text:
    Louis Holland et al., Appellants, v. Fred Y. Presley et al., Respondents, Impleaded with Others.
    Argued May 17, 1939;
    decided May 31, 1939.

      Joseph Lotterman and Louis A. Tepper for appellants.

      James McC. Mitchell, Daniel J. Kenefick and Leonard P. Moore for Charles H. Diefendorf et al., defendantsrespondents.

      Timothy N. Pfeiffer for Fred Y. Presley, respondent.

      John J. Boyle and C. Frank Reavis for National Investors Corporation, respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Crane, Ch. J., Lehman, Hubbs and Loughran, JJ. Dissenting: Finch and Rippey, JJ. Taking no part: O’Brien, J.


source: Caselaw Access Project

license: Public Domain

text:
    The People of the State of New York, Respondent, v. Carmine Cameroto, Appellant.
    Submitted May 22, 1939;
    decided May 31, 1939.

      Samuel J. Foley, District Attorney (Sol Boneparth of counsel), for motion.
    No one opposed.
   Motion granted and appeal dismissed.


text:
    Mary Kanigher, as Administratrix of the Estate of Gerald Kanigher, Deceased, Appellant, v. Schwerin Air Conditioning Corporation, Respondent, Impleaded with Others.
    Submitted May 22, 1939;
    decided May 31, 1939.
   Motion to amend the remittitur denied, with ten dollars costs and necessary printing disbursements. (See 280 N. Y. 751.)


text:
    John L. Stark, Appellant, v. Howe Sound Company, Inc., et al., Respondents.
    Submitted May 22, 1939;
    decided May 31, 1939.
   Motion for reargument denied, with ten dollars costs and necessary printing disbursements. (See 280 N. Y. 622.)


text:
    In the Matter of the Estate of Abraham Ratchick, Deceased. Sarah Ratchick, Individually and as Executrix of Abraham Ratchick, Deceased, et al., Appellants; Patchogue Citizens Bank and Trust Company, as Executor and Trustee under the Will of Abraham Ratchick, Deceased, et al., Respondents.
    Argued April 3, 1939;
    decided June 2, 1939.

      Alexander G. Blue for appellants.

      Charles H. Kelby and Joseph T. Losee for Patchogue Citizens Bank and Trust Company as executor and trustee, respondent.

      George H. Carleton for Kissimmee Plaza Building Co., Inc., respondent.
   Order affirmed, with costs payable out of the estate; no opinion.

Concur: Cbane, Ch. J., Lehman, O’Brien, Hubbs, Loughran, Finch and Rtppey, JJ.


text:
    In the Matter of Rubel Corporation, Appellant, against Harris H. Murdock et al., Constituting the Board of Standards and Appeals of the City of New York, Respondents, Impleaded with Another.
    Argued April 13, 1939;
    decided June 2, 1939.

      Jacob A. Freedman, Michael Levine and Louis R. Patur for appellant.

      William C. Chanler, Corporation Counsel (James Hall Prothero, Paxton Blair and Sidney M. Freeman of counsel), for respondents.
   Order affirmed, with costs; no opinion.

Concur: Crane, Ch. J., Lehman, O’Brien, Hubbs, Loughran, Finch and Rippey, JJ.


text:
    Albrecht, Maguire & Co., Inc., Respondent, v. General Plastics, Inc., et al., Appellants.
    Argued May 18, 1939;
    decided June 2, 1939.

      James McC. Mitchell, Homer H. Woods and Daniel G. Yorkey for appellants.

      Edward N. Mills for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Crane, Ch. J., Lehman, Hubbs, Lotjghran, Finch and Rippey, JJ. Taking no part: O’Brien, J.


text:
    Louise Henry, Respondent, v. New York Post, Inc., Appellant.
    Argued May 18, 1939;
    decided June 2, 1939.

      Eugene Untermyer, Mitchell Salem Fisher and Alan Nordlinger for appellant.

      Samuel Robert Weltz, Henry H. Shepard and Benjamin M. Franklin for respondent.
   Judgment affirmed, with costs; no opinion.

Concur: Crane, Ch. J., Hubbs, Loxjghran, Finch and Rippey, JJ. Lehman, J., dissents on the ground the article is not libelous per se. Talcing no part: O’Brien, J.


text:
    The People of the State of New York, Respondent, v. Gus George, Appellant. (Two Cases.)
    Submitted May 19, 1939;
    decided June 2, 1939.

      Stephen R. J. Roach for appellant.

      William R. Condit, Corporation Counsel (Samuel Faile of counsel), for respondent.
   Judgments affirmed; no opinion.

Concur: Crane, Ch. J., Lehman, Htjbbs, Loughran, Finch and Rippey, JJ. Taking no part: O’Brien, J.


text:
    The People of the State of New York, Respondent, v. John Lo Turco, Appellant.
    Submitted May 19, 1939;
    decided June 2, 1939.

      Rosario Ingargiola for appellant.

      William F. X. Oeoghan, District Attorney (Henry J. Walsh of counsel), for respondent.
   Judgment affirmed; no opinion.

Concur: Crane, Ch. J., Lehman, Hubbs, Loughran Finch and Rippey, JJ. Taking no part: O’Brien, J.


text:
    In the Matter of the Probate of the Will of Jozef Augustini, Deceased. Elsie Conklin et al., Respondents; Victor Augustine, Appellant.
    Argued May 19, 1939;
    decided June 2, 1939.

      George Levitus for appellant.

      Theodore L. Sklamberg for respondents.
   Order affirmed, with costs payable out of the estate; no opinion.

Concur: Crane, Ch. J., Lehman, Hubbs, Loughran, Finch and Rippey, JJ. Taking no part: O’Brien, J.


text:
    In the Matter of William T. Rushford et al., Appellants and Respondents, against Fiorello H. LaGuardia, as Mayor of the City of New York, et al., Respondents and Appellants.
    Reargued May 23, 1939;
    decided June 2, 1939.

      William C. Chanler, Corporation Counsel (Paxton Blair and William S. Gaud, Jr., of counsel), for defendants, respondents and appellants.

      Harold Riegelman, H. H. Nordlinger and Jacob M. Dinnes for Citizens Budget Commission, Inc., amicus curiæ.

      Irving H. Saypol, Laurence Arnold Tamer and Leo Kotler for petitioners, appellants and respondents.
   Upon reargument, order affirmed, without costs; no opinion.

Concur: Lehman, Hubbs, Loughran and Rippey, JJ. Dissenting: Crane, Ch. J., O’Brien and Finch, JJ. Upon the reargument Crane, Ch. J., is convinced that the meaning of section 68 of the charter is correctly stated in the dissenting opinion of Finch, J. (See 280 N. Y. 223.)


text:
    New York Central Railroad Company, Appellant, v. Cabot Gas Corporation, Respondent.
    Submitted May 15, 1939;
    decided June 2, 1939.
   Motion for reargument or to amend the remittitur denied, with ten dollars costs and necessary printing disbursements. (See 280 N. Y. 654.)


text:
    Moscow Fire Insurance Company et al., Respondents, v. Bank of New York and Trust Company, as Agent, et al., Respondents. Samuel E. Morro et al., Respondents, v. Moscow Fire Insurance Company et al., Respondents. United States of America, Appellant.
    Submitted May 29, 1939;
    decided June 2, 1939.
   Motion for reargument denied. Motion for a stay to permit application for a writ of certiorari granted. (See 280 N. Y. 286.)


author: Crane, Ch. J.

text:
    The People of the State of New York, Respondent, v. Morris S. Tremaine, as Comptroller of the State of New York, Appellant.

      Argued June 19, 1939;
    decided June 21, 1939.

      Arthur A. Ballantine, Cloyd Laporte, Charles C. MacLean, Jr., Rupert Warren, Richard E. Manning and Lyman M. Tondel, Jr., for appellant.

      John J. Bennett, Jr., Attorney-General (Henry Epstein, Wendell P. Brown and John C. Crary, Jr., of counsel), for respondent.

      John T. DeGraff for Association of State Civil Service Employees of the State of New York, amicus curix.

      Herman E. Cooper and William Sardell for State, County & Municipal Workers of America, amicus curix.

   Crane, Ch. J.

Article VII of the present Constitution, if we take it as it reads, provides a clear and distinct plan for appropriation bills whereby money is to be raised to run the State. The first thing, of course, is to find out how much is needed, and section 1 directs the heads of each department in the State government, except the Legislature and the Judiciary, to furnish the Governor this information, which shall also be furnished to the committees of the Legislature. Hearings shall be had upon these proposed estimates, at which members of the legislative committees shall be entitled to attend. In other words, before the Governor’s budget is made up the whole matter is gone over by the Governor, the heads of the departments, and the appropriate members of the Legislature. The knowledge, thus acquired for the Legislature, antedates the Governor’s budget. The Legislature and the Judiciary are to furnish itemized estimates of the amounts required, which shall be put in the budget without revision. In other words, that part of the budget which relates to the Judiciary and the Legislature must be itemized

The next step is the Governor’s budget, which shall contain a complete plan of the expenditures proposed to be made, containing full information.- The words “ clearly-itemized ” are not used as in article IV-A, section 2, of the former Constitution, but the meaning appears to be.the same, as there must be an explanation of the basis for all the estimates and recommendations and all information deemed proper. The Governor’s budget is to be itemized so as to show of. what the estimates consist. The information necessarily consists of items. The Constitution means that the budget, and the appropriation bills accompanying it, shall be broken down into items sufficient to show what money is to be expended, and for what purpose. It is information the Governor must give, and it is the items giving this information which is embodied in his appropriation bills.

