text:
    Eugene Kade, Appellant, v. Sanitary Fireproofing and Contracting Company, Respondent.
    (Argued May 11, 1931;
    decided May 19, 1931.)

      Earl H. Gale and Julian A. Bonan for motion.

      Frank H. Hiscock, Carroll B. Low and Henry Hoelljes opposed.
   Per Curiam.

Plaintiff brought this action as one partner of a firm consisting of himself and William Geraerdts against the corporation defendant and Geraerdts to obtain an accounting for the value of the partnership property which plaintiff claims that defendant, aided by Geraerdts, converted to its own use. The existence of the partnership was denied. Geraerdts died and the action was continued against the corporation alone. Final judgment was rendered for $151,969 against the defendant, after an interlocutory judgment adjudging that the partnership existed.

On appeal to the Appellate Division the judgments were reversed and a new trial granted. Findings of fact as to the existence of the partnership were reversed as being against the weight of evidence and based upon incompetent testimony. Then came this provision: It is further ordered and directed that the legal representatives of the estate of William Geraerdts, deceased, be brought in as necessary parties to this action.”

The plaintiff did not desire to bring in the legal representatives of the estate of William Geraerdts, deceased, and took no steps to do so. He moved at Special Term for an order requiring the defendant to apply for final judgment, dismissing the complaint herein “ for failure of the plaintiff to comply with the direction in the order herein of the Appellate Division, Second Judicial Department, dated June 21st, 1929, that the legal representatives of the Estate of William Geraerdts, deceased, be brought in as necessary parties to this action.”

This order was granted and final judgment not on the merits ” was entered in conformity with the order.

An appeal was then taken to this court from such judgment. The notice of appeal says: that the plaintiff-appellant intends to bring up for review on said appeal the said order of the Appellate Division of the Supreme Court, and the judgment of reversal entered thereon in the office of the Clerk of Kings County, on or about December 16,1928, and the order of the Supreme Court, Kings County, dated August 27, 1930, and entered in said Clerk’s office on or about August 28, 1930, which granted the defendant’s motion for an order dismissing the complaint herein, and each and every part of said order and judgment.”

This is the appeal which the respondent moves to dismiss. The motion must be denied. We are not concerned with the part of the order of the Appellate Division granting a new trial. In substance that court ordered the complaint dismissed unless the parties which it held were necessary parties were brought in. It was only after they were brought in that the new trial was to proceed.

Plaintiff has seen fit to have the complaint dismissed rather than bring in the new parties. (Redman v. Verplex Art Co., 237 N. Y. 475, 478.) He is a party aggrieved by the dismissal of his complaint. (Lahens v. Fielden, 3 Abb. Ct. of App. Dec. 1.) The judgment appealed from is final. On the reversal of the interlocutory judgment in the Appellate Division and the dismissal of the complaint at Special Term, he may appeal directly to this court. (Civ. Prac. Act, § 590.) On such appeal the question of law as to necessary parties may alone be considered. If the decision here is favorable to appellant his complaint should not have been dismissed. The question of new trial may await further action in this case, as it is not now before us.

Motion denied, with ten dollars costs and necessary printing disbursements.


source: Caselaw Access Project

author: Cardozo, Ch. J.

license: Public Domain

text:
    In the Matter of Edge Ho Holding Corporation et al., Respondents. James A. Higgins, as Commissioner of Accounts of the City of New York, Appellant.

      (Argued May 11, 1931;
    decided June 2, 1931.)

      Arthur J. W. Hilly, Corporation Counsel {Leonard M. Wallstein, William E. C. Mayer, J. Joseph Lilly and Ralph M. Frink of counsel), for appellant.
    The Commissioner of Accounts had power to issue the subpoena because the proceeding in which it was issued was an examination of the methods of city departments and the facts which were sought to be ascertained by means of the subpoena were material and relevant to such methods. (Matter of Hirshfield v. Hanley, 228 N. Y. 346; Matter of Hertle, 120 App. Div. 717; 190 N. Y. 531; Matter of Foster, 139 App. Div. 769; Matter of Hirshfield v. Craig, 209 App. Div. 555; 239 N. Y. 98; Matter of Hirshfield v. Cook, 188 App. Div. 843; 227 N. Y. 297; Matter of Johnson, 144 N. Y. 563; Parmenter v. Fitzpatrick, 135 N. Y. 190; Matter of Jennings Street, 207 App. Div. 170; Rathbone v. Ayer, 121 App. Div. 355; Rorke v. Kings Co. El. Co., 22 App. Div. 511; Matter of Public Park, 171 App. Div. 834; Matter of Dept. Public Works, 53 Hun, 280; Matter of Block, Ave. A, 66 Misc. Rep. 488; Matter of Valley Stream, 152 App. Div. 422; Matter of Hamilton Place, 67 Misc. Rep. 191; Matter of Simmons, 132 App. Div. 574; Porter v. International Bridge Co., 137 N. Y. Supp. 214; Muskian v. Reilly, 124 Misc. Rep. 571.) The fact that the Commissioner of Accounts was making such examination at such a time that evidence or information, which he was obtaining, might be useful in a pending litigation, does not oust him of jurisdiction or authorize the vacating of the subpoena. (Sinclair v. United States, 279 U. S. 265; People ex rel. McDonald v. Keeler, 99 N. Y. 463; Matter of Shrig, 181 App. Div. 865; 223 N. Y. 670; Matter of Bunner, 223 App. Div. 832; Matter of Egan, 205 N. Y. 147; Matter of Hirshfield v. Craig, 239 N. Y. 98; Spalding v. Vilas, 161 U. S. 483; Matter of Fuller, 21 Hun, 497; Brown v. Smith, 24 Barb. 419; Conley v. Carney, 126 App. Div. 337; Beardsley v. Kilmer, 238 N. Y. 80.)

      Charles S. Noyes and William S. Pettit for respondents.
    The Commissioner of Accounts has no power under the statute creating Ms office to conduct the examination sought. (Matter of Hirshfield v. Craig, 239 N. Y. 98; Matter of Steiger v. Collins, 213 App. Div. 76; 241 N. Y. 526; Matter of Hirshfield v. Smith, 215 App. Div. 81; Matter of Hertle, 120 App. Div. 717; 190 N. Y. 531; Matter of Foster, 139 App. Div. 769; Matter of Wallstein, 178 App. Div. 140; Matter of Hirshfield v. Hanley, 228 N. Y. 346.) The fact that the Commissioner of Accounts was authorized to examine the methods of the departments specified, did not justify the issuance of the subpoena. (People v. Keeler, 99 N. Y. 463; Matter of Hirshfield v. Craig, 239 N. Y. 98.)
   Cardozo, Ch. J.

