author: Lehman, Ch. J.

text:
    In the Matter of Harry Cherry, Appellant, against The Board of Regents of the University of the State of New York, Respondent.

      Argued May 28, 1942;
    decided October 15, 1942.

      Israel Hoffman and Lawrence J. Rittenband for appellant.
    Employing and making use of advertising solicitors or free publicity press agents did not constitute unprofessional conduct within the meaning of subdivision 2(h) of section 1311 of the Education Law (Cons. Laws, ch. 16) providing for revocation and suspension, where the dentist has been otherwise or in any other way guilty of unprofessional conduct. (Brown v. University of State of New

      York, 242 App. Div. 85; 266 N. Y. 598.) Subdivision 2(h) of section 1311 of the Education Law is unconstitutional. The section is vague and indefinite and sets up no standards to guide the Board of Regents in formulating its rules as to when the dentist has been otherwise or in any other way guilty of unprofessional conduct. The Board itself may not set up standards since that is the function of the Legislature. (Semler v. Oregon Stole Board of Dental Examiners, 294 U. S. 608; Matter of Small v. Moss, 279 N. Y. 288; Green Point Sav. Bank v. Zoning Appeals Board, 281 N. Y. 534; Schechter Poultry Corp. v. United States, 295 U. S. 495; Panama Refining Co. v. Ryan, 293 U. S. 388; Matter of Ellis, 258 App. Div. 558; People ex rel. Karlin v. Culkin, 248 N. Y. 465; Connally v. General Constr. Co., 269 U. S. 385; United States v. Cohen Grocery Co., 255 U. S. 81; Standard Chemicals & Metals Corp. v. Waugh Chemical Corp., 231 N. Y. 51.) The determination of the Board of Regents cannot be sustained under subdivision 2(g) of section 1311 for the reasons that petitioner was not charged with violating 2(g); that at the hearing respondent conceded that 2(g) was not violated and had no application; and that rule 5 of the Board of Regents is restrictive of subdivision 2(g) of section 1311 and is, therefore, invalid. (Brown v. University of State of New York, 242 App. Div. 85; 266 N. Y. 598; State Board of Medical Examiners, 149 Ga. 716; State v. Robinson, 288 Mo. 659; Abrams v. Jones, 35 Idaho 532.)

      John J. Bennett, Jr., Attorney-General (Bernard Bienstock of counsel), for respondent.
    The findings and determination were just, legal and based upon sufficient legal evidence. The rules governing dental advertising.were adopted for the purpose of maintaining proper professional standards and for the protection of the public against unscrupulous practitioners. (Niagara Falls Power Co. v. Water Power Control Comm., 267 N. Y. 265; New York Water Service Corp. v. Water Power & Control Comm., 257 App. Div. 590; People ex rel. Freeborn & Co. v. Graves, 257 App. Div. 587; People ex rel. Bennett v. Laman, 277 N. Y. 368; Matter of Dr. Bloom Dentist, Inc., v. Cruise, 259 N. Y. 358; Matter of Levine, 210 App. Div. 8; Matter of Springer, 227 App. Div. 490; Matter of Schleider, 227 App. Div. 532; Matter of Wohl, 227 App. Div. 628; Matter of Bovard, 228 App. Div. 263; Matter of Weinberger, 259 App. Div. 592; Matter of Deady, 259 App. Div. 889.)

      Albert L. Solodar for Allied Dental Council, Inc., amicus curiæ.

    Rule 5 of the Rules of the Board of Regents was violated. (Semler v. Oregon State Board of Dental Examiners, 148 Ore. 50; 294 U. S. 608; Thompson v. Van Lear, 77 Ark. 506; Matter of Dr. Bloom Dentist, Inc., v. Cruise, 259 N. Y. 358; Cherubino v. Munan, 253 N. Y. 462; Matter of Mandel v. Board of Regents, 250 N. Y. 173; Matter of Davis v. Sexton, 211 App. Div. 233; Red “ C ” Oil Mfg. Co. v. Board of Agriculture, 222 U. S. 380; Matter of Bovard, 228 App. Div. 263.)
   Lehman, Ch. J.

The appellant, Harry Cherry, was licensed in 1918 to practice dentistry in the State of New York. In October, 1940, he received notice that, upon charges preferred against him, an application had been made to revoke his license to practice dentistry, pursuant to the provisions of section 1311 of the Education Law (Cons. Laws, ch. 16). , A hearing was held, as provided in that section, before the members of the Dental Board, having jurisdiction to hear all charges against duly licensed dentists of this state for violation of the provisions of subdivision 2 of this section.”

The charge against the appellant was unprofessional conduct ” in violation of subdivision 2 (h) of section 1311 of the Education Law, committed as follows: “ Between on or about October, 1937, up to and including about August, 1939, respondent did make use of and employ a certain dental credit agency as advertising solicitors and free publicity press agents for the purpose of obtaining patients for his dental practice, and during the aforesaid period, respondent did, in fact, obtain as patients Ethel Scolnick, Louise Kroog, Madeline Kannengeiser, Robert Buchholz, Charles Michael, Elinor Isaacs and divers other persons, for his dental practice through the use of the said advertising solicitors and free publicity press agents.”

The Dental Board found that the appellant had' committed the acts specified in the charge and as a conclusion the Dental Board found that the charges against respondent have been sustained and that he is guilty of unprofessional conduct in violation of section 1311, subdivision 2-h of the Education Law.” The Dental Board unanimously recommended “ that respondent be reprimanded and censured by reason of his misconduct as above found.” The Board stated in explanation, “ This is the first violation of any of the provisions of the Education Law by respondent. We are satisfied that respondent discontinued the practices complained of herein as soon as it was brought to his attention that these practices were considered objectionable and unprofessional.” The Board of Regents accepted the determination of the members of the Dental Board that the appellant was guilty. It rejected the recommendation that the penalty be reprimand and censure. Instead it determined that the appellant should be suspended from practice for six months. The appellant brought proceedings "under article 78 of the Civil Practice Act to set aside the determination of the Board of Regents. His application was granted at Special Term but upon appeal the Appellate Division reversed the order setting aside the deternfination of the Board of Regents and confirmed the determination.

The evidence presented at the hearing established the following facts: The owner of a clothing store conceived the plan of maintaining in the store a dental credit service.” Customers who, at the clothing store, applied for or were induced to accept the dental credit service ” were then sent, and at times escorted by clerks in the clothing store, to the office of a dentist who was asked to fix a price for which he would perform the required dental work. After the price was fixed the “ dental credit service ” agreed to discount the dentist’s charge, paying to the dentist approximately seventy per cent of the charge. The appellant Cherry was one of the dentists who agreed to cooperate in this plan. In the course of two years he obtained about twenty-five patients by such means.

