes and adjourning the trial of the case. (Montrose v. Baggott, 161 App. Div. 494; 220 N. Y. 686; Berger Mfg. Co. v. City of New York, 206 N. Y. 24; Harley v. Plant, 210 N. Y. 405; Ringle v. Matthiessen, 10 App. Div. 274; 158 N. Y. 740; Rukeyser v. Fountain & Choate, Inc., 185 App. Div. 263.)

      Thomas E. O’Brien and Thomas F. Conway for respondent.
    The surety, upon the hen cancellation undertakings, was discharged by extensions of time given to the principal debtor without the knowledge or consent of the surety; by the acceptance of the notes and mortgage, and by the acceptance of the various renewal notes. (Ducker v. Rapp, 67 N. Y. 464; Murray v. Marshall, 94 N. Y. 611; National Park Bank v. Koehler, 204 N. Y. 174;
      Montrose v. Levenson, 132 App. Div. 928; Thomas Motor Branch Co. v. U. S. Fidelity & Guaranty Co., 153 App. Div. 32; 211 N. Y. 574; Foo Long v. American Surety Co., 146 N. Y. 251; Place v. McIlvain, 38 N. Y. 96; Brown v. Farmers Loan & Trust Co., 117 N. Y. 266; Bangs v. Strong, 7 Hill, 250.) If there is no privity of contract, nor any relationship between the plaintiff and the surety, the plaintiff has no standing to prosecute the action against the surety. (Aeschlimann v. Presbyterian Hospital, 165 N. Y. 296; Morton v. Tucker, 145 N. Y. 244; Smith v. City of New York, 32 Misc. Rep. 380.) Because of failure promptly to correct the exaggerated amount in the first lien filed against the county job, the plaintiff lost the right to enforce the liens against both the county and the State jobs. (Aeschlimann v. Presbyterian Hospital, 165 N. Y„ 296.)
   Finch, J.

These are actions to foreclose mechanics’ liens. The defendant Petro Luciano & Son, Inc., entered into a contract with the county of Westchester for the construction of a highway. It also entered into a contract with the State of New York for the construction of a highway. The. plaintiff-appellant, the Yonkers Builders Supply Company, furnished cement to the Luciano company for both contracts.

On August 21, 1929, the plaintiff filed a notice of lien against the county contract for the sum of $24,000. The Luciano company thereupon obtained from the Globe Indemnity Company, the respondent herein, an undertaking discharging the lien. No attempt was made to enforce this lien, it being permitted to expire. Subsequently, more cement was furnished and, the contractor having failed to pay in accordance with the terms of the contract, a new lien was filed on September 10, 1929, for approximately $20,000. The verification of this lien proved to be defective and it was refiled on September 30, 1929. A lien against the State contract for more than $6,000 was filed on August 23, 1929. Both of these liens were discharged by court order upon the filing of an undertaking by the respondent. In January, 1930, these suits were commenced to foreclose the hens.

Jn the fall of 1930 the Luciano company obtained a new State contract and the plaintiff contracted to supply cement for the work. In the course of the negotiations the question of the last two hens, bonded and sued on as above, was raised and an adjustment was had. It was agreed that the actions were to be adjourned by stipulation and that Petro Luciano & Son, Inc., would give the plaintiff notes for the sum owed, indorsed by the Lucianos individually and secured by a mortgage on property owned by Petro Luciano. The stipulations were signed on November 8, 1930.

The case was reached for trial on November 10th but was adjourned to the 12th, at the request of counsel for the plaintiff. On the 12th it was adjourned again in accordance with the stipulations. The Globe Indemnity Company did not object to the adjournment but it was not apprised of the execution of the notes or mortgage. The adjournment of the trial with the consent of the surety was from November until May. The time of payment of the notes was in February, but the notes were renewed regularly until the plaintiff insisted upon going to trial because of the failure to pay the notes. The Special Term granted judgments against Petro Luciano & Son, Inc., and the Globe Indemnity Company. The Appellate Division reversed on the law and the facts.

The new findings of fact of the Appellate Division must first be considered. The Appellate Division found that the plaintiff was guilty of fraud and was not in court “ with clean hands.” These findings appear to be based upon a contention by the respondent Globe Indemnity Company that the plaintiff and his attorney entered into a scheme with the principal debtor and Petro Luciano and his wife, the indemnitors to the surety company, the purpose of which was to obtain satisfaction of the plaintiff’s claim from the surety company and to reheve the principal debtor and its indemnitors of that burden. It would unduly lengthen this opinion to review the fact situation. Suffice it to say here that the record does not support the finding of fraud or of unclean hands or inequitable conduct on the part of the plaintiff, even assuming that fraud had been pleaded. It does contain evidence of a number of transactions between the attorney for the plaintiff, the Luciano company and the Lucianos individually, but these transactions took place after the stipulations were agreed to and at a time when the attorney who acted for the plaintiff was employed also by the Lucianos as their own counsel. It is clear that in all these transactions the plaintiff is not involved, the attorney acting solely in his position of counsel to the Lucianos. Furthermore, no fraud or defense of unclean hands was pleaded in the answer of the defendant surety, although the answer was amended at the trial to plead inequitable conduct.