The Commissioner of Accounts of the city of New York is empowered by the city charter to make such special examinations of the accounts and methods of the departments and offices of the city and of the counties of New York, Richmond, Queens, Kings and Bronx, as the mayor may from time to time direct, and such other examinations as the said commissioner may deem for the best Mterests of the city, and report to the mayor and the board of aldermen the results thereof. For the purpose of ascertaining facts in connection with these examinations he shall have* full power to compel the attendance of witnesses, to administer oaths and to examine such persons as he may deem necessary ” (Charter of City of New York, § 119; L. 1901, ch. 466, amd. L. 1916, ch. 517, § 1).

In October, 1930, a special assistant corporation counsel was appointed to conduct an investigation into the system of condemnation of real property for city purposes. At the same time the Mayor gave instructions to the Commissioner of Accounts to co-operate with the special assistant so appointed, Mr. Leonard M. Wallstein, and to preside at any hearings appropriate to that end.

The Commissioner, in discharge of the duty thus laid upon him, by the Mayor, issued a subpoena directed to the Edge Ho Holding Corporation, its president and its secretary, requiring them to appear for examination and to bring with them “ all contracts, memoranda, records and other documents ” relating to a sale of real property made by the corporation subpoenaed to another corporation in August, 1925. Upon the service of the subpoena, the witnesses applied to the Supreme Court for an order to vacate the process. The moving affidavit, made by their attorney, stated upon information and belief that the documents subpoenaed were not desired in good faith for the purpose of inquiry into the methods of any department of the city government and were not pertinent thereto. They were sought, it was said, in aid of objections then pending undetermined to an award in the Rockaway Public Beach condemnation proceeding, which had gone forward to the stage of a tentative decree (Charter of City of New York, § 1001). The attorney for the witnesses is also the attorney for the claimant, the owner of the award. The special assistant, Mr. Wallstein, representing the city in the general inquiry as to the methods of condemnation, represents it also in its opposition to the tentative decree. The land described in the subpoenaed documents is part of the land condemned, and the sale is one of the links in the claimant’s chain of title. In response to the application to set aside the subpoena the Commissioner of Accounts submitted an answer asserting the good faith of the inquiry and the importance of the information for the attainment of the end in view. The application to vacate was denied by the Supreme Court at Special Term. It was granted by the Appellate Division in a reversal upon the law and the facts. The order being final (Matter of Depue, 185 N. Y. 60, 66), the case is here.

We think an inquiry as to the price paid to former owners for land condemned within a period of time not unreasonably remote is fairly related to an inquiry into the efficiency of the methods by which condemnation proceedings are conducted in the offices of the city government responsible therefor. In such proceedings as in lawsuits generally the courts must rest their determination on the evidence exhibited by counsel. They are helpless, except in rare instances, to speak the word of truth if the facts are not uncovered for them. It results that the efficiency of any system of awards for land condemned depends in no small measure upon the diligence and skill with which the case has been prepared. The inquisitor in the pending investigation has in mind to show that awards have been swollen in excess of the market values, and that this has been done without scrutiny of the cost and without attempt to prove it by witnesses easily available. We cannot say with fairness that such evidence is unrelated to an inquiry into the efficiency of official methods. It is directed to one of the things that an inquisitor, charged with a duty to investigate the existing system of condemnation, would not unnaturally wish to know. He would wish to know whether material information had been withheld or accessible witnesses ignored, whether preparation for trial had been painstaking and thorough or indifferent and lax. If indifference or laxity appeared to be serious or general, the conclusion might be drawn that there was something wrong in the methods of the office where these deficiencies prevailed. The deficiencies might point to the need of administrative reforms, or, if these should seem to be inadequate, to amendments of the statute.

The argument is made that the Commissioner is not at liberty to pursue an inquiry into the efficiency of governmental methods unless those methods have a direct relation to the system of accounts in the office or department subject to his scrutiny. We do not read so narrowly the statutory grant of power. The statute says that he may investigate the accounts and methods of the departments and offices of the city and of the counties embraced within it. This does not mean that both accounts and methods must be involved in every instance. Investigation aimed at either will wake into action the Commissioner’s authority. Nothing to the contrary was determined in Matter of Hirshfield v. Craig (239 N. Y. 98). The inquiry there excluded (p. 114) was aimed at a mere proposal for a contract unrelated to a settled practice, to any method of the office. Indeed it is hard to think of a situation in which incompetence or laxity so general as to amount to proof of method will not also have direct relation to the accounts of the department or office subject to the criticism, since the wages of the assistants are wastefully expended if reasonably efficient service is not rendered in return. We are not unmindful of the fact that this particular subpoena is directed to a single contract, and not to contracts generally. The Commissioner cannot reasonably be expected to prove everything at once. Only in its immediacy is his inquiry directed to a particular transaction as distinguished from a course of dealing. In its ultimate significance it seeks to uncover something typical of a practice or a method. We have held that investigation is not limited to a consideration of the methods actually in vogue. It may go beyond these into a consideration of what the methods ought to be (Matter of Hertle, 120 App. Div. 717; 190 N. Y. 531; Matter of Hirshfield v. Craig, supra, p. 112). The inquiry now proposed is an attempt to probe into the past in the belief that discovery of its evils may bring correction in the future.

The argument is made that the witnesses are not employees of the city nor even claimants for an award, but merely former owners, and that they are exempt from a duty to make disclosure of their own affairs. We have held that the Commissioner’s power to inquire is not limited to witnesses in the service of the city, and that there is no privilege of silence when reticence, if tolerated, would thwart the public good (Matter of Hirshfield v. Hanley, 228 N. Y. 346). Argument is made also that the subject matter of the contract described in the subpoena is the same as the subject matter of a proceeding for condemnation now pending in a court, and that inquiry by a court, though directed to a different end, displaces and supersedes inquiry by an administrative officer as to administrative methods. The law is settled to the contrary (Sinclair v. United States, 279 U. S. 263, 265, 289, 295; People ex rel. McDonald v. Keeler, 99 N. Y. 463, 468).

A final argument is built upon an analysis of motives. Nothing in the record gives fair support for the conclusion that the professed object of the inquiry into administrative methods is merely a cover and a sham. This being so, there is no occasion to consider whether the motives of the Commissioner are subject to judicial review when the subject of the inquiry is within his jurisdiction (as to this, see Matter of Hirshfield v. Craig, supra, p. 110). If the Appellate Division in reversing upon the facts can be supposed to have impugned the good faith of the inquiry, our estimate of the facts is different. The case is before us on the merits, with full power of review on the facts and on the law (Matter of Flagler, 248 N. Y. 415, 420; Civ. Prac. Act, § 589, subd. 2).

