author: Loughran, J.

text:
    Oscar Berg et al., Appellants, v. Jacob Hoffman, Respondent.
    Argued May 21, 1937;
    decided July 13, 1937.

      R. Waldron Herzberg and R. Monell Herzberg for appellants.
    The evidence presented on the trial warranted the verdict rendered by the jury in favor of the plaintiffs. (Elco Shoe Manufacturers, Inc., v. Sisk, 260 N. Y. 100;
      Murray v. Beard, 102 N. Y. 505; Wendt v. Fischer, 243 N. Y. 439.)

      John L. Crandell for respondent.
    Refusal to strike out the evidence of an alleged oral contract preceding the written agreement required reversal of the judgment. (Mersereau v. Mersereau, 49 App. Div. 647; Harris v. Eakins, 201 App. Div. 257; Wallach v. Riverside Bank, 206 N. Y. 434; Cornell Co. v. McKiever, 214 App. Div. 738; Smith v. Smith, 214 App. Div. 383; Gulickson v. Seglin Constr. Co., 152 Misc. Rep. 624; Sims v. Farson, 162 App. Div. 426; 220 N. Y. 710.) The alleged oral contract was not enforceable under the Statute of Frauds. (R. & L. Co. v. Metz, 175 App. Div. 276; 219 N. Y. 556.) The alleged oral contract was illegal and void. (Riker v. Comfort, 140 App. Div. 117; Hall v. Schultz, 4 Johns. 240.)
   Loughran, J.

Premises owned by the plaintiffs were subject to a mortgage for $15,000. The holder of the lien agreed with them to take $2,000 for it. Defendant, who had done the plaintiffs many kindly offices and had been their trusted adviser, undertook to put through the deal. The terms of that undertaking are the subject of this controversy. It is undisputed, however, that having paid $2,000 for an assignment of the mortgage to himself, the defendant offered to surrender it to the plaintiffs when he was paid $3,000 by them; and that an ensuing wrangle resulted in a formal written instrument in accordance with which he satisfied the mortgage upon his receipt from them of $2,750. This is an action to recover back $750 of that payment as money collected by duress.

The jury decided for the plaintiffs. Under the court’s charge the finding must have been that the defendant was their agent to buy the mortgage and that he “ betrayed his trust and made them pay $750 to protect themselves.” On appeal by the defendant to the Appellate Division, the judgment was reversed on the law and facts and the complaint dismissed. It was there held “ that the oral contract was void under the Statute of Frauds, was unilateral, without consideration, and, therefore, void; and *• * * that whatever oral arrangements had been made were merged in the written contract.” (249 App. Div. 913.) The plaintiffs bring these rulings here for review.

It is the conception of the defendant that the first transaction was on his part at most “ an.agreement to agree ” to sell the mortgage to the plaintiffs. It is on this basis that he invokes the Statute of Frauds relating to personal property. (Pers. Prop. Law [Cons. Laws, ch. 41], § 85.) But that was not the only admissible view. The jury were not unwarranted in finding that the defendant manifested only the intention to act as agent for the plaintiffs. On that finding, the statute was no defense. (Stover v. Flack, 41 Barb. 162; 30 N. Y. 64. Cf. R. & L. Co. v. Metz, 175 App. Div. 276; 219 N. Y. 556. See Colt v. Clapp, 127 Mass. 476, 480; Wiger v. Carr, 131 Wis. 584.)

Nor was the case against the defendant necessarily no more than his mere default on a wholly gratuitous undertaking. According to the plaintiffs’ proof, it was he who insisted upon his taking control of their engagement with the mortgagee, although they protested that there was no need of his intervention. He said it wasn’t necessary to do anything, he would take care of everything for us.” If the defendant entered upon such a trust, he was bound to a full execution thereof. (Siegel v. Spear & Co., 234 N. Y. 479.)

The jury must also be taken to have found that the plaintiffs signed the subsequent writing under the compulsion of fear that otherwise they would suffer a greater detriment. On this finding that there was no binding assent by them the paroi evidence rule was inapplicable. (3 Williston on Contracts [Rev. ed.], § 634. See Kilpatrick v. Germania Life Ins. Co., 183 N. Y. 163, and the cases there cited.)

The foregoing considerations dispose of the questions presented. If the case involves anything else, it has not been raised.

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

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

Judgments reversed, etc.


source: Caselaw Access Project

author: Finch, J.

license: Public Domain

text:
    In the Matter of the Accounting of Andrew A. Fraser et al., as Executors of Edwin K. Scheftel, Deceased, Respondents. Trinity Securities Company, Appellant.

      Argued May 17, 1937;
    decided July 13, 1937.

      Carroll G. Walier, James Lee Kauffman and William B. Denton for appellant.
    Section 181 of the Tax Law (Cons. Laws, ch. 60) does not bar an allowance of appellant’s claim for the reason that there is neither allegation nor proof that any license tax had been fixed by the State Tax Commission. (Halsey v. Jewett Dramatic Co., 190 N. Y. 231; Seibert v. Dunn, 70 Misc. Rep. 422; 157 App. Div. 387; 216 N. Y. 237; Fairmount Film Corp. v. New Amsterdam Casualty Co., 189 App. Div. 246; International Petroleum Co. v. Mexican Sinclair Petroleum Co., 238 N. Y. 554; People v. Tropical Fruit Corp., 252 N. Y. 605; Ewert v. Bluejacket, 259 U. S. 129; Iselin v. United States, 270 U. S. 245; Wallace v. Cutten, 298 U. S. 229; Matter of Erikson v. Cohen, 243 App. Div. 1; International Fuel & Iron Corp. v. Donner Steel Co., 242 N. Y. 224.) Section 181 does not make it essential that the tax be paid before an action is commenced. It operates, not as a forfeiture, but merely as a suspension of a civil remedy until compliance. (People ex rel. Mutual Trust Co. v. Miller, 177 N. Y. 51; Matter of Gates, 243 N. Y. 193; Neuchatel Asphalte Co. v. Mayor, 155 N. Y. 373; National Fertilizer Co. v. Fall River Bank, 196 Mass. 458; Kendrick & Roberts v. Warren Bros., 110 Md. 47; Shipman v. Portland Construction Co., 64 Ore. 1; Burton v. Oliver F. E. S. Co., 121 Fla. 148; Carson-Rand Co. v. Stern, 129 Mo. 381; Ryan Livestock & Feeding Co. v. Kelly, 71 Kan. 874; Buffalo Zinc & Copper Co. v. Crump, 70 Ark. 525.) The Surrogate had the power, and it was his duty, to accept the receipt for the tax when tendered by appellant before the entry of the decree and thereupon to allow the claim. (Matter of Fuller, 227 App. Div. 801; 254 N. Y. 519; Herpe v. Herpe, 225 N. Y. 323; Chester v. Buffalo Car Mfg. Co., 183 N. Y. 425; Matter of Henderson, 157 N. Y. 423; Butler v. Clark, 66 Hun, 444; 142 N. Y. 636; Oka v. United States F. & G. Co., 213 App. Div. 746; Morgenbesser v. Tartasky, 235 App. Div. 697; Asserson v. City of New York, 195 App. Div. 12; Matter of Van Bokkelen, 155 Misc. Rep. 289; Matter of Snitkin, 151 Misc. Rep. 118; Matter of Erlanger, 154 Misc. Rep. 862.) Section 218 of the General Corporation Law does not justify disallowance of the claim. (Eclipse Silk Mfg. Co. v. Hiller, 145 App. Div. 568; Buffalo & Jamestown R. R. Co. v. Gifford, 87 N. Y. 294; Yonkers Gazette Co. v. Taylor, 30 App. Div. 334; International Fuel & Iron Corp. v. Donner Steel Co., 242 N. Y. 224; Angldile Computing Scale Co. v. Gladstone, 164 App. Div. 370; Commercial Coal & Ice Co. v. Polhemus, 128 App. Div. 247; Tallapoosa lamber Co. v. Holbert, 5 App. Div. 559; Southworth v. Morgan, 143 App. Div. 648; 205 N. Y. 293; Hoevel Sandblast Machine Co. v. Hoevel, 167 App. Div. 548; Fairmount Film Corp. v. New Amsterdam Casualty Co., 189 App. Div. 246.)

      Blaine F. Sturgis and Andrew A. Fraser for respondents.
    The claim' of appellant was properly dismissed on the ground that it was subject to and had not complied with section 181 of the Tax Law. (International Text Book Co. v. Tone, 220 N. Y. 313; Tausa v. Susquehanna Coal Co., 220 N. Y. 259; People ex rel. Chicago J. Rys. & U. S. Y. Co. v. Roberts, 154 N. Y. 1; People ex rel. Manila El. R. R. & L. Co. v. Knapp, 229 N. Y. 502; Matter of Green, 231 N. Y. 237; Howden & Co. v. American C. & E. Corp., 194 App. Div. 164; 231 N. Y. 627; People ex rel. Griffith, Inc., v. Loughman, 249 N. Y. 369; Wood & Selick v. Ball, 190 N. Y. 217; Wylie v. Addoms, 268 N. Y. 160.) The lower courts, in the exercise of discretion, have properly refused to allow appellant to introduce a receipt showing payment of a license fee made subsequent to the decision, and the Court of Appeals will not review that discretion. (Matter of Noll, 273 N. Y. 219.) The facts found establish that appellant’s contract for the sale of stock is unenforceable under section 218 of the General Corporation Law (Cons. Laws, ch. 23). (Penn Collieries Co. v. McKeever, 183 N. Y. 98; Mahar v. Harrington Park Villa Sites, 146 App. Div. 756; 204 N. Y. 231; Inter. Fuel & Iron Corp. v. Donner Steel Co., 242 N. Y. 224; Wood & Selick v. Ball, 190 N. Y. 217; International Text Book Co. v. Tone, 220 N. Y. 313.)
   Finch, J.