The Constitution (Art. VII) reads:

§ 3. At the time of submitting the budget to the legislature the governor shall submit a bill or bills containing all the proposed appropriations arid reappropriations included in the budget and the proposed legislation, if any, recommended therein.”
“ § 4. The legislature may not alter an appropriation bill submitted by the governor except to strike out or reduce items therein, but it may add thereto items of appropriation provided that such additions are stated separately and distinctly from the original' items of the bill and refer each to a single object or purpose. None of the restrictions of this section, however, shall apply to appropriations for the legislature or judiciary.”

When, therefore, we are told that the Legislature may not alter an appropriation bill submitted by the Governor, except to strike out or reduce items therein, we expect the appropriation bill to contain items. As stated before, the items must be sufficient to furnish the information necessary to determine whether in the judgment of the Legislature all that is demanded should be granted or is required.

The Governor in this case, according to the agreed statement and the exhibits, on January 30, 1939, submitted to the Legislature a budget duly itemized. At the same time the Governor, pursuant to section 3 of article VII, submitted four bills containing all his proposed appropriations itemized.

It is the bill containing the general appropriations for the support of the government which is the subject of this litigation. The bill under discussion contained in Part 1 thereof appropriations for the departments of the State government. In each instance, as required by section 36 of the State Finance Law (Cons. Laws, ch. 56), the appropriations for the department, division or bureau were divided into two main items, namely, expenses for personal service and expenses for maintenance and operation. The appropriations for personal service were by an accompanying schedule itemized so that amounts should be available for each of the various positions or groups of positions in the department, division or bureau. These items are commonly referred to as line items.” Likewise in each instance of an appropriation for maintenance and operation, there is an itemized statement accompanying the schedule showing the amounts which were to be available for the various expenses. This was in accordance with the Constitution, as we read it, unless we consider a lump sum appropriation for a department an item. Under section 4 of the Constitution, above quoted, the Legislature could strike out or reduce any of these items, or could strike them all out, which it did in some instances.

The Governor’s appropriation bills were referred to the Ways and Means Committee of the Assembly, and on April 25, 1939, that committee amended and reported to the Assembly, as so amended, the general appropriation bill for the support of the government. It struck out substantially every item contained in Part 1 of the bill, as submitted by the Governor, and substituted therefor a single item of appropriation to each of the various departments, or divisions of departments, combining expenses of maintenance and operation, personal service, travel outside the State, and the purchase or exchange of automobiles. In some cases it substituted such a single item of appropriation plus certain items of appropriation for special functional activities of the department, division or bureau — in other words, it made what is commonly known as “ lump sum appropriations.”

People v. Tremaine (252 N. Y. 27) is not an authority justifying lump sum appropriations. True, in that case there were lump sum appropriations the same as there are in this case. The point, however, in the Tremaine case was the power of segregation, and this was the sole question decided, although there were strong intimations throughout the opinions that the whole spirit of the Constitution was against lump sum appropriations and in favor of appropriations showing the items of expenditure. I said: “ * * *, in fact, the spirit and apparent intention of the budget amendment to the Constitution is that there shall be itemized appropriations. The best thing to do is to put the purpose in the appropriation and limit the expenditure to the amount of the appropriation for each item. The Governor and Legislature have apparently done this for the major part of the budget bill. But it is also conceded that there are times when item appropriations would be almost impossible or impracticable, as in the case of the reorganization of an office, and lump sum appropriations are made ” (p. 53).

Of course in these matters, as in every other case of the interpretation of a Constitution or of a law, the evils result from the extreme exercise of a power and not in the general principle — from a system pushed too far.

The present Constitution emphasizes the necessity of items, not lump sums, for an entire department or bureau. On the other hand, there are cases in which it would be impracticable, if not impossible, to itemize the sum required. Departments with uncertain contingent expenses or seasonal occupations, building or road construction may require lump sum appropriations. We expect in all these matters that the spirit of the Constitution shall be observed and that good sense in its application will govern. In the Tremaine case the lump sum appropriations were recognized as it was impossible to tell beforehand exactly what might be needed in reorganization of the government. In fact the question was not directly in issue or the point raised. However, in the departments containing personal staffs of clerks and assistants, and which have been functioning for years, there is every reason for items the same as there is in making up the Judiciary budget for the Legislature. In this Governor’s appropriation bill there are many places where the lump sum appropriation is necessary. These are readily recognized and will afford no disagreement between the Executive and the Legislature. Where, however, a whole appropriation has been stricken out, including the items of which it is made, and compensation for clerks and services as well as maintenance is lumped together, the words of the Constitution have not been followed and such appropriation is illegal.

The crux of this controversy turns upon the meaning of the word items.” It is claimed by the appellant that the Legislature by its reserve power may make lump sum appropriations in any case, guided simply and solely by the information furnished in the Governor’s budget or otherwise. The Governor’s budget, containing the information necessary for the running of the various departments of government, is more than a mere source of information. If this were not so, it would be unnecessary for the Governor to submit any appropriation bills. These appropriation bills originate with the Governor — not with the Legislature, and the control of the Legislature lies in the manner in which it may deal with these bills.

Itemized estimates of the financial needs of the Legislature and of the Judiciary, certified by the Comptroller, shall be transmitted to the Governor for inclusion in the budget without revision; in other words, the budget for the Judiciary is itemized; so is that for the Legislature (Art. VII, § 1). In our Judiciary budget, which was thus submitted, every place and position are stated with the salary connected therewith. There are small lump sum appropriations which are rendered necessary because of the uncertainty of events. To itemize means to give items. Does the word “ item ” or “ items ” in section 1 have a different meaning than the word “ item ” in section 4? Does the meaning of the same word change in the same article? Thus in section 2 of article IV-A of the constitutional amendment of 1928 (adopted November 8, 1927), we find that the Governor’s budget shall contain all the estimates revised or certified and clearly itemized. In article VII of the Constitution of 1938, these words are changed so that the budget shall contain a complete plan of expenditures proposed “ together with an explanation of the basis of such estimates and recommendations as to proposed legislation, if any.” (§ 2.) The appropriation bills which the Governor shall submit shall contain all the proposed appropriations included in the budget. Aside from the provisions relating to the financial requirements of the Legislature and the Judiciary the word “ item ” or “ itemized ” is not used in connection with either the budget or the appropriation bills in the present article VII of this Constitution of 1938. In this respect there is a change in phraseology, but neither in the statement issued by the Convention for the guidance of voters, nor in the brief of the appellant is there any claim that the meaning or purpose of article IV-A, section 2, of the former constitutional amendment has been changed. And this is necessarily so. Can the word itemized,” as used in this amendment of 1928, have a different meaning than the use of the word “ items ” in section 4 of article VII of the present Constitution? For instance, in the appropriation bill for the Banking Department, items were stricken out and the substitution made as follows: “ For general expenses of maintenance and operation, including personal service and travel outside of State at not to exceed $3,000... $965,000.” Read this appropriation in conjunction with section 4. “ The legislature may not alter an appropriation bill submitted by the governor except to strike out or reduce items therein.” The reference here is not to the items in the budget but to the items in the Governor’s appropriation bill. Is this substitution to be considered the striking out or reducing of an item? When it refers to striking out an item, we cannot conceive it as meaning striking out the entire appropriation for a department — all the items, and putting in a lump sum. The section must have reference to the items which go to make up the sum total of the appropriation for the department. The Governor is obliged to furnish the items or information making up the appropriation, and cannot submit it as a lump sum. The appropriation for a department must be in such form that the Legislature may be able to strike out or reduce any of its items. When the word item ” or items ” is used in connection with the budget, as it was in 1928, or as used in 1938 for the estimates of the Legislature and the Judiciary, and in section 4 in reference to the ability and power of the Legislature to strike out or reduce items,” the meaning of the words is the same. The appropriations so far as practicable or possible are to be itemized as submitted, and the limitation on the Legislature is to reduce or strike out the items. To strike them all out and substitute lump sums is to revert to the old system which years of agitation and endeavor have sought to abolish.

Again, in this connection, in laying down this broad principle for the interpretation of this Constitution, we must remember what I have heretofore said, that details must not run into absurdities, and only those details need be given which are necessary or appropriate to show where and for what the money is to be spent. For instance, it is not necessary to state the salaries of all clerks or of all stenographers, but it may be appropriate to state the number that is required to do such class of work and the lump sum that is to be appropriated for the purpose.

We cannot deal with every provision of these budget bills and of the action of the Legislature thereon. We do, however, state that the Legislature cannot strike out the itemized appropriations in the Governor’s appropriation bills and substitute therefor lump sums for the same personal services and maintenance. The Legislature has complete power over appropriations. It does not have to make them, but when it does attempt to do so, it is obliged to follow the provisions of the Constitution. The control of the purse strings is not unlimited control; it is subject to veto in some instances and to method of action in all.