The powers devolved by the charter upon the Commissioner of Accounts are of great importance for the efficient administration of the huge machinery of government in the city of New York. They will be rendered to a large extent abortive if his subpoenas are to be quashed in advance of any hearing at the instance of unwilling witnesses upon forecasts of the testimony and nicely balanced arguments as to its probable importance. Very often the bearing of information is not susceptible of intelligent estimate until it is placed in its setting, a tile in the mosaic. Investigation will be paralyzed if arguments as to materiality or relevance, however appropriate at the hearing, are to be transferred upon a doubtfui showing to the stage of a preliminary contest as to the obligation of the writ. Prophecy in such circumstances will step into the place that description and analysis may occupy more safely. Only where the futility of the process to uncover anything legitimate is inevitable or obvious must there be a halt upon the threshold.

The order of the Appellate Division should be reversed and that of the Special Term affirmed with costs in the Appellate Division and in this court.

Pound, Crane, Lehman, Kellogg, O’Brien and Hubbs, JJ., concur.

Ordered accordingly.


author: Crane, J.

text:
    In the Matter of the City of New York, Respondent, Relative to Acquiring Title to Real Property Along the Shore of Jamaica Bay in the Boroughs of Brooklyn and Queens. William Armbruster et al., Appellants.

      (Argued May 11, 1931;
    decided June 2, 1931.)

      Ralph L. Baldwin for William Armbruster et al., appellants.
    Riparian rights acquired by the city of New York for purposes other than in aid of navigation and commerce must be compensated for. (Matter of City of New York [Speedway], 168 N. Y. 134; Sage v. Mayor, 154 N. Y. 61; Matter of City of N. Y. [West 205th St.], 240 N. Y. 68.)

      Charles J. Nehrbas, Hamilton Anderson and William R. Rust for Harry A. Hanbury et al., appellants.
    The improvement undertaken by the city of New York is not of the character permitted under its general right to improve waterways for the benefit of navigation. (Sage v. Mayor, 154 N. Y. 61; Egerer v. New York Central

      R. R. Co., 130 N. Y. 108; Reis v. City of New York, 188 N. Y. 58; Prosser v. Northern Pacific R. R. Co., 152 U. S. 59; Appleby v. City of New York, 271 U. S. 364; Vilias v. Featherson, 94 App. Div. 259; Matter of City of New York, 168 N. Y. 134.)

      Francis P. O’Connor and Edward W. Murphy for John Mocilar et al., appellants.
    The improvement undertaken by the city of New York, particularly as to lands lying north of the marginal street was not in its governmental but in its proprietary capacity. (Matter of City of New York, 168 N. Y. 134; Sage v. Mayor, 154 N. Y. 61; Stuart v. Palmer, 74 N. Y. 183; Hathorn v. National Carbonic Gas Co., 194 N. Y. 326; Matter of Rapid Transit Railroad Commrs., 197 N. Y. 81.)

      Arthur J. W. Hilly, Corporation Counsel (Willard S. Allen, J. Joseph Lilly, Josiah A. Stover and Joseph F. Mulqueen, Jr., of counsel), for respondent.
    Claimants whose property has not been acquired by the city are • entitled to no damages for loss of alleged riparian rights. (Sage v. Mayor, 154 N. Y. 61; Greenleaf Johnson Lumber Co. v. Garrison, 237 U. S. 251; Montgomery v. Portland, 190 U. S. 89; Bergen Beach Land Corp. v. City of New York, 113 Misc. Rep. 491; McCarthy v. Mills, 214 App. Div. 70; Vilias v. Featherston, 94 App. Div. 259; Swindell v. New York & Cuban S. S. Co., 98 Misc. Rep. 350; Interborough R. T. Co. v. City of New York, 172 App. Div. 230; Matter of City of New York [West 205th St.], 211 App. Div. 33; 240 N. Y. 68; Matter of City of New York, 168 N. Y. 134; Lansing v. Smith, 4 Wend. 9; Frazee Milling Co. v. State of New York, 122 Misc. Rep. 545; Thompson v. State of New York, 204 App. Div. 684; Burns Bros. v. City of New York, 178 App. Div. 615; 232 N. Y. 523; Stegmeyer v. State of New York, 117 Misc. Rep. 626; 204 App. Div. 858; Scranton v. Wheeler, 179 U. S. 141; Gibson v. United States, 166 U. S. 269; Marine Ry. & Coal Co. v. United States, 265 Fed. Rep. 437; 257 U. S. 47; Dalton Sons Co. v. City of Oakland, 116 Cal. 463; Holyoke Water Power Co. v. Connecticut River Co., 52 Conn. 570; Transportation Co. v. Chicago, 99 U. S. 635; Winifred Coal Co. v. Central R. R. & Bridge Co., 24 Ohio L. J. 173.)
   Crane, J.

The city of New York by this proceeding instituted in 1924 has acquired title to lands, land under water and riparian rights for the improvement of the waterfront and the establishment of a marginal street or wharf on the northerly shore of Jamaica bay in the boroughs of Brooklyn and Queens. The plan as made and filed by the Commissioner of Docks in 1921 extends this marginal street or wharf for a distance of about seven miles. Along this north shore at Jamaica bay are marshlands and creeks, inlets and waterways. Many of these are closed or to be closed entirely by the establishment of this wharf improvement.

Title to the lands under the water of Jamaica bay was vested in the State of New York as successor to the English crown. By virtue of chapter 568 of the Laws of 1909 the title passed, as hereinafter stated, from the State to the city of New York. Title to all the creeks, harbors and havens and marshes within the limits of the old town of Jamaica by virtue of Colonial patents and by various consolidations vested in the city of New York by the Greater New York Charter (Laws of 1897, eh. 378). All the land under water was at the time of this proceeding owned by the city of New York.

