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    National Cellulose Corporation, Appellant and Respondent, v. State of New York, Respondent and Appellant.
    (Claim No. 22256.)
    Argued November 30, 1943;
    decided April 20, 1944.

      Louis L. Waters and Frank J. Jr., for claimant, appellant and respondent.
    I. If there was evidence to support each finding- made by the Official Referee, the court will not disturb his decision on appeal. (Aldridge v. Aldridge, 120 N. Y. 614; Carpenter v. Mosher, 125 N. 736; Baird v. Mayor, etc., of City of N. ¥., 96 N. Y. 567; Aerated Products Go. v. Godfrey, 290 N. Y. 92; People ex rel. MacCracken v. Miller, 291 N. Y. 55.) II. The declared policy and intent of the State of New York has always fully recognized that in the construction and operation of the Barge Canal injuries to waterpower and riparian owners would result, and that the State would prevent such injuries as far as possible, and that the State would compensate the property owners for such injuries so occasioned, whether or not such damages were occasioned by the acts of the State in the exercise of its governmental functions and whether or not such damages were damnum absque injuria. {Oswego & Syracuse B. R. Go. v. State, 226 N. Y. 351.) III. The injuries complained of and proved were injuries caused by the construction and operation of the Barge Canal, and were in large part new damages occasioned by the acts of the State in Barge Canal operation in 1930 and 1931, and in part continuing trespasses and injuries resulting from prior construction and operation of the Canal as to which new causes of action against the State and in favor of claimant arose every day including all days of the canal seasons of the years 1930 and 1931. (Silsby Mfg. Go. v. State of New Yorlc, 104 N. Y. 562.) IY. The State has given no evidence as to the value of claimant’s plant or water rights before and after the acts complained of. The evidence is that that value was diminished by those acts between January 1, 1930 and December 31, 1931, in the sum of $55,000. (Heimcm v. Bishop, 272 N. Y. 83; Colriclc v. Swinburne, 105 N. Y. 503; Beisert v. City of New Yorlc, 174 N. Y. 196; Kinsey v. City of New Yorlc, 75 App. Div. 262; Ford v. State of New Yorh, 119 Mise. 484; Baumann v. City of New Yorlc, 227 N. Y, 25; Hall Sons’ Go. v. Sundstrom & Stratton Go., 138 App. Div. 548, 204 N. Y. 660; N. Y. R. Go. v. Rothery et al., 132 N. Y. 293; Gallagher v. Kingston Water Go., 25 App. Div. 82; Neal v. City of Rochester, 156 N. Y. 213.) Y. On the undisputed evidence the value of claimant’s property and water rights has been impaired and diminished by the acts of the State in the construction and operation of the Barge Canal during the years 1930 and 1931. YI. The release to the State executed by a predecessor in title of claimant was not a release of claims for damages to water rights, either by the releasor or by any successor in title. YII. The State has overlooked the provisions of the enabling act, chapter 630 of the Laws of 1921, one of the enabling acts under which the claim of claimants was filed. YIII. Appellant’s attack upon the order amending the claim, in Point YI, is neither justified in fact or in law. {Al Raschid v. News Syndicate Go., 265 N. Y. 1; Foster v. Central Nat. Bank, 183 N. Y. 379; Harriss v. Tams, 258 N. Y. 229.)

      Nathaniel L. Goldstein, Attorney-General {Herman F. Nehl-sen and Orrin G. Judd of counsel), for defendant, respondent and appellant.
    I. The reservation by a predecessor in title of the present claimant of all claims for damages resulting from the construction and operation of the Barge Canal, followed by the judgment and satisfaction thereof in an action against the State by said predecessor in title and the release executed by her are a bar to a recovery of damages in this action. (.Drucker v. Manhattan Railway Go., 213 N. Y. 543; Shepard v. Manhattan Railway Go., 169 N. Y. 160; Oehler v. New York Elevated R. R. Go., 4 App. Div. 152.) II. The State being free from negligence in the operation of the Barge Canal, it is not liable for damages thereby suffered by riparian owners. (Bon-nell v. Griswold, 89 N. Y. 122; Wahl et al. v. Rarnum et al., 116 N. Y. 87; Kelly v. Leggett, 122 N. Y. 633; Israel v. Manhattan Railway Co., 158 N. Y. 624; Williams v. State of New York, 106 Mise. 19; Gordon v. Ellenville & Kingston R. R. Co., 195 N. Y. 137.) III. The Appellate Division erred in ruling that the State had deprived claimant of water at a time when it would have been available at a lower datum. (Frasee Milling Go. v. State of Now York, 122 Mise. 545; Sage v. The Mayor, 154 N. Y. 61; Little Falls Fibre Go. v. Ford & Son, Inc., 249 N. Y. 495; Matter of City of New York [Jamaica Ray'], 256 N. Y. 382; People v. N. Y. and S. I. F. Go., 68 N. Y. 71.) IV. Lay testimony of witnesses who have seen and observed conditions to which they testify is entitled to greater credence and weight than mere opinion evidence. (Daly v. State of New York, 238 App. Div. 253; Roberts v. Jones, 156 Mo. App. 552; Ladwig v. Jefferson Ice Go., 141 Wis. 191; Cincinnati, etc., R. Go. v. Webber, 178 Ky. 171.) V. It was error to admit proof of damages accruing after the effective date of the enabling act of 1931. (Stone et al. v. State, 138 N. Y. 124; Farrington v. State, 248 N. Y. 112; Smith v. State of New York, 227 N. Y. 405; Mowers v. State of New York, 168 Mise. 651; Throckmorton v. State of New York, 128 Mise. 599.) VI. It was error to allow respondent to amend its claim by substituting a different parcel of land nine years after the time to file had expired. (Coleman v. Manhattan1 Reach Im. Co. et al., 94 N. Y. 229; Jones et al. v. Smith, 73 N. Y. 205; Thayer v. Finton, 108 N. Y. 394; Slocum v. State of New York, 177 Mise. 114; Quimby v. Gluflin, 27 Hun 611; Ruckles v. State of New York, 221 N. Y. 418; Clark v. Post et al., 113 N. Y. 17; Rafferty v. State of New

      York, 172 Mise. 870; Gognetta v. State of Neto York, 111 Mise. 329; Empire State Railroad Corp. v. State of N. Y., 113 Mise. 238; Kormer v. State, 180 App. Div. 837, 227 N. Y. 478.)
   The National Cellulose Corporation acquired between 1925 and 1929, inclusive, by various conveyances, in fee simple, and has since been the owner in possession of, a valuable water power and factory site on the southerly side of the Seneca River in Baldwinsville, near what is known as the Baldwinsville Dam,” “ together with water power and privileges thereunto belonging ” and riparian rights appurtenant thereto, and was engaged in the manufacture of paper products in a irn'll and other buildings located on said property with necessary machinery and equipment and a productive capacity of 13,000 pounds of paper per day. It has been found by the courts below that it owned a one-fifth right among other property owners to take water for its purposes from the pool in the river above the Baldwinsville Dam amounting to four hundred and fifty cubic feet per second under an eight-foot head subject only to the superior right of the State to take for navigation purposes during navigation seasons twenty cubic feet per second and four other property owners to take six hundred thirty-one cubic feet per second from the impounded waters. The property had been used by claimant’s predecessors in title for the same purpose and under similar conditions as to the use of water power for more than fifty years before the State began the construction of the Barge Canal.

This claim was filed on March 21, 1932, within the time specified by the Legislature under enabling acts (L. 1921, ch. 630 and L. 1931, ch. 693) upon the authority of chapter 147 of the Laws of 1903 (commonly known as the Barge Canal Act), to recover damages for interference with and appropriation of the property rights of claimant by the State and embraced all damages sustained from the date of its acquisition of title to the date of filing the claim. The claim was referred for hearing and determination to Honorable Feank H. Hiscock, an Official Referee of this court. During the hearing, upon application of the State, the claim was limited and amended to include only damages suffered by claimant through injury to its property and riparian rights during the years 1930 and 1931. There has been no issue raised by claimant as to the propriety of the amendment. The learned Referee, after extended bearings and exhaustive examination into the facts and tbe applicable law, made findings of fact and concluded that claimant was entitled to damages in the sum of $55,000, the amount of the claim as amended, with interest, and judgment for that sum was accordingly entered in favor of claimant. The basic findings upon which the award was necessarily made were unanimously affirmed by the Appellate Division. The latter court modified the awrard, however, by a -reduction of the loss to $22,000 and interest, on the theory apparently that the claimant was entitled to recover only the usable value of the water of which the claimant was deprived during the years in question rather than the reduction in the market value of claimant’s water rights by appropriation by the State during those years.. A review of facts, similar to those found in the case at bar, down to 1924 as to the reciprocal rights and obligations of the State and other property owners and claimant’s predecessors in title to power rights in the waters of the Seneca River and the applicable law is covered in detail in the case of Frazee Milling Co. v. State of New York (122 Misc. 545) and we shall refer here only to so much of the approved findings of the Referee as we deem necessary to our decision.

By chapter 54 of the Laws of 1809, the State authorized the construction by Jonas C. Baldwin, his heirs and assigns, of what is known as the Baldwinsville Dam, in the Seneca River, a navigable stream, at Baldwinsville, N. Y., of such a height as might be necessary for improving the navigation of the river but “ not exceeding seven and an half feet on the rapids above said dam,” with the fight “ to take and make use of the water in said dam for the use of mills and hydraulic works, or to any other use to which the same is capable of being applied upon land owned by him, his heirs or assigns ”, for a period of twenty years, which term was extended by later statutes. Baldwin was then the owner of riparian rights appurtenant to the lands he owned adjoining the river. Conditional upon the grant was a construction by Baldwin of an apron of an even ascent from the bottom of the river to the top of the lowest part of the dam, not exceeding a twelve and a half degree elevation, to permit the passage of rafts and boats down and fish up the river and Baldwin was required to construct and maintain a canal and loci; through his own land to the north of and parallel with the river of specified dimensions to enable larger boats to pass up and down the river by the dam. Baldwin built the canal, lock, guard gate and necessary appurtenances and the dam and complied with all the conditions imposed by the State by the Act of 1809 contingent upon the grant of the water rights .above-mentioned, operated the canal and exercised the rights .granted by the State. The Act of 1809 was for the improvement ■of navigation and constituted a contract between the State and Baldwin and his grantees by virtue of Baldwin’s acceptance •of the Act and his compliance therewith in the construction and maintenance of the canal and the Baldwinsville Dam, a contract which was within the power of the State to make.