•. Again, the Legislature may not alter an appropriation bill by striking out the Governor’s items and replacing them for the same purpose in different form. Thus reads the fundamental law binding on us all, Judiciary, Governor, Legislature. It may, however, add items of appropriation, provided such additions are stated separately and distinctly from the original items of the bill and refer each to a single object or purpose. The items thus proposed by the Legislature are to be additions, not merely substitutions. These words have been carefully chosen. The added items must be for something other than the items stricken out. This article VII was prepared after years of experience and after many appropriation bills in the last ten years had been submitted in various forms — some in compliance with the constitutional provision and others departing therefrom. The application of the constitutional provisions has not been uniform, acquiescence no doubt on the part of all accounting for the failure to question the action. However, the matter having been brought into the courts, we are forced to give this explanation in hopes that it may somewhat clarify and assist future legislation. It is easier to state a rule than to apply it. Many conditions arise which create doubts. The utmost we can do is to state the fundamental principles in hopes that the parties acting under them will give a practical and useful application. As said before, it is the extreme which causes disputes or danger. Items should not be carried out in full detail; it is sufficient when they give information as to the necessities for or purposes of the expenditures. During the course of the year these may prove inadequate or excessive, but no system works perfectly.

Again, the lump sum appropriation may be carried to the extreme so that the theory of the Constitution is evaded. Here, too, the way is clear. In between the two extremes we must rely upon the Executive and Legislative branch of the government to provide a budget sufficiently itemized to comply with the spirit and words of the Constitution, and yet'containing lump sum appropriations when experience in the line of work or in the department shows that details and items in a budget would be impracticable or almost impossible — unworkable.

The full and complete brief of the appellant is very interesting and contains much matter bearing upon the wisdom of the constitutional limitations in the amendment of 1928 and present Constitution, stating the manner in which the Legislature may exercise its plenary power over appropriations. Writers upon the subject, as quoted, take the view that experience has inclined them to believe that ans appropriation bill should contain a few lump sums, leaving to administrative officers to make proper segregation or expenditures. The parliamentary system of England is given as an instance. We are not a parliamentary government where the Executive branch is also part of the Legislature. The conflict of views upon this subject; in fact upon all forms of government expenditures and taxation, has waged for years and will continue, I dare say, for a long time to come. Much has been and may be said on all sides. These are, however, not for our consideration. We start with a Constitution which it is our province to interpret as it is written, and not as we think it might have been written. Thus it is, why we confine this opinion to the words used, giving to them not only their ordinary meaning but that which previous acts, measures and reports intended them to have.

All agree that the “ general provisions ” are unconstitutional and have no place in the budget.

The Appellate Division has by inadvertence included in its judgment certain provisions about which there is no controversy, i. e., the appropriation for State highways, Part III, page 909, with the exception of the part conceded to be illegal, and the provision for common schools, Part VI, page 1003. Those provisions are constitutional afi.d the judgment of the Appellate Division as to those should be modified, and as so modified affirmed, without costs.

The judgment should be modified in accordance with this opinion and as so modified affirmed, without costs.

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

Judgment accordingly.


author: Finch, J.

text:
    In the Matter of Davega-City Radio, Inc., Appellant, against State Labor Relations Board, Respondent.

      Argued April 21, 1939;
    decided July 11, 1939.

      Walter Chalaire, Miner W. Tuttle, Walter C. Lundgren and Soia Mentschikoff for appellant.

      Burton A. Zorn and Bernard Jaffe for respondent.
   Finch, J.

This is an appeal by an employer from an order of the Appellate Division unanimously affirming an order of Special Term directing the employer to offer reinstatement to two discharged employees.

After an investigation by the State Labor Relations Board of charges filed with it by the Retail Employees’ Union, Local 830-C. I. 0., the Board issued its complaint alleging that the employer had been engaging in unfair labor practices within the meaning of section 704, subdivisions 1, 3, 4, 5 and 10, of the State Labor Relations Act (L. 1937, ch. 443). Specifically, the employer was charged with forming a company union, requiring employees to join the company union, interfering with employees in the exercise of their rights of self-organization, and discharging certain employees because of their union activities. By its decision the Board found that the employer was guilty of fostering a company union and that it unlawfully discriminated against three employees by discharging them for their union activities. The Board ordered that the employer cease its connection with the company union, desist from interfering with the attempts of the employees to form their own organization, and that it offer to reinstate with back pay the three employees unlawfully discharged. Thereafter the employer moved at Special Term to vacate the orders of the Board. Special Term affirmed the findings of the Board as to the unlawful discharge of two of the three employees, remitted the proceeding for further hearing with regard to the third employee, remitted the proceeding in regard to the question of compensating the employees for unpaid wages, and made no order with respect to the other questions on the ground that they had since become moot. This order was affirmed on appeal to the Appellate Division without modification, so that the only question here is the validity of the order of the Board and the decisions of the courts requiring the reinstatement of the two employees.

The appeal to this court is taken as of right on the ground that a substantial constitutional question is involved, as will presently appear. The fact that we decide the constitutional question against appellant does not make it the less a ground for appeal. No appellant should be required to insure that his answer to the constitutional question will be adopted by the court.

The argument presented by the employer on this appeal may be summarized as follows:

Although it is engaged in the business of selling at retail, it makes substantial purchases and sales in interstate commerce, and is thereby brought within the scope of the National Labor Relations Act (U. S. Code, tit. 29, ch. 7). Article VI of the United States Constitution provides that the laws of the United States, enacted pursuant to the Constitution, are part of the supreme law of the land, and, therefore, the State Labor Relations Act, which covers the same ground as the National act, is not applicable to appellant since the National act must be held to occupy exclusively the field. In any event, the language of the State law limits expressly its own operation by that of the National act, and hence, according to its own terms, it does not attempt to protect appellant’s employees.

We come then to a decision of the questions presented.

First. Whether appellant’s labor relations are within the scope of the National Labor Relations Act.

Appellant’s business is that of selling radios, refrigerators, sporting goods and miscellaneous merchandise. In 1936 the total purchases by appellant amounted to $4,385,000. Of this amount $2,706,000 was purchased by appellant from manufacturers located outside of the State of New York. In that same year appellant’s total sales were approximately $7,350,000. Of these $1,200,000 consisted of sales in interstate commerce. Thus, approximately sixty-one per cent of appellant’s purchases and seventeen per cent of appellant’s sales involved interstate transactions. It may be observed that most of appellant’s purchases are stored in its New York warehouse for a period of from two weeks to several months before being resold to appellant’s retail customers. These in brief are the facts upon which appellant relies to establish that it is subject to the jurisdiction of the National Labor Relations Board.

It may well be that appellant’s activities are sufficient to bring it within the national jurisdiction based on the commerce clause. (Consolidated Edison Co. v. National Labor Rel. Bd., 305 U. S. 197; National Labor Rel. Bd. v. Fainblatt, 306 U. S. 601. Cf. U. S. v. Rock Royal Co-operative, Inc., 307 U. S. 533.) To bring to full fruition a legal principle often requires its application in many cases. “In maintaining the balance of the constitutional grants and limitations, it is inevitable that we should define their applications, in the gradual process of inclusion and exclusion.” (Santa Cruz Fruit Packing Co. v. National Labor Rel. Bd., 303 U. S. 453, 467.) We do not determine this point since we reach the conclusion that the order below should be affirmed even though appellant’s labor relations be amenable to the jurisdiction of the National Labor Relations Board.

Second. Whether by the operation of article VI of the United States Constitution the mere existence of the National Labor Relations Act ousts the State Labor Relations Board from jurisdiction in the case at bar.

This question may be resolved, based on its application to different factual situations, as follows: Where both the National and State acts are identical in aims and requirements; where they are in conflict; and there is a middle ground where the State and National acts are identical in aims and requirements, but the State act adds requirements in addition to, but in harmony with, those of the National act. The case at bar involves statutes within the first category.

We may ehminate as non-existent in the case at bar any claim that the State Labor Relations Board is attempting to act through the enforcement of the National Labor Relations Act in the same manner that State courts often enforce causes of action created by Federal statutes.

We may further assume that the police power of the State would warrant the application of the State Labor Relations Act to the labor relations of appellant if the National Labor Relations Act were not in existence. (Minnesota Rate Cases, 230 U. S. 352, 408.) On the other hand, it has long since been settled that where there is a conflict between a statute enacted by Congress pursuant to its delegated powers, e. g., the regulation of interstate and foreign commerce, and a law adopted by a State in the exercise of its police power, then the former prevails. (Gibbons v. Ogden, 9 Wheat. [U. S.] 1.) If effect were given to the contrary directions of the State law, then the National act would no longer be the supreme law of the land, as is required by article VI of the Constitution. But where a State act is enforced in the absence of National legislation, or a State act is enforced where there co-exists consistent National legislation, then article VI is complied with, since the supremacy of the laws of the United States is in no manner impaired. Since there is nothing in the State law which is inconsistent with,- or could conceivably interfere with the operation or enforcement of, the Federal law, the statute of Missouri was not superseded.” (Brandeis, J., Dickson v. Uhlmann Grain Co., 288 U. S. 188, 200.)

