text:
    Goldberger-Raabin, Inc., Plaintiff, v. 74 Second Avenue Corporation, Bespondent, and Jacob S. Harman, Appellant, Impleaded with Others.

      (Argued November 25, 1929;
    decided December 6, 1929.)

      Harold R. Medina and William Gilbert for appellant.
    The notice of hen complies in ah respects with section 9 of the Lien Law. (Pascual v. Greenleaf Park Land Co., 245 N. Y. 294.) The plaintiff’s notice of hen contains a statement of the amount unpaid for services rendered to the date of its filing and also comphes with the requirement of the statute that the agreed price and value of such services shall be stated. (Barrett v. Schaefer, Jr., & Co., 162 App. Div. 52.) The services rendered by the plaintiff clearly entitled him to the protection afforded by the Lien Law. (Thompson-Starrett Co. v. Brooklyn Heights Realty Co., 111 App. Div. 358; Spannhake, Inc., v. Mountain Const. Co., 159 App. Div. 727; Stryker v. Cassidy,
      76 N. Y. 50; Swasey v. Granite Spring Water Co., 158 App. Div. 549; Rinn v. Electric Power Co., 3 App. Div. 305; Chase v. James, 10 Hun, 506; Post & McCord v. City of New York, 86 Misc. Rep. 300.)

      Frederick Zorn and Joseph Kahn for respondent.
    The notice of lien is fatally defective because it states the nature of labor performed and to be performed and a lump sum for agreed price and value thereof and a lump sum for the amount unpaid. This is insufficient as failing to set forth the agreed price or value of labor performed at the time of filing the notice of lien. (Bossert v. Fox, 89 App. Div. 7; 180 N. Y. 546; Finn v. Smith, 186 N. Y. 465; Bachmann v. Spinghel, 164 App. Div. 725; Pascual v. Greenleaf Park Land Co., 245 N. Y. 294; Storch & Co. v. Marginal Realty Corp., 109 Misc. Rep. 669; Gately v. Gately, 103 Misc. Rep. 16; Copp v. Firemi, 182 App. Div. 289; Higgins v. Piel Co., 208 App. Div. 729; Mahley v. German Bank, 174 N. Y. 499; McDermott v. Lawyers Mortgage Co., 232 N. Y. 336.) The statute does not give a hen for services in connection with making contracts, obtaining insurance or conferring with architect, owner or engineer. (Bennett v. Gerry Co., 273 Penn. St. 585; Hilton Bridge Const. Co. v. New York Central R. R. Co., 145 N. Y. 390; Holzhauer v. Meer, 59 Mo. 434; Bruns v. Braun, 35 Mo. App. 337; Sound Transfer Co. v. Phinney Realty & Investment Co., 71 Wash. 473.) Appellant has in effect obtained damages for breach of a contract of employment. A hen cannot be awarded for such damages. (Whritenour, Inc., v. Colonial Homes Co., Inc., 209 App. Div. 676; Higgins v. Piel Co., 208 App. Div. 729; O’Reilly v. Mahoney, 123 App. Div. 275.)
   Crane, J.

The 74 Second Avenue Corporation commenced the erection of an office building known as 97-101 Walker street, in the borough of Manhattan, city of New York, and employed Jacob S. Harman as superintending engineer in charge of construction. Work commenced August 15, 1926, and ended April 25, 1927, before completion through the owner’s financial inability to complete. Harman filed a mechanic’s lien which he has sought to foreclose in this action. The Special Term upheld the hen, awarding him judgment for $4,500. The Appellate Division has reversed the Special Term judgment, holding the notice of hen defective and insufficient under the statute.

Before examining the notice of hen we had better understand the nature and extent of Harman’s claim.

The contract between the parties was made orally in August of 1926 and later reduced to writing October 1st of the same year. There is no dispute over the terms of the contract. After the recitals it is agreed:

“First. The Corporation hereby hires Harman, and Harman hereby agrees to be employed by the Corporation as general superintendent of the Corporation with relation only to the construction of a modern office building on premises 97-101 Walker Street, Borough of Manhattan, City of New York.

“ Second. That the duties of said Harman shall be only that of generally superintending the job, procuring bids from sub-contractors for the different items of work necessary to be performed; the co-ordinating of the work of the sub-contractors; and to co-operate with the engineer and architect, subject, however, at all times to the orders,

directions and instructions of the Corporation. *******

“Fourth. That for his services as aforesaid the Corporation shall pay to Harman a sum equal to two and one-half per cent. (2J%) of the total net cost of construction. The total net cost of the construction shall be deemed to include net cost of material and labor, but shall not include the cost of the land, insurance, plans, nor the salaries and fees paid to those who act in a superintending, executive or advisory capacity with relation to the construction of said building.

“Fifth. The Corporation shall pay to Harman the sum of One Hundred Dollars ($100.00) at the end of each and every business week during the course of his employment, which payment shall be on account of the commissions or compensation earned or to be earned by Harman. If the compensation earned by Harman is less than the aggregate of the sums paid in weekly installments as herein provided for, the said Harman shall reimburse the Corporation to the extent of the surplus received by him.”

As this contract was broken in April of 1927 by the 74 Second Avenue Corporation, Harman has an action against it for damages in which he may recover the profits he would have made if the contract had been fully completed. He cannot recover such damages through a mechanic's lien. (O’Reilly v. Mahoney, 123 App. Div. 275; Whritenour Co., Inc., v. Colonial Homes Co., Inc., 209 App. Div. 676.)

The Lien Law [Cons. Laws, ch. 33], section 3, gives to a contractor who performs labor for the improvement of real property a hen for the value or agreed price of such labor upon the real property improved. Section 2 defines improvement: The term ‘ improvement' when used in this chapter, includes the erection, alteration or repair of any structure upon, connected with, or beneath the surface of, any real property and any work done upon such property or materials furnished for its permanent improvement * * * and shall also include the drawing by an architect or engineer, of any plans or specifications which are used in connection with such improvement.” Harman was to have two and one-half per cent upon the total net cost of construction for doing some things for which he could not file a lien, standing alone and by themselves. The record shows that there was a building upon this property which had to be torn down before the new building could be erected. We are not told the nature, of this building or how extensive was the work of demolition. All we have is the statement that a building was tom down. Neither does Harman testify as to his connection with this work of destruction. Where the removal or tearing down of a building does not amount to an improvement of the real property it has been held that no mechanic’s lien can be filed for the value of such work. (Thompson-Starrett Co. v. Brooklyn Heights Realty Co., 111 App. Div. 358.)

Harman did not prepare the plans and specifications. He says, however, that he supervised and prepared the contracts for the subcontractors. For this work there can be no mechanic’s lien. Section 2, as above quoted, gives a Hen to an architect or engineer for drawing plans and specifications which are used in connection with such improvement. Ordinarily such work would probably include the contracts prepared by the architect or engineer but where an architect has prepared the plans and specifications our Mechanics’ Lien Law does not provide that an engineer may have a Hen for merely preparing and obtaining subcontracts based upon these plans and specifications. The case of Bennett v. Gerry Co. (273 Penn. St. 585), under an act giving an architect no Hen for his services, held that the work of securing contracts from subcontractors was no part of the work of superintendence.

The tearing down or destruction of the building may have been an improvement to the real property or part of the necessary improvement according to the circumstances to be determined as a question of fact. If such work was an improvement or necessary part of work done upon such property for its permanent improvement I see no reason why the labor and service in connection with such work should not be covered by the Lien Law.

We come then to the claim of Harman, the engineer, under the contract and under the Lien Law. For what services can he have a Hen and what wiU be the measure of his compensation?

Harman is entitled to a Hen for the reasonable value of his services as superintending engineer up to the time of his filing the lien in April, 1927. This includes the reasonable value of his services in superintending the construction of the new building and the tearing down of the old building, providing the old building was torn down as part of the work necessary for construction and for the improvement of the real property. This, of course, will be determined upon a new trial. He is not entitled to a lien for his services in aiding or assisting in procuring subcontracts or subcontractors. While this was part of his contract, it is not part of the work of improving property for which the law provides a lien.

The record in this case is barren of any evidence of the value of these services. The estimated value given by Harman includes services which are here ehminated and is also figured in an improper way. The claimant estimated value as he would for damages upon breach of contract. He is confined in this action to the reasonable value of his services rendered by him for which the law provides that he may file a lien. These, to repeat, are confined to his service in superintending construction including service in superintending the demolition of the old building, providing that was a necessary part of the work of improving the real property.

The next question is whether the hen as filed by Harman complies with the law. . Section 9 says that the notice of Hen shall state, among other things, the labor performed and the agreed price, or value thereof, and the amount unpaid for such labor. This does not mean that the Hen is void if the amounts stated are inaccurate; it means that the Hen shall state the claim of the Henor which, upon the trial, may appear to be much less than the amount stated. If the claimant has stated the labor performed and the agreed price or value thereof, the Hen is good for the amount of labor he proves that he has performed and for the value which the court determines that labor has, even though it be different from that stated in the claim

The notice in this case complies with this law, although stating the figures inaccurately. The agreed price is stated according to the contract two and one-half per cent of construction cost, or $7,750. This is the contract price as figured by the claimant. It also states that by the contract he is to have $100 per week. The labor performed is also accurately stated; it is supervision and superintendence of the construction of the building erected at the place stated, 97-101 Walker street. The lien also states that this work of superintendence commenced August 15th, 1926, and that the last day of performance was April 25th, 1927, a period of thirty-six weeks. We, therefore, have this notice of lien stating on its face that the labor performed by Harman was the supervision and superintendence of the contract for construction and the work thereunder on the building specified; that this work lasted for thirty-six weeks and that the contract price was to be $100 a week. This would make $3,600, the amount due for the work performed. He also states in the lien that $1,100 had been paid on account, which leaves $2,500 due, which he expresses in this way: “ The amount unpaid to the laborer for such labor is $2,500, due on drawing account.” He also claims that there is to be added to this an amount due on the percentage balance, two and one-half percentum (2%%) of construction cost, claiming the balance according to contract price instead of the reasonable value of the services performed. The Lien Law permits the amount due to be stated according to contract price or according to the value of the work performed. The labor performed, however, must be figured and determined according to the reasonable value thereof as the contract was not completed and the percentage includes pay for services for which a hen may not be filed.