The appellant, Trinity Securities Company, a foreign stock corporation organized in Delaware, filed a claim against the estate of the decedent Edwin King Scheftel for the sum of $20,000 with interest, which it alleged was the balance due on a subscription for stock of the corporation. An answer was filed which set up as partial defenses, among others, that the appellant is a foreign corporation which did business in this State without qualifying as required by section 210 of the General Corporation Law (Cons. Laws, ch. 23) and without paying the license^tax required by section 181 of the Tax Law (Cons. Laws, ch. 60). The Surrogate filed a decision which, while dismissing all other defenses, disallowed the claim on the ground that under section 181 of the Tax Law failure to pay the license tax barred recovery on the claim. Immediately after the decision was rendered, but before the entry of the decree, the appellant requested the State Tax Commission to fix the amount of capital upon which the tax imposed by section 181 was payable and, when the Commission made the assessment, the appellant paid the amount thereof and obtained a receipt. Thereupon the Trinity Company petitioned the Surrogate for leave to submit the receipt and have its claim allowed. The Surrogate denied the motion on the ground that he lacked the power to alter the decision, and that in any event the statute barred a recovery unless the tax was paid before instituting action or filing a claim. The Appellate Division affirmed, two justices dissenting, the majority opinion stating that while the Surrogate erred in saying that he lacked jurisdiction to reconsider his decision, he properly exercised his discretion to do so in this case, since the payment of the tax after the commencement of the proceedings does not remove the bar imposed by section 181.

The pertinent portions of section 181 of the Tax Law read as follows:

“ § 181. License tax on foreign corporations. * * * Every foreign corporation * * * doing business in this state, shall pay for the use of the state, a license fee of one-eighth of one per centum for the privilege of exercising its corporate franchises or carrying on its business in such corporate or organized capacity in this state, to be computed upon the basis of the capital stock employed by it within this state, during the first year of carrying on its business in this state; which first payment shall not be less than ten dollars; * * *. The measure of the amount of capital stock employed in this state shall be such a portion of the issued capital stock as the gross assets employed in any business within this state bear to the gross assets wherever employed in business * * *. The amount of capital upon which such license fees shall be paid shall be fixed by the state tax commission, * * * and the state tax commission shall have the same power to issue a warrant for the collection of such license fees, as now exists with regard to domestic corporations. No action shall be maintained or recovery had in any of the courts in this state by such foreign corporation after thirteen months from the time of beginning such business within the state, without obtaining a receipt for the payment of the license fee upon the capital stock employed by it within this state during the first year of carrying on its business in this state.” (Italics interpolated.)

Obviously this section imposes a license fee for the privilege of doing business in this State. Since 1895 license fees have been imposed upon certain foreign corporations for the privilege of doing business in this State. These statutes from the first have contained provisions barring recovery or the maintenance of actions by such foreign corporations without obtaining a receipt for the license fee. In 1907 the last sentence of this tax provision read as follows: No action shall be maintained or recovery had in any of the courts in this state by such foreign corporation without obtaining a receipt ior the license fee hereby imposed within thirteen months after beginning such business within the state, or if at the time this section takes effect such a corporation has been engaged in business within this state for more than twelve months, without obtaining such receipt within thirty days after such tax is due.” (Laws of 1901, ch. 558; Laws of 1906, ch. 474.) In that year two cases involving this provision were decided by this court. In Wood & Selick v. Ball (190 N. Y. 217) it was held that section 181 sets up a condition subsequent, that compliance with it need not be pleaded in the complaint, but that non-compliance may be set up in the answer as a defense. In Halsey v. Jewett Dramatic Co. (190 N. Y. 231) it was decided that the failure to pay the tax could not be set up as a defense unless the failure to pay-occurred after the amount of the license fee had been assessed by the Comptroller. A like result was reached by Chief Judge Crane, then sitting at Special Term, in an opinion in which he stated that it was not intended that foreign corporations should tax themselves, and that until the tax was computed by the Comptroller no tax was due. (Seibert v. Dunn, 70 Misc. Rep. 422; affd., 157 App. Div. 387; reversed on other grounds, 216 N. Y. 237.) Although minor changes had been made in the law, the ruling of the earlier cases was reiterated in Fairmount Film Corp. v. New Amsterdam Cas. Co. (189 App. Div. 246).

Section 181 of the] Tax Law was amended by the Legislature thrice subsequent to the above decisions of this court in 1907. In 1909 the Tax Law was revised (L. 1909, ch. 62), in 1910 the forfeiture clause was amended (L. 1910, ch. 340), and in 1917 the section was applied to all foreign corporations with certain limited exceptions not material here, and a minimum fee was fixed (L. 1917, ch. 490). In each instance the important provision was retained that the amount of capital upon which the tax is to be paid shall be fixed by the State Tax Commission. But more important than these amendments is the fact that the Legislature is presumed to have had knowledge of the construction which had been placed on the provision requiring assessment, and in adopting in these re-enactments the language used in the earlier act, must be deemed to have adopted also the interpretation of the legislative intent decided by this court, and to have made that construction a part of the re-enactment. (Hecht v. Malley, 265 U. S. 144, 153; Heald v. District of Columbia, 254 U. S. 20, 23; Latimer v. United States, 223 U. S. 501, 504; Kepner v. United States, 195 U. S. 100, 124.) Subsequently a case arose in which the defense of non-payment of the tax was stricken out because it failed to allege that the tax had been assessed against the plaintiff therein. On appeal to this court, it was urged that the earlier cases were no longer binding by reason of the 1917 amendment. Although the provision of the statute barring a recovery or the maintenance of an action without obtaining a receipt for the tax remained without material change, it was asserted that the extension of the tax to corporations doing business within the State without authority required a changed interpretation. Otherwise, it was stated, foreign corporations could do business in this State without obtaining a certificate, evade payment of the tax imposed by section 181 and nevertheless be in a position to institute actions herein on their contracts because the Tax Commission, not knowing of their presence, could not and would not have assessed a tax against them. Despite this argument, this court affirmed the order dismissing the defense of non-payment of the tax as insufficient, because it failed to allege that the tax had been assessed. (International Petroleum Co. v. Mexican Sinclair Petroleum Co., 238 N. Y. 554.)

No pertinent change has been made in the statute since the decision of International Petroleum Co. v. Mexican Sinclair Petroleum Co. (238 N. Y. 554) up to the time of the dismissal of the claim in the case at bar, and the foregoing authorities, therefore, are binding. They state a rule upon which reliance has been had. The Legislature at any time can amend the section so as to make the bar more stringent. Apparently, however, the trend is the other way for it has come to our attention that the most recent amendment of the section entirely eliminates the provision that no recovery may be had or action maintained without obtaining a receipt for the tax (Laws of 1937, ch. 496). Perhaps this is because section 218 of the General Corporation Law accomplishes much the same purpose.

In any event the contract in the case at bar does not fall within section 218 of the General Corporation Law. That section provides that a foreign corporation doing business in this state shall not maintain any action in this state upon any contract made by it in this state, unless before the making of such contract it shall have obtained a certificate of authority.” This section has no application to contracts made by a foreign corporation before it commences doing business in this State. The subscription agreement became binding upon the decedent at the time the Trinity Company was organized, and the company cannot be said to have been doing business in this State at that time. The so-called opening of an account with a brokerage firm prior to the effective organization of the corporation, into which account no money was paid until after the decedent had subscribed for the stock, and the sale of its own stock by the corporation does not constitute doing business in this state ” within the meaning of that phrase as used in section 218.

The order of the Appellate Division and the decree of the Surrogate’s Court so far as appealed from should be reversed and the claim allowed, with costs in all courts.

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

Ordered accordingly.


text:
    Theo I. Tapley, Respondent, v. Ross Theatre Corporation, Appellant. Robert A. Tapley et al., as Administrators of the Estate of Helen E. Tapley, Deceased, Respondents, v. Ross Theatre Corporation, Appellant. Robert A. Tapley, Respondent, v. Ross Theatre Corporation, Appellant. Norman B. Tapley, an Infant, by Robert A. Tapley, His Guardian ad Litem, Respondent, v. Ross Theatre Corporation, Appellant.
    Argued June 11, 1937;
    decided July 13, 1937.

      William Dike Reed and William B. Shelton for appellant.
    The trial court erred in submitting to the jury as an issue of negligence the conduct of the employees after the fire was discovered in not using fire extinguishers to put out the flames. (Ward v. F. R. A. Operating Corp., 265 N. Y. 303; Woloszynowski v. N. Y. C. R. R. Co., 254 N. Y. 206; Kawacz v. D., L. & W. R. R. Co., 259 N. Y. 166.) The trial court erred in submitting to the jury, as a second issue of negligence, the plaintiff’s claim that the employees of the defendant’s theatre neglected to supervise the exit of the patrons and sought to protect themselves, as to which there was no evidence. (People v. Lazar, 271 N. Y. 27; Phillipson v. Ninno, 233 N. Y. 223; Ward v. F. R. A. Operating Corp., 265 N. Y. 303; Owen v. Straight, 239 App. Div. 622; 267 N. Y. 453; Griswold v. Ringling, 221 N. Y. 705; Woloszynowski v. N. Y. C. R. R. Co., 254 N. Y. 206.) The jury were permitted to find negligence, without regard to the facts and circumstances, such as the short period of time in which to act, the impending danger and consequent excitement, the various acts required to clear the theatre of the audience in the emergency, and all other circumstances surrounding them. The submission of this issue to the jury was erroneous. (Benoit v. Troy & L. R. R. Co., 154 N. Y. 223; Lewis v. Long Island R. R. Co., 162 N. Y. 52; Piehl v. Albany Ry., 19 App. Div. 471; Stabenau v. Atlantic Avenue R. R. Co., 155 N. Y. 511.)