Section 51 of the Education Law provides, so far as material to the questions presented upon this appeal, that: Conformably to law the regents may supervise the entrance regulations to and the licensing under and the practicing of the professions of medicine, dentistry, veterinary medicine, pharmacy, optometry and chiropody * * Section 1311, subdivision 2, of the Education Law provides: The license and registration of a practitioner of dentistry may be revoked, suspended or annulled, or such practitioner reprimanded, censured or otherwise disciplined * * * upon decision and due hearing in any of the following cases: (a) * * *; (b) * * * ; (c) * * *; (d) * * * . (e) * * * . (f) * * *; (g) that the dentist has advertised for patronage by means of handbills, posters, circulars, stereopticon slides, motion pictures, radio or newspapers; (h) that the dentist has been otherwise or in any other way guilty of unprofessional conduct.”

The order suspending the license of the appellant for six months must be annulled, unless upon the record here presented it appears that the Board of Regents had power to discipline the appellant for the cause specified in clause (h), “ that the dentist has been otherwise or in any other way guilty of unprofessional conduct.” Concededly he has not offended otherwise against the letter of the statute.

That the State may regulate the practice of dentistry, prescribing the qualifications that are reasonably necessary, and to that end may require licenses and establish supervision by an administrative board, is not open to dispute.” (Semler v. Oregon State Board of Dental Examiners, 294 U. S. 608, 611.) Exercising that power the Legislature may restrict the means of publicity and the form of advertising which a dentist may use. • As the court said in the cited case, when the Legislature does that it is not dealing with traders in commodities, but with the vital interest of public health, and with a profession treating bodily ills and demanding different standards of conduct from those which are traditional in the competition of the market place. The community is concerned with the maintenance of professional standards which will insure not only competency in individual practitioners, but protection against those who would prey upon a public peculiarly susceptible to imposition through alluring promises of physical relief. And the community is concerned in providing safeguards not only against deception, but against practices which would tend to demoralize the profession by forcing its members into an unseemly rivalry which would enlarge the opportunities of the least scrupulous.” (p. 612.)

Acting pursuant to this well-recognized power the Legislature has, in section 1311, defined the “ cases ” where the license of a dentist may be revoked or suspended. In clauses (a) to (g) the Legislature has specified conduct and acts which, upon pain of loss of right to practice, are forbidden to a dentist. The conduct and acts banned are, for the most part so reprehensible that a dentist guilty of any of them would thereby demonstrate his unfitness to practice his profession, even though such conduct and acts were not expressly prohibited. Where the act might be considered only malum prohibitum the prohibited act is plainly defined in language which cannot be misunderstood. Where a dentist has been charged with guilt of act or conduct which constitutes a ground specified by the Legislature in clauses (a) to (g) as sufficient to justify disqualification for practice, the evidence presented to sustain the charge may in some cases leave room for doubt and difference of opinion as to whether the accused has been guilty of the act or conduct charged. There can seldom be difference of opinion whether the act or conduct charged comes within the scope of these clauses. That is not true where the charge is unprofessional conduct.” That term, the appellant argues, is so vague that the Legislature in specifying that it may constitute sufficient ground for revocation or suspension of a license to practice has in effect delegated to the Board of Regents unfettered discretion to determine what shall be sufficient cause for disqualification of a dentist.

The Legislature, of course, could not grant to an administrative board or quasi-judicial tribunal power to impose such a penalty upon a dentist for act or conduct not defined in advance. That would be contrary to our basic concepts of justice. Nor could it delegate to the Board of Regents legislative power to define, in accordance with an unfettered discretion, the acts or conduct which, in the opinion of the Board, would justify disciplinary action against a. dentist.

The Board of Regents does not claim a power so unlimited. It claims that whether act or conduct of an accused dentist is unprofessional ” may be determined by the standards recognized by the dental profession as “ ethical ” and that the Legislature may properly leave to a quasi-judicial body the task of ascertaining and applying those standards in a particular case. It claims, also, that the Legislature has properly delegated to it power to define ethical ” professional standards and to adopt rules and regulations prohibiting acts or conduct which do not, in its opinion, conform to such standards, and that a violation by a dentist of a regulation so adopted is sufficient ground for discipline.

The Legislature has provided that, “ Subject and in conformity to the constitution and laws of the state, the regents shall * * * establish rules for carrying into effect the laws and policies of the state, relating to education, and the functions, powers, duties and trusts conferred or charged upon the university and the education department.” (Education Law, § 46.) Accordingly, the Board of Regents has adopted “ regulations governing dental advertising.” These regulations provide that: “ In the administration of the law, the following forms of advertising are considered unprofessional and objectionable: (1) * * *, (2) * * *, (3) * * *, (4) * * *, (5) employing or making use of advertising solicitors or free publicity press agents, (6) * * *, (7) * * The professional misconduct charged against the appellant is, as we have said, that he employed the dental credit agency as advertising solicitors and free publicity press agents for the purpose of obtaining patients ” and that he did, in fact, obtain certain persons as patients “ through the use of the said advertising solicitors and free publicity press agents.” We have said that the Board of Regents’ “ specific supervisory powers over the practice of dentistry * * * enable it, within reasonable limits, to prescribe canons by which conduct deemed by it, in the exercise of fair judgment, to be unprofessional and objectionable may, in the interest of rescuing that profession from vulgar commercialism, be banned.” (Matter of Dr. Bloom Dentist, Inc., v. Cruise, 259 N. Y. 358, 363.) The field in which that power may be exercised is nonetheless subject to restriction by the Legislature, and even within the field in which the Legislature has delegated to the Board of Regents power to prescribe canons banning conduct which it deems unprofessional and objectionable, the Board of Regents cannot by the exercise of that power enlarge the causes for which the license of a dentist may be revoked or suspended, as defined in subdivision 2 of section 1311.

In its original form subdivision 2 of section 1311 (L. 1927, ch. 85) provided that: “ Upon the report of the board to the department that the accused has been guilty of unprofessional or immoral conduct, or that he is grossly ignorant or inefficient in his profession, or of fraud or deceit in procuring admission to practice, the department may, without further hearing, suspend the person so charged from the practice of dentistry for a limited season, or may revoke his license.” The statute in that form placed no restriction upon the means of publicity or the form of advertising which a dentist might use, but the Board of Regents adopted regulations declaring that certain forms of advertising were improper and unprofessional. In our opinion in Matter of Dr. Bloom Dentist, Inc., v. Cruise (259 N. Y. 358) we had these regulations in mind and what was there said has been properly construed as an approval by this court of the assumption of power by the Board of Regents to adopt appropriate regulations for such purpose under the statute then in effect.