This notice of lien, therefore, complies with the requirements of section 9 as fully and completely as can be done considering the nature of the contract, the class of labor and the breach or termination of the contract before completion.

Pascual v. Greenleaf Park Land Co. (245 N. Y. 294) is unlike this case. There the notice of Hen failed to state the value of the work performed or the amount due for such work. The figures given may have included work yet to be performed. The amount unpaid to the Henor for such labor and material is Four Thousand eight hundred and ten dollars.” Such labor ” referred to the previous statements in the notice which included work performed and to be performed. We said that the part referring to work to be performed could not be rejected if the notice fails elsewhere to state, by imphcation, at least, the agreed price or value of the labor performed and materials furnished, exclusive of labor to be performed or materials to be furnished in the future.” The Hen here states the labor performed for thirty-six weeks, the agreed ■ price and the balance due therefor; plus work at the agreed percentage meaning two'and one-half per cent on the net cost to April 25th, 1927. The reference, therefore, in this notice to work to be performed may be disregarded.

We, therefore, conclude that there must be a new trial in this case, that the notice of Hen is vaHd and that upon the new trial Harman will be entitled to a judgment for the reasonable value of the labor of superintendence performed by him as that has been Hmited by us, less the amount already paid him.

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

Pound, Kellogg, O’Brien and Hubbs, JJ., concur; Cardozo, Ch. J., and Lehman, J., not sitting.

Judgments reversed, etc.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Bula E. Croker, Respondent, v. Richard Croker, Appellant. Bula E. Croker, Respondent, v. Ethel White, Appellant.
    (Submitted December 6, 1929;
    decided December 6, 9129.)
    (See 252 N. Y. 24, 517.)
   Per Curiam.

When a judgment of the Appellate Division affirming a judgment of a lower court is reversed by this- court, it has been the practice of recent years to state for greater certainty that both judgments are reversed. Such fullness of recital is in fact unnecessary, since a reversal of a judgment of affirmance rendered by the Appellate Division involves as an incident the failure of the judgment affirmed by that court.

We grant the motions to amend the remittiturs by specifying both judgments without intending to suggest thereby that an amendment is essential.


text:
    The People of the State of New York, Appellant, v. David H. Bergman, Respondent.
    (Argued November 18, 1929;
    decided December 6, 1929.)

      Henry Hirschberg for motion.

      Elmer H. Lemon, District Attorney, opposed.
   Per Curiam.

The Appellate Division in reversing the judgment of conviction and granting a new trial states that the reversal is upon the law, but says nothing about the facts. We said in People v. Redmond (225 N. Y. 206) that this court has no jurisdiction to review such an order of the Appellate Division unless it appears affirmatively in the body of the order that the court below has exercised its power to review the facts and, that being satisfied with the judgment in that respect, the reversal is ordered for error of law only. This court also stated in that opinion that the Appellate Division should give heed to this rule and in justice to the People as well as to the defendant should review the facts. That court only performs part of its duty when it passes upon the law only. It is equally requisite under our practice for it to pass upon the facts and state its conclusion.

For the reasons stated in the Redmond case the motion to dismiss the appeal must be granted without prejudice to an application by the District Attorney for appropriate relief at the Appellate Division.


author: Htjbbs, J. Cabdozo, Ch. J.

text:
    Walter J. McClelland, Appellant, v. Climax Hosiery Mills, Respondent.

      (Argued October 10, 1929;
    decided January 7, 1930.)

      Edward Endelman for appellant.
    A plea in mitigation must be specially pleaded under section 262 of the Civil Practice Act. As there is no answer in this action, there is no plea in mitigation before the court. Evidence offered to support such a plea was, therefore, erroneously accepted by the trial court. (Bassett v. French, 10 Misc. Rep. 678; Ford v. David, 1 Bosw. 570; McKyring v. Bull, 16 N. Y. 297; Gabay v. Doane, 77 App. Div. 416.) The testimony for defendant of an alleged offer of employment made before plaintiff was discharged on June thirtieth was improperly received. (Whitmarsh v. Littlefield, 46 Hun, 418; Martin v. Johnson, 6 Misc. Rep. 310; 148 N. Y. 740.) The burden of proving employment, or earnings, if any, or efforts to procure employment, or non-efforts on the part of the plaintiff, was on the defendant. (Howard v. Daly, 61 N. Y. 362; Graff v. Blumberg, 53 Misc. Rep. 296; Griffin v. Brooklyn Ball Club, 66 App. Div. 566; Merrill v. Blanchard, 7 App. Div. 167; Monroe v. Proctor, 51 Misc. Rep. 632; Milage v. Woodward, 186 U. Y. 252; Crawford v. Mail & Express, 22 App. Div. 54.) This court has jurisdiction in this case and the appeal does lie. (Yaw v. Whitmore, 66 App. Div. 317.)

      Thomas P. Hall for respondent.
    The court is without jurisdiction to review orders denying motions for new trials entered upon proceedings for the assessment of damages, where the appellant has mistakenly pursued that remedy instead of moving at Special Term for the vacation of the assessment of damages. (Bossout v. R., W. & O. R. R. Co., 131 N. Y. 37; Trieber v. New York & Q. C. Ry. Co., 149 App. Div. 804; Lewin v. Lehigh Valley R. R. Co., 169 N. Y. 336; Ware Brothers Co. v. Cortland Cart & Carriage Co., 192 N. Y. 439; Mortimer v. Bristol, 190 App. Div. 456.)
   Htjbbs, J.

The complaint alleges that on April 19, 1926, the plaintiff and defendant entered into a written contract in which it was agreed that the plaintiff was to have charge of the sales of the defendant at a salary of $12,000 a year for the balance of the year and for the year 1927; that the contract was carried out and the plaintiff was paid according to its terms; that he continued to work until and during the month of June, 1928, but that the $1,000 due for that month’s work had not been paid. It is also alleged that on or about January 12, 1928, the parties entered into a further agreement whereby the defendant agreed to employ the plaintiff for the balance of the year 1928 upon the same terms. On June 30th the defendant discharged the plaintiff and this action is to recover $1,000, the salary earned for the month of June and $6,000 damages for his wrongful discharge.

The defendant being in default in answering moved at Special Term to open the default. The motion was denied and defendant appealed to the Appellate Division. The order of the Special Term was affirmed. The plaintiff then moved at Special Term under section 490 of the Civil Practice Act for an assessment of damages. The motion was granted and the court directed- that the assessment be taken before it at Special Term. The parties appeared and the plaintiff established a prima facie case entitling him to a judgment for $7,000. The defendant then offered testimony over the plaintiff’s objection and exception tending to establish that a third party during the month of June before plaintiff’s discharge offered the plaintiff a similar position at the same salary. The plaintiff in his objection specifically pointed out that at the time of the alleged offer of employment, the plaintiff had not been discharged but was still employed under his contract with the defendant. The Special Term sustained the defendant’s contention, refused to award the plaintiff judgment for damages for his wrongful discharge but granted judgment for $1,000 salary for the month of June. Judgment was entered accordingly. The Appellate Division has affirmed the judgment and permission to appeal has been granted by this court. In an action for damages for wrongful discharge the burden of going forward with the evidence upon an issue in reduction of damages is on the defendant. The testimony offered by the defendant was insufficient to establish any basis for the reduction of plaintiff’s damages. It was indefinite and uncertain and did not tend to establish that plaintiff could have procured similar employment elsewhere for any definite time at any definite salary.

It is urged by the appellant that it is improper, upon an assessment of damages, to receive testimony offered by a defendant to the effect that the plaintiff refused to accept similar employment and thereby reduce bis damages.

The defendant, by failing to answer, admits all traversable allegations contained in the complaint. (Foster v. Smith, 10 Wend. 377; Paine & Duer Practice, vol. 1, p. 635.) An allegation of damage is not, however, a traversable allegation. (Emery v. Baltz, 94 N. Y. 408, at 412.) It is not admitted by a defendant’s failure to answer. (Hartness v. Boyd, 5 Wend. 563; Howell v. Bennett, 74 Hun, 555, at 558; Thompson v. Halbert, 109 N. Y. 329; Lewis v. City Realty Co., 158 App. Div. 733; Sutton v. Duntley, 205 App. Div. 660.)

Upon an assessment of damages, a defendant who has served a notice of appearance is entitled to notice of the assessment, to appear and cross-examine the plaintiff’s witnesses, and to offer testimony upon the question of damages, not for the purpose of defeating the plaintiff’s cause of action in toto, because he has admitted the cause of action by failing to answer and plaintiff is entitled, in any event, to nominal damages. The testimony is competent, however, for the purpose of assisting the court in fixing the real damages suffered by the plaintiff. (Kerker & Willets v. Carter, 1 Hill, 101; Hartness v. Boyd, supra; Wandell v. Edwards, 25 Hun, 498; Graham’s Practice, 642.)

Where a summons and complaint is served personally, and the clerk may enter a default judgment as provided in section 485 of the Civil Practice Act, the clerk must enter it for the amount demanded in the complaint, unless the plaintiff elects to have it entered for a smaller sum. (Civ. Prac. Act, § 487.) In such cases the default admits the cause of action alleged and the amount for which judgment may be entered. If the case is not one where the clerk may enter a default judgment for the amount demanded in the complaint, the plaintiff must “apply to a court or to a judge thereof for judgment.” (§ 489.) In Bullard v. Sherwood (85 N. Y. 253, at p. 256) Judge Finch, in referring to a similar provision of the Code of Civil Procedure, said: “ The very requirement of an application to the court implies a judicial determination of the proper judgment to be rendered which is not at all controlled by the legal conclusions of the pleader.”

The appellant contends that such testimony cannot be given by a defendant upon an assessment of damages because of the provisions of the Civil Practice Act which control in the matter of pleading. Section 261 provides: “ The answer of the defendant must contain: * * * 2. A statement of any new matter constituting a defense or counterclaim.” Section 262 provides that an answer may state a partial defense and “ Matter tending only to mitigate or reduce damages is a partial defense, within the meaning of this section.” Section 339 reads: “In an action to recover damages for the breach of a promise to marry, or for a personal injury, or an injury to property, the defendant may prove, at the trial, facts not amounting to a total defense, tending to mitigate or otherwise reduce the plaintiff’s damages, if they are set forth in the answer, either with or without one or more defenses to the entire cause of action. A defendant, in default for want of an answer, may prove facts of that description upon a reference or inquiry to ascertain the amount of the plaintiff’s damages.”