      John R. Bushong for respondents.
    The evidence .justified the finding of negligence against defendant. (Griswold v. Ringling, 165 App. Div. 737; 221 N. Y. 705; Owen v. Straight, 239 App. Div. 622; 242 App. Div. 892; 267 N. Y. 453.)
   Loughran, J.

On December 31, 1933, fire swept the interior of a motion picture theatre maintained by the defendant at a corner of Park avenue and Elm avenue in the city of Mount Vernon. Present as patrons were Mr. and Mrs. Robert A. Tapley and their infant children, Helen and Norman. They were hurt by the flames, the injuries to Helen resulting in her death. For the consequent damages the defendant has been held to answer by judgments which are here for review.

It is to be premised that no claim was made of structural inadequacy of the defendant’s property and that there was no proof of default in respect of the origin of the fire. The allegations of wrongdoing were “ that there were fire extinguishers present that were not used ” and “ that the employees neglected to supervise the exit of the patrons.”

The theatre was a one-story building having a seating capacity of 580. There was no balcony. The seats were divided into three sections by two aisles which separated the central floor space from that on either side. The main entrance was from Park avenue. On the right as one entered were two emergency exits to Elm avenue, one nearer the lobby, the other nearer the opposite end of the building where on a small platform the screen was erected. Suspended on a hook in the wall on either side of the platform was a copper cylinder holding two and a half gallons of fire-extinguishing liquid. Silk curtains overhung the screen. These could be parted and drawn together by a device installed in the projection booth which was affixed to the inside lobby wall. In that booth also was a switch which controlled the interior lighting.

The Tapleys were seated at the middle of the house in the block of seats on the right side as they faced the screen on which a picture was being shown. Smoke was observed on the platform and the manager appeared there with an usher. One of the men had a flashlight and opened this door of some kind under the platform and looked in there with a flashlight and closed that and then took a curtain and pulled the curtain, this drape or whatever it was hanging there, back, and a little flame and smoke shot out from there, and they closed it back again and turned around — the flashlight went out — and one of the men started running up the aisle and the other man walked toward the right.” No attempt was made to use a fire extinguisher. The one man, as he ran up the aisle, he told us to keep our seats and everything would be all right.” That man was the manager. He called to two employees in the projection booth to stop the show, to put the house lights on and to give him a hand. As the lights came on the silk curtains closed over the screen. “ They were on fire, and it made a complete solid frame of flame, and that went directly up over the ceiling and over the back towards the lobby.” Both emergency exits to Elm avenue were opened. The husband took the boy, the wife the girl. All were retarded by other patrons who carried down a partition in the stampede for safety. Officer John F. Bradley, of the Mount Vernon police, describes the scene. “ They were jumping over seats and yelling and screaming and trying to make their way out. * * * 1 went to about the center of the theatre, as far down as I could get in. I thought by passing people down there it would calm them more. * * * 1 found a lady lying on the rear of the theatre * * * I assisted her to her feet and helped her out the door and helped other children through the aisles, in between the seats, to get them back.” Mr. Bradley did not see the defendant’s manager or any of its ushers inside the theatre.

When Mr. and Mrs. Tapley got into the street their children were found to have been left behind. Officer Bradley twice crawled back into the building and rolled out, first with one child, then with the other.

On these facts, the question is whether there was evidence of negligence. We have approached that question mindful that our own opinion of the defendant’s conduct is immaterial, and that, as the operation of motion picture theatres is an almost universal affair of everyday life, the case is peculiarly one in which we should be slow to deny all validity to the inferences that in fact have been drawn by the jury.

It is argued that there was no evidence that the flames could have been arrested by the means and within the time available. We find that evidence. It is all very well to say that this tragedy occurred in two and a half or three minutes. Use of a fire extinguisher would have been a matter of seconds. Two of these things were within easy reach when the curtain broke into flame. We think it might fairly have been found (apart from other factors to be noticed in a moment) that, since such an appliance was required to be provided, it was to be used on a burning curtain if it was ever to be used at all. (Cf. Griswold v. Ringling, 165 App. Div. 737; 221 N. Y. 705; 1 Beven on Negligence in Law [4th ed.], 626.)

It is argued that failure in that regard was at most a mere error of judgment in an immediate and overmastering emergency. We think this issue was properly left to the jury. The emergency was but part of the defendant’s situation. “ One who collects a large number of people for gain or profit must be vigilant to protect them.” (Tontillo v. Goldstein Brothers Amusement Co., 248 N. Y. 286, 290.) The extinguishers that were at hand at the source of the blaze were means designed to meet this very exigency. Since the theatre was fully manned by employees (two of whom were at the spot of danger), those means could, perhaps, reasonably have been utilized without abandonment of the course that was pursued and without unduly increasing the peril. This being the case, a jury alone could solve the question whether in this aspect the defendant acted as the man of ordinary prudence would have acted in all the circumstances. (See Terry, Selected Essays on the Law of Torts [negligence], pp. 261, 269, 270; 1 Street, the Foundations of Legal Liability, pp. 96, 97; American Law Institute, Restatement of the Law of Torts, § 296; 1 Beven on Negligence in Law [4th ed.], pp. 41, 42; 21 Halsbury’s Laws of England [1st ed.], pp. 366, 367.)

It is argued that there was no evidence of failure properly to supervise the exodus of the audience to the street. We find that evidence in the testimony of Officer Bradley. The duty of the defendant in this aspect was not so far determinate as to admit of a declaration that (even if all other things were then equal) there was in this instance due care in law once the theatre was lighted and the ways of egress thrown open. At that' point, too, the question was not merely what the defendant did or left undone, but whether the man of ordinary prudence would in the circumstances have more effectively managed the safe-conduct of the patrons.

It is also argued that there was error in the refusal of an unqualified instruction that the defendant was not responsible for the action of the terror-stricken audience. On this head we think it sufficient to point out that all the injuries in question were caused by bums. (Cf. Ward v. F. R. A. Operating Corp., 265 N. Y. 303.)

In brief, we agree with the courts below that this was a case in which it was for the jury to ascertain what was negligence and whether it was proved.

In each action the judgment should be affirmed, with costs.

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

Judgments affirmed.


author: Crane, Ch. J.

text:
    Percy C. Reed, Appellant, v. Martin W. Littleton, as District Attorney of Nassau County, et al., Respondents.
    Argued June 10, 1937;
    decided July 13, 1937.

      Edwin M. Borchard for appellant.
    The case presents a justiciable issue. (Ætna Life Ins. Co. v. Haworth, 57 Sup. Ct. Rep. 461.) This proceeding is the appropriate way to try the issue of the legality of the plaintiff’s business. (Multnomah County Fair Assn. v. Langley,
      140 Ore. 172; Lagoon Jockey Club v. Davis County, 72 Utah, 405; Utah State Fair Assn. v. Green, 68 Utah, 251; Little v. Smith, 124 Kan. 237; Chung Mee Restaurant Co. v. Healy, 86 N. H. 483; Sage-Allen Co. v. Wheeler, 119 Conn, 667; Tirrell v. Johnson, 86 N. H. 530; Erwin Billiard Parlor v. Buckner, 156 Tenn. 278; Paths Exchange, Inc., v. Cobb, 202 App. Div. 450; 236 N. Y. 539; Socony-Vacuum Oil Co. v. City of New York, 247 App. Div. 163; 272 N. Y. 262; James v. Alderton Dock Yards, 256 N. Y. 298; Dyson v. Attorney-General, [1911] 1 K. B. 410; Burghes v. Attorney-General, 2 Ch. 139; Talbott v. Park, 256 Ky. 534; Faulkner v. City of Keene, 85 N. H. 147; Bemis Bros. Bag Co. v. Wallace, 266 N. W. Rep. 690; Milwaukee Electric Ry. & L. Co. v. City of Milwaukee, 218 Wis. 24; State ex rel. Hopkins v. Grove, 109 Kan. 619.)

      Philip Huntington and Martin W. Littleton for respondents.
    The facts and circumstances in this case fully justify the granting of a declaratory judgment; and the granting of such declaratory judgment would serve a useful and important purpose both public and private. (People v. Monahan, 257 N. Y. 388; People ex rel. Seaman v. Hendrickson, 245 App. Div. 838; People ex rel. Kohut v. Hendrickson, 249 App. Div. 528; Kalman v. Shubert, 270 N. Y. 375; Westchester Mortgage Co. v. Grand Rapids & Ionia R. R. Co., 246 N. Y. 194; Craig v. Commissioners of Sinking Fund, 208 App. Div. 412; Dowsey v. Village of Kensington, 257 N. Y. 221; Gwynne v. Board of Education, 259 N. Y. 191; Kress v. Village of Watkins Glen, 242 App. Div. 856; James v. Alderton Dock Yards, 256 N. Y. 298.)
   Crane, Ch. J.

For several years plaintiff has been the proprietor and operator of a greyhound racing track at the Mineóla Fair Grounds located in the village of Garden City. In connection therewith he operates a complicated system of selling and re-purchasing so-called “ options ” for the purchase of dogs participating in the races. The defendants contend that the sole purpose and intent of plaintiff in operating this system is to enable the general public attending the race meetings to gamble on the result of the races, in violation of section 986 of the Penal Law. Plaintiff maintains that his operations are carried on in good faith for the purpose of acquiring for himself a large stable of racing greyhounds, and that it does not constitute gambling in violation of the statute. The district attorney commenced criminal proceedings against him in the police court, and this plaintiff was acquitted of the charge. The district attorney has served notice of his intention to institute further prosecutions, and plaintiff seeks from the court a declaratory judgment that the court determine that the method of purchase and sale of racing greyhounds and the sale of options thereon is not in violation of any of the sections of article 88 of the Penal Law. The Appellate Division has held that an action for a declaratory judgment was not available to plaintiff under the facts'here disclosed. From that determination plaintiff appeals.