Thereafter the Legislature amended section 1311 by chapter 609 of the Laws of 1933. As amended subdivision 2 then provided: “ The license and registration of a practitioner of dentistry may be revoked, suspended or annulled, or such practitioner reprimanded, censured or otherwise disciplined in accordance with the provisions and procedure defined in this article upon decision and due hearing in any of the following cases: (a) that the dentist has been guilty of unprofessional or immoral conduct; (b) * * *; (c) * * *; (d) * * *; (e) * * *; (f) * * *; (g) that the dentist is guilty of untrue, fraudulent, misleading or deceptive advertising.” For the first time, in the statute as so amended the Legislature imposed a specific restriction upon the right of a dentist to advertise and declared that untrue, fraudulent, misleading or deceptive advertising ” was sufficient ground for revocation of an offending-dentist’s license. The regulations of the Board of Regents purported to impose more drastic restrictions. The bill which had been introduced in the Legislature defining the grounds for the revocation of a dentist’s license included as an additional ground, that the dentist has violated the rules of the regents governing-advertising or any other rules.” That ground was stricken out before the bill was passed. (See Brown v. University of State of New York, 242 App. Div. 85.)

In that case a dentist sought to enjoin the Board of Regents from enforcing a regulation banning the employment of letters, hand bills, posters, circulars, cards, stereoptican slides, motion pictures, radio, newspapers or other advertising devices for the purpose of soliciting patronage, except that a dentist may use personal professional cards of a modest type announcing his name, title, address, telephone number and office hours.” (p. 86.) Because the Legislature had undertaken to impose a specific restriction upon dental advertising, the Appellate Division and this court (266 N. Y. 598) held that the Board of Regents could not adopt different or additional restrictions prohibiting the use of particular means of publicity and that the regulation of the Board of Regents was for that reason invalid. The court read into the statute imposing specific restrictions on advertising an implied sanction of advertising that did not violate the restrictions. Thereafter, the Legislature itself determined that the means of publicity which the Board of Regents had attempted to ban by regulation should, with some exceptions, be banned by statute, and amended subdivision 2 of section 1311 accordingly. (L. 1935, ch. 406.)

It should be noted that in Brown v. University of State of New York (supra) the courts did not hold that the challenged rule or regulation of the Board of Regents was unreasonable. We did not question that, in the exercise of the police power, the State could place such a restriction upon dental advertising. We held that the regulation of the Board of Regents was invalid only because the Legislature, having itself fixed a standard for dental advertising and having provided that failure to abide by such standard was ground for revocation of a license, had by necessary implication sanctioned advertising which did not transgress the express ban of the statute, and had not delegated to the Board of Regents power to provide other standards of permissible advertising or to create additional grounds for revocation of license. Though the Legislature has thereafter by amendment of the statute placed a ban upon the use of some of the means of advertising which the Board of Regents had attempted to ban by regulation, the ban is not complete. Publicity or advertising by other means is still sanctioned by the statute. The reasons which dictated the decision in Brown v. University of State of New York (supra), would, with even more compelling force, constrain the courts to declare invalid any assumption by the Board of Regents to ban by rule or regulation such other means of publicity or advertising.

That does not mean, however, that a dentist may, with impunity, use means of publicity and advertising, though sanctioned by the Legislature, for a purpose or in a manner which is unlawful, or perhaps even improper. The legislative ban includes almost all means which are generally used for publicity or in advertising. By necessary implication it sanctions the use of other means of publicity but by no possible implication does it sanction the use of the permitted means for a purpose or in a manner which would constitute unprofessional conduct.

What constitutes unprofessional conduct by a dentist must be determined by those standards which are commonly accepted by those practicing the same profession in the same territory. The law is a very ancient profession and certain forms of conduct have been banned as unprofessional for centuries in both England and America. Ancient traditions have created rigid bans and by common consent those who violate those bans should be excluded from the goodly company of the members of the bar. At least in part these bans have been formulated in Canons of Ethics adopted and enforced by associations of members of the bar. In the profession of the law no person can plead ignorance as palliation for professional misconduct. In vocations, like dentistry, more recently accepted as professions, professional standards are perhaps less uniform, less well understood, and less rigidly defined. Nonetheless, the standards of conduct generally accepted by practitioners in the State of New York are not so indefinite that they cannot be determined by qualified persons. They are part of the ethics of the profession and what is generally called the ' ethics ’ of the profession is but the consensus of expert opinion as to the necessity of such standards.” (Semler v. Oregon State Board of Dental Examiners, supra, p. 612.) Every member of the profession should be regarded as an expert for such purpose. There is a moral dereliction in failure by any member of a profession to apply in professional practice the standards which, by consensus of opinion in the profession, are necessary.

The Board of Regents cannot, as we have said, suspend or revoke the license of a dentist for any cause not specified in section 1311, subdivision 2. It cannot ban, as unprofessional, conduct which has been impliedly sanctioned by the Legislature. Nor can it by regulation ban, as unprofessional, conduct which, though not expressly or impliedly sanctioned by the Legislature, accords with the standards accepted as proper by the consensus of expert opinion.” Even so there remains a large -field in which the Board of Regents may by the exercise of its specific supervisory power prescribe canons by which conduct deemed by it, in the exercise of fair judgment, to be unprofessional and objectionable ” is banned. (Matter of Dr. Bloom Dentist, Inc., v. Cruise, supra, p. 363.) Though breach of a regulation or canon prescribed by the Board of Regents is not of itself, and in all cases, sufficient ground for discipline, it may be sufficient if the regulation or canon is reasonable and the conduct which has been specifically banned by the regulation may fairly be classed as unprofessional. In such case the regulation serves to apprise all practitioners of the standards which the official body authorized to supervise the profession deems necessary, and those who choose to disregard the warning do so at their peril. In adopting such a regulation the Board of Regents does not exercise a legislative power delegated to it without mandate that it be exercised in accordance with the standards fixed by the Legislature. The powers conferred upon the Board of Regents to supervise the practice of dentistry and to establish rules for carrying into effect its powers and functions are subject to the plainly implied condition that in the exercise of its power the Board may ban only acts and conduct which, upon reasonable ground, it deems unprofessional. The Legislature has, itself, specified the grounds upon which a license to practice dentistry may be suspended or revoked. The Legislature has not delegated to the Board of Regents power to create offenses which shall furnish additional grounds. The Legislature has restricted the means which a dentist may use for publicity or advertising. It has not delegated to the Board of Regents power to ban the use of means which do not violate the restriction formulated by the Legislature. The Legislature has not delegated to the Board power to define as “ unprofessional ” conduct which, by the “ consensus of expert opinion ” is ethical ” and not reprehensible. The Legislature has, however, delegated to the Board power by rule to specify and define conduct which by consensus of expert opinion in the profession is unethical and does not conform to standards which are necessary, and power to decree that such reprehensible conduct should not go unwhipt of justice. Through the exercise of that power it can adequately supervise the practice of dentistry and ban conduct dictated by “ vulgar commercialism.”

The rule that the “ employing or making use of advertising solicitors or free publicity press agents ” constitutes unprofessional conduct may be invalid under the case of Brown v. University of State of New York (supra), if rigidly applied as a ban in all cases. Advertising solicitors and free publicity press agents are ordinarily employed and used for a purpose and in manner which would be regarded as unprofessional and improper, even if not specifically banned by regulation. As we have said, the statute cannot be construed as an implied sanction of such employment or use. Nonetheless, there may be occasions when advertising solicitors or free publicity press agents may be employed or used for proper purposes and in proper manner; and the Board of Regents could not by general regulation ban proper use and improper use indiscriminately.