The grant to Baldwin of water rights and privileges of the use of the waters of Seneca River was continued undisturbed .and all conditions of the grant were performed by Baldwin •and his heirs and assigns until 1850 when, by chapter 153 of the laws of that year, the State' acquired the dam, locks and canal theretofore constructed by Baldwin in the exercise of the power of eminent domain, took possession of the dam and .acquired so much'of the waters of the river as should be necessary for the purpose of improving the navigation of the river and the operation of the locks and canal to be maintained at the same place and no more (§8). The Canal Commissioners were directed to maintain the dam at Baldwinsville for the purpose of improving the navigation of the Seneca River and to appropriate only so much of the water of the river as was necessary to operate the canal and to permit the surplus water, if any, to be drawn from said dam and canal for hydraulic purposes. The provisions of the 1809 Act relating to the grant of property rights to Baldwin and his heirs and assigns were continued in full force and effect until the State should acquire title to all the rights of Harvey Baldwin and the representatives of Stephen W. Baldwin, who had succeeded to the title of Jonas Baldwin, their father, in 1819, in and to said dam, locks and canal (§ 11). The river was thereupon further canalized by the State, the dam was rebuilt at an elevation of 372.28 feet later Barge Canal datum and various improvements were made in the Baldwinsville Canal. In the interest of navigation, the State required an average water flow of twenty cubic feet of water per second at a head of seven and one half feet and no more.

Under chapter 147 of the Laws of 1903, it was provided that the Barge Canal should, in part, be located in the Seneca River and involved reconstruction of the Baldwinsville Dam and construction of locks and other accessories in that location for the convenience of navigation. The State engineer was authorized to enter upon, take possession of and use lands, structures and waters, the appropriation of which for the use of the improved canals and for the purposes of the work and improvement authorized by that Act should in his judgment be necessary, and the Court of Claims was given “ jurisdiction to determine the amount of compensation for lands, structures and waters so appropriated.” ' Thus the State waived any claim that it might appropriate or interfere with the use of the waters of Seneca River for the necessity of navigation as against the contractual rights of Baldwin and his heirs and grantees without due compensation to the owners thereof (Oswego & Syracuse R. R. Co. v. State, 226 N. Y. 351). It was found by the Referee, upon documentary and other evidence, which finding was approved by the Appellate Division, that one of the purposes of the State in connection with the construction of the Barge Canal was to preserve the rights of power users so far as was consistent with the public interest.

In the course of the building of the Barge Canal under the Act of 1903 and supplementary and amendatory acts, the State,among other things, rebuilt the Baldwinsville Dam and raised its crest from 372.28 to 374 feet Barge Canal datum, constructed a new canal parallel with the river to the south of the property later acquired by claimant and therein constructed a lock which, with uncompensated leakages and necessary use of water for its operation took from the pool above the dam far in excess of twenty cubic feet per second during every day of the navigable seasons, made numerous changes in the control of the normal flow of water from the watershed above the pool and interfered with normal flow of water from feeders of the river and compelled power users to shut down their plants when the water in the pool fell one-tenth of a foot below the crest of the dam and made numerous other changes which interfered with and diminished the water rights which claimant had secured by grant from the assigns and successors of Baldwin. The State thereby appropriated, as the Referee correctly found and the Appellate Division affirmed, during September to December in the years 1930 and 1931 a considerable and valuable right of claimant to the use of waters impounded by the dam as that right existed at the time the State began the construction of the Barge Canal for which no compensation had been made to claimant or to its predecessors in title at any time. In 1930, there were one hundred and nineteen days and in 1931, there were one hundred and twenty-three days during which there was not enough water flowing over and above the dam elevation of 374 feet Barge Canal datum to satisfy the requirements of the owners of the five water rights although, during those periods, there was sufficient water flowing in and out of the pool to satisfy those rights at the elevation of the old dam which was 372.28 Barge Canal datum. During those times, there was no water or insufficient water to operate the claimant’s mill. Claimant’s employees were rendered idle by lack of water to run the machinery. There was interference with claimant’s contracts and claimant suffered loss of profits on business which it would otherwise have obtained. Other suitable power for the operation of machinery adapted to the use of water power could not be substituted for water power without a reconstruction of the plant. Although flash boards in the dam which would have neutralized to some extent, at least, the loss of water power were permissible in the discretion of the State, the use of such flash boards was prohibited.

going concern and with, its production schedule, its loss of profits and the expenses necessarily incurred due to the shutdowns were other elements that were entitled to due consideration. Evidence was properly received as to the annual rental value of claimant’s water rights of which it was deprived, the cost of necessary electric power to operate its mills to the full extent of its water rights as a substitute therefor, the usable value of the portion of claimant’s water rights of which it was deprived during the period in question, the saving in cost to claimant by the use of water power as against the use of other power, if available, the fair and reasonable market value of the water rights of claimant before and after interference with and appropriation of those rights by the State in the years 1930 and 1931, and the cost of reconversion of the plant from one operated by water power to one operated by electricity. We think in circumstances such as exist in this case the damage fixing authority was authorized to take into consideration in fixing the amount of damages all testimony which was relevant as an aid to a determination of what constituted a just and equitable compensation to claimant for its loss through the interference with and appropriation by the State of its property rights and thereupon, in the exercise of its best judgment, to determine the amount of that loss. No fixed rule of damages, unvarying according to circumstances, is available. In principle, we have so held in other cases (Heiman v. Bishop, 272 N. Y. 83; Matter of Board of Water Supply of New York, 277 N. Y. 452).

The State argues that, in any event, damages may not be awarded which accrued after April 23, 1931, the effective date of - the enabling Act of 1931. That position cannot be sustained in view of the fact that the claim in question was specifically filed not only under the enabling Act of 1931 but also under the enabling Act of 1921 which provided for the filing of claims for past or future damages within one year after such damages accrued, or, where such time had lapsed, within one year from the passage of the Act. The Act of 1931 is not, in effect, an amendment of the Act of 1921. It provides that, notwithstanding the lapse of time since the accruing of damages, a claim for damages theretofore suffered or caused as mentioned in the Act of 1921 may be filed within, one year from the passage of the Act. The claim for damages for the year 1930 was properly filed within one year after the passage of the Act of 1931. The claim for damages for the year 1931 was properly filed within one year after their accrnal, in accordance with the provisions of the Act of 1921.

¥e have not overlooked other points raised by the State bnt we find no point of law which requires further consideration.

The judgment of the Appellate Division should be reversed and judgment of the Court of Claims entered on the decision of the Official Referee affirmed, with costs to the National Cellulose Corporation in this court and in the Appellate Division.

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

Judgment accordingly.


source: Caselaw Access Project

license: Public Domain

text:
    John Sadowski, Appellant, Long Island Railroad Company, Respondent.
    Argued December 7, 1943;
    decided April 20, 1944.

      A. Harold Frost and Bernard J enkin for appellant.
    I. Plaintiff established defendant’s negligence by a preponderance of the evidence and the verdict of the jury was proper. It was error to reverse the judgment and dismiss the complaint. (Bailey v. Central Vermont Railway, Inc., 87 L. ed. 1030, U. S. Supreme Court, decided May 24, 1943; Branson v. Baltimore & Ohio Railroad Co., 128 Md. 679, 131 Md. 686; McGrath v. Lehigh Valley R. R. Co., 263 N. Y. 657; Jacque v. Locke Insulator Corp., 70 P. 2d 680, 293 TJ. S. 585; Piecsonka v. Pullman Co., 102 P. 2d 432; Harrison Engineering Construction Corp.
      y. Rollinson, 109 F. 2d 602; Galeota v. United States Gypsum Go., 123 F. 2d 947, 315 U. S. 813; Texas S Pacific Ry. Go. v. Rehymer, 189 TJ. S. 468; Hellweg v. Chesapeake & Potomac Telephone Co., 110 F. 2d 546; Baltimore ,& Ohio R. R. Go. v. Whitacre, 242 U. S. 169; Tiller v. Atlantic Coast Line R. Go., 318 U. S. 54.) II. The plaintiff sustained an injury the provisions of the Federal Employers’ Liability Act. (Branson Y. Baltimore & Ohio Railroad Go., 128 Md. 679, 131 Md. 686; McGrath v. Lehigh Valley R. R. Co., 263 N. Y. 657; Schmidt v. Merchants Despatch Trans. Go., 270 N. Y. 287; Illinois Steel Go. y. Fuller, 216 Ind. 180; McBeth Evans Glass Go. y. Brunson, 70 Ind. App. 513; Nat. Rolling Mill v. Heishman, 80 Ind. App. 673.) III. This action was commenced two years of the last day of plaintiff’s employment. (Schmidt v. Merchants Despatch Trans. Co., 270 N. Y. 287; Michalek y. United States Gypsum Go., 76- F. 2d 115; Gillespie v. Great Northern Ry. Go., 63 Mont. 598; Morrison v. Baltimore Ry. Go., 40 App. Cas. D. C. 391.) IV. Plaintiff did not assume the risk of his employment. The assumption of risk as a defense under the provisions of the Federal Employers’ Liability Act, as amended August 11,1939, has been obliterated and is no longer available to the defendant. (Tiller v. Atlantic Coast Line R. R. Go., 318 U. S. 54; Galeota v. United States Gypsum Co., 123 F. 2d 947, 315 U. S. 813;. Seaboard Air Line Railway v. Horton, 233 U. S. 492; Choctaw, Oklahoma Sc. R. R. Go. v. McDade, 191 U. S. 64; Schlemmer v. Buffalo, Sc. Ry. Go., 220 U. S. 580; Pac. Ry. Go. v. Harvey, 228 U. S. 319; Gila Valley Ry Go. v. Hall, 232 U. S. 94; Chi. and Northwestern Ry. v. Bower, 241 U. S. 470; Dana v. N. Y. G. & H. R. R. R. Go., 92 N. Y. 639; Piecsonka y. Pullman Go., 102 F. 2d 432.)