Section 473 of the Civil Practice Act provides: “ The supreme court shall have power in any action or proceeding to declare rights and other legal relations on request for such declaration whether or not further relief is or could be claimed, and such declaration shall have the force of a final judgment. Such provisions shall be made by rules as may be necessary and' proper to carry into effect the provisions of this section.”

In International Mutoscope Reel Co. v. Valentine (271 N. Y. 622) the owners of machines known as crane,” claw ” and digger ” type brought action against the police commissioner to have it determined that such machines were not violative of sections 977, 982 and 1376 of the Penal Law, and were not susceptible of being used for gambling, lottery, or any purpose in violation of the Penal Law. This court hel that “ the case is not one for a declaratory judgment.” (See, also, Buffalo Gravel Corp. v. Moore, 201 App. Div. 242; affd., 234 N. Y. 542.)

The court of equity has at times been called upon to enjoin the enforcement of a criminal prosecution. The rule has been firmly established that it will not ordinarily intervene to enjoin the enforcement of the law by the prosecuting officials (Davis v. American Society, 75 N. Y. 362; Delaney v. Flood, 183 N. Y. 323) unless under proper circumstances there would be irreparable injury, and the sole question involved, is one of law (Mills Novelty Co. v. Sunderman, 266 N. Y. 32) where a clear legal right to the relief is established (Triangle Mint Corp. v. Mulrooney, 257 N. Y. 200). One reason for such a rule is the desire to preserve the separation of governmental powers. (Cf. Truax v. Corrigan, 257 U. S. 312, dis. op., Brandeis, J., p. 374.)

Where administrative officials act under a statute which infringes the Constitution, or under rules or regulations that are invalid, a person may have the right to petition the court to determine the jurai relations, and to have the invalidity of the statute, rule or regulation declared. Here there is no question of invalidity of the statute. The findings of the trial court set forth the acts and operations of plaintiff as shown by the evidence in this proceeding. The court has adjudged that the business conducted by him at the Mineóla Fair Grounds * * * and in selling and re-purchasing options on dogs is a legal and valid business and is not in violation of the gambling laws of the State of New York, nor in violation of section 986 of the Penal Laws of the State of New York.” Plaintiff, in an effort to show the necessity for such a judgment, states in his brief that such a judgment is binding upon the District Attorney; “ it is not conceivable that he would undertake to disregard it. But if he did, it would be res judicata and a complete defense to any future prosecution on the same facts.” But perhaps at a later date the District Attorney may find further facts which in his opinion give a different color to the whole transaction. Additional evidence may be procured by the prosecuting authorities which sheds a new light upon the transactions carried on by the appellant. Will the civil courts impede the administration of justice by placing a restraint upon the administrative officials who threaten to act under a statute concededly valid? Counsel even stated in argument that if the Equity Court should determine that the scheme was gambling the judgment would be binding on the defendant in a criminal court.

Appellant urges many cases as authority for the relief asked for in his complaint. None of them goes so far as appellant would have this court go in the present instance. In the case at bar, the criminal statutes are concededly valid, and there is no question of any right to any license or permission, nor of any right to proceed without a license. Many of the cases cited involved the constitutionality of statutes or rules and regulations. Sage-Allen Co. v. Wheeler (119 Conn. 667) was an action for judgment to the effect that certain rules of the State Board of Examiners in Optometry were illegal and void and for an injunction restraining them from enforcing said rules. Erwin Billiard Parlor v. Buckner (156 Tenn. 278) was a bill filed “for a decree declaring unconstitutional chapter 104 of the Private Acts of 1925, as amended by chapter 290 of the Private Acts of 1925, and for a decree of injunction restraining the defendants from proceeding in the criminal court against complainants for violations of said Private Acts.” In Utah State Fair Assn. v. Green (68 Utah, 251): “ The purpose of the action [was] to test the constitutionality of chapter 77 * * *.” Little v. Smith (124 Kans. 237) involved an action to obtain the interpretation of a statute “ and particularly a declaration and determination as to the validity of section 18 of that act.” In Dyson v. Attorney-General ([1911] 1 K. B. 410): The “ action was brought against the Attorney-General to test the validity of the notices issued by the Commissioners of Inland Revenue under the Finance Act * * *.” Similarly Burghes v. Attorney-General ([1911] 2 Ch. 139) involved an action “ against the Attorney-General for a declaration that a certain form issued by the Commissioners of Inland Revenue * * * was illegal, unauthorized, and ultra vires, and that he was not under any obligation to comply with the requisitions of the form or any of them.” Bemis Bro. Bag Co. v. Wallace (197 Minn. 216) was an action to determine the validity and construction of the corporate excess tax act ” and the rights and status of the plaintiff. The issues were whether section 2021 had been repealed by implication, and if not, whether they can be constitutionally applied to plaintiff.

In Chung Mee Restaurant Co. v. Healey (86 N. H. 483), the question was whether petitioner had to obtain a license under an ordinance and to provide a police officer in charge in accordance with the statute, and whether the State and municipality had the power to regulate such matters. In Lagoon Jockey Club v. Davis County (72 Utah, 405) the question was whether the provisions of a statute had been repealed. “ It is conceded by all the parties here that the cooperative or pari-mutuel system of betting is a form of pool selling, and it follows from such concession that, unless the provisions of section 8161 relating to pool selling were repealed by the Redd Act, pool selling is still forbidden by law and punishable as a felony, as provided in said section.” Faulkner v. City of Keene (85 N. H. 147) was an action for a declaration that the construction of a filling station did not require a license and was not in conflict with a zoning ordinance. In Tirrell v. Johnston (86 N. H. 530) plaintiff sought a declaration that he as a rural mail carrier was not subject to the gasoline road tax. The ground for refusing to pay the charge was an allegation that plaintiff is an agency of the Federal government and that the State could not, therefore, lay a charge of this character. American Trust Co. v. McCallister (136 Ore. 338) was an action for a declaration of the status of plaintiff as affected by the Blue Sky Laws, that a section thereof exempts plaintiff from its operation; that plaintiff is not required to obtain a permit to sell stock and that plaintiff is not subject to the control or jurisdiction of the corporation commission.

Without expressing approval of these decisions, at least it can be said that we need not criticize the holdings. If the question here were whether the penal statutes infringed the Constitution, or whether .plaintiff was required to obtain a license before engaging in his business, or whether the statute which was being enforced had been theretofore repealed, the courts could decree plaintiff’s rights without impeding or interfering with the administration of the criminal law. In this case, the issue presented by counsel appeared to be whether the system in use was a bona fide method of accumulating a large stable of racing dogs, or whether the elaborate mechanics of the system was merely a camouflage for the taking of bets on the outcome of races. The system seems to be susceptible of such a use.

The other cases cited by appellant dó not support his position. Talbott v. Park (256 Ky. 534) involved the question whether the position of member of the Board of Bar Commissioners of the State is incompatible with the office of the Commonwealth’s attorney under a statute which provided that the acceptance by one in office of another office or employments incompatible with the one he holds, shall operate to vacate the first.” Milwaukee E. Ry. & L. Co. v. City of South Milwaukee (218 Wis. 24) was an action to determine the rights and status of plaintiff under a franchise ordinance. State ex rel. Hopkins v. Grove (109 Kans. 619) was an action by the Attorney-General for the purpose of determining the legal capacity of defendant to hold the office of member of the Board of Commissioners of the city to which he had been elected. The claim of disqualification was based on a statute which forbade an employee of a railroad company operating under any franchise granted by the city from holding any city office.

The futility of resorting to Equity to determine whether certain or uncertain facts constitute crime is apparent when we consider the different measure of proof in criminal and civil_ cases. Should equity declare on disputed testimony or conflicting inferences by a fair preponderance of the evidence that a penal violation was proved, what would be the effect? None. It would not and could not be binding as res adjudicate, or even as stare decisis in a subsequent prosecution where guilt must be established beyond a reasonable doubt. Should equity hold that no offense had been committed it would not be binding were 1-he subsequent proof varied. In the meantime the applications for injunctions staying the criminal trials pending the hearing of the equity cases for declaratory judgments would disrupt prosecutions for crime and we would have more delay than at present. The policy of this State is to reduce delays in the trying of all cases, not to increase them by resort to unnecessary procedure. There is no need nor necessity for a resort to a trial in Equity to determine whether a scheme or device is gambling within the Penal Law. We might as well try out a larceny or a bigamy case in Equity. No doubt criminal prosecutions are always annoying and may disarrange the defendants’ income and finances but never yet has this been sufficient to change the usual and customary course of prosecutions for crime. The declaratory judgment has proved and no doubt is a useful procedure but its usefulness will soon end when its advocates seek to make it a panacea for all ills, real or imaginary.

The judgment should be affirmed with costs.

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

Judgment affirmed.


text:
    M. H. Treadwell Company, Inc., Respondent, v. United States Fidelity & Guaranty Company, Appellant.
    Argued June 10, 1937;
    decided July 13, 1937.