The present proceeding is concerned with the duty imposed upon the employer not to discharge its employees for certain causes. The measure of the employer’s duty with regard to the employees who have been accorded relief below is the same under the Federal and the State statutes. In so far as is pertinent here, both the National Labor Relations Act and the State Labor Relations Act provide that employees shall have the right to bargain collectively and to join labor organizations of their own choosing, and the employer may not discriminate against any employee in order to discourage or circumvent the realization of collective bargaining. (49 U. S. Stat. 452; §§ 7, 8 [subds. 1, 3]; U. S. Code, tit. 29, ch. 7, §§ 157, 158 [subds. 1, 3]; N. Y. Labor Law [Cons. Laws, ch. 31], §§ 703, 704 [subds. 5, 10].) The two statutes are not only alike in their provisions but are almost identical in their language. It has been observed that the New York act is the State’s equivalent of the National act. (Consolidated Edison Co. v. National Labor Rel. Bd., supra, at pp. 222, 223.) If the employer were to obey the mandate of the State rather than that of the National act the result would be precisely the same.

From a study of authorities it does not appear that the National Labor Relations Act ipso facto precludes the State legislation applicable to the same situations.

In Dickson v. Uhlmann Grain Co. (supra) the court upheld a defense that the contract sued upon was illegal under the Missouri bucket shop law, even though the contract was executed upon grain exchanges located in Chicago and not only were subject to but legal under the Federal Grain Futures Act (42 U. S. Stat. 998). The court pointed out that the State act was not inconsistent with the Grain Futures Act and did not interfere with the object or the enforcement of the Federal law. Similarly the New York State Labor Relations Act is in no way inconsistent with the provisions of the National Labor Relations Act, and the New York law does not legalize any transaction which the National act has denounced. In the case at bar certain conditions in the contract of employment are imposed by operation of law. That this is accomplished not only by the National statute but also by the State law is no objection to the operation of the latter since it would not interfere with the enforcement of the former. Under the Dickson case it would be proper for New York to enumerate certain causes for which an employee may not be discharged in addition to the causes listed in the National act; yet appellant contends that the New York law may not forbid an employee’s dismissal for the same causes for which the National act forbids dismissal. (Cf. Missouri, Kansas & Texas Ry. v. Haber, 169 U. S. 613.)

In Crossman v. Lurman (192 U. S. 189, 199) the court applied the New York statute prohibiting the sale of adulterated food to goods imported by the seller although Congress had enacted a law prohibiting the importation of adulterated articles of food or drink.”

On the other hand, in Southern Ry. Co. v. Railroad Comm. of Indiana (236 U. S. 439) it was held that an Indiana statute regulating the equipment of railroad cars was inoperative because in conflict with the Federal Safety Appliance Act. The operation of the State Labor Relations Act in the case at bar does not impose greater or less or different penalties, nor does it impose a greater or less stringent or different standard of conduct.

Appellant, to establish the proposition that when Congress has acted in a field within its competence State legislation is necessarily superseded, relies on Napier v. Atlantic Coast Line R. R. Co. (272 U. S. 605); Oregon Washington R. R. & Nav. Co. v. Washington (270 U. S. 87); Erie R. R. Co. v. New York (233 U. S. 671); Northern Pacific Ry. Co. v. Washington (222 U. S. 370); and Southern Ry. Co. v. Reid (222 U. S. 424).

To the foregoing cases may be added the Second Employers’ Liability Cases (223 U. S. 1,55), where the court declared, And now that Congress has acted, the laws of the states, in so far as they cover the same field, are superseded, for necessarily that which is not supreme must yield to that which is.” But in all the cases in which such or similar language is to be found it is clear that the problem is one of State regulations whose requirements differ from those of the acts of Congress.

Appellant argues that it is the intent of Congress, as expressed in the National Labor Relations Act, to preclude consistent State regulation of the same subject-matter and that this intent is purportedly established by the absence of a saving clause in the National act and by the fact that the National Labor Relations Board is given exclusive jurisdiction to enforce the terms of that act. The significance of the lack of a saving clause in favor of State legislation is considerably diminished by the fact that there was no like legislation in existence when Congress adopted the National act. Furthermore, where the result would be to curtail what is otherwise an exercise of the State’s police power, such an intent is not to be inferred, but must be clearly manifested. (Kelly v. Washington, 302 U. S. 1; Reid v. Colorado, 187 U. S. 137.)

That the National Labor Relations Board is given exclusive jurisdiction under the National act is of significance only in fixing the appropriate agency to enforce the National act, and is not relevant to the question whether a consistent State law may co-exist with a National act.

We reach the conclusion, therefore, that the State Labor Relations Board may enforce the State act at least until such time as it is ousted by the exercise by the National Labor Relations Board of its jurisdiction under the National act. At what point the State Board would be displaced need not be considered. (Cf. Lake Erie, A. & W. R. R. Co. v. Public Utilities Comm., 109 Ohio St. 103.) It is sufficient that in the present case the National Board has not acted. Indeed, the record shows that the appellant was informed by the Regional Director of the National Board, albeit not by formal order, that the Board would not assume jurisdiction.

Appellant seeks to create a twilight zone, in which it may disobey its plain duty, required by both statutes, upon the pretext that its conduct is dictated by the other statute. In so far as is possible within the framework of our Federal form of government, such a result should be avoided. To permit State enforcement of a State law consistent with a Federal law on the same subject until such time as the appropriate "Federal agency asserts its own jurisdiction in no way lessens the supremacy of .the national laws as required by article VI of the Constitution.

The same question was considered in Wisconsin Labor Relations Board v. Rueping Leather Co. (228 Wis. 473), and the same decision was there rendered.

Third. Whether the State Labor Relations Act, by its own terms, excludes its application to the appellant’s employees. New York Labor Relations Act (Labor Law), section 715, provides:

Application of article. The provisions of this article shall not apply to the employees of any employer who concedes to and agrees with the board that such employees are subject to and protected by the provisions of the national labor relations act. * *

Appellant contends that since its employees are protected by the National act, the State law, because of the above provision, does not apply. Such is not the language of the statute. It does not exempt from its jurisdiction all who are subject to the National act but only those as- to whom the employer and the Board agree are subject to the National act. In the case at bar the Board has not agreed with the employer that the latter is subject to the National Labor Relations Act. Hence, appellant is not exempted by the operation of this section.

If an employer, by merely making claim that it was subject to the jurisdiction of the National Labor Relations Board, could oust the State Labor Relations Board from jurisdiction, then, if for any reason the National Labor Relations Board should decline jurisdiction, the employer might be freed from regulation by either agency. This would not seem to be a reasonable construction of section 715.

• The order should be affirmed, without costs.

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

Order affirmed.


text:
    In the Matter of Hesslein & Co., Inc., Respondent, against Maurice E. Greenfield et al., Individually and as Copartners under the Names of The Peter Pan Co. and M. E. Greenfield Co., Appellants.

      Argued May 15, 1939;
    decided July 11, 1939.

      Jay Leo Rothschild and Arthur E. Lehrfeld for appellants.

      Jacob H. Corn and Benjamin Siegel for respondent.
   Crane, Ch. J.

On the 20th day of January, 1938, the respondent made a motion to confirm an award in arbitration, awarding to it $2,493.56 for merchandise — gabardine— alleged to have been sold to the appellants. The award is dated December 20, 1937. The motion was opposed upon the ground that no sale was ever made, the goods were not ordered, and that no contract of arbitration had existed between the parties. The Special Term, on the 26th day of February, 1938, made an order wherein the motion was granted to the extent of directing the trial of the issue as to whether or not there was an existing and binding contract requiring the appellants to submit to arbitration: “ And it is further ordered that the following issue of fact, raised by the affidavits herein, be submitted to a court for determination: ‘ Whether or not there was an existing and binding contract requiring the respondents [appellants herein] to submit to arbitration.’ ” The order further sent the matter for trial to a Trial Term of the Supreme Court, to be tried by a court without a jury. The Appellate Division reversed this order and confirmed the award of the arbitrators, one of the justices dissenting and voting for affirmance. The decision of the Appellate Division no doubt followed Schafran & Finkel, Inc., v. Lowenstein & Sons, Inc. (254 App. Div. 218; subsequently reversed in this court, 280 N. Y. 164.)

Counsel in this case concedes that the notice to arbitrate which was first served was of the same kind as that discussed in the Schafran case, at least as ineffectual. Under subdivision 2 of section 1458 of the Civil Practice Act, where a party has not been served with an application to compel arbitration he may put in issue the making of a contract either by a motion for a stay of the arbitration or in opposition to the confirmation of an award. If a notice shall have been personally served upon a party of an intention to conduct arbitration, pursuant to the provisions of a contract, then the issue of the existence or the making of a contract may be raised only by a motion for a stay of the arbitration, notice of which must be served within ten days after the service of the notice of intention to arbitrate. The validity of the ten days’ limitation depends upon the sufficiency of the notice. The Appellate Division in the Schafran case held the notice sufficient, and we reversed, holding the notice insufficient. As the notice in the present case was no better than that in the Schafran case, the ten days’ limitation does not apply, and, therefore, it was proper for the appellant to raise the issue of the existence of the contract upon the motion made herein to confirm the award. The appellant had previously made a motion before Mr. Justice McLaughlin on December 27, 1937, for a stay of the proceedings, but he denied the application, holding that the ten-day limitation applied. He did not pass upon the merits, that is, on the existence of a contract, and so his decision is immaterial here.