      Ralph E. Hemstreet and Louis J. Carruthers for respondent.
    I. Plaintiff failed to establish that he was injured through the negligence of any of the officers, agents or employees of the defendant company. (Bailey v. Central Vermont Ry., 319 U. S. 350; Second Employers’ Liability Gases, 223 IT. S. 1; Toledo, St. L. S W. R. R. v. Allen, 276 TJ. S. 165 ;O.M.S St. P. Ry. v. Coogan, 271 U. S. 472; Cleary v. Diets Go., 222 N. Y. 126; Christopher’s Administrator v. Blanton Stone Go., Inc., 258 Ky. 587; O’Connor y, Webber7 239 N. Halverson V,
      562 W. 149th St. Corp., 290 N. T. 40; Butler v. Village of Oxford, 186 N. Y. 444; Hubbell v. City of Yonkers, 104 N. Y. 434; Missouri Pao. B. B. v. Aeby, 275 IT. S. 426.) II. The damages complained of by the plaintiff were not an “ injury ” within the meaning of the statute. (Federal Employers’ Liability Act, IT. S. Code, tit. 45, ch. 2; Barrencotto v. Cocker Saw Co., 266 N. Y. 139; Matter of Goldberg v. 954 Marcy Corp., .276 N. Y. 313; Jeff reyes v. Sager Co., 198 App. Div. 446, 233 N. Y. 535; Bailey V. Central Vermont By., 319 IT. S. 350; Dougherty v. Salt, 227 Y. 200.) III. A statute providing a remedy and. limiting the time within which such remedy may be sought, affects the right and not merely the remedy. If the specified time has elapsed, the right is gone along with the remedy. Section 6 of the Federal Employers’ Liability Act, stating the limitation, is a condition imposed upon the right. (Seaboard Air Line v. Benn, 241 IT. S. 290; Central Vermont By. v. White, 238 IT. S. 507; Engel v. Davenport, 271 IT. S. 33; Morrison v. B. & O. B. Co., 40 App. Cas. D. C. 391; CallahanY. Chesapeake & O. By. Co., 40 F. Supp. 353; Horton v. N. Y. C. B. B. Co., 237 N. Y. 38; Isaac v. Town of Qtieensbury, 277 N. Y. 37; Dougherty v. Salt, 227 N. Y. 200; TVichita Falls & S. B. Co. v. Durham, 132 Tes. 143; Carpenter v. Central Vermont B. Co., 93 Yt. 357; Wabash By Co. v. Bridal, 94 F. 2d 117, 305 IT. S. 602; Schmidt v. Merchants Despatch Trans. Co., 270 N. Y. 287; Michaleck v. United States Gypsum Co., 298 IT. S. 639.) IY. Plaintiff assumed the risk of contracting the disease of which he now complains. (N. Y. C. & St. L. B. B. Co. v. Bowlden, 62 F. 2d 917, 289 IT. S. 753; Kaare v. Troy Steel Co., 139 N. Y. 369; Seaboard Air Line By. Co. v. Horton, 233 IT. S. 492; Jacobs v. Southern B. B. Co., 241 IT. S. 229; Chesapeake & Ohio By. Co. v. DeAtley, 24-1 IT. S. 310; Chesapeake & Ohio By. Co. v. Kuhn, 284 IT. S. 44; D. L. & W. B. B. Co. v. Koske, 279 IT. S. 7; Winfree v. Northern Pacific B. Co., 227 IT. S. 296; Tiller v. Atlantic Coast Line B. B., 318 IT. S. 84.)
   Plaintiff was, at the time of his alleged injury on August 25, 1939, thirty-five years of age and in the employ of the defendant as an engine service man in its yards at Morris Park, N. Y., on an eight-hour shift. He had been working on the same job with the same duties continuously for the previous sixteen years or more. It was the only job he ever had. He serviced some twenty to thirty locomotives during each shift by filling their tenders with coal and water and their sand boxes with a hard, fine sharp quartz sand.

Adjoining the coal wharf and water tank where the locomotives were placed for servicing was a sandhouse where the sand required was prepared for use, entirely enclosed except for one or two doors and some three or four windows. Three stoves were located inside the building with large hoppers around the drums into which the sand, procured by means of a wheelbarrow from a pile outside the building, was shoveled for the purpose of drying. After heating and drying, the warm, dry and finely pulverized sand was run off into piles on the floor around the stoves from which it was shoveled upon an open 1/64" mesh screen and sifted into an open tank beneath. Particles too large to pass through the screen and other foreign waste material were thereafter shoveled into wheelbarrows and removed from the building. Prom the tank, the screened sand, as needed, was forced up through a pipe into a sand box located above the top of the locomotives in the coal wharf by means of a 100-pound pressure blower, from whence it was sent through a hose manually operated as needed to the sandboxes of the locomotives.

The jury were authorized to find that a substantial part of plaintiff’s duties during each work shift was to fire the stoves and to handle the sand during the details of its preparation and the operations required to transport it to its resting place in the locomotive sandboxes and that, during all of that time, he was required to work in more or less of a cloud of silica dust which enveloped him and which he necessarily inhaled. Con-cededly, defendant furnished for his use no protection against inhalation of the particles of silica by way of masks or other appliances or by way of mechanical devices in the sandhouse to clear the air of dust, without which, it was shown, reasonable protection from injury was lacking, nor warned plaintiff of the dangers incident to the inhalation of the dust. Negligence is charged against defendant in its failure to perform duties in those respects which it owed to plaintiff and in failure to furnish plaintiff with a reasonably safe place in which to work. Upon sufficient evidence, the jury have found, as a necessary incident to the work so required of plaintiff in the place and under the conditions described, that silica dnst entered plaintiff’s lnngs and destroyed the tissues by reason of which tuberculosis has been superimposed, resulting in total permanent disability, His consequent total collapse occurred on August 25, 1939.

The summons in this action was served on defendant on July 31, 1941. On August 21, 1941, plaintiff served his complaint. In due course, plaintiff served upon defendant a bill of particulars in which he described with greater detail and precision the injuries which he received while in defendant’s employ and the particular violations of duty by defendant which were the proximate causes of his injuries. The cause of action which was put in issue by the answer and upon which plaintiff relied and to which both parties exclusively directed their proofs at the trial has its foundation in the Federal Employers’ Liability Act (U. S. Code, tit. 45, ch. 2, § 51-60). It is there provided, among other things, that every common carrier by railroad while engaging in interstate commerce shall be liable in damages to any person suffering injury while he is employed by such carrier in such commerce, * * * for such injury .# * resulting in whole or in part from the negligence of any of the officers, agents, or employees of such carrier, or by reason of any defect or insufficiency, due to its negligence, in its * # * appliances, machinery, '* * * works * * * wharves, or other equipment ” (§51) and that an action to recover upon such liability may be maintained either in a proper State court or in a proper Federal court (§ 56). That defendant was engaged in interstate commerce as a common carrier by railroad and that plaintiff was in the employ of such carrier and engaged in such commerce at the time of his alleged injury are not disputed by defendant. The rights and obligations of the parties under that chapter, whether relating to questions of negligence, the weight of evidence, assumption of risk or contributory negligence on the part of the employee, depend exclusively upon the terms of the Federal statute, upon applicable principles of common law and upon the Federal decisional law (Jacobs v. Reading Co., 130 F. 2d 612; Second Employers’ Liability Cases, 223 U. S. 1; Seaboard Air Line v. Horton, 233 U. S. 492, 501; C. M. & St. P. Ry. v. Coogan, 271 U. S. 472, 474; Missouri Pac. R. R. v. Aeby, 275 U. S. 426; Toledo, St. L. & W. R. R. v. Allen, 276 U. S. 165; Bailey v. Central Vermont Ry., 319 U. S. 350). Over looking that well-known rule of law in effect since the first effective date of the Employers’ Liability Act on April 22, 1908 (ch. 149, § 3; 35 U. S. Stat. 66), the trial court erroneously charged the jury that, applying the law of the State of New York, plaintiff must establish, if he was to recover at all, complete freedom from contributory negligence. That is not the standard fixed by Congress on which recovery may be based under the Federal Employers ’ Liability Act (U. S. Code, tit. 45, § 53; Seaboard Air Line v. Tilghman, 237 U. S. 499). It was necessary only for plaintiff to show that the proximate cause of his injuries was lack of due care on the part of defendant (Scarlett v. D. L. & W. R. R. Co., 222 N. Y. 155, 158). On that subject, the court correctly charged the rule of the common law which is applicable alike under the law of New York and the Federal statute that the burden was upon plaintiff to show that his injuries were due to failure of the defendant to do or to its omission to do what a reasonable and prudent man would have done or would have omitted to do in the exercise of ordinary care under all the circumstances (Tiller v. Atlantic Coast Line R. Co., 318 U. S. 54, 67). The jury found that there was no negligence on the’ part of plaintiff contributing to his injuries and that the sole proximate cause of his injuries was the failure of defendant to exercise that degree of care and caution for his safety which, under the circumstances shown by the record, an ordinarily prudent man would be expected to exercise. No exception to the charge or to any refusal of the court to charge upon request presents any question for our consideration.

The reversal of the judgment entered on the verdict of the jury in favor of plaintiff and the dismissal of upon the law by the Appellate Division were on the ground that plaintiff failed to show any actionable negligence on the part of defendant. The question of whether plaintiff presented a prima facie case entitling him to go to the jury is open to review here upon exceptions to the refusal of the trial court to grant defendant’s motion to dismiss the complaint at the close of the plaintiff’s case and again at the close of the whole case and to the refusal of the court to direct a verdict for defendant. A motion for a nonsuit or for a direction of a verdict may not be granted where the facts are in dispute or where the evidence is such that reasonable men may draw different inferences from undisputed facts or where the issue depends upon the credibility of witnesses (McDonald v. Metropolitan St. Ry. Co., 167 N. Y. 66; Place v. N. Y. C. & H. R. R. R. Co., 167 N. Y. 345; Tiller v. Atlantic Coast Line R. Co., supra, pp. 67, 68). The questions of whether plaintiff was required to work in the sandhouse at all and the extent of such work, if any, of whether there was any silica dust at all in and around the place where plaintiff was required to work, or, if any such dust existed, whether it was of sufficient quantity to cause him injury, of whether the place furnished bim in which to work and the appliances furnished for use in the work of defendant were reasonably safe and suitable under the circumstances, and whether, if dust existed, defendant exercised the care that ordinary and common prudence dictated in failing to furnish plaintiff with appliances to protect him against the inhalation of dust or to keep the air in the sandhonse and at the point where the locomotive sandboxes were filled free from dust, were sharply contested at the trial, involving the credibility of witnesses, and the evidence adduced on those questions was open to different inferences and to diffrent conclusions by reasonable men. The place in which plaintiff was required to work was fully described in the testimony, the plaintiff’s evidence furnishing one picture and the defendant’s evidence another.

Essentially, what is negligence in a given case is a question of fact. Each case depends upon its own peculiar circumstances. Decisions in other actions in which damages are sought for personal injuries furnish no criterion or guide for determination of what is or is not negligence in a particular case involving its own peculiar facts and circumstances. Under circumstances existing in one case the ordinary care required might not be the same as that required under other circumstances. Negligence arises from breach of duty and is relative to time, place and circumstance (Mink v. Keim, 291 N. Y. 300, 304). Ordinary care must be in proportion to the danger to be avoided and the consequences that might reasonably be anticipated from the neglect (Railroad Co. v. Jones, 95 U. S. 439; Bailey v. Central Vermont Ry., supra). It must be commensurate with known dangers. Defendant created the place in which the work was done and supervised the doing of the work by plaintiff and was aware for a period of at least sixteen years of the conditions under which plaintiff was required to work and of the means and methods by which its work was accomplished. It is a matter of common knowledge that it is injurious to the lungs and dangerous to health to work in silica dust, a fact which defendant was hound to know. That fact was fortified by abundant medical, testimony to like effect. In this case, as we have pointed out, no means were used by defendant for minimizing the quantity of silica dust arising from the work or for removing it from the atmosphere in which plaintiff was required to work or effort made to provide plaintiff with a place to work in which such dust was not present and no devices, such as a respirator or a mask, were provided for his use to enable him to avoid inhaling the dust. The jury found upon ample evidence that plaintiff was required to work a substantial part of his working time each day for many years in a cloud of silica dust. Those facts, with additional oral evidence in abundance to which reference has already been made, furnished a basis for a conclusion by reasonable men that defendant negligently failed in its duty to furnish plaintiff with a reasonably safe place in which to work and to furnish him with contrivances and appliances with which he could do the work required of him with a reasonable degree of safety and that such failure to perform its duty to plaintiff was the sole proximate cause of his injury. What constitutes ordinary care and prudence under all of those circumstances was properly affirmed by the triers of fact. The evidence in the instant case, fairly and considered in aspect most favorable to plaintiff, does not transport the question of defendant’s negligence into the domain of undebatable fact or lead so unerringly to a conclusion that the court may hold as matter of law that no negligence of defendant was a proximate cause of plaintiff’s injury (Bailey v. Central Vermont Ry., supra).