It is urged that the effect of those provisions is to prevent the defendant who has failed to set up in an answer as a partial defense matter tending only to mitigate or reduce damages ” from giving testimony thereof, and that, therefore, such testimony is not admissible on an assessment of damages. The rules of pleading embodied in those provisions of the Civil Practice Act are intended to govern when a pleading is served. They have no application upon an assessment of damages taken upon a default for service of an answer except as stated in section 339, which expressly provides that a defendant' in default for an answer in an action for wrong may offer evidence in mitigation or reduction of plaintiff’s damages.

The practice upon an assessment of damages, except as provided in section 339, is governed by the rules of the common law. (Bossout v. R., W. & O. R. R. Co., 131 N. Y. 37, at 39; Yaw v. Whitmore, 66 App. Div. 317, 321.) The principle which prevents a defendant from offering evidence upon an assessment of. damages in contradiction of material allegations of the complaint is that by failing to answer he has conclusively admitted the plaintiff’s cause of action. To that extent, he is foreclosed from offering testimony. But. by failing to answer he does not admit the plaintiff’s legal conclusion as to damages. He is not, therefore, foreclosed from offering evidence upon that question.

The defendant contends that the plaintiff was required by rule 222 of the Rules of Civil Practice to move at Special Term to vacate or set aside the assessment of damages and that the order made on the motion upon the minutes of the court to set aside the verdict and for a new trial offers no ground for an appeal to this court. This was neither a reference nor a writ of inquiry.

The assessment having been made by the court, the motion was properly made on. its minutes and no court of concurrent jurisdiction could have entertained a motion to set aside the assessment. The procedure upon an assessment of damages by the court is not specified in the Civil Practice Act and general rules must be held to apply. (Bossout v. R., W. & O. R. R. Co., supra; Yaw v. Whitmore, supra; Elsey v. International Ry. Co., 93 App. Div. 115.) While it might be true that this court could not entertain an appeal from the order entered upon the denial of plaintiff’s motion to set aside the verdict if taken independently, an appeal from the judgment brings up for review such order. (Civ. Prac. Act, § 580.)

The judgment is clearly final and it must, therefore, be held that it as well as the order in question may be reviewed by this court. (City Trust S. D. & S. Co. v. American Brewing Co., 182 N. Y. 285; Civ. Prac: Act, § 588, subd. 5.) The assessment of damages did not involve a discretion on the part of the court in making the assessment as the amount of the plaintiff’s damage was the amount fixed in the contract. The evidence was insufficient to establish any basis for the reduction of plaintiff’s damages which were prima facie the salary fixed by the contract of employment. (Ware Brothers Co. v. Cortland Cart & Carriage Co., 192 N. Y. 439.)

The judgment and order should be reversed and the matter remanded to the Special Term for reassessment of damages in accordance with the determination of this court.

Cabdozo, Ch. J.

(concurring). I agree with Judge Hubbs that the testimony as to other employment was too vague and indefinite to disprove the prima facie case of damage made out by the plaintiff. I agree with him also that Civil Practice Act, section 262, like Civil Practice Act, section 339, is inapplicable to a case where the defendant is in default for want of an answer. I am satisfied, however, that even if an answer had been served, a failure to seek other employment would not be matter in mitigation within the meaning of the statute, and would, therefore, be provable though not specially pleaded. It is important to avoid any implication to the contrary.

For many years the Codes of Procedure and of Civil Procedure had rules as to the pleading of “ mitigating circumstances ” in certain classes of actions, i e., in actions of libel and slander (Code of Procedure, § 165), and in actions to recover damages for the breach of a promise to marry, or for a personal injury, or an injury to property (Code Civ. Proc. § 536). These provisions were carried forward into section 339 of the Civil Practice Act, which reads as follows: “Proving mitigating circumstances in action for wrong. In an action to recover damages for the breach of a promise to marry, or for a personal injury, or an injury to property, the defendant may prove, at the trial, facts not amounting to a total defense, tending to mitigate or otherwise reduce the plaintiff’s damages, if they are set forth in the answer, either with or without one or more defenses to the entire cause of action. A defendant, in default for want of an answer, may prove facts of that description upon a reference or inquiry to ascertain the amount of the plaintiff’s damages.”

The courts had occasion from time to time to pass upon the meaning of the phrases “ mitigating circumstances ” or facts “ tending to mitigate or otherwise reduce the * * * damages,” as used in these statutes. The rule came to be established that the mitigating circumstances referred to were those that bore upon a defendant’s liability for punitive or exemplary damages by reducing or softening the moral or social culpability attaching to his act, or upon his liability for actual damages by showing that, though suffered, they had been partially extinguished. For illustration, a defendant might wish to show that in publishing a libel he had acted without malice, upon credible reports, and in the belief that what he was writing was the truth. To gain for himself the benefit of these mitigating circumstances in reduction or extinguishment of punitive damages, there was need for him to plead them (Wackter v. Quenzer, 29 N. Y. 547; Spooner v. Keeler, 51 N. Y. 527, 535; Bradner v. Faulkner, 93 N: Y. 515; Gressman v. Morning Journal Assn., 197 N. Y. 474). On the other hand, there could never be mitigating circumstances ” to cut down the recovery of damages actually suffered unless afterwards extinguished pro tanto by payment or release (Gressman v. Morning Journal Assn., supra; Lynch v. Figge, 194 App. Div. 126, 132). Matter tending to the disproof of actual damages, or damages claimed to be actual, was not matter in mitigation within the meaning of the statute, and might be proved by a defendant though not mentioned in the answer (Wandell v. Edwards, 25 Hun, 498; Gulerette v. McKinley, 27 Hun, 321; Young v. Johnson, 46 Hun, 164; 123 N. Y. 226; Osterheld v. Star Co., 146 App. Div. 388,394; Walmsley v. Kopczynski, 202 App. Div. 104, 108). The doctrine of these decisions is in harmony with the rule that an allegation of a complaint as to a plaintiff’s general damages is not the subject of traverse in an answer, and may be disputed by a defendant though not covered by a denial (Howell v. Bennett, 74 Hun, 555, 558,1 and cases there cited). A fortiori it may be disputed without 'plea in mitigation.

Until the adoption of the Civil Practice Act, the statutory rules with reference to mitigating circumstances were confined, as I have said, to three classes of actions. At an early date, however, the question came before the courts as to the practice to be followed where matter in mitigation was to be proved by a defendant sued in assumpsit or in debt. In the leading case of McKyring v. Bull (16 N. Y. 297, 304), this court laid down the rule that there must be a plea even in such actions whenever the matter to be proved was in full or in partial discharge of a cause of action theretofore accrued, since this was “ new matter ” within the meaning of the Code. The case there considered was an action in assumpsit for the value of services. In such an action full payment is not provable unless pleaded as a defense (cf. Lerche v. Brasher, 104 N. Y. 157). Our ruling was that partial payment mitigating the damages was not provable unless pleaded as a partial defense. The cause of action became complete when the services were rendered. Evidence of later payments was not matter tending to disprove the cause of action at the date of its accrual, nor even tending to reduce the amount then owing for the services as a fixed and certain obligation. Like proof of release or of accord and satisfaction, it made out a discharge, pro tanto, of a liability once existing. In substance, it was confession and avoidance. Nothing in that decision or any other gives support to the conclusion that there must be a plea in mitigation where the matter to be proved by the defendant is directed to his contention that the damages sued for by the plaintiff were never suffered as claimed (cf. Gabay v. Doane, 77 App. Div. 413; Pomeroy, Code Remedies [5th ed.], §§ 570, 571).

The question now is whether section 262 of the Civil Practice Act has brought with it the need for a new and different definition of “ mitigating circumstances.” The provisions of that section so far as relevant are as follows: “ A partial defense may be set forth [in an answer], but it must be expressly stated to be a partial defense to the entire complaint, or to one or more separate causes of action therein set forth. * * * Matter tending only to mitigate or reduce damages is a partial defense, within the meaning of this section.” The sentence last quoted was not in the earlier codes.

I see no reason to believe that this section has changed the definition of “ mitigating circumstances.” If it has, the curious result will follow that even in the classes of cases enumerated in section 339, matter disproving actual damages must be pleaded today, though never required to be pleaded in the past. I cannot bring myself to believe that a change so revolutionary was brought about by merely declaring in respect of actions generally the same rule of pleading long in force with reference to actions of certain designated classes. Mitigating circumstances are not those that reduce the actual damages by showing that they were not suffered. Mitigating circumstances are those that affect the basis for an award of exemplary damages, or reduce actual damages by showing, not that they were never suffered, but that they have been partially extinguished (cf. Gabay v. Doane, supra.)

The final question is this: Does a servant’s refusal to accept other employment amount to an extinguishment of liability for damage actually suffered, or to disproof of the claim that damage to the extent demanded was actually suffered? Plainly, I think, the latter. Upon a wrongful discharge of a servant during the term of employment, the prima facie measure of damage is the wage that would be payable during the remainder of the term (Howard v. Daly, 61 N. Y. 362, 371; Milage v. Woodward, 186 N. Y. 252, 257; Warren v. Stoddart, 105 U. S. 224). This is only the prima facie measure. There is no fixed and certain obligation on the part of the master to respond in damages for that amount. The obligation of the master is merely to pay whatever damages have actually been suffered, and these exclude damages that a servant, acting reasonably, would have diminished or avoided. Proof of a prima facie case will charge the master with a duty of going forward with the evidence. This does not mean that he has the burden of proof in the strict sense, a burden that would require him to plead the matter to be proved (Whitlatch v. Fidelity & Casualty Co., 149 N. Y. 45, 50; Irving v. Irving, 90 Hun, 422; 149 N. Y. 573).