It may well be doubted whether in this case it can fairly be said that the petitioner, though obtaining patients in the manner above-described through the dental credit service,” did in fact employ or make use of advertising solicitors or free publicity press agents ” within the meaning of the regulation. We need not decide that now. The only charge against the petitioner is a violation of the ban against employment and use of advertising solicitors and free publicity agents, and that is the only act or conduct of which the petitioner has been found guilty; yet, as we have said, violation of that regulation is not by itself a ground for revocation of a license to practice dentistry. Cooperation by the petitioner in the plan of the so-called dental credit service ” might well be subject to censure as “ vulgar commercialism ” and we assume that it could be banned by regulation of the Board of Regents, and might be regarded as unprofessional conduct even without such a regulation. That is not, however, the charge which has been tried by the Dental Board. Indeed, we cannot overlook the fact that in its recommendation that Board stated, We are satisfied that respondent discontinued the practices complained of herein as soon as it was brought to his attention that these practices were considered objectionable and unprofessional.” In effect, that is a finding that the petitioner acted without wrongful intent and in the belief that his conduct was not objectionable and unprofessional.” Quite evidently the Dental Board found a wrong which, in its opinion, was only technical and at least partly venial.

Since the conduct charged here as unprofessional is not of itself a ground for suspension of license, the order of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division.

Loughran, Rippey and Desmond, JJ., concur; Finch, Lewis and Conway, JJ., dissent.

Ordered accordingly.


source: Caselaw Access Project

license: Public Domain

text:
    William P. Fisher et al., Constituting the Common Council of the City of Buffalo, Respondents, v. Joseph J. Kelly, as Mayor of the City of Buffalo, Appellant.
    Argued July 29, 1942;
    decided October 16, 1942.

      Andrew P. Ronan, Corporation Counsel (Elmer S. Stengel of counsel), for appellant.
    It was error for the Appellate Division to determine that the provisions of Local Law No. 1 of 1942 did not conflict with the provisions of the Public Health Law. (Cons. Laws, ch. 45; People ex rel. Bush v. Houghton, 182 N. Y. 301; Adler v. Deegan, 251 N. Y. 467.) The Common Council had no authority to adopt.Local Law No. 1, 1942, under the provisions of subdivision 1 of section 11 of the City Home Rule Law. (Cons. Laws, ch. 76; Adler v. Deegan, 251 N. Y. 467; Robertson v. Zimmermann, 268 N. Y. 52; County Securities, Inc., v. Seacord, 278 N. Y. 34.) The Public Health Law applies to the city of Buffalo. (Laws 1914, ch. 217; Cons. Laws, ch. 76, § 20, subd. 3; Cons. Laws, ch. 45, § 20.) Section 20 of the Public Health Law requires a board of two or more members. (People ex rel. Barmore v. Robertson, 302 Ill. 422; Matter of Dobson, 146 N. Y. 357; Matter of Bronson, 150 N. Y. 1.) The Local Law, if valid, is subject to a mandatory referendum. (Cons. Laws, ch. 76, § 15, subd. 5; Matter of Heeran v. Scully, 135 Misc. Rep, 874; 254 N. Y. 344.)

      Philip Halpern and George Clinton, Jr., for respondents.
    The Public Health Law does not govern the organization of departments of health in cities of the first or second class, having a population of- over 50,000. The organization of the Department of Health of the city of Buffalo has never been governed by the provisions of section 20 of the Public Health Law. (Cons. Laws, ch. 53, § 145; Cons. Laws, ch. 45, § 20; Ponsrok v. City of Yonkers, 254 N. Y. 91.) There is no provision of any state statute, applicable to the city of Buffalo, which requires that the health department be headed by a board of two or more persons rather than by a single officer. (Strickland v. Harger, 16 Hun, 465; McCormick & Co. v. Brown, 52 Fed. Rep. [2d] 934; Wohlgemuth Bus Co. v. Public Service Co-ordinated Transport,, 125 N. J. L. 232; Broadhurst v. City of Falls River, 278 Mass. 167; Milovich v. City of Los Angeles, 42 Cal. App. [2d] 364; Commonwealth v. Wilson Co., 241 Mass. 406.) The provision of the Public Health Law with which the local law is assumed to be in conflict, does not in terms and in effect apply alike to all cities. (Bareham v. City of Rochester, 246 N. Y. 140; New York Steam Corp. v. City of New York, 268 N. Y. 137; Johnson v. Etkin, 279 N. Y. 1.) The local law reorganizing the health department of the city of Buffalo relates to the property, affairs or government of the city. The city therefore had the power to supersede the provision of the State law with which the local law is assumed to be in conflict, under subdivision 1 (a) of section 11 of the City Home Rule Law. (City of New York v. Village of Lawrence, 250 N. Y. 429; Metzger v. Swift, 258 N. Y. 440; People ex rel. Bush v. Houghton, 182 Y. Y. 301; People ex rel. Werner v. Prendergast, 206 N. Y. 405; Matter of Towne v. Porter, 128 App. Div. 717; People ex rel. Lynch v. Pierce, 149 App. Div. 286; New Rochelle Trust Co. v. White, 283 N. Y. 223; Commission of Public Charities v. Wortman, 279 N. Y. 711; Matter of Osborn v. Cohen, 272 N. Y. 55; People ex rel. New York, New Haven & Hartford R. R. Co. v. Willcox, 200 N. Y. 423; People ex rel. Yonofsky v. Blanchard, 288 N. Y. 145.) In any event, the local law is valid under part (b) of subdivision 1 of section 11 of the City Home Rule Law of 1939, authorizing cities to adopt local laws in relation to the qualifications, number, mode of selection or removal, terms of office and compensation of all its officers and employees whether such local laws relate to the property, affairs or government of such city or not. (New Rochelle Trust Co. v. White, 283 N. Y. 223.)
   Lehman, Ch. J.

In 1927 the city of Buffalo,'in the exercise of powers conferred by the City Home Rule Law (Cons. Laws, ch. 76), adopted, by local law (Local Law No. 4, 1927, pub. in Local Laws, 1932, p. 21), a City Charter superseding its charter which had been enacted by the Legislature (L. 1914, ch. 217.) Article XIY of the new Charter defined the powers of the Department of Health and the powers, duties, qualifications, number, mode of selection and removal, terms of office, etcetera, of the officers and employees of the Department. The Common Council of the city in March, 1942, adopted a local law which purported to “ supersede and repeal ” that article and to “ substitute in place thereof a new article XIV.”

Article XIY of the Charter of 1927, provided that the Board of Health “ shall be the head of the department of health.” (5$ 270). The members of the Board of Health were to be appointed by the Mayor of the city, subject to confirmation by the Council, and were “ removable at any time by the mayor.” (§ 271). The members of the Board did not, individually, have any executive powers and duties. The Charter provided that the board shall appoint and may at pleasure remove a health commissioner ” and that: The health commissioner shall be the chief exécutive officer of the board and shall, subject to its direction, have supervision and management of the affairs of the department and of its employees and of enforcing the local laws and ordinances of the city respecting health and the order, rules and regulations of the board and the provisions of the public health law and sanitary code of the state applicable to the city.” (§§ 275, 276).