Chapter 568 of the Laws of 1909, entitled “An act to grant to the city of New York certain lands under water-in Jamaica bay and vicinity,” provided:

“ Section 1. To the end that the city of New York may cooperate with the federal government in the creation of a new harbor in and about Jamaica bay, including the making of channels, basins, slips and other necessary adjuncts, through the excavation of the soil or lands under water, and otherwise, intended for the advancement of the commercial interests of the city, state and nation, there is hereby granted for the purposes specified in this act, to the city of New York such right, title and interest as the state of New York may have in and to the land under water in Jamaica bay and Rockaway inlet and the tributaries thereto which he to the northward of latitude forty degrees thirty-three minutes north,. and to the eastward of longitude seventy-three degrees fifty-six minutes west, as now interpreted, excluding, however, all lands under water included within the boundary of Nassau county. This grant shall become operative upon the United States government making its first appropriation for the creation of the new harbor mentioned in this act, or upon the city of New York appropriating and setting aside a sum not less than one million dollars for the same purpose.”

This act was amended by chapter 636 of the Laws of 1925 by adding sections 2-a and 2-b, reading as follows: § 2-a. The commissioners of the land office of the state of New York are hereby authorized and empowered, in their discretion, upon the application of the commissioners of the sinking fund of the city of New York, and upon such terms as may be agreed upon with such commissioners, to grant and convey to the city of New York by proper instrument or instruments in writing, all the right, title and interest of the people of the state of New York, not heretofore granted, in and to so much of the lands under water in Jamaica bay and its tributaries as are situated in-shore of the interior line of the proposed marginal street, wharf or place as laid down on the plan for the improvement of the waterfront of the city of New York on Jamaica bay, determined upon by the commissioner of docks of said city on the seventh day of October, nineteen hundred and twenty-one and adopted by the commissioners of the sinking fund of said city on the fifth day of January, nineteen hundred and twenty-two, and as may be laid down on any amendment to said plan hereinafter duly made, except such of said lands under water as lie within the lines of the proposed basins as laid down on said plan.

§ 2-b. The city of New York, acting by the commissioners of the sinking fund of such city, is hereby authorized and empowered to grant and convey, upon such terms and conditions and for such consideration as they may deem proper, by proper instrument or instruments in writing, under the corporate seal of said city, all the property, right, title and interest that it, the city of New York, now has or may hereafter acquire in and to the lands under water in Jamaica bay and its tributaries described in section two-a hereof and situated within the limits and bounds therein defined.”

All the lands under water, therefore, up to high-water mark involved in this proceeding were owned by the city of New York. The marginal street or wharf as planned is to be of considerable size and extent not only in length, but in width. Seventeen hundred feet is given as the width of the wharf extending along the shore for a distance of about seven miles.

The rights of the city in the wharf or marginal street when constructed are stated in section 819-a of the Greater New York Charter (Laws of 1920, ch. 809), reading:

It shall be lawful for the commissioner of docks, with the approval of the commissioners of the sinking fund to erect and maintain within the lines of and upon any marginal wharf, street or place now constructed or which may hereafter be constructed sheds, warehouses, coal pockets and other buildings and structures devoted to commercial uses in connection with the adjacent piers and bulkheads * * *. With the approval of the commissioners of the sinking fund it shall also be lawful for the commissioner of docks to lease any portion of any such marginal wharf, street or place * * * and to authorize the lessee under any such lease to erect and maintain upon the premises so demised sheds, warehouses, coal pockets or other buildings or structures devoted to commercial uses in connection with the adjacent piers and bulkheads.”

The extent to which this condemned property may be used under the appellation of a marginal street or wharf ” may be gathered from chapter 515 of the Laws of 1930, providing in section 2 as follows:

“ The city of New York is hereby authorized to lease, in the manner provided in the Greater New York Charter, so much of the lands under water, islands, hummocks, hassocks, marshes and meadow lands herein or heretofore granted, as lie within the lines of any marginal street, wharf or place now adopted or which may hereafter be adopted, for the purposes of establishing and creating commercial, industrial and manufacturing plants, adjuncts and facilities necessary thereto.”

Section 3 of this act authorizes the city to use the lands not acquired for marginal wharves for street or park purposes; and section 4 authorizes the city to lease for residential use lands not included within the limits of the marginal wharf.

That part of the condemnation before us at the present time is designated as “ Parcel 10,” and includes that portion of the property to be taken for the marginal street or wharf running west to Spring creek basin. The pierhead and bulkhead lines of this basin, approved by the Secretary of War, May 8,1916, formed the westerly terminus of the marginal street at this point. Spring creek is to be kept open, according to these pierhead lines, extending north at a uniform width past the property sought to be condemned. No question arises in this proceeding as to the right of the city to build this marginal street or wharf 1,700 feet wide running east and west on the northerly shore of Jamaica bay. Whatever upland is taken has been condemned and will be paid for; the land under water belongs to the city of New York. So far as creeks, kills and waterways are crossed and closed by this marginal street the adjoining property owners have suffered no damage. (Black River Improvement Co. v. La Crosse Booming & Transporation Co., 54 Wis. 659.) Whatever riparian rights are interfered with, obstructed or destroyed by this improvement for commerce and navigation, no claim for compensation therefor can be sustained; the riparian rights of the adjoining owners were held subject to this sovereign right of improvement for such a purpose. (Sage v. Mayor, 154 N. Y. 61.)

Another' and a different question arises regarding riparian rights not taken or interfered with by the construction of the marginal street and wharf itself, and due entirely to the act of the city in filling in its land to the north of the street, and to the east of Spring creek basin. Spring creek runs north from Jamaica bay and to the west of the marginal street or wharf. There will be 1,700 feet or more of this marginal street to the east of Spring creek. But as presently existing, Spring creek widens out into what is known as Mill creek north of the marginal street and to a considerable distance to the east along the northerly edge of the marginal street. After the construction of the wharf the property owners within parcel 10 to the north of the wharf will have access from their property to Mill creek or Spring creek. There is a large body of water at this place between the upland and the bulkhead line of Spring creek basin. These property owners have riparian rights in this waterway. They can pass from their upland by boats into Spring creek basin or Mill creek south past the westerly end of the wharf and into Jamaica bay. In other words, the marginal wharf at its westerly end is surrounded on three sides by water. This north side the city intends to fill in up to the bulkhead line of Spring creek, and the question arises whether in so doing the city must pay for the riparian rights destroyed. If it be done in the interest of commerce and navigation as part of the marginal street wharf improvement the upland owners have suffered no damage; if the city has recognized these riparian rights and by this proceeding has condemned them for its own street improvements then it should pay for the rights thus taken. In other words, every improvement by a city along the margin of its waterways is not necessarily by reason of its location in the interest of commerce and navigation. (Matter of City of New York, 168 N. Y. 134.) In connection with the building of a dock or a wharf or a marginal street in the interest of commerce and navigation I take it that the city may also combine other street improvements which will be of a public nature and in the interest of the municipality but which may not necessarily be an exercise of the sovereign reserve power over waterways. In' other words, if a city determines to fill in land owned by it between the upland and bulkhead or pier line and create city streets and sell the property between the streets for private purposes, it would not necessarily be an improvement in the interests of commerce and navigation. Under such circumstances the city should pay for taking of the upland owners’ riparian rights. Such seems to be the intimation of this court in Sage v. Mayor (supra, p. 76), wherein it was said: There is no evidence in this case that the corporation intended to use any part of the lands in question for its private advantage, or for any purpose except to aid the commerce of a great city, and it was admitted by the learned counsel for the corporation in his argument of this appeal that the defendants could not lawfully use these lands except for commercial purposes.”