The statement is made not infrequently in treatise and decision that a servant wrongfully discharged is under a duty ” to the master to reduce the damages, if he can. The phrase is accurate enough for most purposes, yet susceptible of misunderstanding, if emphasized too sharply (American Law Institute, Tentative Restatement of the Law of Contracts, § 328). The servant is free to accept employment or reject it according to his uncensored pleasure. ' What is meant by the supposed duty is merely this, that if he unreasonably reject, he will not be heard to say that the loss of wages from then on shall be deemed the jural consequence of the earlier discharge. He has broken the chain of causation, and loss resulting to him thereafter is suffered through his own act. It is not damage that has been caused by the wrongful act of the employer.

I am confirmed in the conclusion that evidence as to these matters does not come within the description of mitigating circumstances when I reflect where we shall be led if we adopt a different rule. A manufacturer of merchandise brings an action against the buyer by reason of an anticipatory refusal to accept the merchandise when made. Must the defendant plead in his. answer that the plaintiff aggravated the damages by proceeding with the process of manufacture after notice to desist? A buyer sues a manufacturer for an injury to merchandise resulting, as he claims) from packing in defective cases. Must the defendant plead in defence that the plaintiff kept the goods in the cases after knowledge of the defect when at a trifling expense they could have been repacked in cases that were perfect? In these and countless other instances, the course of justice will be greatly embarrassed if the damage actually suffered as a jural consequence of the wrong may not be proved to be less without a plea in mitigation. Often the truth does not come out without the probe of cross-examination in the progress of the trial. The defendant cannot know it in advance, or even have information about it, so as to supply a basis for a pleading. This is conspicuously so in the very class of actions now before us, where the servant often sues immediately after his discharge, and the employer does not know until the trial whether there has been diligence or inaction in looking for employment elsewhere.. We encouragé reckless, pleading if we say that in such circumstances there can be no reduction of the damages, no proof that they were not actual, unless the defendant has the hardihood to assert a plea in mitigation.

There should be. a reassessment of the damages in accordance with these views.

Cardozo, Ch. J., concurs in opinion; .Pound, Crane, Lehman, Kellogg and O’Brien, JJ., concur in both opinions.

Judgment accordingly.


author: Pound, J.

text:
    Donemar, Incorporated, Appellant, v. James Molloy et al., Respondents.

      (Argued November 25, 1929;
    decided January 7, 1930.)

      Charles H. Kelby, Thomas E. O’Brien, John B. Doyle and Robert A. Huddleston for appellant.
    The issue of liability is closed in favor of plaintiff, because defendants have not appealed and because all controverted and inferable facts in support of that issue were established by the jury’s verdict in favor of the plaintiff. (Water Co. v. Village of Brockport, 203 N. Y. 399; Thompson v. Simpson, 128 N. Y. 270; Smith v. Weston, 159 N. Y. 194; Colaizzi v. Penn. R. R. Co., 143 App. Div. 638.) Upon the facts as found by the jury plaintiff was entitled to recover from both defendants the sum of $4,555.05, with interest, as money had and received to the plaintiff’s use and benefit. (Wendt v. Fisher, 243 N. Y. 439; Selwyn & Co. v. Waller, 160 App. Div. 725; 212 N. Y. 507; Spencer v. Towles, 18 Mich. 9; Hitchcock v. Watson, 18 Ill. 289; Phelps v. Reider, 39 Ill. 172; Koch v. Roth, 150 Ill. 212; Patten v. Hamilton, 1 Irish Rep. [1911] 46; Murray v. Beard, 102 N. Y. 505; Slater v. Slater, 208 App. Div. 567; 240 N. Y. 557; Dutton v. Willner, 52 N. Y. 312; Marshall v. Sackett & Wilhelms Co., 181 App. Div. 157; Reis & Co. v. Volck, 151 App. Div. 613; Murphy v. Harrison Granite Co., 168 App. Div. 723.) The verdict was due to the court’s erroneous instruction that the jury might make a finding of nominal damages. (Hovenden & Sons v. Millhoff, 83 L. T. 41; Salford Corp. v. Lever, 63 L. T. 658; 1 Q. B. 168; Grant v. Gold Exploration & Development Syndicate, 82 L. T. 5; 1 Q. B. 233.)

      Denis O’L. Cohalan and John H. Waters for James Molloy, respondent.
    The complaint does not state a cause of action. (Vail v. Reynolds, 118 N. Y. 297; Brackett v. Griswold, 112 N. Y. 454; Reno v. Bull, 226 N. Y. 546; Kountze v. Kennedy, 147 N. Y. 124; Lamphere v. Lang, 213 N. Y. 585.) The evidence does not warrant a verdict for plaintiff even in nominal damages. (Merchants’ Line v. B. & O. R. R. Co., 222 N. Y. 344.) A nominal verdict for plaintiff is equivalent to a verdict for the defendant. (Corn Novelty Co., Inc., v. Norwich Union Fire Ins. Soc., Ltd., 176 App. Div. 261.)

      Charles Chambers for Hugh Cafferky, respondent.
    The complaint did not allege, nor did the trial establish, a misrepresentation by the defendant Cafferky, to the injury of the plaintiff. (Brackett v. Griswold, 112 N. Y. 454; Kountze v. Kennedy, 147 N. Y. 124; Reno v. Bull, 226 N. Y. 546; Adams v. Clark, 239 N. Y. 403.) The charge of the trial justice contains no error of which the plaintiff can complain. (Corn Novelty Co. v. Norwich Union Fire Ins. Soc., Ltd., 176 App. Div. 261.)
   Pound, J.

Briefly stated, the claim of the plaintiff is that defendant Molloy corrupted defendant Cafferky, an employee of plaintiff, when acting for his employer in the adjustment of a disputed claim for merchandise sold which Molloy had against plaintiff, with the result that plaintiff was induced to pay $57,500 in settlement of the claim, of which $4,555.05 went to Cafferky as a gratuity or compensation for Cafferky’s efforts to obtain a settlement favorable to Molloy. Judgment is demanded against defendants for this sum. The complaint contains the following allegation:

“ Eighth. Pursuant to said secret, corrupt, unlawful and fraudulent promises and agreements by and between the defendants they represented to the plaintiff on and prior to January 23, 1923 at the City, County and State of New York that the aforesaid sum of $57,500 was the minimum net amount which the defendant Molloy would accept from the plaintiff in full settlement and discharge of the aforesaid claims, and believing and acting upon said representation the plaintiff, induced thereby and relying thereon, agreed to said amount and made said cash payment and executed and delivered said notes to the amount of $57,500; but in truth and in fact the defendant Molloy was willing to and did accept in full settlement said sum of $57,500 less the said sum * * * which he corruptly, unlawfully and fraudulently promised and agreed to pay the defendant Cafferky, as aforesaid.” This claim was denied by defendants. In particular, it is denied that Cafferky had anything to do with making the settlement. (Merchants’ Line v. B. & O. R. R. Co., 222 N. Y. 344.) The jury found a verdict in favor of plaintiff against both defendants for the sum of six cents. The appellant claims that this was a verdict in favor of plaintiff on the question of the corrupt agreement and Cafferky’s part in the settlement; that upon the facts found the plaintiff was entitled to recover from both defendants the sum of $4,555.05, with interest from November 20, 1923, and that the verdict was due to erroneous instructions, properly excepted to, on the subject of nominal damages.

The instructions of the court were to the effect that, even if they found that the corrupt bargain was entered into between Molloy and Cafferky, and that Cafferky was instrumental in bringing about the settlement, unless the plaintiff established some disparity between the value of the goods received by it from Molloy and the consideration paid by plaintiff in settlement of Molloy’s claim against it, nominal damages only could be awarded. In other words, if Molloy’s merchandise was paid for at fair prices the plaintiff has had a just return for every dollar it parted with and defendants can keep the money paid in settlement with a good conscience. The principle relied on is stated in Schank v. Schuchman (212 N. Y. 352, 359) as follows: “The law may at times refuse to aid a wrongdoer in getting that which good conscience permits him to receive; it will not for that reason aid another in taking away from him that which good conscience entitles him to retain.” It is, • therefore, argued by respondents that as the jury has found that plaintiff has received full value for its money, it has also found that plaintiff was not damaged by the payment of a gratuity and that the verdict of the jury is in effect a verdict for the defendants.

The question, of law is: What is the position of the vendor of property who pays a secret commission to a person whom he knows to be an agent of the vendee in effecting a settlement?

The English rule is to the effect that the court will assume as against the briber that the true price of the goods as between him and the purchaser must be taken to be less than the price paid to, or charged by, the vendor, by, at any rate, the amount or value of the bribe. (Grant v. Gold Exploration & Development Syndicate, Ltd., [1900] 1 Q. B. 233, 244.)

This rule is not in conflict with Schank v. Schuchman (supra). There the action was to recover as money had and received all moneys which the defendant had received from plaintiff for wares and services because of secret commissions paid by the vendor to the agent of the vendee. Here the action is to recover the amount of the secret commissions only. The law does not go so far as to nullify the entire transaction where the vendor has received and used the merchandise. If, however, a vendor bribes a purchaser’s agent it must be assumed that the purchase money is loaded by the amount of the bribe. The vendor has had and received money which belongs to the purchaser to the extent of the bribe which neither the vendor nor the unfaithful agent may in conscience and good morals retain.

Penal. Law, section 439, makes it a misdemeanor to give or receive money for the corrupt influencing of agents, employees or servants. It would be a strange miscarriage of justice if the corrupting vendor and . the corrupted agent of the vendee could retain the fruits of their crime and say that because the settlement was a fair one, the vendee sustained only nominal damages or no damages.

The fact that the jury found a verdict in favor- of the plaintiff implies' a finding that the corrupt agreement was entered into between Molloy and Cafferky (Brockport-Holly Water Co. v. Village of Brockport, 203 N. Y. 399,403), but we are not bound in our review by such determination. Questions of fact still remain in the case for the determination of a jury under proper instructions.

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

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

Judgments reversed, etc.


author: Crane, J. J.

text:
    In the Matter of the Accounting of Elliott L. Brown, as Executor of J. Romaine Brown, Deceased. Central Union Trust Company of New York, as Trustee, et al., Appellants and Respondents; Elliott L. Brown, Individually and as Executor and Trustee, Respondent and Appellant.

      (Argued November 20, 1929;
    decided January 7, 1930.)