In article XIV of the Charter, as amended by the local law adopted by the Council in 1942, a commissioner of health,” appointed by the Mayor, subject to confirmation by the Council, and removable at any time by the Mayor, is substituted for the Board of Health as the head of the Department of Health. His duties are almost identical with the duties of the Board of Health as defined in the Charter of 1927. The commissioner of health shall exercise all the powers and be charged with all the duties now or hereafter conferred upon or required of local boards of health or local health officers by the laws of this state so far as the same pertain to cities, except, as limited or extended by the provisions of this act. The commissioner of health shall also possess such powers and perform such duties as may be prescribed by ordinance of the common council, by this local law or otherwise by law.”

The article as amended not only confers upon the Commissioner of Health the powers and duties previously exercised by the Board of Health but it abolishes that Board as previously constituted. It does, however, provide for an advisory board ” to be appointed by the Mayor for fixed terms, which is charged with the duty to advise the commissioner of health or the mayor upon matters pertaining to public health whenever requested by such commissioner of health or mayor.” In other respects the provisions of the new article XIV are similar to the provisions of the superseded article — or, at least, the differences are not material to any question presented upon this appeal.

The Mayor of the city has declined to appoint a Commissioner of Health and to submit his name to the Common Council for confirmation, in accordance with the provisions of the Local Law of March, 1942, contending that the said local law is invalid, nugatory and void and beyond the power of the Common Council to enact ” and further that “ even if said local law be declared valid, it is not in effect until approved by the electors of the City of Buffalo after a referendum as required by section 15 of the City Home Rule Law.” The controversy has been submitted to the Appellate Division upon an agreed statement of facts. The court sustained the validity of the local law and held that no approval by the electors after a referendum is required by the City Home Rule Law. One of the justices dissented and voted for dismissal of the action on the ground that the local law in question is presumptively valid and that the Common Council is without jurisdiction or authority to institute an action to test the validity of said law.” (264 App. Div. 596, 599).

The parties are seeking a judicial determination of a controversy which affects the government of the city of Buffalo and the protection of the health of the public. The controversy relates solely to the construction of the City Home Rule Law (L. 1924, ch. 363 as amd. by L. 1939, ch. 867) and of the Public Health Law (Cons. Laws, ch. 45; L. 1909, ch. 49), as thereafter amended. It depends upon no facts other than matters of public record, where there is no room for dispute. In the public interest the question should be authoritatively determined and the controversy speedily ended. We do not pause to consider technical objections which, perhaps, might be urged to the procedure and form in which the question has been presented to the Appellate Division, but proceed, as that court did, to consider the question on the merits.

The “ Power of cities to adopt and amend local laws ” is defined by section 11 of the City Home Rule Law. Within the field described in subdivision 1 of that section, “ such local laws may change or supersede any provision of an act of the legislature theretofore enacted which provision does not in terms and in effect apply alike to all cities.” Within the field described in subdivision 2 of section 11, the legislative power of cities is more restricted. There, “ such local laws, in so far as they do not relate to the property, affairs or government of the city or to other matters in relation to which the city is authorized by subdivision one to pass local laws, shall not change or supersede any act of the legislature.” The challenge by the Mayor of the validity of the local law amending the City Charter is based upon the contention that, since public health is a -matter of State concern (Adler v. Deegan, 251 N. Y. 467; Robertson v. Zimmermann, 268 N. Y. 52), the local law relates to matters other than those in relation to which the city is authorized by subdivision one to pass local laws ” and that the provision of the local law which substitutes a commissioner of health ” appointed by the Mayor in place of the Board of Health as " head of the department of health ” conflicts with provisions of the Public Health Law to which we shall hereafter refer, and exceeds the legislative power of the city as defined in the City Home Buie Law. The Appellate Division found no such conflict. If we agree with this conclusion we need not consider whether or not the local law relates to matters “ in relation to which the city is authorized to pass local laws ” under subdivision one.

The Public Health Law is a general statute and relates to a matter of State concern but, like other general statutes relating to matters of State concern, not all of its provisions apply alike in all the subdivisions and to all the municipal corporations of the State. Article 3 of the statute and section 20 of that article are both entitled, “ Local boards of health.” Section 20 provides in part: “ There shall continue to be local boards of health and health officers in the several cities, villages and towns of the state except as hereinafter provided. In cities under fifty thousand population * * * the board shall consist of the mayor of the city who shall be its president, and six other persons * * *. In the cities, except cities whose charters otherwise provide, the board shall appoint, for a term of four years, a competent physician, not one of its members * * * tobe the health officer of the city, * * *. In villages the board of health shall consist of the board of trustees of such village. In towns the board of health shall consist of the town board. * ■* *”

Section 21, entitled “ General powers and duties of local boards of health,” provides in part: “ Every such local board, subject to the -provisions of the public health law and of the sanitary code, shall prescribe the duties and powers of the local health officer, who shall be its chief executive officer, and direct him in the performance of his duties, and fix his compensation * * (Italics are, of course, ours.)

Literal compliance by a city with all the provisions of the statute which we have italicized is possible only where the City Charter provides for a Board of Health with power to appoint and direct a health officer. Under the challenged local law the city of Buffalo will have no such Board. The problem here presented is whether those provisions of section 20, which require such a Board are intended to apply to the city of Buffalo. We are told by the plaintiffs that the words “ boards of health ” as used in the Public Health Law should not be construed literally as a description of a body consisting of several persons but rather as a description of any public health authority, whether a body consisting of several persons or a single officer. So construed it is said that the provisions of sections 20 and 21 of the Public Health Law are not changed or superseded by a local law which substitutes as head of the Department of Health of a city, a single officer appointed by the Mayor in place of a Board of Health with power to appoint and direct an executive health officer.