Evidence that some railroads furnished no such contrivances as plaintiff claimed were necessary for the use of men working under similar conditions or furnished similar places to work for men doing work similar to that required of plaintiff does not establish, as matter of law, that no such contrivances or no different place in which to work or no different appliances to carry on the work were required in the ease at bar in the of ordinary care. The ultimate question of fact was not what particular protective means someone else used in similar work. It was whether or not, under the particular conditions described in this case, the defendant furnished plaintiff a reasonably safe place in which to work and such protection in connection with his work against the inhalation of silica dust as would be expected of a person in the exercise of ordinary care under those conditions. Nor does the fact that no other person in defendant’s works, so far as defendant knows, incurred similar injuries to those plaintiff received relieve defendant, as matter- of law, from liability or indicate that defendant did everything for the protection of plaintiff that ordinary care and prudence dictated. Both items of evidence, if admissible at all (See Schumer v. Caplin, 241 N. Y. 346; Garthe v. Ruppert, 264 N. Y. 290, 295), a point which we find no occasion to decide, have weight only when considered with other evidence, on the question of whether what defendant did or omitted to do under all the circumstances met the requirements of care, as matter of fact, imposed on defendant for plaintiff’s protection from injury (See 2 Wigmore on Evidence, 3d ed., § 461; Pieczonka v. Pullman Co., 89 F. 2d 353, 357).

Defendant urges on this appeal, as it pleaded in its answer and urged at the trial on the motions to dismiss and for a direction of verdict but did not urge in the Appellate Division, that the maintenance of the action is barred since it was not commenced within two years from the day the cause of action acprued (Federal Employers’ Liability Act, § 56 as it read until amended on August 11, 1939, to provide for a three-year limitation). In the state of the record, it is immaterial whether the statutory limitation is part of the substantive law or a bar to the remedy. In whichever way considered, the motion to dismiss on the ground that the maintenance of the action was barred by the statute was properly denied. The duty of defendant to furnish plaintiff with a reasonably safe place in which to work and reasonably safe appliances with which to do the work required of him with safety was a continuing non-delegable duty to the time plaintiff left the particular employment (Kreigh v. Westinghouse & Co., 214 U. S. 249, 256; Bailey v. Central Vermont Ry., supra). The wrong committed coincided as to time with that duty. The injury gave rise to the cause of action and occurred before plaintiff left defendant’s employ. He continued to work until lie was totally disabled by tbe injury but did not return to work after bis collapse' on August 25, 1939. On tbe record bere, it cannot be said, as matter of law, tbat tbe action accrued more tban either two or three years before the action was commenced (Pieczonka v. Pullman Co., supra, pp. 356, 357).

Defendant urges tbat tbe trial court should have held as matter of law tbat plaintiff assumed the risks of bis employment. It cannot be held as matter of law tbat tbe injury for which plaintiff sought recovery occurred prior to August 11,1939. If it occurred after tbat date, it would seem tbat tbe doctrine of assumption of risk has been completely wiped out as a defense in an action brought by an employee of a carrier under tbe Federal Employers’ Liability Act (Tiller v. Atlantic Coast Line R. Co., 318 U. S. 54; 53 U. S. Stat. 1404, amdg. Federal Employers’ Liability Act, § 54). If tbe injury occurred prior to tbat date or if tbe decision in the Tiller case is not as broad as is indicated upon its face (Cf. Owens v. Union Pacific R. Co., 319 U. S. 715), tbe question of whether or not tbe plaintiff assumed tbe risk of bis employment was open to differing inferences by reasonable men and accordingly was one of fact.

Tbe judgment of tbe Appellate Division should be reversed and tbe case remitted to tbe Appellate Division for determination upon tbe questions of fact raised in tbat court, with costs in this court and in tbe Appellate Division to abide tbe event.

Judgment accordingly.


author: Loughran, J.

text:
    In the Matter of the Arbitration Between Joseph L. Kallus, Respondent, and Ideal Novelty & Toy Company, Appellant.
    Argued March 8, 1944;
    decided May 25, 1944.

      George Lion Cohen, Paul Martinson and Murray H. Paloger for appellant.
    I. Paragraph 7 of the agreement was void for indefiniteness, in failing, to provide the period of time of the license, and was a mere “ agreement to agree ”. P. P, Assn. v. Remington P. P. Co., 235 N. T. 338; St. Regis Paper Co. v. Hubbs & Hastings P. Co., 235 N. Y. 30; United Press v. New Yorlc Press Co., 164 N. Y. 406; Ansorge v. Kane, 244 N. Y. 395; Pratt Co., Inc., v. Roseman, 259 App. Div. 534; Mutual Life Ins. Co. v. Stephens, 214 N. Y. 488; Matter of Buffalo & Erie By. Co., 250 N. Y. 275.) II. Because of the invalidity of paragraph 7, there is no arbitrable “ controversy ” between the parties, under section 1448 of the Civil Practice Act. (Matter of Kramer & Uchitelle, Inc., 288 N. Y. 467; Matter of Kahn & Feldman, Inc. [Rothschild\, 265 App. Div. 470, 290 N. Y. 781; Matter of Metro Plan, Inc., v. Miscione, 257 App. Div. 652; Matter of Mfrs. Chem. Co. v. Caswell, Strauss Co., 259 App. Div. 321; Matter of Gruen v. Carter, 173 Mise. 765, 259 App. Div. 712; Matter of Webster v. Van Allen, 217 App. Div. 219.) III. Even if paragraph 7 were valid, the duration of the license thereunder is not arbitrable under section 1448, as amended. (Matter of Fletcher, 237 N. Y. 440, 6 Williston on Contracts [Bev. ed.], § 1921a; Lantry v. Mede, 127 App. Div. 557, 194 N. Y. 544; Sebree v. Board of Education, 254 Ill. 438; Berissi Co. v. Krausz, 239 N. Y. 315; People v. Dethloff, 283 N. Y. 309; Hayes v. Davidson, 98 N. Y. 19; Matter of Buffalo & Erie Ry. Co., 250 N. Y. 27*5; Matter of Stern, 285 N. Y. 239.)

      Walter S. Beclc and Leon Alexandroff for respondent.
    I. The determination of the duration of the license granted to appellant under paragraph 7 of the agreement, is a proper subject for arbitration under section 1448 of the Civil Practice Act. (Matter of Lipman [Haeuser Shellac Co.], 289 N. Y. 76; Matter of Berhowits v. Arbib & Houlberg, 230 N. Y. 261.) II. Paragraph 7 of the agreement, which grants to appellant a license to use respondent’s patents, etc., even after termination of respondent’s employment, upon payment of royalties of three per cent — for a period to be determined by definite and therefore valid and enforcible. (May Metropolitan Corp. v. May Oil Burner Corp., 290 N. Y. 260; Smith v. Rector, etc., of St. Philips Church, 107 N. Y. 610; Moon Motor Car Co. v.

      Moon Motor Gar Go., 29 F. 2d 3; Tin Decorating Go. of Baltimore v. Metal Package Corporation, 29 F. 2d 1006; 37 F. 2d. 5, 281 IT. S. 759; Small v. Eeywood-Wakefield Go., 13 F. Supp. 835, 87 F. 2d 716, 301 IT. S. 698.)
   Loughran, J.

The parties were formerly employer and employee and will be referred to as such for convenience’ sake. The terms of the employment were set forth in a letter written by the employer upon which the employee indorsed his acceptance on February 11, 1939. The material parts thereof are the following:

2. Tour services to the Corporation shall consist of designing, developing and supervising the manufacture and sale, and also selling a new line of Dolls, Toys and Novelties not manufactured heretofore by us # ⅜ *. In addition thereto, you will supervise the manufacture and sale, and you will also sell Toys, Dolls and other Novelties manufactured by us in various departments of our business * * *.

In consideration of the services you are to render exclusively to us, your salary is to be One Hundred Dollars ($100.00) per week # * *.

“4. It is understood between us that whatever copyrights, names, design patents or other patents, license rights, common law rights that you now own and whatever developments you make for us on the basis of such rights shall be recognized as your property. During the time that you are in our employ, we are to have the sole and exclusive rights to use the same without any compensation to you, save the salary above mentioned. • This also includes any pending license agreements. ⅜ # ⅜

“ 7. Upon termination of this employment for whatever reason, we shall have the right to continue to manufacture under all the rights, patents, etc. stated in Paragraph 4, upon payment to you of a royalty of three percent (3%) of our net wholesale selling price for a period of time to be arbitrated. It is also understood that you personally shall have the right to use all these patents and other rights enumerated in Paragraph 4 in your own business, but you shall not have the right to license any other manufacturer to use them. *

“ 9. Any and all disputes arising under this agreement shall be settled hy arbitration in the State of New York, according to the arbitration laws of the State of New York, hy the American Arbitration Society located in New York City and under its rules and regulations.”

This contract came to an end on January 31,1942. Asserting that the employer had thereafter taken advantage of the rights listed in paragraph 4, the employee on April 6, 1943, demanded arbitration of a dispute as to whether he was entitled, for a period of time to he arbitrated, to royalties at the rate fixed hy paragraph 7. The employer thereupon moved for an order permanently staying the arbitration so demanded and has now appealed to this court from the denial of that motion in the courts below. (See Civ. Prac. Act, art. 84, § 1458.)

The words of paragraph 7, as we read them, gave the employer the right to have a fresh license from the employee on the termination of the contract, if the employer so elected. The employee makes no claim of such an election and, that being so, the first question is whether the employer can he forced to accept a further license for any period of time. To say yes would be to say that statutory arbitrators have power to make an award in the shape of a new contract. This idea, of course, cannot he maintained, for no court can impose a contract upon parties, and under our statute arbitrators can deal only with controversies that are open to judicial cognizance. (Matter of Buffalo & Erie Ry. Co., 250 N. Y. 275; Matter of Stern, 285 N. Y. 239.) This last proposition was not altered hy the addition to Civil Practice Act, section 1448, of the provision authorizing arbitration of questions arising out of valuations, appraisals or other controversies which may he collateral, incidental, precedent or subsequent to any issue between the parties ” (L. 1941, ch. 288; see Matter of Fletcher, 237 N. Y. 440; Matter of Kramer v. Uchitelle, Inc., 288 N. Y. 467).

LehmaN, Ch. J., Rippey, Lewis, Conway, DbsmoNd and Thacher, JJ., concur.

Orders reversed, etc.


author: DesmoNd, J.

text:
    Metropolitan Investors Service, Inc., Appellant, v. President and Directors of the Manhattan Company, as Executor of and Trustee under the Will of Emil Reineking, Deceased, Respondent.
    Submitted April 3, 1944;
    decided May 25, 1944.