      Albert Stickney and Albert B. Maginnes for Central Union Trust Company, appellant and respondent.
    Decedent’s ownership of the stock which was the subject of the alleged gift having been proved, is presumed to have continued. The burden was on the respondent executor to establish by a preponderance of evidence that the decedent delivered the property to him during his lifetime with the intention to make a gift, and this burden is not met by evidence showing the unexplained possession of the property by respondent. (Matter of Canfield, 176 App. Div. 554; Matter of Perry, 129 App. Div. 587; Matter of Housman, 182 App. Div. 37; 224 N. Y. 525; Matter of Taber, 30 Misc. Rep. 172; 54 App. Div. 629; Matter of Manhardt, 17 App. Div. 1; Matter of Van Alstyne, 207 N. Y. 298; Matter of Rogers, 10 App. Div. 593; Matter of Gilman, 92 Misc. Rep. 140; 175 App. Div. 185; Tompkins v. Leary, 134 App. Div. 114; Matter of Crawford, 113 N. Y. 560; Matter of Cofer, 121 Misc. Rep. 292; Bowron v. De Selding, 105 App. Div. 500.) The Appellate Division was correct in affirming the decree of the Surrogate with respect to the $17,000 check. (Nay v. Curley, 113 N. Y. 576.) Appellant executor has not established any valid gift to him of the Rockwood street or of the MacCombs road properties, or of the proceeds thereof. (Surr. Ct. Act, § 40; Matter of United States Trust Co.; 175 N. Y. 304; Matter of Schroeder, 113 Clark, 139 N. Y. 307; Bush v. Gilmore, 45 App. Div. 89; Maroney v. Cole, 52 Misc. Rep. 451;. Brock v. Poor, 216 N. Y. 387; Worthington v. Worthington, 100 App. Div. 332; Butler v. Sherwood, 196 App. Div. 603; 233 N. Y. 655.)

      Abel E. Blackmar and' David S. Murden for Mary E. Brown et al., appellants and respondents.
    The burden was on the executor, who affirmatively alleges that the stock was given to him, to prove such claim. (McKeon v. Van Slyck, 223 N. Y. 392; Matter of Van Alstyne, 207 N. Y. 298; Ward v. New York Life Ins. Co., 225 N. Y. 314; Noble v. Smith, 2 Johns. 52; Beaver v. Beaver, 117 N. Y. 421; Vincent v. Rix, 248 N. Y. 76; Matter of Gilman, 92 Misc. Rep. 140; Matter of Housman, 224 N. Y. 525; Matter of Canfield, 176 App. Div. 554.) The evidence justified and required the decision that the $17,000 check was not a gift by decedent to the accounting executor and that, therefore, his account must be surcharged to that extent. (Nay v. Curley, 113 N. Y. 577; Grey v. Grey, 47 N. Y. 553; Stimson v. Vroman, 99 N. Y. 74; Leask v. Hoagland, 205 N. Y. 171.) The decision as to the avails of the Rockwood street property was correct. This fund was not the. property of the executor as an individual. (Surr. Ct. Act, § 40; Matter of U. S. Trust Co., 175 N. Y. 304; Young v. Young, 80 N. Y. 422; Matter of Gurlitz, 105 Misc. Rep. 30; 190 App. Div. 907; Farmers Loan & Trust Co. v. Winthrop, 238 N. Y. 477; Wadd v. Hazelton, 137 N. Y. 215; Hutchins v. Van Vechten, 140 N. Y. 115; Sayer v. Wynkoop, 248 N. Y. 54; Beatty v. Guggenheim Exploration Co., 225 N. Y. 380; Brock v. Poor, 216 N. Y. 387; Boag v. Thompson, 208 App. Div. 132; Matter of Green, 231 N. Y. 237; Palmer v. Ring, 113 App. Div. 643; Bush v. Gilmore, 45 App. Div. 89; C. N. Bank v. Clark, 139 N. Y. 307.) The decision as to the avails of the sale of the MácCombs road property was correct. This fund was not the" property of the executor as an individual. (Wadd v. Hazelton, 137 N. Y. 215; Farmers L. & T. Co. v. Winthrop, 238 N. Y. 477; Young v. Young, 80 N. Y. 422; Butler v. Sherwood, 196 App. Div. 603; 233 N. Y. 655.)

      Henry Wynans Jessup and Russel W. Leary for Elliott L. Brown, respondent and appellant.
    The presumption of continuity of ownership is insufficient to justify findings adverse to the accounting executor. (Plumb v. Richmond Light & R. R. Co., 233 N. Y. 285; Potts v. Parde, 220 N. Y. 431; Rose v. Balfe, 223 N. Y. 481; Matter of Perry, 129 App. Div. 587; Matter of Gilman, 92 Misc. Rep. 140; Matter of Cofer, 121 Misc. Rep. 292.) Evidence of subsequent declarations by the deceased donor that he “has. given” is competent and sufficient to prove the delivery essential to a completed gift. (Porter v. Gardner, 60 Him, 571; Smith v. Maine, 25 Barb. 33; Crouse v. Judson, 41 Misc. Rep. 338; 93 App. Div. 604; Trow v. Shannon, 8 Daly, 239; 78 N. Y. 446; Messiah Home for Children v. Rogers, 212 N. Y. 315; Matter of King, 115 App. Div. 751; 188 N. Y. 626; Govin v. de Miranda, 140 N. Y. 474; Miller v. Silverman, 247 N. Y. 447; Matter of Rosenberg, 251 N. Y. 115.) The evidence is ample to sustain the finding .that- the bank stock was delivered by the decedent to his son and executor with intent to make a, gift. (Livingston v. Arnoux, 56 N. Y. 507; Kennedy v. Smith, 202 App. Div. 249; Waterman v. Rigby, 188 App. Div. 895; People v. Snyder, 41 N. Y. 397.) The decree is erroneous in so far as it surcharges the executor’s account with the proceeds of the testator’s check for '$17,000. (Nay v. Curley, 113 N. Y. 575; Leask v. Hoagland, 205 N. Y. 171.) The decree is erroneous as a matter of law in so far as it surcharges the executor’s account with the value of the two parcels of real estate known as MacCombs road property and Rockwood street property. (Zim v. Cohen, 221 App. Div. 341; Canda v. Totten, 157 N. Y. 281; Smith v. Balcom, 24 App. Div. 437; Foreman v. Foreman, 251 N. Y. 237; Waters v. Hall, 218 App. Div. 149; Widmayer v. Warner, 192 App. Div. 499; Wright v. Douglass, 7 N. Y. 564; Van der Volgen v. Yates, 9 N. Y. 219; Hutchins v. Van Vechten, 140 N. Y. 115; Wendt v. Walsh, 164 N. Y. 154; Sinclair v. Purdy, 235 N. Y. 245; Bryant v. Shaw, 190 App. Div. 578.) The Surrogate erred in holding that the written declarations or certificates of the decedent, in the absence of evidence of delivery, were ineffective for any purpose. (Wadd v. Hazelton, 137 N. Y. 215; Young v. Young, 80 N. Y. 422; Irving Bank-Columbia Trust Co. v. Rowe, 213 App. Div. 281; Ridden v. Thrall, 125 N. Y. 572; Matter of Mills, 172 App. Div. 530; 219 N. Y. 642; Matter of Wiemann, 220 App. Div. 27; Govin v. de Miranda, 140 N. Y. 474; Miller v. Silverman, 247 N. Y. 447.) The determination of the courts below that the legal estate to these two parcels of real property had not been effectually transferred to his son by the decedent during his lifetime is erroneous as a matter of law. (Canda v. Totten, 157 N. Y. 281; McKinley v. Hessen, 202 N. Y. 24; Thomas v. Robert, 123 Misc. Rep. 76; Whitaker v. Westberg, 124 Misc. Rep. 556; 215 App. Div. 785; Hutchins v. Van Vechten, 140 N. Y. 115; Bryant v. Shaw, 190 App. Div. 578; McGuire v. McGuire, 201 App. Div. 71; Martin v. Niagara Falls P. Mfg. Co., 122 N. Y. 165; Barkin Constr. Co. v. Goodman, 221 N. Y. 156; Hall v. Herter Bros., 83 Hun, 19; Goss & Co. v. Goss, 147 App. Div. 698; 207 N. Y. 742; Hubbard v. Syenite Trap Rock Co.178 App. Div. 531; Gerard v. Empire Square Realty Co.,
      195 App. Div. 244; People’s Trust Co. v. O’Meara, 204 App. Div. 268; Barnes v. All Amer. Inv. Co., 120 Misc. Rep. 706.)
   Crane, J. J.

Romaine Brown, of Yonkers, N. Y., died on November 5, 1924, ninety-one years of age. Until within a few weeks of his death he was actively engaged in the real estate business in New York city and Westchester county, conducting it with a will and determination, according to his own plans and ideas. In the buying and selling of real estate, wherein his fortune of over $3,000,000 had been made, he used methods peculiar to himself. He took and carried title in dummy corporations or in the name of his clerks, and had an aversion to the keeping of books. His bookkeeper posted such information as he could get from Mr. Brown, who was rather a reticent man on his business affairs. An account was kept with each piece of property; cost, expense, income, all being entered under the heading of the piece of property to which they related. J. Romaine Brown had an office on Forty-third street, New York, which was also the office, if he ever had one, for the dummy corporations through which he did his real estate business. Robert J. Murphy was the bookkeeper for Mr. Brown and his personally owned corporations. Three corporations are mentioned as the creatures of Mr. Brown, of which he owned all the stock and filled all the offices, except so far as necessary to have his representatives comply with legal forms. These three corporations were the Nod-A-Way Company, the Nathan Realty Corporation and Brown Circle. Mr. Brown also held in his own name two pieces known as the Rockwood street property and the MacCombs road property.

Elliott L. Brown is a son of J. Romaine Brown. He was in business with his father. During the times herein mentioned Elliott Brown was married, had two children, and lived in Yonkers about a mile away from his father. Although giving his entire. time and attention to his father’s business, he appears, to have received a very meager income in proportion to his father’s wealth, and to have been dependent on the good will and bounty of the old gentleman. Mr. Prime, the father’s confidential lawyer and adviser, had frequently spoken to him about Elliott, urging him to give him more money — at least an income suitable for his position — and reminding the father of his good fortune in having such a worthy and dutiful boy. Whether it be that age. was working mental revaluations, or the friendly suggestions revealed the injustice under which Elliott had been patiently, laboring, the father in 1922, two and one-half years before his death, made up his mind to give certain property to his son. This was declared to various people, including Mr. Prime and Mr. Murphy. But his intention was not revealed solely in the spoken word. He carried out his intention as to certain stock and, moneys, and also as to the Mac-Combs road property and the Bockwood street property.