The words Board of Health ” are a descriptive term applicable to an official body consisting of several persons. For many years such an official body, organized in manner prescribed by the Legisture, was the official local health authority in the cities, villages and towns of the State, except where the Legislature in a City Charter provided a special form of organization for the local Health Departments Some cities, including the city of Buffalo, long ago had received charters from the Legislature which provided forms of organization of the Health Department which departed in some respects from the general pattern which the Legislature prescribed for the organization of the other cities of the State. Accordingly, when the Legislature adopted section 270 of the Laws of 1885, it provided in section 1 that: It shall be the duty of the common council, upon the nomination of the mayor of every city in this state, except in the cities of New York, Buffalo, Albany and Yonkers and Brooklyn, which are hereby excepted from the operation of this act, to appoint a board of health for such city,” etc. That statute was the forerunner of section 20 of the Public Health Law adopted by the Legislature by chapter 661 of the Laws of 1893, which provided that: “ There shall continue to be local boards of health and health officers in the several cities, villages and towns of the state. In the cities except New York, Brooklyn, Buffalo, Albany and Yonkers, the board shall consist of the mayor of the city, who shall be its president, and at least six other persons * * *. The board shall appoint a competent physician, not one of its members, to be the health officer of the city.” It appears clear that the first sentence of that section: There shall continue to be local boards of health and health officers in the several cities, villages and towns of the state,” was intended to apply to all the cities of the State, but that Buffalo and the other cities named in the second sentence were excepted from the other provisions of section 20 of the Public Health Law of 1893. The form of that exception was made more general by amendment of the section by chapter 253 of the Laws of 1906. There, the second sentence of the section read, In the cities, except cities of the first and second class, the board shall consist * * *.” With a few changes, to which we shall hereafter refer, the provisions of sections 20 and 21 of the Public Health Law, chapter 45 of the Consolidated Laws (L. 1909, ch. 49 as thereafter amended) are derived from the provisions of the earlier statute.

In the Public Health Law as adopted in 1909 the same form of exception, except cities of the first and second class,” was again used and since Buffalo was a city of the first class ” there could be no possible question about its exclusion from the provisions of sections 20 and 21. Clearly the provisions of those sections, at least after the first sentence of section 20, applied to no cities except those of the third class, i. e. cities with a population of under 50,000 inhabitants.

Though in our opinion the first sentence of section 20, that there shall continue to be local boards of health and health officers in the several cities, villages and towns of the state ” is intended to apply to all the cities of the State, including Buffalo; we agree that it should not be construed as a requirement that in every city, village and town there shall be both a local Board of Health and a health officer. A Board of Health with power to appoint a health officer is one form of organization of a Public Health Authority in this State. Under the Second Class Cities law (L. 1906, ch. 473), the charter of all cities of the second class provided a different form of organization. In those cities a commissioner of public safety ” (see § 130) who is “ charged with all the duties conferred upon or required of local boards of health by the laws of this state ” (see § 145) is head of the Health Department. Other forms of organization are provided also for some cities by special statutes. Section 32 of the General Construction Law (Cons. Laws, ch. 22) provides that “ A reference to several officers of a municipal corporation holding the same office, or to a board of such officers, shall be deemed to refer to the single officer holding such office, when but one person is chosen to fill such office in pursuance of law.” Reasonably construed the first sentence of section 20 can mean only that local boards of health and local health officers are not abolished by the statute and that in each city, village or town of the State the duties conferred upon or required of local boards of health by the laws of the State shall continue to be performed by a local health officer or board. So construed the local law is not in conflict with the first sentence of section 20 of the Public Health Law.

The form of organization of the Health Department of the City of Buffalo as provided in the local law is, as we have pointed out above, different from the form of organization provided in other portions of sections 20 and 21 of the Public Health Law for those cities which are included in the scope of these provisions. There is here no room for construction concerning the form of organization required in those cities which are included within the scope of these statutory provisions. There must be a board of health with power to appoint and direct an executive health officer. The question we must decide is whether or not these provisions apply to any city except cities with a population of under 50,000.

All cities of the first and second class were, as we have pointed out, expressly excluded from the scope of these provisions until 1929. In the cities, except cities of the first and second class, the board shall consist of the mayor * * * and * * * six other persons * * *. In the cities, except cities of the first and second class, and such other cities whose charters otherwise provide, the board shall appoint * * * a competent physician * * *, to be the health officer of the city.” In its present form the statute as amended by chapter 376 of the Laws of 1929 provides: In cities under fifty thousand population * * * the board shall consist of the mayor * * * and six other persons * * *. In the cities, except cities whose charters otherwise provide, the board shall appoint, * * * a competent physician * * * to be the health officer of the city.” The change is, it is plain, purely formal. Before the amendment the statute expressly stated that the provision that the Board shall appoint a competent physician to be the health officer of the city did not apply to cities in the first and second class nor to cities whose charters otherwise provide. In other words, it applied only to cities with a population-of under 50,000. After the change it applied only to the same group of cities. Indeed, with the exception of the city of Buffalo all cities of larger population than 50,000 have charters which do otherwise provide. The section is misread if the amendment is given a broader and forced significance. The provisions of sections 20 and 21, which prescribe a form of organization of boards of health of cities, confer upon such boards of health specified powers and duties, have no application to the city of Buffalo, and are not changed or superseded by the local law which has been challenged.

Nor does the City Home Rule Law require that the local law be approved by the voters of the city before it becomes effective. A local law which merely changes the form of organization of a department of the city, substituting as head of the department a single officer appointed by the Mayor in place of a board whose members were appointed by the Mayor, does not abolish, transfer or curtail ” any power of the Mayor within the meaning of the City Home Rule Law. (§ 15).

The judgment should be affirmed, without costs.

Lotjghran, Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Judgment affirmed.


author: Per Curiam.

text:
    Roy E. Hunn, as Administrator of the Estate of Myrta E. Hunn, Deceased, Appellant, v. New York State Teachers’ Retirement System, Respondent.
    Argued October 6, 1942;
    decided October 29, 1942.

      Everest A. Judd for appellant.
    Inasmuch as decedent was entitled to superannuation retirement under section 1109 of the Education Law (Cons. Laws, ch. 16) and disability retirement under section 1109-a, there was an election possible for her to take superannuation retirement instead of disability retirement and the application of the plaintiff signed in her behalf for disability retirement, constituted a choice and an election as between the forms of retirement and was therefore invalid, because of the incompetency of decedent. (Finch v. Goldstein, 245 N. Y. 300; Matter of Frank, 283 N. Y. 106; Matter of Santora, 253 App. Div. 208; Weinberg v. Weinberg, 255 App. Div. 366; Matter of Long, 261 App. Div. 456; Matter of Gould, 257 App. Div. 109; Matter of Rasmussen, 147 Misc. Rep. 564; Kent v. West, 33 App. Div. 112; Matter of Reeves, 10 Del. C. H. 324; Moorehead v. Teachers’ Retirement Board, 134 Misc. Rep. 123; Matter of Feltner v. Teachers’ Retirement Board, 235 App. Div. 207.) If section 1109-a is interpreted as permitting an election by another for the incompetent, it is unconstitutional. (Matter of Frank, 283 N. Y. 106; Weinberg v. Weinberg, 8 N. Y. Supp. [2d] 345.) Decedent was not legally retired. (Matter of Gulick, 255 N. Y. 364; Matter of O’Brien v. New York State Teachers’ Retirement Board, 215 App. Div. 220.)

      Charles A. Brind, Jr., for respondent.
    Decedent was legally retired. (Cons. Laws, ch. 16, § 1109-a; Grimmer v. Tenement House Dept., 205 N. Y. 549; Matter of City of New York, 217 N. Y. 1; Bullock v. Cooley, 225 N. Y. 566; Story v. Craig, 231 N. Y. 33; Town of Amherst v. County of Erie, 260 N. Y. 361.) The procedure outlined by the statute is in the interest of the mentally incompetent and should not be negatived. In any event the committee in this case by his failure to revoke is bound by the application. (Matter of Feltner v. Teachers’ Retirement Board, 235 App. Div. 207; Matter of Carey v. Teachers’ Retirement Board, 227 App. Div. 695.)
   Per Curiam.