      Herman B. Forman and Richard A. Geis for appellant.
    I. Until the mortgaged property was disposed of to a third party, it remained a part of the fund for which the senior interest holder was accountable under the ownership agreement. (Intra-State Investors Corp. v. New Yorh Trust Co., 249 App. Div. 591, 276 N. Y. 527; Dows Estates, Inc., v. Smith, 290 N. Y. 484.) II. Fraud is not a necessary element of plaintiff’s action for accounting. (Intra-State Investors Corp. v. New Yorh Trust Co., 249 App. Div. 591, 276 N. Y. 527; Van Epps v. Van Epps, 9 Paige 237; Fulton v. Whitney et al., 66 Y. 548; Bennett et al. v. Austin, 81 N. Y. 308.) III. The senior interest holder was unjustly enriched. (Dows Estates, Inc., v. Smith, 290 N. Y. 484; Gelfert v. National City Banh, 313 U. S. 221; IntrchState Investors Corp. v. New Yorh Trust Co., 249 App. Div. 591, 276 N. Y. 527; Central Hanover Banh & Trust Company v. Roslyn Estates, 266 App. Div. 244; Honeyman v. Jacobs, 306 U. S. 539.)

      Otto P. Burhard for respondent.
    I. The senior holder did not occupy any fiduciary relationship to the junior holder and the latter’s rights under the ownership agreement were extinguished by the foreclosure sale. (Dows Estates, Inc., v. Smith, 290 N. Y. 484; Lowenfeld v. Wimpie, 139 App. Div. 617, 203 N. Y. 646; Clare v. New Yorh Life Insurance Co., 178 App. Div. 877; Goodwin v. Gilsey, 210 App. Div. 31.) II. Reineking, as purchaser at the foreclosure sale, was the absolute owner of the property. What he did with it thereafter, there having 'been no fraud in his acquisition of it, was no longer of any concern to the former junior holder. He’ did not assume to act under the judgment but merely under the absolute title he had acquired. Since no excess over the senior holder’s interest had been received from the foreclosure, which was completely terminated by the order confirming the referee’s report of sale, there was no obligation to account under the participation agreement. (Matter of 408. East 18th Street, N. Y. L. J., March 9, 1944.)
   DesmoNd, J.

Plaintiff formerly owned the junior interest, defendant’s testate the senior interest, in a real property mortgage. Their respective rights in that lien were described in an agreement entered into between their predecessors. The mortgage was foreclosed and the land was bought in at the foreclosure sale by defendant’s testator at a price less than was required to satisfy its share of the mortgage. Plaintiff sues here for an accounting under the mortgage ownership agreement, the complaint alleging that defendant, on reselling the premises after having bid it in at the foreclosure sale, got a price substantially in excess of the amount owing to it on its superior interest in the mortgage. No fraud is alleged, but plaintiff asserts that its rights to an accounting extended to the proceeds of that resale. Both parties moved for summary judgment; defendant’s motion was granted and the complaint dismissed. After the Appellate Division had unanimously affirmed, we granted leave because the question involved has not heretofore been answered by this court.

The facts are not in dispute. The principal amount of the mortgage was $6,750. The secondary interest of $2,750 later acquired by plaintiff, was subordinate to the primary interest of $4,000 owned by defendant’s testator, In 1936 Reineking prosecuted the foreclosure suit to a judgment in which the sum of $7,567.87 was found to be the total due for principal and interest on the whole mortgage. Plaintiff’s predecessor as owner of the subordinate interest was joined as a defendant in that suit and received due notice of sale. At the referee’s auction sale Reineking bought in for $2,000, there being no other bidder. Two months after the sale at foreclosure, defendant’s testator sold the premises for $7,700, which was $1,564.20 more than the amount which was unpaid on the senior interest in the mortgage, at the time of the referee’s sale. Plaintiff demands that defendant account to it for that $1,564.20, asserting that the resale was for plaintiff’s benefit and not for the profit of defendant alone.

The mortgage participation agreement, set forth in the complaint, contains these paragraphs:

— The ownership of the party of the second part in said bond and mortgage is now to the extent of Four thousand ($4,000) Dollars and interest thereon at the rate of 5½% per centum per annum from April 1st, 1931, and the party of the first part is the owner of the balance of said mortgage debt remaining; but the ownership of the party of the second part is superior to that of the party of the first part, as if the party of the second part held a first mortgage for said sum of Pour thousand ($4,000) Dollars and interest thereon as aforesaid, and the party of the first part held a second and subordinate mortgage to secure the interest of the party of the first part in said mortgage debt.

Fourth: — The party of the second part shall have all the rights of any holder of said bond and mortgage including the right to foreclose the same and to receive the proceeds of sale from the referee, but the party of the first part shall in any and every event, have the right to an accounting for all money received by the party of the second part or any assignee of the interest of the party of the second part in said bond and mortgage in excess of the ownership of the party of the second part in said bond and mortgage. In case of foreclosure the party of the second part shall be under no obligation to protect the interests of the party of the first part upon a sale of the mortgaged premises.”

The statements in those two paragraphs are plain enough. They give fair- notice to the owner of the junior interest that his co-owner, in whose name the mortgage stood of record, might foreclose the whole mortgage in his own name and in that foreclosure need do nothing to protect the lesser' interest. If in and by that foreclosure suit there should be realized more than enough to pay off the prior interest, then the owner of the subordinate part might demand an accounting of the overplus. Such would be the rights and remedies of the parties without any express agreement. They were tenants in common, each with a vested to his own undivided part of the chose in action and the security therefor. (See discussion in Title G. & T. Co. v. Mortgage Comm., 273 N. Y. 415, 422.) Between the partial assignor (defendant’s predecessor) and the partial assignee (plaintiff’s predecessor) there was no fiduciary relationship, except to the extent that the partial assignor, had he collected anything above the amount due him, would have held that excess, in a trust capacity, for the benefit of the partial assignee. (Lowenfeld v. Wimpie, 139 App. Div. 617, 620, affd. 203 N. Y. 646; 2 Williston on Contracts [Rev. ed.], §§ 441, 445; 1 Scott on Trusts, § 16; Hinkle Iron Co. v. Kolm, 229 N. Y. 179, 183; Markey et al. v. Langley et al., 92 U. S. 142.) The rights of the secondary participant were transferred, by and at the time of the foreclosure sale, to the sale proceeds. (Nutt v. Cuming, 155 N. Y. 309.) Since the avails of the foreclosure sale were not enough to pay off the primary owner, the other’s rights, and the relationship between the two tenants in common, were at an end. There was nothing to account for. The erstwhile owner of the senior interest in the mortgage, now become the owner of the fee, was, by the terms of the agreement and by settled law, no longer in any way beholden to his former cotenant.

We mentioned above that plaintiff alleges no fraud and points to no overreaching. As Justice Scott wrote for the Appellate Division in Lowenfeld v. Wimpie, supra (139 App. Div. at 621), after noting that there was in that case no lack of good faith or reasonable prudence: “ respondent [subordinate participant] is entitled to the payment, out of the proceeds of the sale, of the amount due under its lien, after all the superior liens are satisfied.” When there is less than enough to pay the prior claim,, he is entitled to nothing. Appellant here bases its arguments mainly on Intra-State Investors Corp. v. New York Trust Co. (249 App. Div. 591, affd. 276 N. Y. 527). In that case the owner of the secondary participation won but judgment went for him because he proved that he had been lulled by his co-owner into inaction, the while his unfaithful associate bid in the property and then took advantage of his position to make a secret sale of his bid, for an amount more than enough to satisfy the whole mortgage. All that took place inside the foreclosure suit and before the referee’s deed passed. The judgment in that case was based on specific findings of bad faith.

Our recent decision in Dows Estates, Inc., v. Smith (290 N. Y. 484) does not help appellant. That case dealt with the respective rights of the owners of the superior- and inferior mortgage interests, to the proceeds of a deficiency judgment, and with the effect, on those rights, of a finding of value in the proceedings on the motion for the deficiency judgment. The amounts collected on that deficiency judgment had to he added to the value of the mortgaged property, and accounted for to the co-owner of the mortgage, to the extent that the total of the two sums was more than the amount due the senior holder.

The judgment should be affirmed, with costs.

Lehman, Ch. J., Loughran, Lewis, Coüstway and Thacher, JJ., concur; Rippey, J., taking no part.

Judgment affirmed.


author: Per Curiam.

text:
    Henry Hornstein et al., Suing on Behalf of Themselves and All Other Stockholders of Paramount Pictures, Inc., and on Behalf of Paramount Pictures, Inc., Appellants, et al., Plaintiffs, v. Paramount Pictures, Inc., et al., Respondents, et al., Defendants.
    Argued January 10, 1944;
    decided May 25, 1944.

      Alfred J. Talley and Abraham Eornstein for appellants.
    I. The directors and officers of Paramount are accountable to it for haying caused its funds to be employed in the commission of a crime. (Pollack y. Warner Bros. Pictures, Inc., 266 App. Div. 118; Roth v. Robertson, 64 Mise. 343; Runde y. Bankers Trust Go., 6 N. Y. S. 2d 623; Shea v. Mabry, 69 Tenn. 319; People ex rel. Perkins v. Moss, 187 N. Y. 410; Sagalyn y. Meekins, Packard & Wheat, Inc., 290 Mass. 434; Mannheimer v. Keehn, 41 N. Y. S. 2d 542; London Trust Co. v. Mackenzie, 62 L. J. Ch. 870; Gilbert v. Finch, 173 N. Y. 455; Lydia E. Pinkham Medicine Go. y. Gove, 303 Mass. 1.) II. The giving of Paramount’s funds to Bioff and Browne constituted the commission of a crime. (Penal Law, § 380; Matter of Raplee, 257 App. Div. 408, 282 N. Y. 605; Norton v. Woodruff, 2 N. Y. 153; People v. Clougher, 246 N. Y. 106; People v. Jackson, 191 N. Y. 293.)

      Louis Gonnick and Albert G. Bickford for Paramount Pictures, Inc., respondent.