From the very beginning of this transaction between Hesslein & Co., Inc., and Greenfield the making of a contract to arbitrate was denied. The petition in this case to confirm the award of arbitrators states that on or about the fourth day of December, 1936, the petitioner and the respondents (Greenfield) entered into a written contract for the sale by petitioner to the respondents of 6,500 yards of 35 /36" Beverly Gabardine, and that annexed to the petition is a photostatic copy of said contract. The photostatic copy is a paper in the form of an invoice or bill for gabardine, stating the yardage and the price. Below are printed these words: Please sign and return one copy for our files.” Under this, in fine print, are the words: “ Any controversy arising under, or in relation to, this contract shall be settled by arbitration. If the parties are unable to agree respecting time, place, method or rules of the arbitration then such arbitration shall be held in the City of New York in accordance with the laws of the State of New York and the rules then obtaining of the General Arbitration Council of the Textile Industry.” Below this is a line on which is printed, Accepted for Buyer,” followed by the words, Peter Pan Co. M. E. Greenfield,” which are typewritten. These names were typewritten by the seller, Hesslein & Co., Inc., or their agents, not by the buyer, as requested. Below this line is another fine beginning with the word By,” meant for the signature of the Greenfields or their agents. This was never signed and filled in. So far as the contract alleged in the petition and annexed thereto is concerned, is was never signed and executed by the Greenfields, the purchasers.

The defendants, appellants, in reply to this motion to confirm the award, alleged that they never entered into any such contract, never signed the contract referred to in the petition. The affidavit of Maurice E. Greenfield states:

No copy was ever signed by the respondents [Green-fields], or either of them, or by any of their lawful agents, servants, and/or employees, or by anyone on their behalf authorizing the respondents to be charged therewith. This fact is conceded by the petitioner, and is not denied by them, for on August 25th, 1937, the petitioner wrote a letter to the respondents, containing the following paragraph:
“ ‘ While we do not have a signed order from you on this merchandise, we have sufficient correspondence with you and based upon which there is an offer and acceptance which naturally constitutes a contract.’ ”

Upon the petition, therefore, and the reply affidavits there is a clear question of fact which should have been tried out pursuant to section 1458 of the Civil Practice Act, and as directed by the Special Term order.

Where such opposing party, * * * sets forth evidentiary facts raising a substantial issue as to the making of the contract * * * an immediate trial of the same shall be had, and such party shall have the right to demand a jury trial provided such demand is served with his affidavits.”

In the correspondence passing between these parties, and set forth in the record, there is a repeated denial of the making of the contract. The lawyer employed by the defendants, appellants, appeared before the arbitrators and insisted that they had no jurisdiction because no agreement to arbitrate had been made. His appearance in no way amounted to a waiver of the appellants’ rights, as he was there to protect them, not to waive them, having taken no part whatever in the arbitration. That the respondent thought it best to serve the appellants with a further and second notice to arbitrate, and that the arbitrators notified the appellants to proceed, did not settle the issue or amount to a compliance with the provisions of the statute under the ruling in the Schafran case in this court.

We are of the opinion, therefore, that 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.

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

Ordered accordingly.


text:
    Frysinger Evans, Plaintiff, v. 2168 Broadway Corporation et al., Defendants. Abraham J. Blaivas, Appellant; Thomas Darlington et al., as Trustees, Respondents.

      Argued May 15, 1939;
    decided July 11, 1939.

      David M. Palley for appellant.

      Edwin R. Wolff, Daniel A. Shirk and Samuel Marion (attorney for bondholders) for respondents.
   Finch, J.

This is a proceeding arising out of a proposed judicial sale of real property wherein the trustees of the property and the would-be purchaser each claim the right to recover $20,000 deposited by the latter in connection with his offer to buy the property. On this appeal two questions are presented for decision: First, whether there existed only an offer which could be withdrawn at any time prior to acceptance, or whether the dealings between the parties had ripened into a binding contract; and, second, if there was a contract, was the recovery of the trustees to be measured by the whole sum deposited or only so much as equalled the damages actually sustained.

The facts will appear in the course of the discussion.

On May 4, 1937, Blaivas submitted an offer to purchase an apartment hotel at a fixed price. The deposit of $20,000 accompanied this offer, pursuant to a requirement of an order of the court authorizing sale of the property that the bids be accompanied by a certified check for $20,000.” The purchaser further limited the deposit by providing in writing accompanying the offer that the check must be returned if this offer has not been accepted and duly approved by the Supreme Court * * * entered into within thirty days from date.”

On January 11, 1938, the referee to whom were referred for hearing and report the bids received, submitted to the court with his report a copy of a proposed contract which Blaivas offered to make with the trustees. On January 28, 1938, Blaivas submitted an amendment to that proposed contract, namely, to guarantee to the bondholders ten per cent of the face amount of their bonds, provided that the expenses upon the sale were limited to $50,000. From then on the cost of the property to Blaivas was increased by the delay in the amount of $7,500 monthly, comprising taxes, interest and penalties. By the proposed amendment Blaivas hoped to induce the court to authorize the trustees to accept his offer. The court, however, refused to authorize an immediate acceptance of the offer. Instead, the court only went so far as to provide that the property should be put up for sale and that in the event that the said * * * property shall not bring the amount of the said upset price at the * * * public sale * * * the same to be sold by the * * * trustees * * * to Blaivas, in accordance wdth * * * a certain proposed agreement * * * which agreement, in the event that said * * * property does not bring the upset price at said public sale (and not otherwise), is hereby approved, and shall be executed by the said trustees within five days from the date of the said public sale, and which said trustees are hereby directed to execute within such time, but only in the event (and not otherwise) that * * * said * * * property sha 11 not bring the upset price at the said sale, and only in the further event that the said Abraham J. Blaivas simultaneously executes the said agreement.” The court thus refused to authorize an immediate acceptance of the offer. It directed the trustees to place the property on public sale at a fixed upset price and authorized the trustees to accept the offer in the future, and only in the event the property had been offered for sale and did not bring the upset price, with the further condition that Blaivas should simultaneously execute the proposed contract. The offer could have been accepted and an immediate contract could have been executed and approved, subject to the outcome of the public sale, but this was not done. Instead the acceptance of the offer and the execution of the contract was postponed expressly until after the property was put up at public sale and the upset price was not reached. If the proposed contract had been immediately approved and executed, the trustees would have been bound to sell and Blaivas would have been bound to buy if at the public sale the upset price were not obtained. The order of the court, however, forbade the trustees to enter into an immediate contract, even subject to the outcome of the public sale. The acceptance of theo offer and the execution of the contract was deferred expressly until after the public sale. The legal effect of the terms employed and the meaning and purpose conveyed by the court to the trustees is not in doubt. Following various adjournments the sale was finally set for June 20th. On that day the sale was again adjourned until June 30th, without the consent of the attorney for the offeror and against the assurances theretofore received from the referee that there would be no further adjournments except for good and sufficient cause and then only upon the deposit by the applicant of the amount to pay for the cost of readvertising the sale. According to the petition of the trustees the adjournment was granted at the request of certain individuals purporting to represent bondholders, upon the representation of an individual that he sought to purchase the trust res * * *” on the adjourned date, and without any deposit to pay for readvertising. On June 28, 1938, Blaivas, by letter, withdrew his offer. The trustees thereupon requested Blaivas to execute the proposed contract, which request he refused. Thereafter the trustees made an application to have the $20,000 which had been deposited with the clerk turned over to them and Blaivas made a cross-application for the return of the deposit to him. The motion of the trustees was granted and that of Blaivas denied..

While undoubtedly through the conduct of the parties the offer of Blaivas was kept open until its formal withdrawal by the letter of June 28th, yet at no time did it amount to more than an offer to enter into a proposed contract. Since this offer was not given for a consideration it could be revoked at any time before acceptance. (Petterson v. Pattberg, 248 N. Y. 86; 1 Williston on the Law of Contracts [Rev. ed. 1936], § 55.) Following such withdrawal Blaivas was entitled to the return of his $20,000. By the terms of the offer the $20,000. was restricted to a payment on account of the purchase price only if the offer were accepted and to be returned if the offer were not accepted. With this limitation upon the deposit no question arises of its having been deposited as security, and it -must be returned if the offer is not accepted. Only if and when the proposed contract was actually executed and became a binding agreement was this deposit to be applied as a down payment.