      William Dike Reed for appellant.
    The action against the plaintiff did not fall within any of the provisions in the standard workmen’s compensation and employers’ liability policy issued by the defendant. (Matter of Woodward v. Conkin & Son, 171 App. Div. 736; Thompson v. International Harvester Co., 141 Misc. Rep. 757; Fessenden School, Inc., v. American Mutual Liability Co., 289 Mass. 124; Fidelity & Casualty Co. v. Highway Const. Co., 48 Ohio App. 522; Travelers Ins. Co. v. Brass Goods Mfg. Co., 239 N. Y. 273.) The attempt by the plaintiff to enforce a common law liability upon its workmen’s compensation insurer was in direct conflict with the provisions of the law and with the intent and purpose of the Legislature in passing the statute (Cons. Laws, ch. 67). (Matter of Walsh v. Brooklyn Daily Eagle, 262 N. Y. 657; Sandberg v. Seymour Dress Co., 242 N. Y. 497; Matter of Post v. Burger, 216 N. Y. 544; Matter of Smith v. Bartle Mfg. Corp., 189 App. Div. 426; 228 N. Y. 564; Shanahan v. Monarch Engineering Co., 219 N. Y. 469; Murphy v. Rochester Tel. Co., 208 App. Div. 392; 240 N. Y. 629; Matter of Cheesman, 236 N. Y. 47; Matter of Jaabeck v. Crane’s Sons Co., 238 N. Y. 314; Royal Indemnity Co. v. Heller, 256 N. Y. 322; Longwell Lumber & Building Co. v. Maryland Casualty Co., 144 Misc. Rep. 595.) The intent of the parties under the contract of insurance was to protect the assured’s workmen in case of injury in their hazardous employment and to indemnify the employer against liability to its own employees as determined by the Workmen’s Compensation Law. (Wohlfron v. Brooklyn Edison Co., 263 N. Y. 547; McNally
      v. Phoenix Ins. Co., 137 N. Y. 389; Solomon v. Continental Fire Ins. Co., 160 N. Y. 595.)

      Jeremiah T. Mahoney for respondent.
    The defendant was hable to the plaintiff for the expenses incurred in the defense of the suit brought against the plaintiff by the Brooklyn Edison Company. (Parker Sheet Metal Works, Inc., v. Allied Mutuals Liability Ins. Co., 124 Misc. Rep. 756; 216 App. Div. 746; Zamkin v. United States Fidelity & Guaranty Co., 121 Misc. Rep. 669; Longwell Lumber & Building Co. v. Maryland Casualty Co., 144 Misc. Rep. 595; Alliance Casualty Co. v. Miele, 249 App. Div. 650; Compton Heights Laundry Co. v. General A. F. & L. Assur. Corp., 195 Mo. App. 313; Brassil v. Maryland Casualty Co., 210 N. Y. 235; Matter of Empire State Surety Co., 214 N. Y. 553; Upton Cold Storage Co. v. Pacific Coast C. Co., 162 App. Div. 842; Mayor, Lane & Co. v. Commercial Casualty Ins. Co., 169 App. Div. 772; Sachs v. Maryland Casualty Co., 170 App. Div. 494.) Under the facts alleged in the complaint of the Brooklyn Edison Company against the plaintiff as well as the bill of particulars, the plaintiff was hable to the Brooklyn Edison Company for the damages recovered against it by the employee. (Dunn v. Uvalde Asphalt Paving Co., 175 N. Y. 214; Creem v. Fidelity & Casualty Co., 141 App. Div. 493; Phœnix Bridge Co. v. Creem, 102 App. Div. 354; Birchall v. Clemons Realty Co., 241 App. Div. 286; New York Consolidated R. R. Co. v. Massachusetts B. & Ins. Co., 193 App. Div. 438; Oceanic Steam Navigation Co. v. Compania Transatlantica Espanola, 134 N. Y. 461.)
   Loughran, J.

Brooklyn Edison Company, Inc., let out the construction of an addition to one of its buildings to a number of contractors, including M. H. Treadwell Company, Inc. The work was done under the supervision of engineers employed by the Edison Company. In the course thereof, Valentine Wohlfron, an employee of the Treadwell Company, while passing in dim light along a concrete slab set by another contractor, stepped into an adjacent hole made by still another contractor and was injured. The Treadwell Company was insured against liability to Wohlfron by the United States Guaranty and Fidelity Company. Pursuant to section 29 of the Workmen’s Compensation Law (Cons. Laws, ch. 67), Wohlfron elected to pursue his remedy against the Edison Company for its failure to furnish a safe place to work. Judgment against it for his damages was affirmed (Wohlfron v. Brooklyn Edison Co., 238 App. Div. 463; 263 N. Y. 547).

The Edison Company then brought an action against the Treadwell Company, alleging that the injuries sustained by Wohlfron occurred by reason of the failure of the Treadwell Company to comply with provisions of its contract with the Edison Company whereby it undertook that it “ would keep the job safe at all times for its own employees.” In that action the Edison Company sought reimbursement for the expenses incurred by it in its litigation with Wolhfron and restoration of its payment of the judgment recovered against it by him. Demand by the Treadwell Company that the Fidelity and Guaranty Company defend that action was refused. Thereafter that action was voluntarily discontinued. Counsel who had represented the Treadwell Company therein was paid by it a fee conceded to have been the reasonable value of his services.

This is an action by the Treadwell Company to recover that item from the Fidelity and Guaranty Company. It has been held below that such a recovery was warranted by the terms of the “ Standard Workmen’s Compensation and Employer’s Liability Policy ” which defined the respective engagements of the parties. We have reached a different conclusion.

The policy issued by the Fidelity and Guaranty Company (named as the “ Company ”) to the Treadwell Company (named as the “ Employer ”) was a contract whereby the Company agreed “ with this Employer, named and described as such in the Declarations forming a part hereof, as respects personal injuries sustained by employees, including death at any time resulting therefrom, as follows: One (a) To Pay Promptly to any person entitled thereto, under the Workmen’s Compensation Law and in the manner therein provided, the entire amount of any sum due, and all installments thereof as they become due. (1) To such person because of the obligation for compensation for any such injury imposed upon or accepted by this Employer under such of certain statutes, as may be applicable thereto, cited and described in an endorsement attached to this Policy, each of which statutes is herein referred to as the Workmen’s Compensation Law. * * * One (b) To Indemnify this Employer against loss by reason of the liability imposed upon him by law for damages on account of such injuries to such of said employees as are legally employed wherever such injuries may be sustained within the territorial limits of the United States of America or the Dominion of Canada. * * * Three, To Defend, in the name and on behalf of this Employer, any suits or other proceedings which may at any time be instituted against him on account of such injuries, including suits or other proceedings alleging such injuries and demanding damages or compensation therefor, although such suits, other proceedings, allegations or demands are wholly groundless, false or fraudulent. * * * ” We think that by no sound construction was an obligation to defend the Treadwell Company in the action instituted against it by the Edison Company to be reckoned among the undertakings so assumed by the Fidelity and Guaranty Company.

The whole position of the Treadwell Company is tied to the foregoing stipulation Three.” This is read by it in inverse order as requiring (1) the defense of claims for injuries by employees as such, and (2) the defense of any other suit or proceeding “ on account of ” such injuries. This interpretation, so it is contended, is not capriciously to be dismissed and requires that the covenant to defend be construed as extending to suits or proceedings by third parties against the employer occasioned by injuries received by an employee in the course of his employment. In our judgment this is an inadmissible view of the provisions that have been quoted.

These provisions reveal to us as the dominant purpose of the parties the protection of the Treadwell Company against its liability as an employer to its employees as such. (See Workmen’s Compensation Law, § 54; O’Brien v. Lodi, 246 N. Y. 46.) The meaning and effect of the foregoing covenant to defend are to be resolved accordingly. As we so read it, that undertaking did not go beyond the length of obligating the Fidelity and Guaranty Company to defend all suits and proceedings instituted against the Treadwell Company by any of its employees for injuries in the course of the employment, including, however, all groundless, false or fraudulent suits or proceedings of that character. In that view, there was here no breach by the Fidelity and Guaranty Company of its policy.

The judgments should be reversed and the complaint dismissed, with costs in all courts.

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

Judgments reversed, etc.


author: Hubbs, J.

text:
    Union Trust Company of Rochester, Respondent, v. Louis P. Willsea, Appellant.
    Argued April 22, 1937;
    decided July 13, 1937.

      Vilas M. Swan for appellant.
    The obligation of the principal debtor, guaranteed by the defendant, has been paid in full. (Brown v. Mason, 55 App. Div. 395; 170 N. Y. 584; Burns Bros. v. Solomon, 150 Misc. Rep. 802.) In no event is the plaintiff entitled to a judgment against the defendant for the full amount of its original claim as asked in the complaint. (Herrington v. Davitt, 220 N. Y. 162; Easton Furniture Co. v. Camines, 146 App. Div. 436; Kilpstein & Co. v. Lipschitz, 130 Misc. Rep. 291; Loos v. McCormack, 46 Misc. Rep. 144; 107 App. Div. 8; Griffen v. Edelman, 146 App. Div. 744; Matter of Nine North Church St., Inc., 82 Fed. Rep. [2d] 186; Matter of Diversey Building Corp., 86 Fed. Rep. [2d] 456.)

      Kenneth B. Keating and Nicholas E. Brown for respondent.
    The defendant’s affirmative defense is insufficient as a matter of law. (Matter of American Paper Co., 255 Fed. Rep. 121; Eastern Furniture Co. v. Caminez, 146 App. Div. 436; Herrington v. Davitt, 220 N. Y. 162; Klipstein & Co. v. Lipschits, 130 Misc. Rep. 291; Matter of Kornbluth, 65 Fed. Rep. [2d] 400; Seixas v. Hegeman, 158 Misc. Rep. 560; Matter of Nine North Church Street, Inc., 82 Fed. Rep. [2d] 186; Matter of Diversey Building Corp., 86 Fed. Rep. [2d] 456.) The defendant’s affirmative defense does not constitute a partial defense to the plaintiff’s cause of action. (McGrath v. Carnegie Trust Co., 221 N. Y. 92; Pollitz v. Wabash R. R. Co., 150 App. Div. 709; Thompson v. Halbert, 109 N. Y. 329; Houston v. Coombs, 224 App. Div. 396; Schieffelin v. Hylan, 205 App. Div. 360; Brigham v. Gaynor, 141 App. Div. 301; 203 N. Y. 27.)
   Hubbs, J.