Section 1109-a of the Education Law (Cons. Laws, ch. 16) provides that a member * * * may be retired * * * upon his. own application or that of a person acting in his behalf * * Any person authorized by a member to act in his behalf, or the committee of a member authorized by law to act in his behalf, may, in accordance with the statute, file an application for the member’s retirement but, in our opinion, the statute should not be construed as intended to confer upon any person the right to act for a member when such person has not been otherwise authorized to act in his behalf.

The judgment of the Appellate Division should be reversed and that of the trial court affirmed, with costs in this court and in the Appellate Division.

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

Judgment accordingly.


author: Desmond, J.

text:
    The People of the State of New York ex rel. Jonathan W. Hull et al., as Executors of William S. Hull, Deceased, Respondents, against Mark Graves et al., Constituting the State Tax Commission, Appellants.

      Argued May 1, 1942;
    decided October 29, 1942.

      John J. Bennett, Jr., Attorney-General (John H. Spain and Wendell P. Brown of counsel), for appellants.
    The Tax Commission properly determined that the additional assessment of income tax was valid. (People ex rel. Kohlman & Co. v. Law 239 N. Y. 346; People ex rel. Conway Co. v. Lynch, 258 N. Y. 245; Lucas v. American Code Co., 280 U. S. 445; People ex rel. Hilton v. Fahrenkopf, 279 N. Y. 49; Sullivan v. Rosson, 223 N. Y. 217; Commissioner v. Hoffman, 117 Fed. Rep. [2d] 987.)

      John A. Dutton and Charles J. Eignor for respondents.
    To entitle a taxpayer to a credit for loss of corporate stock, it is not necessary to show that the corporation has been dissolved or has been declared bankrupt or has parted with title to its property. (People ex rel. Conway v. Lynch, 258 N. Y. 245; Hancock v. Commissioner of Internal Revenue, 105 Fed. Rep. [2d] 153; Commissioner v. Hoffman, 117 Fed. Rep. [2d] 987.) There were no identifiable events or other factors which would have justified the deduction of the loss in any prior year. (Morton v. Commissioner, 38 B. T. A. 1270). The petitioner’s loss is allowable under subdivision 5 of section 360 of the Tax Law (Cons. Laws, ch. 60). (Witschger v. Marvin & Co., 255 App. Div. 70.)
   Desmond, J.

Petitioners, as executors of the will of a deceased resident of this State, brought this proceeding in the nature of certiorari under article 78 of the Civil Practice Act, and sections 199 and 375 of the Tax Law (Cons. Laws, ch. 60), to review a determination by the State Tax Commission. The Commission’s determination was that petitioners’ testator had not been entitled to a deduction in the amount of $18,200, which he had claimed on his State income tax return for 1936. The disputed deduction was for a loss on stock of Primal Realty Corporation owned by decedent and which stock, he claimed in his return, had become worthless in that year.

The testimony shows: in 1920 and 1926 decedent and four others purchased six adjoining houses for a total price of $159,500, of which $121,500 was in mortgages assumed (one mortgage on each house), the balance of $38,000 in cash. • Payments on these mortgages had reduced their principal amount to $103,000, when, in 1928, the properties were conveyed to the newly-formed Primal Realty Corporation, which issued $54,600 in stock, representing the equities in the houses, to the “ syndicate ” members, $18,200 thereof going to decedent. By 1936, the unpaid principal of the mortgages had been reduced to $95,000. Pour of these mortgages, on which there was $64,000 in unpaid principal, were held by decedent, individually. These six houses were the Primal Corporation’s only asset. There were in 1936 tax arrears on the six houses, for the years 1931-1936, amounting to about $19,000, indicating that the corporation had been in financial straits for some time back. The corporation’s stockholders would not put up any new money, so it was thought advisable to assign the rents on each house to the respective mortgagees. No deeds were given, however, and title to the properties remained in the corporation, which was not dissolved. The assignment of rents to decedent was given in 1936, the assignments to the other mortgagees in 1935. Decedent in 1936 paid up about $15,000 in back taxes on the four dwellings covered by his four mortgages. Certain violations ” of the Multiple Dwelling Law (Cons. Laws, ch. 61-A) had been filed against all the properties in the summer of 1936; to correct the conditions described in these violations ” an outlay of about $12,000 would have been required. At the end of 1936 the total indebtedness against the properties, including taxes advanced by mortgagees, was $112,455. There was offered in evidence an appraisal, made in 1940, but as of 1936, valuing the six houses at $92,000. It is to be noted, however, that this appraisal did not say that values were greater than $92,000 in the years before 1936. Thus the appraisal, while it remains undisputed in the record as to 1936 value, is not of much help on the question here — whether this stock became worthless in 1936. The properties were carried on the corporation’s books in 1936 at the price paid for them, $157,500. The rents fell, during the period 1929-36, from $28,500 to $16,300, but this drop was at a steady rate from 1929 to 1934; actually there were increases in 1935 and 1936. There were operating losses during several of these years. The appraisal states no basis for its figures, except rents; if based solely on rents, the value of the houses would have been no lower in 1936 than in 1933, 1934 and 1935.

The hearing resulted in a determination by the State Tax Commission that the assessment was correct, and that the claimed deduction was not allowable. On review the Appellate Division unanimously annulled the Tax Commission’s determination on the law and the facts.” That court’s opinion says that “ a realistic view of the situation sustains the claim made in behalf of decedent,” and that there were certain identifiable events sufficient to fix the loss as of 1936.” „ (263 App. Div. 223, 225.) Those events were, according to the opinion, the refusal of stockholders in that year to put up more money, the “ virtual abandonment ” of the properties by rent assignments, the notices of violations, etcetera.

Section 360, subdivision 5 of the State Tax Law; allows as a deduction any loss sustained during the taxable year, in a transaction entered into for profit, though not connected with the taxpayer’s trade or business. The State Tax Commission’s regulations as they stood in 1936 (art. 154, now 487-d) allow deduction only in the year in which the stock became worthless, provided a satisfactory explanation of the worthlessness be made.” The test, this court said in People ex rel. Conway Co. v. Lynch (258 N. Y 245), is a practical one and one way of showing worthlessness, although not the only way, is by liquidation. If there be no liquidation the question is one of fact: did the stock cease to have value, or suffer a definite loss of value, in the particular tax year? “ Ordinarily the loss of an investor in stock or certificates of ownership in a corporation or other artificial entity is sustained only when the loss is definitely and irrevocably fixed.” (People ex rel. Conway Co. v. Lynch, supra, p. 255.) Here the corporation had not parted with title to its properties despite losses. It assigned the rents to the mortgagees as further security. Leaving the title in the owner corporation, and keeping the corporation alive, can be taken as some proof that there was a lingering hope that values which had fallen might rise again to heights beyond the mountainous liens.