Respondents urge that a different rule must be applied where an offer has been made in a judicial proceeding. Obviously an offeror cannot play fast and loose in a case where judicial approval is required. If an offeror duly submits an offer for approval to a court, where such judicial approval is required, it would seem that such offer might not be withdrawn pending approval proceedings, provided the latter were not unduly protracted. The case at bar, however, does not present such a situation. Here the offeror was endeavoring to obtain immediate acceptance of the offer by the court, and the court expressly declined to accept the offer or to enter into a contract until a future contingency had taken place. Before the contingency arrived the offeror withdrew the offer. All the offeror has done in the case at bar is merely to acquiesce as a bidder in a proceeding which the court adopted in order to receive bids for the sale of property. Such acquiescence, however, would not convert an offer into either an irrevocable offer or a binding contract. (Blossom v. R. R. Co., 70 U. S. 196; Baker v. Sproul, 37 Fed. Rep. [2d] 937; Matter of Realty Foundation, Inc., 75 Fed. Rep. [2d] 286; Matter of Glas-Shipt Dairy Co., 239 Fed. Rep. 122.)

Since there existed in the case at bar only a revocable offer, which has been withdrawn, we do not need to consider whether the deposit received may be considered as a down payment upon a purchase price which has been forfeited or whether the trustees are entitled only to so much thereof as equals the damages sustained.

It follows that the orders appealed from should be reversed, without costs, and the cause remanded to the Special Term with instructions that the sum of $20,000 be paid over to Blaivas with such interest as may have been earned thereon from the date of its deposit.

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

Ordered accordingly.


author: Crane, Ch. J. Finch, J.

text:
    Alexander MacKay, Respondent, v. Metropolitan Life Insurance Company, Appellant.
    Argued May 23, 1939;
    decided July 11, 1939.

      Roy P. Ohlin and Mason O. Damon for appellant.

      Alfred L. Hetselt for respondent.
   Crane, Ch. J.

On September 16, 1935, Alexander MacKay was working as an insurance inspector under the Emergency Relief Bureau at 40 Delaware avenue, Buffalo. He was struck over the right eye by a piece of corrugated paper or cardboard which fell from its place over a transom. The force of the blow stunned him temporarily, caused the eyelid to bleed and made the eye so sore that he could not touch it for four days. After the pain ceased he noticed that his sight was dim and blurred. During the winter of 1935 and 1936 the eye troubled him considerably but he continued to work until he was laid off in July of 1936. The light bothered him and he constantly rested the eye by holding his hand or handkerchief over it while working. In August of 1936 he consulted Dr. Constantine, who found that there was a detachment of the retina of the right eye causing a loss of sight. The doctor stated that he believed the accident of September 16, 1935, was the cause of the trouble. MacKay was informed of these facts by the doctor.

MacKay has an insurance policy with the Metropolitan Life Insurance Company, which provides that in consideration of the payment of the premium of $9.90, Alexander MacKay is insured for the term of six months from July 8, 1925, subject to the provisions and limitations therein contained, which policy was kept in force until January, 1937. The principal sum is $5,000, the weekly indemnity being $25. The policy insures “ against the results of bodily injuries sustained while this policy is in force and caused directly and independently of all other causes by violent and accidental means, to wit: —Here follow provisions for injuries which wholly and continuously disable and prevent the assured from performing any duty pertaining to his occupation, which do not apply to this case. After this comes the clause covering this case, if at all.

Or, if such injuries shall not so disable the insured, but shall, directly and independently of all other causes and within 90 days from the date of the accident, result in any one of the losses named in the following schedule, the Company will pay the amount set opposite such loss.

Schedule referred to in clause 1: * * * For Total and Irrecoverable Loss of Sight of One Eye.............. One Third of the said Principal Sum.”

In this action brought upon the policy the jury have found that within ninety days the plaintiff was rendered totally blind in one eye, that is, he had suffered total and irrecoverable loss of sight of one eye.” It is very doubtful if the evidence justifies this conclusion. The defendant worked for ten months after the accident without noticing any total loss, merely describing his condition as blurred sight and weakness of the eye which he considered the result of sinus trouble. Not until the doctor informed him in August of 1936, did he know or realize that he had lost the sight of one eye.

We pass this question for the moment, to take up other conditions in the policy which are called standard provisions ” because they are required by section 107, subdivision c, paragraphs 4, 5, 7 and 14 of the Insurance Law (Cons. Laws, ch. 28). I quote them here for convenience:

“ 4. Written notice of injury on which claim may be based must be given to the Company within twenty days after the date of the accident causing such injury.

5. Such notice given by or in behalf of the insured or beneficiary, as the case may be, to the Company at New York, or to any authorized agent of the Company, with particulars sufficient to identify the insured, shall be deemed to be notice to the Company. Failure to give notice within the time provided in this policy shall not invalidate any claim if it shall be shown not to have been reasonably possible to give such notice and that notice was given as soon as was reasonably possible. * * *

7. Affirmative proof of loss must be furnished to the Company at its said office in case of claim for loss of time from disability within ninety days after the termination of the period for which the Company is liable, and in case of claim for any other loss, within ninety days after the date of such loss. * * *

“ 14. No action at law or in equity shall be brought to recover on this policy prior to the expiration of.sixty days after proof of loss has been filed in accordance with the requirements of this policy, nor shall such action be brought at all unless brought within two years from the expiration of the time within which proof of loss is required by the policy.”

As stated above, the accident in this case occurred September 16, 1935. No written notice of injury or proof of loss was furnished to defendant until September 4, 1936, almost a year later. The twenty-day requirement for furnishing notice of injury may be extended by necessity, that is, it may be given as soon as reasonably possible, but even this liberal extension has its limitations. Affirmative proof of loss of the kind here in question must be given within ninety days after the date of such loss and, by the terms of the policy, the loss must have occurred within ninety days of the accident. Within ninety days after September 16, 1935, the total and irrecoverable loss of the sight of the plaintiff's eye must have occurred or else it was not such a loss as was covered by the policy. This is. what the policy says and this is what we must necessarily hold. As before stated, I doubt very much whether plaintiff has proved that such a loss occurred within ninety days. Assuming that it did, however, we have the standard provision that affirmative proof of loss must be furnished to the company within ninety days after the date of the loss. Surely it is not unreasonable to suppose that any one who has suffered the total loss of an eye would discover it within ninety days after an accident. After such discovery the insured can give notice of injury and furnish proof of loss, but this has a ninety-day limit. If notice is not given and proof of loss furnished within ninety days after the loss, how can there be any recovery on the policy when these are the plain words of the statute?

The courts below have construed the provision regarding the giving of notice of injury as also extending the time for giving proof of loss; in other words, if notice of injury may be given as soon as it is reasonably possible, the same extension applies to giving proof of loss. There may be some ground to sustain such reasoning, and, if the company had itself adopted this language, I would be inclined to follow the Appellate Division’s conclusion. However, the law of the State requires the standard provisions to be included in such policies, and one of these provisions is that which says that the proof of loss must be furnished within ninety days after the loss occurs. (Maryland Casualty Co. v. Massey, 38 Fed. Rep. [2d] 724.)

We, therefore, must hold that the plaintiff has failed to comply with these conditions of the policy.

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

Finch, J.

(dissenting). The judgment appealed from should be affirmed and this plaintiff recover. Concededly he was insured under a valid policy. Concededly, also, he gave a valid notice to the insurance company as soon as he could. His claim is dismissed because he did not file a proof of claim before it was reasonably possible to know of his injury and give notice thereof. The facts and circumstances which excuse the giving of the notice earlier clearly should likewise excuse his failure to give proof of the valid claim. The conclusion at which a majority have arrived is based on a holding that the provision fixing the time in which notice must be given is limited by the time in which proof of lqss must be given. But certainly the filing of proof of claim is merely a procedural consequence of the filing of the notice, and if the notice of injury complies with the time limitation prescribed therefor, then the proof of injury submitted promptly thereafter likewise should be deemed timely. The conclusion at which the majority have arrived is contrary to that in other jurisdictions. I dissent and vote to affirm the judgment from which this appeal is taken.

Lehman, Hubbs and Loughran, JJ., concur with Crane, Ch. J.; Finch, J., dissents in opinion in which Rippey, J., concurs; O'Brien, J., taking no part.

Judgments reversed, etc.


text:
    In the Matter of the Application of The City of New York, Appellant, Relative to Acquiring Title to Real Property Required for the Opening and Extending of Northern Boulevard (Jackson Avenue) in the Borough of Queens. Koppers Company, Respondent.

      Argued May 16, 1939;
    decided July 11, 1939.

      William C. Chanler, Corporation Counsel (Joseph F. Mulqueen, Jr., and Julius Isaacs of counsel), for appellant.

      Bernard M. Fineson, Clarence C. Ferris and Millard F. Kuh for respondent.
   Finch, J.