Let us examine first the MacCombs road property. On June 2, 1922, this property stood .in the name of J. Romaine Brown. On that date he, apparently in his own hand, signed-and executed the following:

June 2, 1922
This is to certify that the property known as vacant lots Concourse & Bockwood St. deeded to Nod-A-Way Company is property of Elliott L. Brown. • Any taxes or assessments to be paid by me or out of Estate. Also the improved property on MacCombs Road is to be conveyed to Nod-A-Way Co. and held-by said company subject to a mortgage of $8,000 and it is to belong to Elliott L. Brown. •- “ (Sgd.) J. ROMAINE BROWN
“ Witness
Annie E. Brown.”

Annie E. Brown was the mother of Elliott.

In 1923 Mr. Brown signed and executed a further paper reading as follows:

1923
This is to certify that I have given to my son Elliott L. Brown all my right title and interest in that certain property known as Rockwood St. property in Block 2836 and Lots 21-22, 26 & 27 on North side of -Rockwood Street and west of Grand Concourse, Borough of Bronx and any right, title or interest in old Fifth Ave. or Concourse or any interest in any adjoining streets, and I am to pay all Taxes, assessments or Tax Sales with interest after 1923. Said property stands in the name of Nod-AWay Co., Inc., and I direct the property to be made over to him at any time he requests.
“ J. ROMAINE BROWN,
“ President of Nodr-A-Way Co., Inc.
P. S.
I have made this statement at many times but for fear that there may be some doubt or dispute I have put it in my own hand. . -
“ 1923 (sgd.) J. ROMAINE BROWN.”

As before,stated, at the time of these declarations, the MacCombs property stood in the name of J. Romaine Brown. That he intended his son to have these properties is not at all questioned. Undue influence, fraud or any other taint has never been suggested. The father knew what he was about, but like so many other people in this world, he had formed his own ideas and notions, which to others seemed peculiar. Individuality is either the mark of genius or the reverse. Mediocrity finds safety in standardization. Brown might have made a deed at once to his son. He did not do it. Both father and son had carried on business by holding real property in the name of others — individuals or corporations.

On April 3, 1924, J. Romaine Brown conveyed-the-property to Nod-A-Way Co.— one of the dummies — of which he was president and sole stockholder. Of course the company must have, taken it, charged with the knowledge which its president, board of directors and stockholders had, that the conveyance was subject to the trust declared by the grantor in writing in favor of his son. The corporation took it, knowing that the son owned the property and that the conveyance to it was for the purpose of holding the property for the son. These papers, written and signed by J. Romaine Brown, were found after his death in the possession of his son Elliott. Expression and facts are cramped when the person knowing the circumstances is prevented from telling them by section 347 of the Civil Practice Act. There is evidence, however, from which it may reasonably be found that these papers were delivered to Elliott at the time of execution. In the first place, J. Romaine Brown wrote them out in his own hand, one in 1922 and the other in 1923, and he did it to make known to others his intention, and to accomplish his previously declared purpose. In the paper of 1923 he said, I have made this statement many times.” Mr. Murphy and the attorney Prime state that Mr. Brown told them that he had given these pieces of real property to his son Elliott.' To others he made the statement of having made gifts to his son without specifying the nature thereof. Delivery may be proved by admissions that the property belongs to another. (Porter v. Gardner, [4th Dept.] 60 Hun, 571; Govin v. de Miranda, 140 N. Y. 474; Miller v. Silverman, 247 N. Y. 447.)

After this declaration of June, 1922, the MacCombs road property was treated by father and son and by the office help as belonging to Brown, Jr. It was income-paying property, and when there was a balance over expenses, Elliott received it, and when there was a deficit, he paid it. The Nod-A-Way Co. gave no consideration for the property, and the entry on its books is “ 1349-51 MacCombs Road given to Elliott L. Brown.” The corporation, after the death of J. Romaine Brown, and in 1926, deeded the property to a purchaser from Elliott Brown, the latter receiving the consideration price. The mortgages received in part payment, made to the Nod-AWay Co., were assigned to him. The Nod-A-Way Co. has never claimed to own this property.

But while there is evidence to support the inference that these written trust declarations were delivered to Elliott, yet delivery is not necessary to constitute a valid trust. While a transfer of the property to a trustee for the purposes of the settlement may be the surest way to create a trust, yet the same result will be accomplished if the owner declare that he himself holds the property in trust for the person designated, and this trust may be created either in writing or, if relating to personal property, by parol. The declaration need not be made to the beneficiary, nor the writing given to him; in fact, his ignorance of the trust is immaterial. There must be proof of a declaration of trust in writing to pass real property (Real Prop. Law, § 242; Cons. Laws, ch. 50), but the declaration varies with the circumstances of each case; it may be contained in a letter (Percy v. Huyck, 252 N. Y. 168; McKenna v. Meehan, 248 N. Y. 206), or as here by formal witnessed statement. A declaration implies an announcement of an act performed, not a mere intention, and in most instances to another party. However, a writing formally creating a trust, kept by the donor without delivery to any one, under such circumstances and conditions as to show that a trust was declared, created and intended, will be given effect as such by the courts. (Martin v. Funk, 75 N. Y. 134.) There are many cases,” wrote Church, Ch. J., “ where the instrument creating the trust has been retained by the author of it until his death, especially when he made himself the trustee, and yet the trust sustained.”

If we retain the corporate entity, as is so much insisted upon, we must maintain it to the end. J. Romaine Brown, as president of this company, director and sole stockholder, knew when the corporation accepted the deed from J. Romaine Brown, the individual, that it was without consideration and for the purpose of passing title to Elliott; that the property belonged to Elliott and was subject to the trust declared by the two instruments above referred to, signed by J. Romaine Brown.' Having taken the property under such conditions, for such use, and under the implied promise to fulfill it, the courts, or to speak technically, equity, would compel the corporation to carry it out. The Nod-A-Way Co. could not keep the property and benefit by repudiation and its own wrong. (Foreman v. Foreman, 251 N. Y. 237; Hutchins v. Van Vechten, 140 N. Y. 115; Sinclair v. Purdy, 235 N. Y. 245; Amherst College v. Ritch, 151 N. Y. 282, pp. 323-325; Siemon v. Schurck, 29 N. Y. 598; Medical College Laboratory v. N. Y. University, 76 App. Div. 48; affd., 178 N. Y. 153.)

Murphy was bookkeeper of the J. Romaine Brown Co. and also the Nod-A-Way Co. from 1922. After the death of the president of the company, other officers were elected, and he continued to handle the books. All the books were kept in the one office, as heretofore stated, in Forty-third Street, New York. The entry, therefore, in the books of the Nod-A-Way Co., that these properties belonged" to Elliott, is at least some evidence that the company recognized the trust or the purpose of the transaction. Murphy, the bookkeeper for all these companies; wrote up the books after the death of J. Romaine Brown from such information as he could gather. This is not surprising, however, when we recall that this was the way in which he posted the books during the lifetime of the elder Brown. These entries would be .of ,little weight, of hardly any value as evidence in favor of Elliott Brown, having been made after he had succeeded his father as president of the company, and might possibly have béen made under his direction, if it were not. for .the fact that the' entries" áre consistent and in harmony with all the other circumstances and transactions in the case., In other words, the Nod-A-Way Co. has never challenged the transaction or questioned its , legality. After- the' intention and purpose of J. Bomaine Brown had been carried out, the gift or trust is now for the first time challenged by the grandchildren of the donor.

It has been apparent to all the .parties in this case,- and admitted by them, that J. Bomaine Brown intended Elliott to have the MacCombs road property and the Bockwood street property. They also admit that he intended to accomplish this purpose by a conveyance through the Nod-A-Way Co. It is also beyond dispute that the Nod-A-Way Co. was J. Bomaine Brown and used by him as a mere dummy. He was- the president and owned all the stock. The one point to which the objectors have clung in this transaction is the corporate entity of the Nod-A-Way Co. and the deed to it without reservations. The desire to, reach realities and the fast falling supports of fiction have perhaps been responsible for the arguments about corporate entity and the corporate shell, and the claim that J. Bomaine Brown and the Nod-A-Way Co. were one and the same thing as a fact. The discussion does not--arise in this case. We may treat the Nod-A-Way Co., as we have in the above statement, as a distinct entity. Nevertheless, it has no greater rights than an individual would have. Any person taking the MacCombs road property with knowledge of the declarations of trust that the property belonged to Elliott, and that title was to be held for him, could not keep the property. The law would execute the trust if the trustee failed to do so.

Although the facts are somewhat different regarding the Bockwoou street property, the underlying principles are the same. J. Bomaine Brown carried this property in his own name until May 9, 1922, when, he executed a deed conveying it to the Nod-A-Way Co. There is no evidence of any delivery of this deed, or that -it passed out of the possession of the grantor, if it ever did, until May 31, 1922, when it was recorded. Two days thereafter he wrote out and signed the paper, above referred to, dated June 2, 1922, wherein he declared that this Rockwood street property “ is the property of Elliott L. Brown.” In May, when the deed was signed and executed, the grantor intended to give the property to his son. He had so declared to friends and employees. Later he told them that he had given the property to his son. Here again he told Murphy that he was going to convey the property to the Nod-A-Way Co., the dummy, for the convenience of Elliott. In other words, this is the way father and son transacted their real estate affairs, held property and made conveyances. The knowledge of Brown as the individual and grantor was the knowledge of the corporation. What he knew regarding the transaction, it also knew. As heretofore said, he was the sole stockholder and officer, the board of directors.