We have no statement in the petition and in the proceedings following it as to the purpose for the filling in of the lands north of the marginal street and between the upland and the bulkhead line of Spring creek basin. Here for quite a distance the shore of the upland and the bulkhead line ran north almost parallel with a body of water between them. The resolution of the Board of Estimate permitting and authorizing these proceedings directed the city to condemn any riparian rights necessary and not owned by it. So far as the marginal street or wharf itself shut off riparian rights no damage was sustained; the riparian rights were not taken as they by nature were subject to the sovereign right of improvement for commerce and navigation. (Scranton v. Wheeler, 179 N. S. 141.) Whether the city were in doubt regarding the riparian rights in front of the property to the north of the marginal street we do not know, but we have it in the record that the city attempted to condemn these property rights and has done so. Whatever doubt existed has been exercised in favor of the property owner. From the lines upon one of the exhibits in the case it looks as if the city intended at some time to open streets and avenues through this filled-in land. The proceedings do not state; neither have any maps been filed showing such street openings. We may assume, however, that after the land is filled in north of the marginal street and between the upland on the east and the bulkhead line of the basin on the west the city will open streets and sell the property. It has been authorized so to do by the acts of the Legislature, above quoted. This to my mind is for a public improvement but not a part of the improvement for commerce and navigation. This is a city purpose, one for its own benefit, to accomplish which it should compensate the upland owners whose riparian rights are taken. Some courts have taken a different view (Home for Aged Women v. Commonwealth, 202 Mass. 422, p. 435; Marine Ry. & Coal Co. v. United States, 265 Fed. Rep. 437), but this ruling is in fine with our own authorities.

For these reasons the order as to the owners having riparian rights on Spring creek or Mill creek basin north of the marginal street must be reversed, and the matter remitted to the court to determine whether the appropriation of such rights was incidental to the construction and usefulness of the marginal street and if not so incidental for the award of damages if any, wherever such rights have been appropriated.

The order should be modified as stated in this opinion and as modified affirmed, without costs.

Caedozo, Ch. J., Pound, Lehman, Kellogg, O’Brien and Hubbs, JJ,, concur.

Ordered accordingly.


author: Pound, J.

text:
    Abraham Friedman et al., Respondents, v. New York Telephone Company, Appellant.
    (Argued May 13, 1931;
    decided June 2, 1931.)

      Irving W. Young, Jr., N. H. Egleston, Edward F. Snydstrup and Charles T. Russell for appellant.
    It is the duty of a party dealing with a real estate broker to ascertain and know the extent of the broker’s authority and if he omits to do so, it is at his peril and he has no redress against the vendor for acts of the broker exceeding the authority as it exists in fact. (Dudley v. Perkins, 235 N. Y. 448; Matter of Lane v. Lane, 229 App. Div. 50; Deyo v. Hudson, 225 N. Y. 602; Stone v. U. S. Title Guaranty & Ind. Co., 159 App. Div. 678; 217 N. Y. 656; Martin v. Farnsworth, 49 N. Y. 555; Molloy v. Whitehall Portland Cement Co., 116 App. Div. 839; Smith v. Tracy, 36 N. Y. 79; Lansing v. Coleman, 58 Barb. 611.)

      Joseph A. McCabe for respondent.
    The defendant is liable for the torts of his agent. (2 C. J. § 536; Bennett v. Judson, 21 N. Y. 238; Ahern v. Goodspeed, 72 N. Y. 108; Jarvis v. Manhattan Beach Co., 148 N. Y. 652.)
   Pound, J.

Plaintiffs, as purchasers of real estate in Poughkeepsie, N. Y., brought action against the defendant, the vendor, to recover damages for fraudulent representations made to them by the vendor’s broker at the time of the purchase, concerning the condition of the heating and plumbing system of the building. No doubt arises as to the nature of the broker’s employment. He was, in writing, “ authorized to enter into negotiations with prospective purchasers for the sale of our property located at #9 Cannon St. in the City of Poughkeepsie, N. Y.” The broker had no authority to sell and convey the land and the contract of sale was in fact executed by plaintiffs and defendant themselves.

The question is whether the misrepresentations were incidental to the business with which the broker was intrusted; whether the wrongful act was in the real or apparent course of the employment; in the line of duty or outside of it and foreign to its purpose. (Mulligan v. N. Y. & R. B. Ry. Co., 129 N. Y. 506; Jarvis v. Manhattan Beach Co., 148 N. Y. 652.)

When the agent misconducts himself in the course of his employment ” his acts are the acts of the principal, who must answer for them whether he authorized them or not. Otherwise the principal is not held. (Mott v. Consumers’ Ice Co., 73 N. Y. 543.) The proper application of this rule may depend upon questions of fact and may vary with the circumstances of each case. Thus it may appear that a real estate broker was also an agent to sell and convey (Fairchild v. McMahon, 139 N. Y. 290, 294, 295), or that there was such a community of interest and action between employer and broker as to enlarge the scope of the employment of the broker. (Krumm v. Beach, 96 N. Y. 398, 405.) It is not, however, under ordinary conditions a natural incident of the employment of a real estate broker, authorized only to enter into negotiations with prospective purchasers, for him to represent that the heating and plumbing in a building are in good order, water shut off and pipes drained.

A principal is hable for false representations of a selling agent in respect to the land (Bennett v. Judson, 21 N. Y. 238) because he has the authority, real or apparent, to bind his principal by a formal contract. (Haydock v. Stow, 40 N. Y. 363, 368.)

A real estate broker has no general authority as such to make a sale or a binding contract of sale. (Stone v. U. S. Title Guaranty & Indemnity Co., 159 App. Div. 679, 683; affd., 217 N. Y. 656.)

The employment of one as a broker to enter into negotiations with prospective purchasers ” carries with it no general incidental powers to make representations as to the condition of the heating and plumbing system of the property. The purchaser is, therefore, bound to know the extent of the broker’s powers. (Martin v. Farnsworth, 49 N. Y. 555, 558; Dudley v. Perkins, 235 N. Y. 448.)