The Appellate Division also found that the plaintiff abandoned the claims upon which these actions are based. The main evidence to support this finding is testimony that the attorney who had originally acted for the plaintiff and thereafter for the contractor, was present when the contractor paid his original attorney for services rendered in connection with several matters, including the hen proceedings, and although it was stated that the latter proceedings were finished, the attorney who had originally acted for the plaintiff did not demur. This did not bind the plaintiff. Neither this nor the other findings referred to by the respondent are adequate to support a finding of abandonment by the plaintiff.

Nor was the indebtedness represented by the hens paid or the hens discharged by the acceptance of the notes and mortgage by the plaintiff. (Rukeyser v. Fountain & Choate, Inc., 185 App. Div. 263.)

The respondent further contends that although neither the Special Term nor the Appellate Division have found the plaintiff guilty of exaggerating the amount of the hens, the facts as found clearly show such exaggeration. No such result follows. The facts found show that the first lien entered was for an amount $10,000 in excess of what was actually owed. This was the result of a mistaken belief on the part of the plaintiff that a check received by it as part payment was not good. Shortly afterward the plaintiff learned of its mistake but nevertheless did not correct the amount. On this ground the respondent rests its contention of exaggeration. This hen, however, was permitted to lapse and it is probable that the amount was not corrected because the plaintiff intended to and did permit the hen to lapse. Inaccuracy in amount of hen, if no exaggeration is intended, does not void a mechanic’s hen; willfulness also must be shown. (Goldberger-Raabin, Inc., v. 74 Second Ave. Corp., 252 N. Y. 336. See Aeschlimann v. Presbyterian Hospital, 165 N. Y. 296.) Willfulness on the part of the plaintiff has not been proven, nor does the claimed exaggeration involve a hen now being foreclosed.

The remaining and vital question is whether the plaintiff, by entering into binding stipulations postponing the trial of the actions and taking notes and a mortgage in settlement if paid, discharged the respondent. What fohows is not in conflict with the general principle of law that in the ordinary case of suretyship an agreement on the part of the creditor which operates to extend the time of payment of the original debt and suspends the right of action against the principal, discharges the surety, unless he has acquiesced in such extension. (National Park Bank v. Koehler, 204 N. Y. 174.) This principle does not apply in the case at bar because of the nature of the undertaking here given.

An undertaking given to discharge a lien differs in important particulars from that of the ordinary surety-ship. In the first place, it is a substitute, so far as the rights of the lienor are concerned, for the fund or property subject to the lien. In Harley v. Plant (210 N. Y. 405, at p. 410) this court said: The undertaking does not change the relation or rights of the parties otherwise than in substituting its obligations for the fund subject to the lien, and it was not within the legislative purpose in permitting the substitution to deteriorate the lienor’s rights.” Similarly in Berger Mfg. Co. v. City of New York (205 N. Y. 24, 30) this court said: The undertaking does not change the relation and rights of the parties other than to substitute its provisions for the fund remaining due or to become due from the municipality to the contractor.”

While in the ordinary case of guaranty or suretyship the creditor for his own benefit seeks and desires the additional security, in the case at bar the undertaking is given for the benefit of those owning the fund or property and against the will of the lienor, who does not desire the discharge of the hen and would prefer to keep the same. The effect and purpose of the undertaking in the case at bar was to release the funds to the defendant contractor and to reheve the pubhc official in the payment of this contractor from the effects of the plaintiff’s hen; The amount of the undertaking is determined by the court, and not by the henor, and where, as here, the undertaking is furnished by a surety company, the henor lacks the right to compel justification by the surety and is not even entitled to personal service of a copy of the undertaking. Wdien this surety furnished the undertaking herein, it must be presumed to have had knowledge of the precise nature and purpose of the undertaking and that it takes the place of the fund or property subject to the hen. It cannot be contended successfully that once a hen is filed the henor and the contractor cannot compromise, settle or adjust the claim, or extend the time of payment of the indebtedness between them without the consent of the owner, in the case of a private hen, or the custodian of the fund in the case of a pubhc hen. When an undertaking is substituted and the hen released, the rights of the henor are not less. (Harley v. Plant, supra.)