This action is on a guaranty of payment. The answer is that the obligation has been satisfied and paid in full. The appellant executed and delivered to respondent a written guaranty of payment of all indebtedness of The Willsea Works, a domestic corporation, in an amount not to exceed $20,000 of principal at any one time. The principal debtor filed in the United States District Court a petition for corporate reorganization under section 77B of the Bankruptcy Act (U. S. Code, tit. 11, § 207). An order was made by the District Court confirming the plan of reorganization offered by the principal debtor to its creditors. It is the claim of appellant that the order of the District Court which was fully carried out by the principal debtor has resulted in the full payment and satisfaction of the contract of guaranty sued upon.

In the proceeding in the District Court, appellant filed its claim against the principal debtor which represented the same indebtedness set up in the complaint. The claim against the principal debtor was allowed in the proceeding in the District Court. Respondent appeared in that proceeding and actively participated in the various steps involved therein. The plan of reorganization submitted by the principal debtor, The Willsea Works, which was approved by the District Court, provided for payment in full to its creditors by the issuance of 5,000 shares of a new first preferred Class A, 5 per cent cumulative stock of the par value of $10. In pursuance of the order of the District Court approving and ratifying the plan, the new stock was issued and accepted by the creditors, including the respondent, which received 915 shares of the stock.

It is urged that the acceptance of that stock and participation by the respondent in the proceeding in the District Court constituted full payment of the guaranty agreement. The appellant relies upon the elementary principal of the law of suretyship, that the payment or satisfaction of the principal obligation discharges the guarantor and asserts that the provision of the order of the District Court that the delivery of the stock in pursuance of the terms of the order should constitute payment in full of the principal debt. There is no doubt about the principle relied upon by the appellant. (Brown v. Mason, 55 App. Div. 395; affd., 170 N. Y. 584; 28 C. J. p. 1003 and cases cited.)

We think, however, that the principle has no application in the situation here presented. The proceeding under section 77B involved the debtor and its creditors. It did not, in any way, affect the independent guaranty agreement entered into between the respondent and appellant and the District Court had no jurisdiction to adjudge that the claim was by the proceeding paid and discharged. True it is that respondent had made itself a party to that proceeding as a creditor of the bankrupt as it had a right to do as a creditor and as a creditor it received by virtue of the decree of the District Court the new stock issued by the bankrupt. The proceeding Under section 77B is subject to all other applicable provisions of the Bankruptcy Act, but we are referred to no provisions of that law whereby a guarantor of a debt of the bankrupt is relieved of liability on account of a debt of the bankrupt as the result of a proceeding under section 77B unless such creditor has himself been adjudicated not liable in a proceeding instituted by or against him as a result of his own insolvency. There is no contention that the appellant is insolvent or that he has been discharged in bankruptcy or has petitioned for a composition or extension of time to pay his individual debts under section 74 of the Bankruptcy Act (47 U. S. Stat. 1467 as amd.; U. S. Code, tit. 11, § 202). Section 16 (U. S. Code, tit. 11, § 34) thereof expressly provides that the liability of one who is a guarantor or surety for a bankrupt shall not be altered by the discharge of such bankrupt. (Matter of Nine North Church Street, Inc., 82 Fed. Rep. [2d] 186; Matter of Diversey Building Corp., 86 Fed. Rep. [2d] 456; certiorari denied, 57 Sup. Ct. Rep. 492; Seixas v. Hegeman, 158 Misc. Rep. 560; affd., 246 App. Div. 813.)

By analogy, the cases are applicable which hold that a composition in bankruptcy between a principal debtor and holders of instruments issued by it does not discharge the liability of endorsers, sureties or guarantors upon such instruments, even though they participate in the composition proceeding as creditors of the principal debtor and accept dividends on the instruments from the maker (Eastern Furniture Mfg. Co. v. Caminez, 146 App. Div. 436; Herrington v. Davitt, 220 N. Y. 162.)

Respondent, in accepting the new stock, did not accept it as payment or partial payment of its claim. There is no allegation in the answer as to the value of the stock. For all that appears, it may not have any value. True it is that respondent cannot have payment of its claim and also retain the stock. Upon payment by the appellant of the judgment, he will be subrogated to the rights of the respondent in the stock. No doubt the judgment entered would have so provided if it had been requested instead of insisting that the claim had been fully paid by force of the order entered by the District Court and by the acceptance of the stock. The small payment made by the principal debtor in lieu of a fraction of a share of stock may be disregarded under the principle of de minimis.

The judgment should be affirmed with costs.

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

Judgment affirmed.


author: Crane, Ch. J. Rippey, J.

text:
    The People of the State of New York ex rel. Joseph Ross, Respondent, against Joseph H. Wilson, as Warden of Great Meadow Prison, Appellant.
    Argued May 19, 1937;
    decided July 13, 1937.

      John J. Bennett, Jr., Attorney-General (Bernard L. Alderman, Henry Epstein and Patrick H. Clune of counsel), for appellant.
    The conditions imposed in granting the commutation gave the Parole Board the power to declare relator delinquent for violation of parole. (People ex rel. Brackett v. Kaiser, 209 App. Div. 722; People ex rel. Presser v. Lawes, 221 App. Div. 692; People ex rel. Atkins v. Jennings, 248 N. Y. 46; People ex rel. Mongno v. Lawes, 225 App. Div. 193; People ex rel. Cecere v. Jennings, 250 N. Y. 239.) In any event relator’s commutation and parole are governed by article 8 of the Prison Law (Cons. Laws, ch. 43) as it existed prior to 1928. The article 8 enacted in 1928 does not affect relator. (People ex rel. Cecere v. Jennings, 250 N. Y. 239.) The amendment in 1921 of section 243 of the Prison Law was not ex post facto as to the relator. (People ex rel. Ross v. Lawes, 242 App. Div. 638; People ex rel. Sabatino v. Lawes, 217 App. Div. 779; People ex rel. Schlechter v. Jennings, 130 Misc. Rep. 748; 223 App. Div. 814; People ex rel. Cecere v. Jennings, 250 N. Y. 239.)

      Harry Kalman for respondent.
   Crane, Ch. J.

Section 218 of the Prison Law (now Correction Law, Cons. Laws, ch. 43), as amended by chapter 286 of the Laws of 1912, reads as follows: Absolute discharge of paroled prisoner. If it shall appear to said board of parole that there is reasonable probability that any prisoner so on parole will live and remain at liberty without violating the law, and that his absolute discharge from imprisonment is not incompatible with the welfare of society, then said board shall issue to said prisoner an absolute discharge from imprisonment upon such sentence, which shall be effective therefor.”

Note must be made that this refers to an absolute final discharge, not a release on parole for good behavior.

On June 5, 1931, the Governor commuted the prison term of Joseph Ross who on February 11, 1921, had been sentenced to a determinate term of twenty years for grand larceny first degree, second offense. The certificate of his release is in the record and recites that the commuted term expires June 5, 1931, and annexed to it is the acceptance of the prisoner, wherein he states: “ This parole is granted under the conditions as set forth in the commutation granted by the Governor, which provides that I shall live and remain at liberty without violating the law, and be subject to the jurisdiction and control of the Board of Parole, as provided in article eight of the Correction Law, and also under the further condition that if I shall, during the period between the date of my release on parole and the date of the expiration of the full term for which I was sentenced, be convicted of any felony committed in the interval, as aforesaid, I shall, in addition to the sentence which may be imposed for such felony, be compelled to serve in a state prison or penitentiary, the remainder of the term without commutation, which I would have been compelled to serve but for the reduction of my sentence.”

The commutation issued from the Executive Chamber, signed by Governor Roosevelt, read: “ I do hereby reduce the sentence of each of the said convicts as recommended by said Board, under the conditions * * * he does not offend against the Laws of the State * * * and under the further condition that such convict shall five and remain at liberty without violating the law, and be subject to the jurisdiction and control of the Board of Parole for State Prisons as provided in article eight of the Prison Law, excepting section Two Hundred and Eighteen thereof, and also under the further condition that if any convict whose sentence is so reduced shall, during the period between the date of his release by reason of such reduction and the date of the expiration of the full term for which he was sentenced, be convicted of any felony committed in the interval, aforesaid, he shall, in addition to the sentence which may be imposed for such felony and before beginning the service of such sentence, be compelled to serve in the prison or penitentiary in which he may be confined for the felony for which he is so convicted the remainder of the term without commutation, which he would have been compelled to serve but for the reduction of bis sentence * *

The prisoner seeks to nullify all the conditions of the Governor’s pardon except that which sends him back to serve the remainder of his sentence, if he commits a felony after he is released. He may offend the laws of the State, commit a misdemeanor or any number of them without having broken his promised conditions or, if he does thus break the law, the condition means nothing:— no authority can bring him back to serve out his sentence. Likewise when the Governor showed mercy on condition that the prisoner should “ be subject to the jurisdiction and control of the Board of Parole for State Prisons as provided in article eight ” this likewise was ineffectual to give the Board any control over him whatever. The deliberate act of the Chief Executive stating so specifically the terms of his pardon should not be treated as a nullity.

Ross was released June 5, 1931, after serving ten years, three months and twenty days. Within two months he was back again, having been convicted of the crime of impairing the morals of a minor.” On August 29, 1931, he was returned to prison for violating his parole. On August 21, 1933, he was again paroled and again apprehended October 2, 1933. Paroled again on October 3, 1934, he was returned to prison on January 22, 1935, and released on habeas corpus by the Appellate Division, the court dividing three to two.

As the prisoner had broken the terms and conditions of his commutation by subsequently committing a crime, he was rightly rearrested and imprisoned. For the commission of a felony the prisoner had to serve out the balance of his term: for the breaking of the law — a misdemeanor, he was again subject to the Board of Parole and might be again paroled, as was done in this case. For this reason if no other he should not have been discharged.