      Louis Nizer and Walter S. Beck for Austin C. Keough and others, respondents.
    I. The payments to Bioff and Browne were extorted and therefore do not constitute a violation of section 380 of the Penal Law. (Van Dyke v. Wood, 60 App. Div. 208; Adams v. Irving National Bank, 116 N. Y. 606; Barry v. Equitable Life Assurance Society, 59 N. Y. 587; People v. Weinseimer, 117 App. Div. 603,190 N. Y. 537; People v. Hughes, 137 N. Y. 29; People v. Barondess, 133 N. Y. 649; People v. Sheridan, 186 App. Div. 211; L. 8. & M. S. By. Go. v. Roach et al., 80 N. Y. 339; People v. Feld, 262 App. Div. 909.) II. Payments to Bioff were made in good faith for the benefit of Paramount and represent a reasonable exercise of the judgment and discretion of respondent Keough as officer and director of Paramount. The finding to this effect is conclusive upon appellants. (Richard v. American Union Bank, 253 N. Y. 166; Matter of Lathers, 137 Mise. 222; Matter of Hunter, 151 P. 904.) III. Respondent Keough acted with reasonable prudence and for the benefit of the company. If the extortionate demand had not been paid, and Bioff’s threat effectuated, the corporation would have suffered a loss of approximately $2,860,000 per week. (Mans on v. Curtis, 223 N. Y. 313; Blaustein v. Pan American Petroleum & Transport Co., 174 Mise. 601, 263 App. Div. 97; Rous v. Carlisle, 261 App. Div. 432; Litwin v. Allen, 25 N. Y. S. 2d 667; Levine v. Behn, 174 Mise. 988, 262 App. Div. 729.) IV. The payments to within the scope of Paramount’s corporate powers. (Cause v. Commonwealth Trust Co., 196 N. Y. 134; Steinway v. Steinway & Sons, 17 Mise. 43; Armstrong Corle Co. v. H. Á. Melclnm Co., 285 P. 58; State ex rel. Sorenson v. Chicago etc. Railroad, 112 Nebr. 248; 45 Harvard Law Review, p. 1158; Matter of Heim’s Estate, 3 N. Y. S. 2d 134; Burden v. Burden, 159 N. Y. 287; Clarice v. American Press Association, 145 Mise. 370; Levine v. Behn, 174 Mise. 988, 262 App. Div. 729.) V. Assuming that the payments were technically ultra vires, respondents are not liable since they acted honestly and for the benefit of Paramount. (Litwin v. Allen, 25 N. Y. S. 2d 667; Hodges v. New England Screw Co., 1 R. I. 312; Smith v. Sherman, 113 Iowa 601; Bailey v. Babcock, 241 F. 501.)

      Stephen Callaghan, Edward Lazansky and Thomas A. Gaff-ney for Neil P. Agnew and others, respondents.
    I. The payments made by defendant Keough on behalf of Paramount Pictures, Inc., were necessarily and properly made in the best interests of the corporation and its stockholders; and no liability on the part of the defendants-respondents herein exists by reason thereof. (People v. Barondess, 133 N. Y. 649; People v. Weinseimer, 117 App. Div. 603, 190 N. Y. 537; Schindler v. Royal insurance Co., 258 N. Y. 310; People v. Feld, 262 App. Div. 909.)

      Lester Kissel for Percy H. Johnston, respondent.

      Francis S. Bensel and W. Frederick Knecht for William S. Gray, Jr., respondent.

      Bruce Bromley and G. S. Collins for Henry R. Luce, respondent.
   Per Curiam.

This stockholders ’ derivative action was brought in behalf of Paramount Pictures, Inc., to compel its officers and directors to repay to its treasury sums they had paid therefrom to labor union officials. Plaintiffs invoke the following provision of Penal Law, section 380: ££ A person who gives or offers to give any money or other thing of value to any duly appointed representative of a labor organization with intent to influence him in respect to any of his acts, decisions, or other duties as such representative, or to induce him to prevent or cause a strike by the employees of any person or corporation, is guilty of a misdemeanor ⅞ #

Upon findings made and affirmed the case is this: The payments in question were coerced by threats of the payees that in the contrary event they would call a strike of the employees of Paramount Pictures, Inc.; the threatened strike would have been unlawful and was calculated to destroy the nation-wide business of the corporation. Special Term said: ££ There is not the slightest evidence that this duly appointed representative of a labor organization was or even pretended to be under any legal duty to cause a strike. He did not ask for pay to influence him in the performance of any duty, real or pretended. He simply threatened to do unlawful injury to Paramount, and other similar companies, by calling a strike or strikes he was under no duty to call, and the only part his position as a representative of a labor organization played in the matter was that it constituted such a source of power as to give meaning to his threat and thereby induce consent to the giving of the money he demanded. ’ ’

In the judgment of the courts below, the payments thus procured were not embraced by section 380 of the Penal Law. We think this ruling was right. Such a threat is a felony (Penal Law, §§ 851, 852) and such a payment is deemed to be so far involuntary as to raise an obligation to make restitution thereof. (See, Woodward, The Law of Quasi Contracts, § 218; 79 A. L. E. 655, 656.) In People v. Shakun (251 N. Y. 107) we said: ££ It is well settled that a criminal statute should narrowly be construed; that acts otherwise innocent and lawful, do not become crimes, unless there is a clear and positive expression of the legislative intent to make them criminal ” (p. 113. See, too, People v. Benc, 288 N. Y. 318, 323; People v. Fein, 292 N. Y. 10, 14). In that view, we are not ready to impute to section 380 of the Penal Law the meaning that one who is victimized by an extortion of the kind in question should on that account suffer loss of his liberty or property.

The judgment should be affirmed, with costs.

Ch. J., LoughraN, Lewis, Conway and DesmoNd, JJ., concur; Rippey and Thacher, JJ., taking no part.

Judgment affirmed.


author: Desmond, J.

text:
    Niagara Falls Power Company, Respondent, v. John White et al., Constituting the Water Power and Control Commission of the State of New York, et al., Appellants.
    Argued April 12, 1944;
    decided May 25, 1944.

      Nathaniel L. Goldstein, Attorney-General (Orrin G. Judd and Ruth Kessler Toch of counsel), for appellants.
    I. Plaintiff did not follow the proper procedure for determining the constitutionality of chapter 46 of the Laws of 1943, and therefore the Supreme Court did not have jurisdiction of the subject matter of the complaint. Special Term properly exercised its discretion in holding that the complaint did not state a case for declaratory judgment. (Reed v. Littleton, 275 N. Y. 150; James v. Alderton Doch Yards, 256 N. Y. 298; Somberg v. Somberg, 263 N. Y. 1; Newburger v. Lubell, 257 N. Y. 383; Woollard v. Schaffer Stores Go., 272 N. Y. 304; Brown v. Equitable Life Assur. Society of TJ. S., 290 N. Y. 818; Colson Y. Pelgram, 259 N. Y. 370; General Accident Fire and Life Assurance Corp. y. Becher, 252 App. Div. 556; 79 Delancey Corp. v. Meridian Folding Corp., 286 N. Y. 354; Rockland Light & Power Co. v. City of New York, 289 N. Y. 45; International Mutoscope Reel Co. v. Valentine, 271 N. Y. 622; Guide Escort Service, Inc., v. Moss, 176 Mise. 66, 260 App. Div. 920, 285 N. Y. 857.) II. The complaint does not state a cause of action for an injunction. (Cruickshank v. Bidwell, 176 U. S. 73; California v. Latimer, 305 U. S. 251; T. & B. R. R. Co. v. B. F. T. & W. By Co. et al., 86 N. Y. 107; Brass v. Rathbone, 153 N. Y. 435; Allerton v. Belden, 49 N. Y. 373; Myers v. Bethlehem Corp., 303 U. S. 41; Petroleum Co. v. Public Service Comm., 304 U. S. 209; Staten Island Edison Corp. v. Maltbie, 267 App. Div. 72; New York State Electric & Gas Corp. v. Maltbie, 266 N. Y. 521; Davis et al. v. American Society, etc., et al., 75 N. Y. 362.) III. The complaint does not state a cause of action giving the right to sue the State. (Saranac L. & T. Co. v. Roberts, 195 N. Y. 303; Breen v. Mortgage Commission, 285 N. Y. 425; Water Power & Control Comm. v. Niagara Falls P. Co., 289 N. Y. 353; Pauchogue Land Corp. v. State Park Com., 243 N. Y. 15; Rolston y. Missouri Fund

      Gom’rs., 120 U. S. .390; Adler, Inc., v. Noyes, 285 N. Y. 34; Miller Supply Go. v. State Board of Control, 72 W. Va. 524.) IV. The complaint cannot be sustained as a suit under article 15 of the Eeal Property Law and jurisdiction • over the State acquired thereby.- (Niagara Falls P. Go. v. Water P. & G. Comm., 267 N. Y. 265; Water Power & Control Comm. v. Niagara Falls P. Go., 289 N. Y. 353; Breen v. Mortgage Commission, 285 N. Y. 425; Rubin, v. Bernstein, 133 Mise. 95.)

      Joseph M. Proshauer, Randall J. Le Boeuf, Jr., Warren Tubbs, Lauman Martin and J. Alvin Van Bergh for respondent.
    I.' The action for an injunction and a declaration of rights was an appropriate method of determining the constitutionality of chapter 46 of the Laws of 1943. (Nashville, G. & St. L. Ry. v. Wallace, 288 U. S. 249; So. Bell T. & T. Go. v. City of Mobile, 162 F. 523, 174 F. 1020; Phenix City v. So. Bell T. & T. Go., 33 F. Supp. 283; Faulkner v. City of Keene, 85 N. H. 147; Buder v. First Nat. Bank, 16 F. 2d 990, 274 U. S. 743; Schwarts v. Essex County Board of Taxation, 129 N. J. L. 129; Aerated Products Go. v. Godfrey, 290 N. Y. 92; Richfield Oil Gorp. v. City of Syracuse, 287 N. Y. 234; German Masonic Temple Assn. v. City of N. Y., 279 Y. 452; Rockland Light & Power Go. v. City of New York, 289 N. Y. 45; Bank of Yorktown v. Boland, 280 N. Y. 673; City of New York v. Maltbie, 274 N. Y. 90; Elm-hurst Fire Go. v. City of New York, 213 N. Y. 87; Euclid v. Ambler Go., 272 U. S. 365; Garter v. Garter Goal Go., 298 IT. S. 238; City Bank Go. v. Schnader, 291 U. S. 24.) II. The action may he maintained against the State of New York as an action to compel the determination of a claim to real property under article 15 of the Eeal Property Law. (Water Power & Control Comm. v. Niagara Falls P. Go., 289 N. Y. 353; Pauchogue Land Gorp. v. State Park Comm., 243 N. Y. 15; Town of Ohio v. People, 264 App. Div. 220; Tracy Development Go. v. Becker, 212 N. Y. 488; Hydraulic Race Company y. Greene, 230 App. Div. 274, 257 N. Y. 540; International Paper Go. y. ü. S., 282 U. S. 399.)
   Desmond, J.

Plaintiff hy this suit seeks to obtain a judicial declaration of the unconstitutionality of chapter 46 of the Laws of 1943. That chapter added a new section (612) to the Conservation Law and amended sections 614, 634 and 639 thereof. These statutory changes were intended to achieve the State’s purpose of charging, fixing and collecting from plaintiff, beginning July 1,1943, an ‘1 equitable rental * * * for the diversion of water from the Niagara River to the extent of a daily diversion at the rate of fifteen thousand one hundred cubic feet per second ”• (§ 614). In 1942 we had held (Water Power & Control Comm. v. Niagara Falls P. Co., 289 N. Y. 353) that the Conservation Law, as it then this plaintiff from its licensing requirements. Plaintiff asserts, in its complaint in this suit, that it is the owner of the right to divert the water, without any obligation to pay rent, and that the charging, fixing or collecting by the .State of such a rental, under the 1943 amendments, would deprive it of its property without due process of law, in violation of the Federal and State Constitutions. Those questions of constitutionality and of the nature or extent of plaintiff’s alleged rights are not before us at this stage of this litigation and nothing said herein is to be taken as indicating any view of this Court as to those matters. Special Term granted defendants’ motion (under Civil Practice Rule 106) to dismiss the complaint for lack of jurisdiction of the subject matter and of the persons of defendants. The Appellate Division reversed, denied the motion, granted leave to appeal to this court, and certified to us questions as to the jurisdiction of the Supreme Court over the subject matter of the complaint, as to its jurisdiction over the person of the State of New York, and as to whether the complaint constitute [s] the proper procedure for determining the constitutionality of Laws of 1943, chapter 46 ”. The question of sufficiency of the complaint was not, speaking most strictly, covered by defendants’ notice of motion to dismiss for lack of jurisdiction of subject matter and person, but both courts below have, apparently, passed on the sufficiency of the pleading as well as the jurisdictional questions. That being so, and since the questions are most intimately connected, we answer the three questions as certified to us.