A real estate broker, as such, is sent out as a mere negotiator. He brings the parties together. Having done this his task is completed. (Lansing v. Coleman, 58 Barb. 611.) The deal must be consummated by the principals. It follows that if such a broker, in his zeal and to carry out his own purposes, makes false representations as to the condition of the property, the principal is not bound thereby.

The judgment of the Appellate Division and that of the Trial Term should be reversed and the complaint dismissed, with costs in all courts.

Cardozo, Ch. J., Crane, Lehman, Kellogg, O’Brien and Hubbs, JJ., concur.

Orders reversed, etc.


author: O’Brien, J.

text:
    The People of the State of New York, Respondent, v. Angelo Martone, Appellant.
    (Argued May 13, 1931;
    decided June 2, 1931.)

      F. R. Serri for appellant.
    The People’s case, based entirely on a confession, if it establishes anything, links the defendant to a felony murder solely by his possible participation in an attempted felony, and necessitates instructions and a verdict of guilty of murder in the first degree or an acquittal. (People v. Seiler, 246 N. Y. 262; People v. Schleiman, 197 N. Y. 383; People v. Friedman, 205 N. Y. 161; People v. Koerber, 244 N. Y. 147; People v. Van Norman, 231 N. Y. 454; People v. Emieleta, 238 N. Y. 158; People v. Sullivan, 173 N. Y. 122; People v. Flanigan, 174 N. Y. 357; People v. Huter, 174 N. Y. 237; People v. Patini, 208 N. Y. 176; People v. Madas, 201 N. Y. 349; People v. Falletto, 202 N. Y. 494.)

      William F. X. Geoghan, District Attorney (Henry J. Walsh of counsel), for respondent.
    The jury’s verdict convicting the appellant of the crime of manslaughter in the first degree was a legally appropriate finding. (People v. Huson, 187 N. Y. 97; McKellar v. American Synthetic Dyes, 229 N. Y. 106; People v. Moran, 246 N. Y. 100; People v. Emieleta, 238 N. Y. 158; People v. Sullivan, 173 N. Y. 122; People v. Schleiman, 197 N. Y. 383; People v. Giro, 197 N. Y. 152; People v. Giusto, 206 N. Y. 67; People v. Chapman, 224 N. Y. 463; People v. Nichols, 230 N. Y. 221; People v. Marwig, 227 N. Y. 382; People v. Huter, 184 N. Y. 237; People v. Moran, 246 N. Y. 100; People v. Madas, 201 N. Y. 349; People v. Falletto, 202 N. Y. 494; People v. Friedman, 205 N. Y. 161; People v. Patini, 208 N. Y. 176; People v. Wagner, 245 N. Y. 143.)
   O’Brien, J.

Defendant, a youth sixteen years of age, who has been convicted of manslaughter in the first degree, contends through his counsel that he is innocent of any crime but that in no event can one other than murder in the first degree be supported by the evidence. We agree that the proof does not warrant a conviction for manslaughter and that, if any crime has been committed by him, it is murder in the first degree.

By his confession, found on conflicting evidence to have been voluntary and supported by additional proof that the crime had been committed (Code Crim. Proc. § 395), defendant admits that, accompanied by two companions nearly his own age, he entered a grocery store for the purpose of robbery and that during the commission of that felony the proprietor was mortally wounded by one of the other boys. No evidence tends to identify defendant as the actual killer and, accordingly, all issues relating to intent, deliberation or any other fact bearing upon the various degrees of homicide are absent from the case. The evidence, when accepted by the jury, justifies only one verdict. It is murder in the first degree committed in the course of a felony. (People v. Giusto, 206 N. Y. 67; People v. Fisher, 249 N. Y. 419.) After the court had instructed in respect to the various degrees of homicide and had charged the jury that, under the evidence, homicide in any one of these degrees could be found or a verdict of not guilty could be rendered, counsel duly excepted and raised the point now before us. Clearly, he is correct. His theory is fully supported by our decisions in People v. Schleiman (197 N. Y. 383) and People v. Seiler (246 N. Y. 262). There is no possible view of the facts which can warrant any verdict except acquittal or murder in the first degree.

The judgment of the Appellate Division and that of the County Court should be reversed and a new trial ordered.

Cardozo, Ch. J., Pound, Crane, Lehman, Kellogg and Hubbs, JJ., concur.

Judgments reversed, etc.


author: Hubbs, J.

text:
    Joseph Ferro, an Infant, by Theodore Ferro, His Guardian ad Litem, Appellant, v. Leopold Sinsheimer Estate, Inc., Respondent.
    (Argued May 13, 1931;
    decided June 2, 1931.)

      Gilbert D. Steiner for appellant.
    Plaintiff’s claim is not within the purview of the Workmen’s Compensation Act; he was not an employee of defendant; no relationship of employer and employee was created and none was contemplated by the circumstances under which he proceeded to clean the elevator machinery. (Anderson v. Hanling, 214 App. Div. 826; Noreen v. Vogel & Bros., Inc., 231 N. Y. 317; Matter of Mandatto v. Hudson Shoring Co., 190 App. Div. 71; 229 N. Y. 624.)

      Robert H. Charlton, Michael F. Dee and William A. Earl for respondent.
    Plaintiff’s employment by defendant was a question of fact and there is ample proof to sustain the determination of the court, necessarily based upon the finding of such employment. (Lipari v. Bush Terminal Co., 193 App. Div. 309; Marks v. Rochester Ry. Co., 146 N. Y. 181; Geibel v. Elwell, 19 App. Div. 285; Meyers v. Hines, 199 App. Div. 594; Dashnau v. City of Oswego, 204 App. Div. 189.)
   Hubbs, J.

The defendant is a domestic corporation. On November 11th, 1925, it owned a ten-story loft building situate at No. 714 Broadway, New York city, which was occupied by a number of tenants. Aaron Levy for many years had been the superintendent of the building. He had full charge and control and hired the help which he needed in operating it. It contained two elevators. At that time the infant plaintiff was between thirteen and fourteen years of age. For some time he had been helping his brother who was engaged in the trucking business. It had been his practice to go to the premises after school and gather up packages for his brother. On rainy days, Levy, the superintendent, permitted. him to store his packages in the hallway until his brother called for them.