It fohows that in each action the judgment of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division.

Lehman, J.

(concurring). The plaintiff filed notices of liens under contracts for public improvements. The liens attached to moneys of the State or county applicable to the construction of such improvements. (Lien Law [Cons. Laws, ch. 33], § 5.) The statute which created the hens defined their limits and provided the manner in which they might be enforced. By the filing of a notice, the henor obtained the rights accorded by the statute — no more and no less. Any rights acquired by the filing of a notice of lien upon the moneys which, by the statute, were made subject to the hen, might, from their inception, be discharged or defeated by the filing of an undertaking “ conditioned for the payment of any judgment * * * which may be recovered in any action ” to foreclose the hen. (§ 37.) Then, by operation of law, even without the consent of the henor, the obHgation of the bond was substituted for the fund which was subject to the Hen. The relation and rights of the parties remained otherwise-unchanged (Harley v. Plant, 210 N. Y. 405), but the undertaking brought in a new party, and thus created a new relation involving new rights and obHgations. The obligations of the surety, though voluntarily assumed for a valuable consideration, are defined and measured by the statute and the language of the bond. The rights of the Henor are defined and measured in the same manner. A Henor has no choice of whether to enforce a Hen upon a fund or to avail himself of the obhgations of the undertaking. He may be relegated, even against his wiH, to an action to enforce the obHgation of the undertaking; but if he seeks to avail himself of the benefit of the statutory undertaking, he subjects himself to any limitation upon his rights, express or imphcit, in the terms of the undertaking. Thus both the rights of the Henor and the correlative obHgation of the surety are in aU cases determined by the statutory undertaking.

The obligation of the surety company is one of surety-ship. Correlative rights and obligations arise from that relationship. They may not be cast aside because the surety receives compensation or because the relationship has been thrust by statute upon the lienor. It is often said that a creditor discharges a surety by any dealing or arrangement with the principal debtor without the surety’s assent, which at all varies the situation or rights of the parties. (1 Brandt on The Law of Suretyship and Guaranty, § 255.) Accordingly the rule is well established that “ when the obligation of the surety is for the debt of the principal, if the time of payment is without the consent of the surety, by a binding agreement between the creditor and the principal, extended for a definite time, the surety is discharged. The reason is that the surety is bound only by the terms of his written contract, and if those are varied without his consent it is no longer his contract and he is not bound by it.” (Id. § 376.) These tests must be applied here, but even so, I reach the same conclusion as Judge Finch that the surety is left without a valid defense.

The time at which a debt is payable constitutes one of the terms of the debt itself. A binding agreement with the debtor extending the time for payment alters the risk assumed by a surety for the payment of that debt. Except for such extension, the surety might at any time pay the debt and compel reimbursement from the principal. The obligation of the surety cannot be altered without the surety’s consent to cover a risk without such safeguard. Here the surety did not guarantee payment of the debt of the principal. Its obligation was confined to the payment of a judgment recovered in an action to foreclose a lien. No such judgment could be recovered if the hen was defective, yet the debt might still remain in existence and be collectible by action at law. The •defendant thus agreed to pay not an existing debt, payable then or at some time in the future, but to pay a judgment which might never come into existence. How or when or in what amount such a judgment would be obtained was then undetermined, and the surety had no right to object to any fair and honest agreement between the parties intended to govern such matters.

The surety is not a necessary party to an action to foreclose the lien, yet a “ judgment therein establishing that the hen when discharged by the undertaking was valid and enforceable in a fixed amount is conclusive as an adjudication in an action upon the undertaking against the sureties, although they were not parties to the former action.” (Harley v. Plant, supra, p. 410.) The giving of the undertaking in no way altered the right and power of the henor to control the action to foreclose the hen. That remained as before, and when the henor chose, for its own benefit but without bad faith, to enter into an agreement with its debtor to adjourn the trial for a definite time pending consummation of a settlement, it merely exercised rights which belonged to it and which it never abandoned. The surety’s risk and its habihty are not increased by exercise of a right by a creditor which the parties must have understood the creditor retained. Concededly, a judgment has been recovered in an action brought to foreclose a lien, as stipulated in the bond. There was no stipulation in the bond which expressly or by implication restricted the plaintiff in its control of the foreclosure action. The plaintiff has proceeded in manner permitted by law.

Judgment should be reversed.

Crane, Ch. J., O’Brien, Crouch and Loughran, JJ., concur with Finch, J.; Lehman, J., concurs in separate opinion, in which ah concur; Hubbs, J., not sitting.

Judgment accordingly.