This was a condemnation proceeding instituted in 1925 by the city of New York to acquire title to the existing Northern boulevard to a width of 100 feet. In 1926, by amendment, the width in the block adjoining Flushing river was increased to 150 feet. In 1929 another amendment increased the width in this same block to 175 feet. On the trial, which began in March, 1931, and ended in June, 1932, no claim was made by this claimant for consequential damage due to the proposed physical improvement by way of a ramp, or otherwise. Upon hearing of the objections, which began in January, 1934, and continued until May, 1936, counsel for claimant for the first time, and over objections of the city, sought to prove by an employee in the Topographical Bureau of the city, the details connected with a proposed and tentative plan for the building of a new and wider bridge over Flushing river. This would occasion a ramp as a westerly approach to the bridge, which would occupy a small portion of the property taken from claimant, and would face the remaining portion of the land of claimant. However, there would be a portion of the street in front of claimant’s property which would lie between this property and the side of the ramp for service as a street 43.5 feet wide. According to the tentative plan, the ramp was to begin in Northern boulevard approximately 600 feet from the bridge, and gradually to rise until at Flushing river the structure would be twenty-five feet above the grade of the street. The remainders of parcels on the northerly side, and the remainder of this parcel of claimant on the southerly side, would be served by two marginal or service roadways on either side of the ramp and running between the ramp and the abutting property. The ramp would be entirely in the bed of the former Northern boulevard, except that on its southerly side it would extend over a very small portion of what was claimant’s property taken in this proceeding.

When and if constructed (it has been proposed for upwards of thirteen years now, and so far as this record shows, has not yet been finally determined) this ramp will be in the center of a legally acquired street and abut on no private property.

The city objected to this testimony introduced by the claimant, upon the ground that the lands were acquired in this proceeding for street purposes and for no other purpose, and that this evidence was immaterial and irrelevant, since the proposed use or plan had not in fact been finally determined upon prior to the vesting date, December, 1935, or even up to the time of the making of this record. The objections of the city were overruled, and the court at Special Term permitted amended appraisals and estimates of damage based upon this tentative and proposed use. Upon such new testimony the court at Special Term revised its awards and' allowed a substantial sum to claimant for consequential damages due to the proposed use of Northern boulevard. Likewise, consequential damages were allowed to other damage parcels. Upon appeal to the Appellate Division, all awards for consequential damage were stricken out except to claimant. This appeal relates solely to such award.

The question presented for decision is whether a distinction should be made in allowing consequential damages between the parcels on the northerly side and this claimant on the southerly side, although all are affected in a similar manner. The Appellate Division, in reaching this result, relied upon the rule in Southern Buffalo Ry. Co. v. Kirkover (176 N. Y. 301), where it was held that a private condemnor, in that case a railroad, would have to pay consequential damages to the untaken balance of a parcel of real property by reason of the severance and use to which the property taken was to be put. Since no part of the property taken on the northerly side was used for the building of the ramp, as here the proposed ramp was to be built in the bed of the original street, the Appellate Division denied any recovery for consequential damages in this proceeding and held that the owners of these parcels were relegated to proving their damage in change of. grade proceedings, citing People ex rel. Crane v. Ormond (221 N. Y. 283).

The title acquired by the city in this proceeding was in fee simple absolute as a street for the general benefit of the public, including the abutting owners. The original resolution of the Board of Estimate, which authorized this improvement, and the various amendatory resolutions, did not go beyond the acquisition of any other title than one in trust for street purposes. The petition of the city was equally specific in the limitations of its purpose. (See Matter of Culver Contracting Corp. v. Humphrey, 268 N. Y. 26.) This conclusion is confirmed by the finding of the Appellate Division, The taking here was in trust for street purposes only.” That the position of the city was not misunderstood nor the claimant misled is evidenced by the fact that on the trial no claim was made for consequential damage due to any proposed physical improvements. It was only on the hearing of objections to the tentative decree, which began almost two years after the conclusion of the trial, that claimant introduced testimony to secure such consequential damages in this proceeding. At that time counsel for claimants elicited from an employee in the Topographical Bureau of the city evidence as to details connected with a proposed and tentative plan for the building of a new bridge over the Flushing river and a westerly approach to such bridge. Respondent seeks in its brief to justify the award upon the theory of the probability that the intended use of the part taken would be carried through' as planned and that such probability effected a diminution in the market value of the part remaining at the time of vesting of title in the City * * *.” At the time of the vesting of title in the city, in December, 1935, all the parcels on this block, both on the northerly and southerly sides, were in the same situation. The proposed use or plan of improvement had in fact not even been finally determined prior to the vesting date. Even if the final map of the city contained plans for the building of the ramp, this does not prevent the city from altering the character of the improvement. (Matter of City of New York . [Saratoga Ave.], 226 N. Y. 128, 137, 138.) In fact, since the original proceeding in 1925, the width of the street in this block has been changed from 100 feet to 150 feet and then to 175 feet. Nothing even now prevents the city from again changing the plans. A higher and wider bridge would necessitate a higher and wider ramp. A wider ramp might encroach on the proposed plans to leave generous service streets between the sides of the ramp and the property of the abutters. One change often leads to many others. To allow damages to this claimant before proposed and tentative plans come to fruition would bring into the proceeding highly speculative and imaginary elements, which would produce results unfair alike both to the claimant and the city. This claimant has a remedy whereby he may recover and the city pay for such damages as have actually been occasioned by the physical improvement after the plans have been finally determined upon and the ramp erected. (Cf. People ex rel. Crane v. Ormond, 221 N. Y. 283.) By emphasizing the tentative nature of the proposed plans for the bridge, we do not mean to overrule our holding in Sauer v. City of New York (180 N. Y. 27; affd., 206 U. S. 536) where an owner of property abutting upon a street owned in fee by the city was denied relief in the absence of legislation.

The order appealed from should be modified by striking out the award of consequential damages to the owner of parcel No. 51, and as so modified affirmed, without costs.

Crane, Ch. J., Hubbs, Loughran and Rippey, JJ., concur; Lehman, J., concurs in result; O’Brien, J., taking no part.

Ordered accordingly.


author: Loughran, J.

text:
    Edward Hoose, an Infant, by Ella Hoose, His Guardian ad Litem, Appellant, v. S. S. Drumm et al., as Trustees of School District No. 1 of the Town of Stuyvesant, Respondents.

      Argued May 19, 1939;
    decided July 11, 1939.

      William E. J, Connor for appellant.

      Morris Simon for respondents.
   Loughran, J.

Plaintiff, ten years old, was a boy pupil in a district school of which the defendants were the trustees. On February 16, 1937, one of his eyes was destroyed by a goldenrod stalk thrown by another pupil when the school was at recess. The casualty happened on a part of the school property that was separated from the playground by a roadway. There was evidence that theretofore the pupils had torn off goldenrod stalks and thrown them at each other and that other boys had been thereby injured. There was evidence that the stalks grew in a ravine and that pupils playing there could not be seen from the school house or the playground. There was evidence that the trustees knew the physical situation. There was evidence that no teacher was with the plaintiff and his companions on the occasion in question.

A verdict against the trustees for the plaintiff’s damages has been set aside and the complaint has been dismissed. We are to say whether in any view of it the case was for the jury. (Paltey v. Egan, 200 N. Y. 83.)

The powers and duties of the trustees of a school district are outlined by section 275 of the Education Law (Cons. Laws, ch. 16). Subdivision 9 thereof empowers such trustees and makes it their duty: “ To establish rules for the government and discipline of the schools.” Whether default of that duty was a proximate cause of the plaintiff's injuries was the sole question left to the jury. The trustees had made no rule in respect of the play of. pupils during recess time. They had said nothing to any teacher in that regard. One of them gave this testimony: All the regulations that we ever passed was, we hired the principal of the school and he was supposed to have jurisdiction of the teachers and the children.”

We think the case is outside the statutory direction “ To establish rules for the government and discipline of the schools.” This phrase cannot mean that every detail of school management is the business of trustees. A complementary measure of its meaning and purpose is found in subdivision 2 of section 310, which confers upon a board of education of a union free school district the like power To establish such rules and regulations concerning the order and discipline of the schools, in the several departments thereof, as they may deem necessary to secure the best educational results.” There is no need now to settle the ultimate scope of these provisions of the statute. (Cf. People ex rel. Lewis v. Graves, 245 N. Y. 195.) For the purposes of the present case it is enough to hold, as we do, that the Legislature did not thereby intend to cast upon school trustees or boards of education the burden of an attempt to fashion guides for the safe conduct of pupils in the indulgence of their boundless natural instincts for self-amusement.

It was not alleged that any incompetent teacher had been retained by the trustees. Teachers have watched over the play of their pupils time out of mind. At recess periods, not less than in the class room, a teacher owes it to his charges to exercise such care of them as a parent of ordinary prudence would observe in comparable circumstances. We do not discover in the statute anything which requires that trustees should specifically remind a teacher of this particular function of his ordinary station. Subdivision 8 of section 275 calls for special supervision of athletic, playground and social center activities only when this is authorized by a vote of a district meeting.

The trial judge ruled that there was no dangerous condition of the school premises. We agree. No suggestion is made that the standing goldenrod stalks were pernicious in themselves. (Cf. Popow v. Central School District No. 1, 277 N. Y. 538.) The danger lay in the probability that the pupils would play as they did. The effective cause of the plaintiff’s injuries was a failure to protect the boys against themselves. Any dereliction in this aspect was the fault of the teachers, for which the trustees cannot be held to answer to the plaintiff. (Cf. Lessin v. Board of Education, 247 N. Y. 503; Education Law, § 569-a.)