On the day in question he went to the building after he left school. The superintendent asked him to go to a store and get a can of kerosene oil. He got the oil and returned with it and the superintendent gave him the change, nine cents. He then asked the plaintiff to go with him to the top of the building and clean an elevator cable. He took the plaintiff on an elevator to a small room on the top of the structure which contained machinery and the cable which was to be cleaned. He instructed plaintiff to hold a cloth saturated with kerosene around the cable so that the cable would pass through the saturated cloth as it moved up and down. Before taking the plaintiff into the room he ordered the elevatorman to stop the elevator. After instructing plaintiff how to hold the cloth, he left the room and directed the elevatorman to start the elevator. When the elevator started, the cable moved through the cloth held in plaintiff’s hand. In about two minutes after the elevator started, it “ stopped and came up again ” and caught the plaintiff’s hand causing the injury to recover damages for which this action was brought.

Prior to that time the plaintiff had occasionally done errands for the superintendent for which he sometimes received a few cents. At' the close of the evidence the learned trial justice directed a verdict for the defendant upon the ground that The plaintiff has an exclusive remedy under the provisions of the Workmen’s Compensation Act.” The judgment of the Trial Term has been affirmed by the Appellate Division.

The superintendent testified that he received $2,700 a year from the defendant for his services. From that amount he paid the elevator operator and others who did work for him about the building. He had known the infant plaintiff for six months before the accident during which time the plaintiff had been gathering packages for his brother, the expressman. During that period the plaintiff bad done errands for the superintendent, and small odd jobs two or three times a month. For such services the superintendent gave him whatever he thought he ought to, out of his own money. Sometimes the plaintiff would go and get a package of cigarettes, and “ little favors like that ” and when he came back the superintendent would give him a little money, a mere gratuity. Sometimes he would sweep down the stairs and dust for which he was paid whatever amount the superintendent desired to give him. There was never an agreement in advance about work or the amount to be paid.

At the time of his injury the plaintiff was not an employee within the purview of the Workmen’s Compensation Act (Cons. Laws, eh. 67). The circumstances disclose that the relationship of employer and employee was not contemplated or established. The payment of small sums as gratuities or a promise to pay the same did not constitute the payment of wages as defined by the act. Section 2, subdivision 9, of the act defines wages as follows: “‘Wages’ means the money rate at which the service rendered is recompensed under the contract of hiring in force at the time of the accident.” There was no “ money rate ” established or contemplated or “ contract of hiring ” in force.

Gratuities or tips received by employees cannot be considered as wages, unless so understood by the parties in making the contract of employment. (Anderson v. Horling, 214 App. Div. 826.)

Subdivision 4 of section 2 of the act reads: “ ‘ Employee ’ means a person engaged in one of the occupations enumerated in Section Three or who is in the service of an employer.”

Group 19 of section 3 refers to “ contract of hire.” The act as a whole connotes the necessity of a relationship between the parties more substantial and formal than existed in this case before the relationship of employer and employee may be held to exist within the letter or spirit of the act.

The words “ employer ” and “ employee ” are used in the act in the common-law understanding of those words. They denote a contractual relation, not a mere casual voluntary rendition of a slight service or favor rewarded by a gratuity. (Matter of Mandatto v. Hudson Shoring Co., 190 App. Div. 71; reversed on dissenting opinion of Kellogg, J., 229 N. Y. 624.)

Although the plaintiff was not an “ employee ” within the meaning of the act, he was rightfully upon the premises and in the room where injured. The superintendent was the defendant corporation for the purposes of this action. He had general authority and full control of the building. He was authorized to clean the cables or to cause another to do it for him. What he did to induce the plaintiff to undertake to hold the cloth while the cable passed through it, the defendant did through its agent. The plaintiff was invited or induced by the superintendent to go into a place of danger and undertake to do a dangerous act, at least a jury might so find. Under the circumstances if the act of the superintendent Was the negligent cause of plaintiff’s injury, the defendant is liable therefor as the superintendent was acting within the scope of his authority.

The American Law Institute, Restatement of the Law of Torts, Tentative Draft No. 4, section 211, reads: “ Liability for Activities Dangerous to Licensees. A possessor of land is subject to liability to licensees, whether business visitors or gratuitous licensees, for bodily harm caused to them by his failure to carry on his activities with reasonable care for their safety, unless the licensees know or from facts known to them, should know of the possessor’s activities and of the risk involved therein.” It cannot be assumed that the infant plaintiff knew “ of the risk involved.”

In this case it is not necessary to go as far as the rule stated, as the plaintiff was upon the premises not as a bare licensee or general invitee. He was there at the request of the superintendent to perform an act for the benefit of the defendant and not for his own convenience. (Sweeny v. Old Colony & Newport R. R. Co., 10 Allen, 368.) There was active negligence on the part of the superintendent in inducing the infant plaintiff to enter upon a dangerous undertaking without warning him of the danger. (Barrett v. Brooklyn Heights R. R. Co., 188 App. Div. 109; affd., 231 N. Y. 605.)

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

Cardozo, Ch. J., Pound, Crane, Lehman, Kellogg and O’Brien, JJ., concur.

Judgments reversed, etc.


author: Kellogg, J.

text:
    The People of the State of New York, Respondent, v. William F. Chatlos, Appellant.
    (Argued May 14, 1931;
    decided June 2, 1931.)

      Harvey T. Mann and Alfred Yankauer for appellant.
    The ordinance is intended to apply to public garages outside the fire limits and not to private garages leased by tenants for their oVn cars in connection with leasing of apartments or dwellings. (State ex rel. Nunley v. Mayor, 94 W. Va. 189; Pratt v. Denver, 72 Col. 51; Congregation Beth Israel v. O’Connell, 187 Mass. 236; Matter of Multiplex Garages, Inc., v. Walsh, 213 App. Div. 155; 241 N. Y. 529; St. Paul Fire & Marine Ins. Co. v. Trice Motor Co., 203 App. Div. 218; Woods v. Kiersky, 14 S. W. Rep. [2d] 825; State v. Luce, 191 N. W. Rep. .260; Gibson v. Main, 14 Del. Ch. 112; Sullivan v. Sprung, 170 App. Div. 237.) The vehicle stored in the garage is not subject to storage chaiges and, therefore, such gaxage is within the exemption of the ordinance. (Shepards & Morse Lumber Co. v. Hurd, 128 App. Div. 28; Thorp v. Munro, 47 Hun, 246; Hannibal Trust Co. v. Elzea, 286 S. W. Rep. 371; American Mfg. Co. v. Commonwealth, 146 N. E. Rep. 801; Weingast v. Rialto Pastry Shop, 243 N. Y. 113.)