What was the purpose of this deed of May, 1922? Why was it given to the Nod-A-Way Co. without consideration? This may be shown by any evidence known to the law — direct as well as circumstantial. Brown’s declaration before making the deed, his declarations thereafter, as president of the company and as sole stockholder, show beyond a doubt that the conveyance to the Nod-A-Way Co. was for the benefit of Elliott Brown. While title might be in the corporation, it was to be held for Elliott Brown. Here also the books of the corporation and its subsequent actions in conveying the property to Elliott Brown’s purchaser show that the corporation was faithful to its trust and carried out the declared purpose. Elliott Brown in 1926 sold this property and received from the corporation, or through the corporation, the purchase price. In the case of the MacCombs road property, the conveyance was made after the declaration of trust; in the case of the Rockwood street property, the written declaration of intention followed a few days after the conveyance of the property. But the dates are immaterial in either case, provided the evidence shows, as it does, that the conveyance to the Nod-A-Way Co. was for the purpose of giving Elliott the property and that the company received the deed upon this trust, and for the purpose of carrying it out, As stated above, the Nod-A-Way Co., taking the property without consideration on the implied promise and understanding to execute a deed to Elliott, could not keep the property for its own benefit. Here again we are using the language of legal mechanics, as the Nod-A-Way Co. was a mere dummy or name for J. Romaine Brown. Although it had a corporate entity, it was charged with the knowledge which its officers and directors possessed pertaining to those transactions.

These questions have arisen on the accounting of Elliott L. Brown as the executor of his father’s will. By that will the father tried to divide his property equally between bis son and daughter. The daughter has children who, through their guardian, have filed objections to the account. The Central Trust Company, co-executor, has shared in these objections in so far as pressing the law points upon the attention of the court. The very able Surrogate of Westchester county has disposed of most of the objections, and the Appellate Division has sustained his action, with some modifications.

There have remained for our consideration on this appeal four of these objections. Two of them we have just referred to. Elliott Brown, before selling the Mac-Combs road property and the Rockwood street property, sent to his sister’s lawyer a full statement of his claim to these properties through a gift from his father. He set forth at length a copy of the instruments of June 2, 1922, and the later paper signed by his father in 1923. On the accounting he claimed the moneys which he had received as the purchase price for these properties. The titles to the real estate had passed to the purchaser; these could not be questioned; they were bona fide purchases for value. The proceeds, as personal property, either belonged to the Nod-A-Way Co., increasing the value of • its stock, or else to Elliott L. Brown. ■ The Appellate Division, • affirming the Surrogate, held that the'’money must- be- accounted for; that it belonged to the- corporation.

■ For -the 'reasons which have here been stated we reach the other conclusion. The property was Elliott Brown’s, and he was entitled to retain the purchase price thereof.

There are two other items in the disposition of which we agree with the Appellate Division. As for the bank stock, there was ample evidence to justify the finding that this had passed by gift to Elliott, and we find no reason for disturbing that finding.

As to the check of $17,000 marked Special,” in the stub book of the' deceased, and passed by Elliott into a special account, separate and distinct from his general account in the bank, we are also satisfied that there is no mistake in the conclusion that the evidence did not justify a finding that there had been a gift to Elliott of this money.

Therefore, the order of the Appellate Division and the decree of the Surrogate’s Court should be modified in so far as the decree relates to the real property in controversy, with costs to all parties payable out of the estate, arid the matter remitted to the Surrogate’s Court for the entry of a decree in accordance with this opinion.

Pound j Lehman, O’Brien and Hubbs, JJ., concur; Kellogg, J., dissents and votes for affirmance; Cardozo, Oh. J., not sitting.

Judgment ¡accordingly.


author: Hubbs, J.

text:
    In the Matter of the Accounting of The Farmers’ Loan and Trust Company et al., as Executors of Lionel J. Salomon, Deceased, Respondents. New York Foundation, Appellant.
    (Argued November 21, 1929;
    decided January 7, 1930.)

      George B. Engelhard for appellant.
    The provisions of section 285 of the Surrogate’s Court Act do not entitle the

      executors to commissions on the real- property in this case because the real property was not, in any case, “ received, distributed or delivered ” by the executors. (Ogsbury v. Ogsbury, 115 N. Y. 290; Coann v. Culver, 188 N. Y. 9; Matter of Wanninger, 120 App. Div. 273; 190 N. Y. 527; Matter of Seiss, 119 Misc. Rep. 521; Matter of Greer, 123 Misc. Rep. 909; Matter of Runk, 181 App. Div. 461; 224 N. Y. 570; Barber v. Terry, 224 N. Y. 334.) The provision of the will that the real property shall be deemed personal property “ for the purpose of the payment of legacies and for the distribution and settlement of my estate ” does not entitle the executors to commissions on the fee value of the real property. (Matter of Hoffman, 201 N. Y. 255; Morris v. Sickley, 133 N. Y. 456; Gourley v. Campbell, 66 N. Y. 169; Read v. Williams, 125 N. Y. 560; Trask v. Sturgis, 170 N. Y. 482; Painter v. Painter, 220 Penn. St. 82; Matter of Barker, 230 N. Y. 364.)

      Otis T. Bradley, Lee McCanliss and Dudley Miller for executors, respondents.
    It was the clear intention of the testator as disclosed by his will that his executors should receive commissions upon the value of his real property. (Matter of Sprague, 46 Misc. Rep. 216; Matter of Arkenburgh, 38 App. Div. 473; Matter of O’Donohue, 115 Misc. Rep. 697; Matter of Kernochan, 104 N. Y. 618; Secor v. Sentis, 5 Redf. 570; Matter of Nester, 166 App. Div. 224; 216 N. Y. 716.)
   Hubbs, J.

The testator left an estate of over $2,500,000 in value. By his will he bequeathed $1,500 to care for cemetery plots, and then established eight trusts in a total of $255,000, the income to be paid to the beneficiaries named during their lives and upon the termination of the several trusts the principal to be paid to the New York Foundation, the appellant. The entire residuary .estate was bequeathed to the appellant. Three hundred and twenty-six thousand five hundred dollars of the estate in value consisted of two parcels of real property. By the fifteenth clause of the will it was provided: 15th. For the purpose of the payment of legacies, and for the distribution and settlement of my estate, my real estate shall be deemed to be personal property.” Upon the accounting before the Surrogate it was held that the executors were entitled to commissions upon the value of the real estate. The appellant objected to the amount of said commissions and appealed to the Appellate Division, where the decree of the Surrogate was unanimously affirmed, and permission granted to appeal to this court.

The question here is whether the executors are entitled to commissions upon the value of the real property left by the testator. The will did not convey to the executors title to the real property or grant to them power to sell it. The testator left sufficient personal property to pay all of his debts and legacies, so that the necessity of selling the real property never arose and the executors never exercised the power conferred upon them to convert the real property into personalty.

Section 285 of the Surrogate’s Court Act reads as follows:

“ The value of any real or personal property * * * received, distributed or delivered, shall be considered as money in making computation of commissions.” The executors have not “received, distributed or delivered” the real property in question. Title to it vested in the appellant by operation of law without any act on the part of the executors. The will vested them with the implied power to sell for the purpose of paying legacies and the distribution of the estate, but as the personal property was sufficient for all of those purposes the power was never exercised and title vested without any action whatever on their part. In the absence of the clause in question in the will, the granting of a power to sell which was never exercised would not entitle the executors to commissions on the value of the real property. (Matter of Wanninger, 120 App. Div. 273; affd., 190 N. Y. 527.)

Even though the clause in ■ question constituted an equitable conversion the executors have not “ received, distributed or delivered ” the property either as. real property or in a converted form. They performed no act in relation to it under the authority vested in them by the terms of the will, and title to the real property never, vested in them. (Barber v. Terry, 224 N. Y. 334.) If entitled to commissions on the value of the real estate it is solely by reason of the clause in question, and that is so conceded in the argument of respondents. The Appellate Division sought to give the clause the meaning that it assumed would carry out the intent of the testator. That court was impressed with the idea that the testator knew that his personal property would pay all legacies and debts, and that by inserting in the will the fifteenth-clause he intended to charge the real property with the payment of commissions the same as though it were personal property. Of course, if he had any such purpose in mind he could have said so in as few words as are-contained in the fifteenth clause. In any event, the intention of the testator upon that question. does not speak of the date of his death but from the date of the' execution of the will. We think it fair to say that the-clause in question was inserted in the will by the attorney who drew it as a matter of precaution to facilitate the-settlement • of the estate in the event that it became necessary to sell any of the real property left by the testator. It seems to us that the holding of the Surrogate and of the Appellate Division cannot prevail in view of the decision of this court in Matter of Barker (230 N. Y. 364).

In that case the will- of James J. Belden provided as. follows: “ I charge .payment of any balance [legacies]- ' upon my real estate and direct that no distinction be made between real and personal property in the execution-of this will, and the settlement and distribution of my estate.” A contest arose in regard to the payment of commissions upon the value of the real property. The Appellate Division (in 186 App. Div. 317) held that there was an equitable conversion of the real property for all purposes of the will and that such equitable conversion required the allowance of commissions to the executors upon the value of the real estate. When that case reached this court, it was held that the executors were entitled to commissions upon the value of the real property because the will in that case vested the title of the property in the executors and they received and controlled it. Judge His cock, writing for this court, said: We agree with the conclusions reached by that court [Appellate Division] upon all questions save one. We disagree, however, with the reasoning by which it reached its conclusion upon another question which seems important enough to call for some consideration” (the question here involved). He then stated that the Appellate Division thought that, because the will worked an equitable conversion of the real property^ it might be regarded as personal property for the purpose of fixing commissions, but stated that where equitable conversion is accomplished by a will it does not follow that it entitles the executors to commissions, and said: “ It may be assumed that where there is an equitable conversion under a will the doctrine of such conversion will be applied to all details which are involved in construing and carrying out the provisions of the will to which it is applicable, but we do not think that the doctrine should be applied to a matter entirely extraneous to the construction and operation of the will itself, as the fixation of fees, so as to enable an executor to collect fees for receiving real estate on the theory that it was personal property. We reach, however, the same result as the Appellate Division by a different course.” In that case the language was substantially the same as in the case at bar. The will read, “ the settlement and distribution of my estate.” In the case at bar the will reads, the distribution and settlement of my estate,” and in both instances the real property is to be deemed personal property. In Matter of Barker (supra) this court clearly stated its disagreement with the Appellate Division upon that question in order that the affirmance by this court might not be construed as an approval of the reasoning of the Appellate Division.