The judgment should be affirmed, with costs.

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

Judgment affirmed.


author: Hubbs, J.

text:
    E. Chase Crowley, Appellant, v. Laura A. Wolf, Respondent.

      Argued May 29, 1939;
    decided July 11, 1939.

      William S. Bennet, Victor House, Samuel H. Levinkind and Edward E. Hoenig for appellant.

      Julian C. Harrison and William E. Reinhardt for respondent.
   Hubbs, J.

Appeal by permission of the Court of Appeals from a judgment of the Appellate Division which unanimously affirmed a judgment of the trial court dismissing the complaint at the end of the plaintiff’s case, on the merits.

The action is by an attorney to recover for professional services either the contract price or on quantum meruit.. The defendant is the surviving spouse of Charles W. Wolf who died October 28, 1931, leaving a will bequeathing to the widow a trust fund of $100,000, a house and its contents valued at $30,052.40; and property in Keene Valley, New York, valued at $23,082.65. His whole estate as inventoried amounted to approximately $808,000. However, the deceased had obligated himself on leases, and the payments on these together with other debts of the deceased materially reduced the size of the estate. The estate was so far cut down that it was apparent that the widow had received under the will more than her intestate share, if the share were figured on net estate and not on the gross estate. On June 7, 1932, before the plaintiff came into the case, the widow exercised her limited right,” under subdivision f of section 18 of the Decedent Estate Law, to take the difference between the aggregate of the provisions made for her benefit under her husband’s will and the amount of her intestate share, the terms of the will otherwise remaining effective. Plaintiff’s services were not enlisted until on or about May 3, 1933. The executors, of whom the defendant was one, had managed the business of the deceased and defendant was aware that an attempt would be made by the other beneficiaries to surcharge her with losses due to the running of the business.

On November 26, 1934, plaintiff and defendant entered into a written agreement of retainer as follows: I, Laura A. Wolf, hereby retain E. Chase Crowley as my attorney to take such proceedings and to conduct such negotiations as in his judgment may be necessary to obtain for me any and all of the property to which I may be entitled by reason of my having exercised my right of election as surviving spouse and against the will of my late husband, pursuant to the provisions of section 18 of the Decedent Estate Law. I am to pay him as full compensation for his services in this connection, twenty five per centum of any and all cash or other property received by me as and for my said elective share, through court proceedings, settlement or otherwise. * * * If I receive no cash or other property as and for my elective share, he is not to be entitled to any compensation whatsoever for services rendered under this agreement.”

The plaintiff believed that he had a chance of convincing the courts that the proper interpretation of elective share provisions of the statute was that the share should be determined before the deduction of the amounts payable on debts and expenses; also that the elective share should be figured before the deductions of the amounts of any surcharge against the" defendant. It is claimed that these theories are so fantastic that they amount almost to malpractice and that the defendant could not get her money’s worth from such a lawyer. Section 18, subdivision 1 (a), of the Decedent Estate Law (Cons. Laws, ch. 13) reads: In exercising the right of election herein granted a surviving spouse shall in no event be entitled to take more than one-half of the net estate of the decedent, after the deduction of debts, funeral and administration expenses and any estate tax, and the words ‘ intestate share ’ wherever used in this section shall in no event be construed to mean more than one-half of such net estate.” The statute seems to us to be clear but it is possible that plaintiff was justified in giving the advice which he gave. It is doubtless true that there is nothing preventing a lawyer from urging his own interpretation of a statute provided there is any reasonable basis for his interpretation. The rule does not, however, justify an attorney urging in court that black is white all at the expense of his client. Possibly the plaintiff had justification for his construction of the statute and probably acted in good faith.

For over three years the plaintiff worked on this case and carried it through the reference ordered by the Surrogate. The report of the referee was unfavorable, he recommending the dismissal of the defendant’s claim to an elective share. Plaintiff’s theories were discredited. On November 7, 1936, the plaintiff filed exceptions to the referee’s report before the Surrogate and the defendant authorized the plaintiff to argue the exceptions before the Surrogate, but later and on November 9, 1936, she wrote to the plaintiff: “ Having been advised that there will not be other objections filed should those filed by you on my behalf, be withdrawn I believe that it is to the best interests of the estate and myself, to do so. As I explained to you, I do not want any further litigation and although I appreciate the fact that you would like and should have an opportunity to present your argument before the Surrogate, I do not feel that I can stand any further court proceedings either before the Surrogate or any referee he may appoint. I certainly do not want to be put on the witness stand again as I fear it would result in a nervous breakdown. My further reason is: that should objections be filed and sustained (1) to the salary I received while managing the business; (2) the losses on the running of the business; (3) to my ‘ dual capacity ’ as executrix and elective share claimant and result in my removal and loss of commissions, I would probably lose more than I would gain if all the claims made in the elective share proceeding were allowed.” The plaintiff took this letter as instructions to withdraw the exceptions and wrote the defendant on November 10, 1936, that he would withdraw the exceptions but would expect her to pay the reasonable value of bis services. She wrote back:111 am sorry to have any difficulty with you in regard to my agreement with you, but certainly am surprised that you should claim compensation when the referee has decided the elective share claim cannot be sustained. Both you and Mr. Greeley told me several times that I could withdraw the elective share claim at any time without any loss to me. If you think anything can be accomplished by your good self before the Surrogate which would give you any right to recover any fee from me by arguing the exceptions to the referee’s report, I have no objection to your making the argument, provided it be done without delay and for the limited purpose of determining whether or not you have any claim 'against me under our agreement, and you so state to the Surrogate.” Plaintiff answered by letter that he still regarded her first letter as instructions to withdraw the exceptions and that her offer to allow him to argue the exceptions under the terms she mentioned would be impractical and unfair, both as to the merits of the elective share claim and as to his compensation. The action of the plaintiff clearly indicates that he had lost faith in his theory and that he was abandoning his opportunity to convince the Surrogate and thus establish his right under the contract to a contingent fee, hoping doubtlessly that he would be able to recover on a quantum meruit on the theory that he had been wrongfully discharged by the defendant, his client.

Assuming, however, that the plaintiff was justified in treating the defendant’s letter as a discharge, the question remains whether in the circumstances the discharge was wrongful. A client who employs an attorney on a contract for a contingent fee has an absolute right to discharge the attorney and will not be liable on quantum meruit if the discharge was in good faith, for cause, and not wrongful. At the time defendant wrote the letter the referee had filed his report in which he had held that defendant was only entitled to one-half of the net estate on a claim for her share under the statute. It also appeared that if the surcharges were allowed her elective share would not exceed the amount which she would take under the will. It appeared that she could not succeed and she desired to end the trouble and worry of further litigation. In such circumstances it was not wrongful to decline to go further with the litigation. She was not bound to permit the attorney to continue after she had been convinced by the referee’s decision that she had no chance of winning in the end.

“ It is quite well settled that where the plaintiff in a case becomes satisfied that his cause of action lacks merit he may discontinue the suit, and surely where a trial of the cause of action has been had, and an adverse judgment rendered, there is no obligation upon the plaintiff to further carry on the litigation simply because his counsel desires to do so. It is not the policy of the law to protract or continue litigation, but when a party to a suit in good faith becomes satisfied that his contention is without merit, and desires to abandon it he must be allowed to do so. (Thornton on Attorneys at Law, § 646; 2 R. C. L. p. 1000.)” (Ryan v. Miller, 82 W. Va. 490, 491.) The above statement seems to us to be good law and good sense. (Cf. Andrewes v. Haas, 214 N. Y. 255.)

Where an attorney is hired on a contract, his payment to be a contingent fee, the client has the right to dismiss the attorney any time before the contract by its terms is to expire, and is not liable for the contract price. However, the client is liable for the value of the services rendered if the discharge is wrongful. This contract differs from other contracts in that the attorney may be dismissed at any time without having a cause of action for damages for breach of the contract. The contract is at an end; but the fact that the contract is at an end does not mean that the same rights and liabilities exist as if the contract had expired by its terms. Where the contract is extinguished by dismissal and not by the expiration of the term named in the contract, the client is liable on a quantum meruit unless the dismissal was justified. ^ (Matter of Tillman, 259 N. Y. 133; Matter of Montgomery, 272 N. Y. 323; Ferkin v. Board of Education, 278 N. Y. 263; Andrewes v. Haas, 214 N. Y. 255.) If a discharge is justified there can be no recovery on quantum meruit. (Fletcher v. Kellogg, 6 Fed. Rep. [2d] 476; Holmes v. Evans, 129 N. Y. 140.)

It seems to us that a holding in the case at bar that plaintiff can recover would be contrary to the right which a client always has to end further litigation when convinced by a decision after trial against him upon the merits. It is true that the decision of the referee appointed by the Surrogate does not have the same effect as a final judgment. Nevertheless it is a decision after trial and if it has the effect of honestly convincing a client that his case is hopeless he should not be compelled to go on in order to afford his attorney an opportunity to earn a fee.

The plaintiff has failed to establish a cause of action and the judgment should be affirmed, with costs.

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

Judgment affirmed.