Since we are not passing on the intrinsic rights and wrongs of the controversy but on jurisdictional and procedural questions only, we limit ourselves to a scant summary of the lengthy complaint. Plaintiff sets forth that it owns and is entitled to the possession of a “ corporeal hereditament ” to take for power purposes, from the waters of the Niagara River above Niagara Palls, the 15,100 cubic feet of water per second (and more water not here involved) and that its rights are based on riparian ownership and on grants and patents from, and statutes of, the State of New York. Those rights, says the complaint, are put in jeopardy by the aforementioned chapter 46 of the Laws of 1943 under which the State has, in terms, “ charged ” a rental for this 15,100 c.f.s. diversion, and pursuant to which the defendant State Water Power and Control Commission intends to, and has begun to, conduct hearings looking to the fixation of an u equitable rent ”. After stating other matters of alleged fact, the complaint asserts that plaintiff suffer irreparable injury unless the court promptly “ declare the rights of plaintiff with respect to continued diversion of such waters of the Niagara River and enjoin defendants from proceeding to fix and determine the aforesaid rental charge.” The relief asked is an injunction, a declaration of the unconstitutionality of the 1943 amendments, and such other declarations as may be thought fit and proper. Special Term agreed with plaintiff that this suit was brought under two theories, i e., for a declaratory judgment, and to compel the determination of a claim to real property under article 15 of the Real Property Law. The declaratory judgment cause of action could not be sustained, held Special Term: first, because the State, a necessary party to any such suit, had not given its consent to be sued; and, second, because, in view of other complete remedies available to plaintiff and the lack of any showing of imminent danger or irreparable injury, no necessity appeared for a resort to the declaratory judgment procedure. The other “ adequate and complete remedy ” said by Special Term to be open to plaintiff’s use, is by way of defense to a suit by the State for the rent, when fixed; the people the state may sue for and collect in behalf of the state such rental as so fixed and determined ” (Conservation Law, § 614 as amd. in 1943). Such a suit by the People is, it seems, the only method of enforcing collection of the rent. The Attorney-General points to what he considers to be another court procedure to which plaintiff may resort, that being a review ‘ ‘ upon the facts upon certiorari to the supreme court ’ ’ of any Commission order fixing a rental (Conservation Law, §'620, not part of the 1943 amendments).

The Appellate Division, reversing* the dismissal order, treated the complaint as being “ plenary action in equity ’ ’ against a public officer, which, said that court, is the classic method of testing the constitutionality of the statute under which he purports to act The only adequate remedy available to appellant [plaintiff] ” wrote Justice HeeeerNAN for a unanimous court, ‘ is that which it has chosen ’ ’. (267 App. Div. 241.) The Appellate Division expressed itself as not being much impressed ” by the argument that plaintiff must await the Commission’s fixation of the rent, then resist an action by the State to collect that rent. As to the State’s denial of any right to bring such a suit as this against it, the Appellate Division held that the complaint contained, implicitly, allegations that the title to real property is involved and held that, accordingly, the State could be joined as a party (the State has by section 508 — formerly 512 — of the Deal Property Law, expressly consented to be sued in actions brought under article 15 of that Law for the determination of claims to real property).

The draftsman of this pleading clearly intended to state at least a cause of action for a declaratory judgment as to the constitutionality of the statute, with a demand for incidental relief by way of injunction. We would have a different problem on our hands if we had to decide whether the situation disclosed by this complaint is inherently such as makes appropriate the use of such a theory of action. We do not come to that question, however. Clearly this lawsuit is one against the State of New York, insofar as that entity itself is made a party and in its impact on defendant Water Power and Control Commission and defendants, Commissioners. There is no showing here of any form of consent by the State to be .sued for such a declaratory judgment and so the court has no jurisdiction of the subject matter. (Kiersted v. The People of the State of New York, 1 Abb. Pr. 385.) As to the State officers named as defendants and as to the Commission itself, they are not here charged with any present or threatened trespass nor any direct physical interference with plaintiff’s enjoyment of what it claims to be its rights. If the complaint contained such charges against them, they could, perhaps, be held individually to account in such an action as this. (Pauchogue Land Corp. v. State Park Comm., 243 N. Y. 15, 28; Saratoga State Waters Corp. v. Pratt, 227 N. Y. 429, 447.) But the Commissioners and the Commission are sned here only because they are going ahead with the hearings mandated by section 614 of the Conservation Law, to determine the amount of the rental. The gravamen of the complaint is plaintiff’s contention that it, and not the State of New York, has a proprietary right to divert the waters. In such a suit, whether it be instituted against the State or its officers or against both officers and State, the State is the real party in interest and the consent of the State to be sued is required. (Sanders v. Saxton, 182 N. Y. 477; Saranac L. & T. Co. v. Roberts, 195 N. Y. 303, see Adler, Inc., v. Noyes, 285 N. Y. 34.) Section 402 of the Conservation Law, empowering the Commission “ to defend such actions, suits or proceedings as may arise through the performance of any of the duties or functions imposed upon it ” may not be construed as a waiver by the State of its sovereign-immunity, under the rule requiring strict construction of statutes in derogation of such (Breen v. Mortgage Commission, 285 N. Y. 425, 431.) We do not, of course, mean that no suit for a declaratory judgment may ever be maintained against a State officer or agency. (See New York Operators v. State Liquor Authority, 285 N. Y. 272.) We do not stop to inquire whether an otherwise permissible suit for a declaratory judgment may not, under some circumstances, be maintained against the State itself. (See Burnham v. Bennett, 259 N. Y. 655; Hydraulic Race Co. v. Green, 257 N. Y. 540.) We do not pass on the correctness of the reasoning or the result in Town of Ohio v. People (264 App. Div. 220). Taking as true the complaint’s statements, we find this suit to be, like Tracy Development Co. v. Becker (212 N. Y. 488) one to define and settle, as between a private suitor and the State, conflicting claims to water rights. To such a litigation the State is surely a necessary party, although we were not in a position definitely so to hold in Water Power Comm. v. Niagara Falls P. Co. (supra). It follows that this complaint discloses a lack of jurisdiction of the subject matter, unless the State has somewhere given specific consent so to be sued.

This brings us to article 15 of the Real Property Law and to the question of whether there may fairly be found in this pleading the allegations required for an 15 suit for 1 ‘ the determination of a claim to real property.” If this be snch a suit, then plaintiff is, in court against the State at least, for the State, as aforesaid, has surrendered its immunity as against such suits. (Real Property Law, § 508, added in 1925 as § 512.) It is no concern of ours whether the pleader had article 15 in mind when he drew the complaint. The opinions in both courts below show that plaintiff advanced this theory as soon as the complaint was challenged. Nor is it of importance that plaintiff has failed to use the language of article 15 or, indeed, to refer to that article. When a cause of action is authorized by such a public statute, the complaint is good if it substantially shows forth the real essentials necessary for a recovery. (McHarg v. Eastman, 35 How. Pr. 205; see Condon v. Associated Hospital Service, 287 N. Y. 411, 414.) What is essential under article 15? First, the suitor must set forth a claim to an estate or interest in real property ” (Real Property Law, § 500). This complaint claims ownership by plaintiff of a corporeal hereditament consisting of the right to divert and use the water. We think that, for pleading purposes, is a claim to an estate or interest in real propery (Tracy Development Co. v. Becker, supra, Angelí on Water Courses, §§ 5, 141; General Construction Law, § 40; Real Property Law, § 2 —the reference in section 2 of the Real Property Law to the first 8 articles of that Law is of no significance here). We think this complaint, fairly read, contains all the statements required by section 502 of the Real Property Law, so far as applicable to this situation, including statements to the effect that “ the defendant claims, or ⅜ * ⅜ might claim an estate or interest in the real property, adverse to that of the plaintiff Plaintiff’s demand for judgment (Real Property Law, § 502, subd. 2) probably asks for more than the court could ever give it under section 506 but asking for too much does not spoil a complaint; the trial court takes cares of that. (See Jackson v. Jackson, 290 N. Y. 512, 516, 517.) We conclude that a cause of action against the State, under article 15, is adequately described in this complaint. The right to sue the Water Power Commission and its members, on this theory, is not so clear. Obviously the Commissioners do not claim for themselves “ an estate or interest in the real property, adverse to that of the plaintiff ” [Real Property Law, § 502, subd. 1, par. (b)]. However, they are the State’s chosen agents for the assertion of such a claim. The complaint says that, while the State has no proprietory interest as against plaintiff in the flow of water diverted by plaintiff for power purposes, defendants claim the power to fix a rental therefor. The requirements for pleading a defendant’s position in a suit to determine a claim to real property have never been very exacting. (See Dime Savings Bank v. Butler, 167 App. Div. 257, affd. 215 N. Y. 708). In view of this and of the power given to the Commission by section 402 of the Conservation Law, to defend suits arising out of the performance of its duties, the Water Power and Control Commission and members are proper parties here.

Completing our analysis of the complaint, we hold that no case is shown for an injunction. There are conclusory statements of imminent and irreparable injury but the facts alleged do not show such a they probably negative it. (California v. Latimer, 305 U. S. 255.)

We notice, since it bears on jurisdiction, a matter that is not argued in the briefs. On or about July 8, 1943, and about a week after the service of the summons and complaint, plaintiff moved, on an affidavit, for a temporary injunction. The Attorney-General served an opposing affidavit, sworn to on July 20, 1943. Argument could be made that such an entrance into the suit by the Attorney-General, without any statement that he was appearing specially only, amounted to a general appearance and a waiver of any immunity of the State. (See Porto Rico v. Ramos, 232 U. S. 627, but compare Seitz v. Messerschmitt, 117 App. Div. 401, affd. 188 N. Y. 587.) The record here shows, however, that the Attorney-General, although not appearing specially, did in that same affidavit notify the court that the State had not consented to be made a defendant. Further, it appears from the record that this affidavit opposing the motion for temporary injunction was served at about the same time as the State’s notice of motion to dismiss the complaint on jurisdictional grounds. No waiver of immunity can fairly be spelled out of such activities of the State’s law officers.

The order should be affirmed, with costs, and the certified questions answered in the affirmative.

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

Order affirmed, etc.


author: LotjgheaN, J.

text:
    William C. Mason, Respondent, v. Electrol, Incorporated, Appellant.
    Argued April 3, 1944;
    decided May 25, 1944.