The respondents argue in their brief that that decision holds only that a provision for equitable conversion cannot in and of itself constitute a ground for granting commissions, but that the case does not hold that a direction for equitable conversion contained in a will prevents the consideration of other language as showing the testator’s intention that his executors should receive commissions upon the value of real estate, that is, that it is a question of construction separate and aside from any question of equitable conversion.

In the case at bar, however, the only basis for the , granting of commissions upon the value of the real estate is the very provision which works an equitable conversion of real estate. In view of the decision in Matter of Barker, the order of the Appellate Division and the decree of the Surrogate’s Court should be reversed, with costs to the appellant payable out of the estate, and the matter remitted to the Surrogate’s Court with instructions to modify the decree in accordance with the directions of this court.

Pound, Crane, Lehman, Kellogg and O'Brien, JJ., concur; Cardozo, Ch. J., not sitting.

Ordered accordingly.


text:
    The People of the State of New York, Respondent, v. Ida B. Johnson, Appellant.
    (Argued November 26, 1929;
    decided January 7, 1930.)

      Henry Hirschberg for appellant.
    The use of the ex parte non-judicial report of the medical examination deprived appellant of the right to confrontation by and cross-examination of the witness against her — deprived her of an opportunity to establish the falsity of the statements in said report and of due process of law. (People v. Hartnett, 124 Misc. Rep. 418; People ex rel. Barone v. Fox, 144 App. Div. 611; 202 N. Y. 616; People v. McCoy, 45 How. Pr. 216; People v. Hevern, 127 Misc. Rep. 141; People v. Dennis, 131 Misc. Rep. 62; People v. Bromich, 200 N. Y. 385; State v. Height, 117 Iowa, 651; Portland v. Bangor, 65 Me. 120.)

      Elmer H. Lemon, District Attorney, for respondent.
    The sentence by the recorder was in accordance with statute and proper. (Code Crim. Proc. § 891-a; People ex r&l. Parker v. Mother Superior, 212 App. Div. 169.) No constitutional rights of appellant are involved on this appeal. (People v. Hildebrandt, 16 Misc. Rep. 195; People v. Fuchs,.71 Misc. Rep. 67; People ex rel. Krohn v. Thomas, 133 Misc. Rep. 145; People v. Gitlow, 234 N. Y. 132.)
   Pound, J.

Defendant was arrested on April 6, 1929, on a charge of vagrancy under Code of Criminal Procedure, section 887, subdivision 4 (prostitution), tried in the Recorder’s Court of the city of Newburgh, found guilty and sentenced under Code of Criminal Procedure, section 891-a, for an indeterminate period, not to exceed three years, in the New York State Reformatory at Bedford.

Section 891-a reads as follows: “ Any person convicted in a city of a violation of subdivision four of section eight hundred and eighty-seven of the code of criminal procedure, shall be committed by the court or judge to any reformatory or house of refuge or other correctional institution for a period not to exceed three years or to a county jail, penitentiary or other penal institution for a period not to exceed one year, or placed on probation for a period not to exceed three years, provided, in the case of a person infected with venereal disease, such probations shall be granted only upon such terms and conditions as shall insure medical treatment of such disease and prevent the spread thereof, and no girl or woman shall be placed on probation except to a woman probation officer where available. The provisions of this subdivision shall not supersede the provisions of chapter six hundred and fifty-nine of the laws of nineteen hundred and ten or any amendment thereto, relating to the commitment of convicted persons.” The conviction was proper on the evidence and the sentence was one which the Recorder was authorized to impose. An appeal was taken to the County Court of Orange county by leave of a justice of the Supreme Court. Judgment of conviction was affirmed and an appeal to this court was allowed by a justice of the Appellate Division of the Second Judicial Department.

The appellant seeks to raise the point that the Recorder had before him when he imposed sentence a report of a medical examination made pursuant to Public Health Law article 17-B, sections 343-m and 343-n (Cons. Laws, ch. 45), which revealed the fact that she was suffering from an infectious venereal disease; that he was influenced by such certificate in finding defendant guilty and in imposing sentence, and that her constitutional rights were thereby invaded.

The material sections of the Public Health Law read as follows:

“ § 343-m. Suspected persons. Whenever the board of health or health officer of a health district shall have reasonable ground to believe that any person within the jurisdiction of such board or health officer is suffering from, or infected with, any infectious venereal disease and is likely to infect or to be the source of infection of any other person, such board of health or health officer shall cause a medical examination to be made of such person, for the purpose of ascertaining whether or not such person is in fact suffering from, or infected with, such disease, and every such person shall submit to such examination and permit such specimens of blood or bodily discharges to be taken for laboratory examinations as may be necessary to establish the presence or absence of such disease or infection, and such person may be detained until the results of such examinations are known, provided, that the required examination shall be made by the health officer, or, at the option of the person to be examined, by a licensed physician who, in the opinion of the health officer, is qualified for this work and is approved by him, and such licensed physician making such examination shall report thereon to the board of health, health department or health officer, but shall not issue a certificate of freedom from venereal disease to or for the person examined. Such suspected person may apply to a magistrate for an order restraining such examination and no examination shall then be made except upon order of such magistrate. Before such examination each suspected person shall be informed of this right and be given an opportunity to avail himself or herself thereof.

§ 343-n. Persons under arrest. Every person arrested for vagrancy as defined under subdivisions three or four of section eight hundred and eighty-seven of the code of criminal procedure or under section one hundred and fifty of the tenement house law or under any statute or ordinance for any offense of the nature specified in subdivision four of section eight hundred and eighty-seven of the code of criminal procedure, or arrested charged with a violation of section one thousand one hundred and forty-six or one thousand one hundred and forty-eight of the penal law, or any person arrested for frequenting disorderly houses or houses of prostitution, shall be reported within twenty-four hours by the court or magistrate before whom such person is arraigned to the board of health or health officer of the health district in which the alleged offense occurred, and shall be examined in accordance with the provisions of the preceding section. For purpose of examination and diagnosis as provided in the preceding section, such person may be detained until the results of such examination are known. No such person if convicted shall be released from the jurisdiction of such court or magistrate until the person so convicted has been examined as provided for in the preceding section.

“ § 343-r. Reports and information confidential. All reports or information secured by a board of health or health officer under the provisions of this article shall be absolutely confidential except in so far as is necessary to carry out the purposes of the article.”

It appears from the record that after her arrest defendant was examined pursuant to these sections without protest from her by a licensed physician of her own selection and that on the trial and when sentence was imposed no public reference was made to the report. Defendant’s attorney avers that he was ignorant of its existence. He is, however, chargeable with knowledge of the law which required such examination and report to be made and by failure to raise any objection to the use of the report by the magistrate, defendant must be deemed to have waived any objection thereto.

But even if the point is before us, the conviction must be affirmed. The report was in the nature of information laid before the court by a probation officer prior to sentence, under Code of Criminal Procedure, section 931, which reads as follows: Probation officers when directed by the court shall fully investigate and report to the court in writing on the circumstances of the offense, criminal record and social history of a defendant. Whenever desirable and facilities exist therefor they shall also obtain a physical, mental and psychiatric examination of such defendant and report thereon to the court prior to sentence. Such investigations and reports shall be made promptly. The court shall have such information before it prior to sentence,” and is supplemented by Code of Criminal Procedure, section 939, which reads as follows: “ The courts are charged with the duty, in co-operation, with the proper fiscal authorities, to provide when practicable clinical facilities, and to adopt necessary rules for the use thereof, for such physical, mental and psychiatric examinations and reports as may be within the required scope of efficient probation investigation and supervision.”

It would indeed be a staggering blow to the probation system to hold that the information collected by probation officers to guide the court in its effort to make the punishment fit the offense and the offender' was improperly before it.

When it is said in section 343-r (supra) that such reports are confidential “ except in so far as is necessary to carry out the purposes of the article ” it is not to be inferred that the court should not, on demand, reveal to the defendant the contents of such a report and permit her on an application to be placed on probation, to controvert the same if she so desired, but on the whole the report is merely a method of enlightening the court as to the physical condition of an accused person so that the community may be to some extent protected from the menace of infectious venereal disease, the consequences of which sometimes fall upon innocent men, women and children, who may acquire such "disease or its sequelce without personal misconduct. The power of the State to stamp out infectious disease upholds compulsory vaccination laws (Jacobson v. Massachusetts, 197 U. S. 11) and quarantine laws. Laws for the sexual sterilization of the hopelessly insane or idiotic have been upheld to prevent the procreation of socially inadequate offspring. (Buck v. Bell, 274 U. S. 200.) The same principle sustains the law in question here. Mistakes may be made but if the medical examination and subsequent treatment are properly safeguarded, the regulation is one for the protection of the public health and the public safety, “ confessedly endangered by the presence of a dangerous disease.” (Jacobson v. Massachusetts, supra.)

So far as this defendant is concerned, the only legal effect of the statute on her is that she may be placed on probation only upon such terms and conditions as shall insure medical treatment of such disease and prevent the spread thereof.” (Code Grim. Proc., § 891-a.) All else was in the discretion of the magistrate. In other words, an infected prostitute is not on conviction to be turned loose on the community without proper safeguards to prevent the distribution of disease not to her patrons alone but also potentially to wives and unborn offspring. The liberty of the defendant has not been otherwise invaded by the use of the report.

The decision of this court in People ex rel. Barone v. Fox (202 N. Y. 616, decided on dissenting opinion of Clark, J., 144 App. Div. 611, 621) is relied on as being in conflict with this holding but the point there upheld was entirely different. The case came up on habeas corpus proceedings. The court held that an unlawful sentence had been imposed on a convicted prostitute. The defendant had been committed to a public hospital for treatment under a mandatory statute. The fundamental defect in the statute was that it made the term and nature of imprisonment depend upon a fact found out of court by a non-judicial officer. No such defect is found in this statute. The magistrate has, under Code of Criminal Procedure, section 891-a, a wide latitude in imposing sentence. He is not required to impose a specific sentence depending upon the condition of the woman’s health. No one has a constitutional right to be placed on probation. For all that appears defendant’s, sentence might have been the same if she had been found free from infection. We may not review the discretion of the magistrate and hold that the sentence was unduly severe as matter of law.

The judgment should be affirmed.

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

Judgment affirmed.