When the Governor said subject to the jurisdiction and control of the Board of Parole for State Prisons as provided in article eight of the Prison Law excepting section Two Hundred and Eighteen,” we would have no doubt as to his meaning had this section read as above quoted and as it was before the amendment in 1928. The commuted prisoner, subject to the Board of Parole, could not be finally and absolutely discharged; he might be paroled but not discharged as provided in section 218.

In 1928 article eight of the Prison Law was revised and section 218 became the following:

§ 218. Board of parole to act on violations of parole. Whenever there is reasonable cause to believe that a prisoner who has been paroled has violated his parole, the board of parole at its next meeting shall declare such prisoner to be delinquent and time owed shall date from such delinquency. The warden of each prison shall promptly notify the board of parole of the return of a paroled prisoner charged with violation of his parole. Thereupon, such board of parole shall, as soon as practicable, hold a parole court at such prison and consider the case of such parole violator, who shall be given an opportunity to appear personally, but not through counsel or others, before such board of parole and explain the charges made against him. The board of parole shall within a reasonable time act upon such charges, and may, if it sees fit, require such prisoner to serve out in prison the balance of the maximum term for which he was originally sentenced calculated from the date of delinquency or such part thereof as it may determine, or impose such punishment as it deems proper, subject to the provisions of the next section.”

Notice that this gives the Board a discretion in requiring the prisoner to serve the maximum sentence: the Governor’s commutation says that if a felony be committed the prisoner shall serve the remainder of bis term.

As above stated, the Parole Board exercised its discretion in this case and paroled Ross two or three times as he had only been convicted of a misdemeanor.

Article nine apparently was not amended to meet the changes in article eight, section 218, because section 242 retained or continued the phrase excepting section two hundred and eighteen thereof,” having reference to that section as it was prior to 1928.

Section 243 of the Prison Law, as amended by chapter 567 of the Laws of 1921, read as follows: The governor shall, in reducing the sentences of convicts not subject to the jurisdiction of the board of parole, annex a condition that such convict shall live and remain at liberty without violating the law, and be subject to the jurisdiction and control of the board of parole for state prisons as provided in article eight hereof, excepting section two hundred and eighteen thereof, * *

Note that this had reference to definite sentences such as that given Ross.

Chapter 567 of the Laws of 1921 amended section 242 of the Prison Law so as to read: “ Any such warrant for the release of other convicts shall be transmitted to the officer to whom it is directed, who shall thereupon proceed to execute such warrant by releasing the convicts mentioned therein on the date fixed for their release. Such convicts shall thereupon be allowed to go on parole outside of said prison walls and inclosure upon such terms and conditions as the board of parole for state prisons shall prescribe, but to remain while so on parole in the legal custody and under the control of the agent and warden of the state prison from which he is so released until the expiration of the term of his sentence subject to the provisions of article eight hereof, excepting section two hundred and eighteen thereof.”

The section 218 referred to in both sections 242 and 243 is that section as it was prior to 1928 and which permitted the Board of Parole to discharge prisoners absolutely, not parole them.

The amendments of sections 242 and 243 in 1921 resulted in placing definí lie-sentenced prisoners under the jurisdiction and control of the Parole Board. Prior to that date the Board had no jurisdiction over them. (People ex rel. Mongno v. Lawes, 225 App. Div. 193.)

The Governor in commuting Ross used the language of these sections 242 and 243 and must have intended that section 218 (excepted) should have the meaning which it had when these sections were amended in 1921.

We need not strain, however, to explain these inconsistencies, as the Governor’s act must be given a fair and reasonable construction. To say that in one phrase he gave Ross into the jurisdiction and control of the Board of Parole ” and in the next phrase by excepting section 218 (as it now is) took it away, and all in one sentence, lacks sense. The exception means that the Board of Parole cannot grant Ross absolute discharge as it could have done prior to 1928.

The Attorney-General of the State in an opinion (Op. 1935, pp. 127, 128) took this view of the law, saying: “ Notwithstanding the fact that section 218 was repealed as of July 1, 1928, section 243 remained as above outlined until April 16, 1931. when the reference to section 218 was omitted.”

The order of the Appellate Division should be reversed and that of the County Court dismissing the writ affirmed and the relator remanded to custody.

Rippey, J.

(dissenting). A writ of habeas corpus directed to the warden of Great Meadow Prison to inquire into the cause of the detention of relator was dismissed by the County Judge of Washington county on June 12, 1936. Upon appeal, the Appellate Division, third department, reversed upon both the law and the facts, sustained the writ and discharged the relator. The Attorney-General has appealed to this court.

We have before us the petition, writ, return and traverse and nothing else. No evidence was taken on the return of the writ. If there was a dispute as to matters of fact concerning which inquiry might be made in this proceeding, it was the duty of the judge before whom thé writ was returned to take such evidence. (Matter of Lee, 220 N. Y. 532.) It must be assumed that there was no dispute as to the facts. Relying upon the record before us, the decision of the Appellate Division must be sustained.

In the petition, relator asserts that he is now illegally held without due process of law, in flagrant violation of his constitutional rights, and contrary to law, in custody, imprisoned and deprived of his liberty without his consent ” by the warden of Great Meadow Prison; that the sole authority claimed by virtue of which he is. detained, imprisoned and deprived of his liberty by the warden is the commitment issued by the County Judge of Bronx county on February 11, 1921, for a definite term of twenty years and that said commitment is null and void in continuing petitioner in prison ” because his term expired and he was duly discharged on June 5, 1931, after a total confinement of ten years and five months, allowing for credit for commutation and compensation pursuant to article 9 of the Prison Law; that he was conditionally discharged by the Governor on June 5, 1931, and has not violated any condition of his discharge nor is he held because of any such claimed violation. He alleges that he has been returned to prison by virtue of some order of the Parole Board for the alleged violation of a rule of the Parole Board relating to the despatch of New Year’s greetings to his family. Attached to the petition are copies of the commitment of February 11, 1921, and of the certificate of release dated May 26,1931, and of the agreement of relator on release dated June 4, 1931.

The only parts of the return which purport to show the cause of relator’s detention are paragraphs II and III. From those clauses it appears that the warden is holding relator under the commitment of February 11, 1921, on a declaration by the Parole Board of delinquency on August 21, 1933. This the relator admits, and there were no facts to traverse, but, by a traverse, relator reasserts his reasons why he is illegally detained. The record contains a copy of the compensation sheet and the commutation of sentence by the Governor.

It appears that on February 11, 1921, the relator was sentenced to a term of twenty years imprisonment after conviction of grand larceny in the first degree as a second offender. The relator was not subject to the jurisdiction of the Board of Parole, as he was sentenced as a second offender for a definite term. On January 19, 1931, as required by the provisions of section 233 of the Correction Law, the officers of Great Meadow Prison, where relator was then confined, constituting the board provided by section 236 for the purpose of determining the amount of commutation and compensation to which relator was entitled under said law, reported to the Governor that relator was entitled to a reduction of forty-six days in jail before sentence and had earned a reduction of nine years, six months and twenty-three days, and such reduction would fix the date for discharge as June 5, 1931. Thereupon, on March 30, 1931, in pursuance of the power conferred by article IV, section 5, of the State Constitution, the Governor conditionally commuted his sentence to expire June 5, 1931. The commutation was in the following words:

Now, therefore, in pursuance of the provisions of the Prison Law, I do hereby reduce the sentence of each of the said convicts as recommended by said Board, under the conditions that prior to his release from imprisonment by virtue of this reduction of sentence, he does not offend against the Laws of the State or the rules of the prison, and under the further condition that such convict shall live and remain at liberty without violating the law, and be subject to the jurisdiction and control of the Board of Parole for State Prisons as provided in Article Eight of the Prison Law, excepting section Two Hundred and Eighteen thereof, and also under the further condition that if any convict whose sentence is so reduced shall, during the period between the date of his release by reason of such reduction and the date of the expiration of the full term for which he was sentenced, be convicted of any felony committed in the interval, as aforesaid, he shall, in addition to the sentence which may be imposed for such felony and before beginning the service of such sentence, be compelled to serve in the prison or penitentiary in which he may be confined for the felony for which he is so convicted the remainder of the term without commutation, which he would have been compelled to serve but for the reduction of his sentence, but, he may, however, earn compensation in reduction of the remainder of such term, and provided further that he willingly and efficiently performs the duties assigned to him prior to his discharge.”

There were three specific conditions fixed by the Governor upon which commutation of sentence was granted: (1) That prior to his release from prison the relator shall not offend against the laws of the State and the rules of the prison. (2) That he shall live and remain at liberty without violating the law, and be subject to the jurisdiction and control of the Parole Board, as provided in article 8 of the Prison Law, excepting section 218 thereof. (3) That in the event he shall be convicted of a felony prior to the expiration of his unexpired maximum term, he shall be required first to serve the unexpired portion of that term without commutation. The return of the warden states that the relator was released on June 5, 1931. By the express terms of the Governor’s commutation, he reduced the sentence so that it would conditionally expire on that date. The return necessarily shows that there was no violation by relator of the condition of release first above mentioned. Inasmuch as the relator was sentenced for a definite period, no action by the Board of Parole was required prior to his release. The situation would have been different had relator been sentenced to an indefinite term and had it been reduced merely to the minimum. (Correction Law, § 223; People ex rel. Cecere v. Jennings, 250 N. Y. 239.) Article 8 of the present Correction Law applies only to prisoners sentenced to an indeterminate period subsequent to July 1, 1928 (§ 223) and the relator is thus specifically excluded from the provisions of that article. (People ex rel. Cecere v. Jennings, 250 N. Y. 239, 241.)