The courts in these cases have a limited power of review only. Section 199 of the Tax Law does say that the determination of the Tax Commission “ may be reviewed both upon the law and the facts,” but the meaning of that phrase has been settled by a number of decisions of this court. The identical provision for a review “ both upon the law and the facts,” appearing in the statute (L. 1889, ch. 463, reenacted L. 1896, ch. 908) which was the predecessor of section 199 of the Tax Law, was construed to mean that the determination of the Comptroller, who was then the taxing officer, was not to be disturbed by the courts, “ unless clearly shown to have been erroneous.” (People ex rel. American Contracting & Dredging Co. v. Wemple, 129 N. Y. 558, 565; People ex rel. Roebling’s Sons, Co. v. Wemple, 138 N. Y. 582, 587; People ex rel. Western Electric Co. v. Campbell, 145 N. Y. 587, 591; People ex rel. United Verde Copper Co. v. Roberts, 156 N. Y. 585, 590; People ex rel. Commercial Cable Co. v. Morgan, 178 N. Y. 433, 440.) The same rule is applied in the recent case of Matter of Calder v. Graves (261 App. Div. 90, 94, 95; affd., without opinion, 286 N. Y. 643).

There is in this record substantial support for the Commission’s determination that the taxpayer had not shown that the loss was “definitely and irrevocably fixed” (People ex rel. Conway Co. v. Lynch, supra) in 1936. A determination that the taxpayer had never sustained a loss on this stock would, of course, be against the very great weight of evidence to the contrary. But the issue here is as to the year of the loss, and the finding that the loss is not shown to have occurred in the particular year of 1936, is not against the overwhelming weight of evidence. In short, it cannot be said that the Tax Commission’s determination was “ clearly erroneous.”

The order of the Appellate Division should be reversed, and the determination of the State Tax Commission confirmed, with costs in this court and in the Appellate Division.

Lehman, Ch. J., Finch and. Lewis, JJ., concur; Loughran, Rippey and Conway, JJ., dissent.

Ordered accordingly.


text:
    The People of the State of New York ex rel. William J. Maloney, Respondent, against Mark Graves et al., Constituting the State Tax Commission, Appellants.
    Argued October 5, 1942;
    decided October 29, 1942.

      John J. Bennett, Jr., Attorney-General (Leon M. Layden and Wendell P. Brown of counsel), for appellants.
    No losses were sustained by the taxpayer during the year 1931 on the properties in question. (Higgins v. Smith, 308 U. S. 473; Burdan v. Commissioner, 106 Fed. Rep. [2d] 207; Dayton Co. v. Commissioner,
      90 Fed. Rep. [2d] 767; Wieboldt v. Commissioner, 113 Fed. Rep. [2d] 384; Matter of Calder v. Graves, 261 App. Div. 90; Burnet v. Houston, 283 U. S. 223.) No deductible loss was sustained on the residential property under subdivision 4 of section 360 of the Tax Law (Cons. Laws, ch. 60). (People ex rel. Merrill v. Gilchrist, 212 App. Div. 763; DeFord v. Commissioner, 29 Fed. Rep. [2d] 532; Schmidlapp v. Commissioner, 96 Fed. Rep. [2d] 680; Rumsey v. Commissioner, 82 Fed. Rep. [2d] 158.) No complete loss was sustained by the taxpayer on the apartment property. (Miner v. Brown, 133 N. Y. 308; Armondi v. Dunham, 221 App. Div. 679.)

      Charles P. Maloney for respondent.
    In the year 1931 all of the holdings of the taxpayer were irrevocably lost. (Lucas v. American Code Co., 280 U. S. 445; People ex rel. Conway v. Lynch, 258 N. Y. 245; People ex rel. Standard Oil Co. v. Law, 237 N. Y. 142; People ex rel. Mosbacher v. Graves, 254 App. Div. 438; 279 N. Y. 793; Royal Packing Co. v. Commissioner, 22 Fed. Rep. [2d] 536; Rhodes v. Commissioner, 100 Fed. Rep. [2d] 966; People ex rel. Hull v. Graves, 263 App. Div. 223.) The losses claimed as deductions by the taxpayer were properly shown to have occurred in the year 1931. (Equitable Trust Co. v. Vanderbilt Realty Imp. Co., 155 App. Div. 723; Matter of Olivit Bros., 57 Fed. Rep. [2d] 718; Hancock v. Commissioner, 105 Fed. Rep. [2d] 153; United States v. White Dental Mfg. Co., 274 U. S. 398; DeLoss v. Commissioner, 28 Fed. Rep. [2d] 803; Denman v. Brumback, 58 Fed. Rep. [2d] 128; Hughes v. Commissioner, 38 Fed. Rep. [2d] 755; Marsch v. Commissioner, 110 Fed. Rep. [2d] 423; DeFord v. Commissioner, 29 Fed. Rep. [2d] 532.)
   Desmond, J.

The State Tax Commission, after a hearing, made a determination disallowing two losses which relator had claimed as deductions on his State income tax return for 1931. The Appellate Division annulled the Commission’s determination.

The disputed deductions were taken by the taxpayer because of alleged losses on two pieces of real property formerly owned by him. That there were such losses cannot be doubted. The controversy is as to the particular year to which the losses are to be assigned. The relator was adjudicated a bankrupt in 1931. One of the properties, an apartment house, was involved in a mortgage foreclosure action begun and prosecuted to judgment in 1931, but the sale in that action, which sale resulted in the establishment of a deficiency, was not held until early in 1932. The other piece of realty here involved, a residence property in which relator had lived for some years, was sold in 1933, pursuant to a judgment entered in a mortgage foreclosure action commenced in 1932. Relator, among other things, says that his loss on both properties was established in 1931 by the fact of bankruptcy. We hold that his adjudication in bankruptcy, although it automatically divested him of title, is not in itself proof of a loss on any particular asset or assets which thus passed out of relator’s ownership.

As to both the properties, we hold that there was substantial evidence before the Commission to justify its determination that the losses were not in fact incurred in 1931.

As to the property in which relator had resided, argument is made also, for the Commission, that relator’s loss was not deductible because it was not “ incurred in trade or business ” (Tax Law; § 360, former subd. 4, Cons. Laws, ch. 60). As to this question also, there was evidence of probative force that relator had bought the house for a home and not for the purpose of resale at a profit.

Since the determination of the Commission has not been clearly shown to have been erroneous,” that determination must stand. (People ex rel. Hull v. Graves, 289 N. Y. 173, decided herewith.)

The order of the Appellate Division should be reversed, and the determination of the State Tax Commission confirmed, with costs in this court and in the Appellate Division.

Lehman, Ch. J., Finch and Lewis, JJ., concur; Loughkan, Rtppey and Conway, JJ., dissent.

Ordered accordingly.