      N. Le Van Haver for appellant.
    All rights of both parties under the contract were terminated under Paragraph “ Seventh ”, not merely defendant’s right to further exploit the patents. {Cohen v. Bass, Inc., 246 N. Y. 270; Bauman & Co. v. Manwit Corporation, 213 App. Div. 300; Brooklyn City B. B. Co. v. Kings Co. Trust Co., 214 App. Div. 506, 242 N. Y. 531; Hurd v. Kelly, 78 N. Y. 588; Manvel v. Holdredge, 45 N. Y. 151; Wing v. Ansonia Clock Co., 102 N. Y. 531; Wolkind v. Berman, 232 App. Div. 47; Graf v. Hope Building Corp., 254 N. Y. 1; Carroll v. Title Guarantee & Trust Co., 131 App. Div. 221; Walton Water Co. v. Village of Walton, 238 N. Y. 46; Zimmerman v. B. & H. Chemical Co., 211 App. Div. 321, 240 N. Y. 501; Churchill Inc., v. Columbia B. System, Inc., 142 Mise. 210, 236 App. Div. 624.) II. The second cause of action is merely to recover minimum royalties under the contract and is not an action to recover damages for breach thereof, hut neither would survive a termination under paragraph “ Seventh (Starin v. Fonda, 107 App. Div. 539; Hurd v. Kelly, 78 N. Y. 588; Manvel v. Holdredge, 45 N. Y. 151; Wing v. Ansonia Clock Co., 102 N. Y. 531; Denise v. Swett, 142 N. Y. 602; Model Brassiere Co., Inc., v. Maiden Form B. Co., Inc., 139 Mise. 694; Schalkenbach v. National Ventilating Co., 129 App. Div. 389.)

      Jay Leo Bothschild and William A. Glenn for respondent.
    I. The license agreement was to continue for as long as the patent structure underlying it. (Koppe v. Burnstingle, 29 P. 2d 923; Fitch v. Shubert, 20 P. Supp. 314; St. Paul Plow Works v. Starling, 140 U. S. 184.) II. Paragraph “ Seventh ” of the license agreement did not, either in terms or effect, contemplate a mutual rescission of all the obligations and liabilities incident to the license agreement, including defendant’s liability for damages for breach of its obligation to pay royalties for the life of the patent structure. The termination contemplated, in the event of defendant’s default, was only of plaintiff’s obligation to afford, and defendant’s privilege to exploit, the licenses under the patent structure. Paragraph “ Seventh ” was intended to wort a forfeiture of defendant’s rights to exploit plaintiff’s patents; not to forfeit plaintiff’s right to damages for defendant’s breach. The termination was for plaintiff’s benefit, not defendant’s. (Meyer v. Brenzinger, 22 Mise. 712; American Belinting Go. v. Pomeraning, 274 P. 212; Matter of Robinson, 203 N. Y. 380; Samuels v. Quartin, 108 P. 2d 789; United States v. Baumgarten, 249 P. 724; Insurance Go. v. Butcher, 95 IT. S. 269; Nicoll v. Sands et al., 131 N. Y. 19; Seymour v. Warren, 179 N. Y. 1; Miller v. McGlintock Go., 210 Minn. 152; Hard v. Seeley, 47 Barb. 428; Booth et al. v. Cleveland Mill Go., 14, N. Y. 15; Born v. Schrenkeisen, 110 N. Y. 55; Stewart v. Griffith, 217 U. S. 323; Western Union Tel. Go. v. Brown, 253 IT. S. 101; Cummings v. Standard Harrow Go., 55 Mise. 601, 124 App. Div. 915, 195 N. Y. 513.) III. Notwithstanding termination of the license structure — indeed, even if there had been termination of the entire agreement, for Electrol’s fault, plaintiff is entitled to recover his damages. (Anvil Mining Go. v. Humble, 153 IT. S. 540; Atwater & Go. v. Panama R. R. Go., 246 N. Y. 519.) IV. In any event, since defendant immediately after assertion of its right to forfeit the contract, by reason of its own default, paid the sum of $500, and now admits its liability for another $500 it waived any right of forfeiture which it may have had. (Titus v. Glens Falls Insurance Go., 81 N. Y. 410.) V. An interpretation of an agreement should be avoided, which makes it nugatory, or which results in such a harsh construction that it puts one party at the mercy of another. (Morris v. Morton Coal Go., 291 N. Y. 582; People ex rel. Wells & Newton Go. v. Craig, 232 N. Y. 125; Bushey & Sons v. American Ins. Co.,'237 N. Y. 24; Gillet v. Bank of America, 160 N. Y. 549; Aldrich v. New York Life Ins. Go., 235 N. Y. 214; Schoellkopf v. Coatsworth, 166 N. T. 77; Segar v. King Features Syndicate, Inc., 262 App. Div. 221; Goletti v. Knox Hat Co., Inc., 252 N. Y. 468.) VI. Evidence of the surrounding circumstances may explain and resolve a patent ambiguity, or create, develop and resolve a latent one. Such evidence presents a question of fact, and is admissible to clarify the intended meaning of the agreement in suit. Accordingly, the proper construction of the agreement cannot, in case of doubt thus apparent, or made apparent, be determined, as a matter of law, on the pleadings alone. (Utica City Nat. Bank v. Gunn, 222 N. Y. 204; Becker v. Frasse & Co., 255 N. Y. 10; Atwater & Co. v. Panama R. R. Co., 246 N. Y. 519; Lamb v. Norcross Brothers Co., 208 N. Y. 427; Rassmussen v. New York Life Ins. Co., 267 N. Y. 129.)
   LotjgheaN, J.

as the owner of certain applications for letters patent upon liquid fuel burning apparatus, entered into a license contract with Eiectrol, Incorporated, as licensee, to take effect as of January 1, 1940. The presently material parts thereof are the following:

“ First: Eiectrol agrees to pay Mason the sum of Two thousand four hundred dollars ($2400) per year during the life of this License Agreement ⅜ ⅜ *. Eiectrol further agrees to pay to Mason * * * royalties at the rates set forth in the table herein * * * on the tenth day of each month following the month during which the royalties are earned by way of shipments of burners. * * *

‘ ‘ The parties hereto are mindful of the fact that this License Agreement is being entered into before patents have actually been granted on the applications concerned and * * * that a division of its rights among competitors on a sub-licensee basis might facilitate the building and maintenance of stronger patent protection and promote more sales than could otherwise be effected. Eiectrol, therefore, agrees to undertake the creation of a so-called ‘ Mason Patent Estate ’ # * * and Eiectrol is expressly authorized and empowered to transfer to said Estate the right to grant (in its sole discretion) nonexclusive licenses to others, upon such terms and conditions as said Estate shall determine to be advisable and proper. Mason shall be entitled to receive through said Estate royalties from all sub-licensees at the same rates ⅜ ⅝ #

“Second: Mason hereby grants to Electrol, its successors and assigns, the sole and exclusive right, license and privilege to make, use and sell * * # feel burners embodying the inventions * * ⅜ for the fell term of the latest of said Letters Patent issued or to issue on said applications * * *, unless this License Agreement be terminated earlier, as hereinafter provided * * *.

“ Sixth: In the event Electrol or the ‘ Mason Patent Estate ’ shall to pay any sum or sums provided as royalties under the provisions hereof * * *, Mason may terminate the license granted by this License Agreement to Electrol and by the ‘ Mason Patent Estate ’ to its sub-licensees by giving Elec-trol thirty (30) days’ notice in writing of such termination; but * # * should Electrol and/or the ‘ Mason Patent Estate ’ within said thirty (30) days make full and complete payment of all sums due, such termination shall not take effect ⅝ * *.

“ Seventh: All rights, privileges and benefits of the respective parties under this License Agreement and the license hereby granted to Electrol and all sub-licenses granted by the ‘ Mason Patent Estate ’ shall be terminated and canceled for all purposes without notice in the event Electrol or the ‘ Mason Patent Estate ’ shall fail to pay to Mason within sixty (60) days after the expiration of any quarterly period of any year after the calendar year 1940 (quarterly periods beginning on the first day of January, April, July and October of each year), the amount of all royalties to which Mason is entitled for such quarterly period in accordance with the provisions of this License Agreement. ’ ’

No royalties were paid to Mason after March, 1941, with the result that he brought this action on April 20, 1942, for breach of the contract. As a defense Electrol set up its own nonpayment of royalties in the period from April 1, 1941, to June 1, 1941, on the theory that this sixty-day omission had put an end to the contract on both sides by operation of the above words of paragraph Seventh. A motion by Electrol for judgment on the pleadings followed and was denied on Mason’s argument that the contract imposed upon Electrol an ‘ ‘ obligation to pay royalties for the life of .the patent structure.” Bv leave of the Appellate Division, Electrol has now brought the case here upon the following question certified: “ Should defendant’s motion for judgment on the pleadings have been granted? ”

The first thing to be noticed is that the contract is silent in respect of any specific date for its termination.

Special Term was of opinion that Electrol at all events was estopped from asserting its own default as a ground for extin-guishment of its obligation. The difficulty we have with this solution is that thereby, as it seems to us, an absolute quality in undertaking is presumed from the start.

It is in order next to notice what Mason’s counsel now have in mind when they speak of ‘ ‘ the patent structure. ’ ’ They say: “ Paragraph Seventh ’ clearly contemplates cancellation of such rights, privileges and granted to said ‘ respective parties ’ to the patent structure, i. e., Electrol, Mason Patent Estate and its sub-licenses — and nothing else.” (The emphasis is first-hand.) But as appears by paragraph First, Mason Patent Estate had not even been organized when the contract went into effect. Mason’s argument thus imports that the phrase ‘ respective parties ’ — as it occurs in paragraph Seventh— designates not the parties to the contract, but only Electrol and one or more persons who were nonexistent at the time the contract was signed by Electrol and by Mason. This interpretation was accepted by a majority of the Appellate Division. They said: “ The license agreement was to continue as long as the patent structure underlying it. Paragraph ‘ Seventh ’ was intended to work a forfeiture of defendant’s rights to exploit plaintiff’s patents; not to forfeit plaintiff’s right to damages for its breach.” (267 App. Div. 216, 217.)

We cannot go along with so valiant a construction. There is nothing obscure or absurd in a stipulation that all rights of the respective parties under an agreement shall be terminated for all purposes, after one of the parties to the contract shall have failed in performance for a stated period. Consequently the express provision to that effect in paragraph Seventh ought not to be artificially altered by us, unless its natural meaning is unworthy of the whole of the language the parties have used. Looking through this contract from that standpoint, we do not see how the words of paragraph Seventh can normally bear the implied meaning that Mason imputes to them; and, on the other hand, we believe the regular significance of that paragraph disproves the liability charged to Electrol by this canse of action.

The orders should be reversed and the motion granted, with costs to the appellant in all courts. The question certified should be answered in the affirmative.

LehmaN, Ch. J., Lewis, CoNway, and Thachee, JJ., concur; Rippey, J., taking no part.

Orders reversed, etc.