The functions of the Board of Parole for State Prisons, together with all the jurisdiction, powers and duties pertaining to such functions as of January 1, 1927, were transferred to the Department of Correction to be exercised and performed therein by or through the appropriate board. (State Departments Law, § 401 [Cons. Laws, ch. 78]; Laws of 1926, ch. 606.) Out of subsequent legislative enactments (one of which repealed § 401 above) emerged the Parole Board in authority at the time of relator’s release. (See Laws of 1928, ch. 485, § 2; Laws of 1929, ch. 243, § 11; Laws of 1930, ch. 824, § 5.) So far as relator is concerned, the powers of this Board were expressly limited by the Governor as provided in the second above mentioned condition of commutation. The Governor could attach such conditions as he saw fit and commutation was not subject to legislative restrictions, limitations or extensions. (People ex rel. Atkins v. Jennings, 248 N. Y. 46.) Notwithstanding, the Board proceeded to attach terms and conditions to the release not imposed by the Governor. Among them was the condition in effect that he should be subject to the same broad jurisdiction and control by the Board as that exercised over prisoners sentenced to indeterminate sentences. They also extended their jurisdiction to the limits permitted by article 8 of the Correction Law, in spite of the fact that that article of the Correction Law could have no application to this relator. The extent of the jurisdiction was that of supervision within the limitation imposed by the Governor and did not extend to miles and regulations enacted to govern parolees to whom the Board itself was authorized by law to grant parole. The fact that relator agreed to the conditions imposed by the Parole Board does not change the situation, for he could not be compelled to agree to forego a right which was given him by law or contract himself into servitude. The result is that the Board had no jurisdiction to parole and reparóle as was done in this case or to return the relator to prison for violation of any rules, regulations or conditions imposed by it and not included within the express conditions of release imposed by the Governor. The provisions of section 218 of the Prison Law before amendment in 1928 (Laws of 1928, ch. 485) extends the jurisdiction of the Parole Board to grant an absolute discharge in a case under their control on conditions therein stated. The purpose of the Governor in excepting section 218 as then in force was to limit the Board’s jurisdiction and control over this relator.

Section 696 of the Code of Criminal Procedure provides for the effect of violation of the conditions imposed by the Governor and also provides that determination of such violation shall be had in the manner prescribed in the Correction Law. The Governor placed, control of relator in the hands of the Board of Parole as provided in article 8 (except as to section 218). The practice required for retaking in the event of violation of the conditions imposed by the Governor is laid down in sections 216-220 of article 8 of the Correction Law. The record is barren of any evidence that any determination was made or practice followed as required by the provisions of those sections. It must be presumed that relator was reincarcerated by virtue of the declaration of delinquency made by the Parole Board on August 21, 1933. It is so stated in the return, but the proceedings before the Parole Board are not in the record and there is nothing to indicate what the delinquency was. There was nothing before the court upon which any conclusion could be based that a violation of the terms and conditions imposed had occurred. Thus, there was no evidence that the Parole Board had jurisdiction to order his reincarceration. No matter how broad a jurisdiction the Parole Board may have had, Ross could not be reincarcerated unless it was upon evidence of violation of conditions of parole or commutation. In People ex rel. Atkins v. Jennings (supra, at p. 53) it is said: On a question so vitally affecting personal liberty, the record should establish that the right to remain outside prison walls had been forfeited. Nothing should be left to surmise or conjecture.” Under section 1245 of the Civil Practice Act, the return must state the authority and true cause of the imprisonment or restraint, setting it forth at length, and this provision requires that the facts upon which the order of reincarceration was made should be set forth. (People ex rel. Tweed v. Liscomb, 60 N. Y. 559; People ex rel. Trainor v. Baker, 89 N. Y. 460; People ex rel. Stumpf v. Craig, 79 Misc. Rep. 98.) There is no evidence in the record that Ross has violated any law since June 5, 1931. The Parole Board could not act arbitrarily and was without jurisdiction to make a decision unfavorable to the relator requiring his reincarceration unless based upon facts showing violation of the conditions imposed. Action on undisclosed grounds may not avail, for those grounds, if any existed, might be no grounds at all. Retaking without a warrant and an opportunity to be heard is authorized by no law. Such arbitrary power is nowhere committed to that Board. The situation is in no wise changed by the statement of relator in the petition that he was recommitted by the Parole Board three times for infractions of its rules. For that ground he could not be recommitted. The law provides that if he violated the conditions imposed by the Governor, the “ commutation shall be void and he shall be remanded to the place of his former imprisonment and there confined for the unexpired term for which he had been sentenced.” (Code Crim. Proc. § 696.)

Exhibit A, attached to the brief of the Attorney-General, certifying that on May 3, 1931, one Peter Criscuolo was convicted and given a suspended sentence and returned to Sing Sing Prison on August 28, 1931, has no place in the record on this appeal. This exhibit did not appear in the record upon which the case has been heard nor is there a scintilla of evidence in the record connecting the relator with the person mentioned in that exhibit.

The order of the Appellate Division should be affirmed.

Lehman, O’Brien, Htjbbs, Loughran and Finch, JJ., concur with Crane, Ch. J.; Rippey, J., dissents in opinion.

Ordered accordingly.


text:
    In the Matter of the Claim of Fannie Lurye, Appellant, against Stern Brothers Department Store et al., Respondents. State Industrial Board, Respondent.

      Argued May 20, 1937;
    decided July 13, 1937.

      Edward T. Curran and Emma A. Grippa for appellant.
    The features of an occupational situation are lacking, and in place thereof there is a concomitant set of factors, unusual in their nature, which caused this unusual and catastrophic injury.(Ismay, Imrie & Co. v. Williamson, [1908] A. C. 437; Matter of Jeffreyes v. Sager Co., 233 N. Y. 535; Matter of Connelly v. Hunt Furniture Co., 240 N. Y. 83.) The claim should have been allowed. (Matter of Waters v. Taylor Co., 218 N. Y. 248; Matter of Petrie v. Oneida Steel Co., 215 N. Y. 335; Hensy v. White, [1900] Q. B. 481; Fenton v. Thorley & Co., [1903] A. C. 443; Matter of Ismay, Imrie & Co. v. Williamson, [1908] A. C. 437; Clover v. Hughes, [1910] A. C. 242; Matter of Connelly v. Hunt Furniture Co., 240 N. Y. 83.)

      James P. Allen, Jr., and John P. Smith for Stern Brothers Department Store et al., respondents.
    The claimant did not sustain an accident within the meaning of the Workmen’s Compensation Law (Cons. Laws, ch. 67). (Lerner v. Rump Bros., 241 N. Y. 143; Matter of Jeffreyes v. Sager Co., 198 App. Div. 446; 233 N. Y. 535; Wager v. White Star Candy Co., Inc., 217 App. Div. 316.)
   Loughran, J.

The claimant, Fannie Lurye, was employed as a saleswoman in a department store. On October 15, 1932, while the said Fannie Lurye was engaged in the regular course of her employment and while working for her employer, showing coats to a customer, a fellow-employee switched on an electric fan, which caused a draft to be blown upon her, causing her to sustain a chill, resulting in Bell’s Palsy, and as a result of which she became disabled.” On this finding the claim for an award of workmen’s compensation has been dismissed on the authority of Matter of Lerner v. Rump Bros. (241 N. Y. 153).

In that case the finding was that the employee, a salesman, while worldng on June 2, 1923, at his employer’s plant, and while showing fruit and vegetables to a customer of his employer in the refrigerator of said employer’s plant, and because of the sudden transition from the superheated atmosphere on the outside of said refrigerating plant to the chilly atmosphere in the interior thereof, and as his duties necessitated his remaining in said refrigerator for ten minutes, he received a chill that naturally and unavoidably caused a cold to develop which lowered his disease-resisting power, and as a result, pulmonary edema and cerebral embolism and septic endocarditis developed and caused his death on November 22, 1923; the proximate cause of death being the injury that he received in the refrigerator of his employer’s plant on June 2, 1923.” (212 App. Div. 747, 748; 241 N. Y. at p. 154.) It was there held that the facts so found did not make out a case of disease which could be classified as an accident within the fair meaning of the statute.

We have here the same circumstances of contact with cold air at a definite time and place resulting in disease, with nothing out of the ordinary either in the claimant’s work or condition of health. But there, we think, the likeness ends.

In the Lerner case the employee passed from a hot room into a cold one. The specific result was something that was álmost as likely to occur as not. What was presented, the court said, was “ a case of ordinary exposure resulting in a cold.” We thought that to the average man there would seem to be no accident in such a sequence of events. (Cf. Matter of Hocke v. Emdee Management Corp., 269 N. Y. 592.)

In the case at hand the claimant was struck by air propelled by the fan. The result was palsy which is limited to one side of the face and is acute in onset and called Bell’s ”— with consequent distortion of the parts and of the powers of expression. We think the average man would say that so swift and harsh a disablement was an accidental injury when it was so strangely suffered in the ordinary day’s work. (See Lewis v. Ocean Accident & Guarantee Corp., 224 N. Y. 18, 21.) It seems to us that analogy, too, leads to that conclusion. “ Sunstroke, strictly speaking, is a disease, but the suddenness of its approach and its catastrophic nature have caused it to be classified as an accident.” (Matter of Connelly v. Hunt Furniture Co., 240 N. Y. 83, 87.)

For cases like this no general rule can be annunciated. (Mansbacher v. Prudential Ins. Co., 273 N. Y. 140, 145.) Confining ourselves to the finding here made and affirmed, we hold that the claimant was entitled to relief. (Cf. Industrial Commission v. Middleton, 126 Ohio St. 212.)

The order of the Appellate Division and the determination of the State Industrial Board should be reversed and the award originaUyjnade reinstated, with costs in all courts.

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

Ordered accordingly.