      Arthur J. W. Hilly, Corporation Counsel (J. Joseph Lilly, Milton I. Hauser and James Hurley of counsel), for respondent.
    The vehicles housed in the defendant’s garages are subject to storage charges, and, therefore, fall within the purview of the ordinance. (Smith v. O’Brien, 46 Misc. Rep. 325; 103 App. Div. 596; Rapp v. Mabbett Motor Car Co., 201 App. Div. 283; Matter of Multiplex Garages, Inc., v. Walsh, 241 N. Y. 527; Matter of Barker v. Boettger, 124 Misc. Rep. 461; St. Paul Fire

      & Marine Ins. Co. v. Trice Motor Co., Inc., 203 App. Div. 218.)
   Kellogg, J.

The defendant has been convicted of a violation of section 150 of chapter 10 of the Code of Ordinances of the City of New York. That section forbids any person to store, house or keep any motor vehicle except in a building for which a garage permit shall have been issued. There is this limitation upon the application of the section: “No permit, however, shall be required for the maintenance outside of the fire limits, of a garage in which motor vehicles, which are not for sale, rent or hire, or subject to charges for storage, or used exclusively for business purposes, are stored, housed or kept.” The defendant is the owner of real property, outside of the fire limits,” upon which stands an apartment house, apartments in which are leased to various tenants. Behind this building there are several small garages for the storage of automobiles. In several instances, a lease to a particular tenant entitles him to the use of a specific garage in connection with his apartment; in others, the lease is not inclusive of a garage. In the former case the rental exacted is greater than in the latter. Concededly, vehicles stored in these garages are not for sale; they are not for rent or hire; they are not used for business purposes. It follows that, unless the vehicles stored are “ subject to' charges for storage,” no permit is required and the defendant has not been guilty of the violation charged. It will be noted that the exception is inapplicable where cars stored are “ subject to charges for storage; ” not where car owners are subject to rental charges for storage space. In the instance where a tenant of this defendant leases a garage in connection with an apartment, he is entitled to its exclusive possession and use for any lawful purpose. If he stores no cars, nevertheless he needs must pay the rental charge. His position is identical with that of a tenant whose lease comprehends a dwelling house and private garage. No doubt the inclusion of the garage contributes an item to swell the sum of the rental. Nevertheless, the presence of cars within the garage does not add to the rental charge; the cars stored are not subject to charges for storage.” So in this case, the tenant of an apartment pays an added sum for the right exclusively to occupy a particular garage with cars; he pays no charges for the storage of cars actually placed therein. The distinction is between a charge for the right to occupy and a charge upon the thing with which you occupy. We think that there has been no violation of the ordinance.

The judgment should be reversed and the information dismissed.

Cardozo, Ch. J., Pound, Crane, Lehman, O’Brien and Hubbs, JJ., concur.

Judgment reversed, etc.


text:
    Ebsary Gypsum Company, Inc., Respondent, v. George H. A. Ruby, Appellant, Impleaded with Others.

      (Argued May 11, 1931;
    decided June 2, 1931.)

      George J. Skivington for appellant.
    Appellant’s rights under his letters patent are not such personal property as was contemplated by section 232, subdivision 6, of the Civil Practice Act, under which the order for substituted service was granted. (Stevens v. Gladding, 17 How. [U. S.] 155; Standard Gas Power Co. v. Standard Gas Power Co., 224 Fed. Rep. 990; Chase v. Wetzlar, 225 U. S. 79; Ager v. Murray, 105 U. S. 126.)

      Harlan W. Bippey for respondent.
    The complaint contains a demand for judgment that the appellant be excluded from a vested or contingent interest in specific personal property within the State of New York, or that such an interest within the State in favor of plaintiff be enforced, regulated, defined or limited, or that the title to such property be conveyed to plaintiff. The moving papers establish that there is such property within the State, that a judgment herein against appellant can be enforced and personal service of the summons on appellant without the State should be sustained. (New Era Electric Range Co. v. Serrell, 252 N. Y. 107; Gillett v. Bate, 86 N. Y. 93; Miller v. Jones, 67 Hun, 281; Gagnon
      v. Roberts, 131 Misc. Rep. 126; Stief v. Hart, 1 N. Y. 20; Burr v. DeLaVergne, 102 N. Y. 415; Spears v. Willis, 151 N. Y. 443; Marsh v. Nichols, Sheppard & Co., 140 U. S. 344; New Marshall Co. v. Marshall Engine Co., 223 U. S. 473; Beecher v. Contoure Lab., 279 U. S. 338; Ager v. Murray, 105 U. S. 126; Underfeed Stoker Co. v. American Ship Windlass Co., 165 Fed. Rep. 65.)
   Cardozo, Ch. J.

The complicated transactions stated in the complaint may be summarized with sufficient accuracy as follows: Ruby and Armstrong, the owners of patents and of patented devices, made a contract with the plaintiff, the Ebsary Gypsum Company, Incorporated, whereby Ruby was to construct for the plaintiff a machine that would manufacture blocks in accordance with the patents, and whereby plaintiff was to have an exclusive license for the manufacture of such blocks within the State of New York and other designated territory. While this license was in force, Ruby constructed another machine for another corporation doing business in the same territory, and threatened to continue to give like privileges to others. The controversy that followed was composed for a time by an agreement of settlement. In consideration of a cash payment, Ruby agreed to assign to the plaintiff bis own interest and Armstrong’s in the letters patent then issued as well as in other inventions not covered by the patents, and also to release and deliver to plaintiff the jigs, fixtures, patterns and tools necessary for construction. This agreement he partly performed in that he delivered to the plaintiff at its factory in New York the jigs, fixtures, patterns and tools. He refused, however, to assign any interest in the letters patent or in the unpatented inventions. The complaint prays for judgment that specific performance be directed of the contract for the assignment of these incorporeal rights and that there be an injunction restraining the use of the inventions, patented or unpatented, for the benefit of others.

Ruby is a resident of Michigan, Armstrong a resident of Iowa, and Oldfield, who holds an assignment of the patents as trustee for Ruby and Armstrong, is a resident of Illinois. Personal service cannot be made on any of them in the State of New York. The plaintiff upon proof to that effect applied for and obtained an order for service by publication or in the alternative without the State (Civ. Prac. Act, §§ 232, subd. 4; 233). No warrant of attachment can be granted in a suit for such relief. In such circumstances service without the State, to be permissible, exacts a showing by the plaintiff that “ the complaint demands judgment that the defendant be excluded from a vested or contingent interest in or lien upon specific real or personal property within the state; or that such an interest or lien in favor of either party be enforced, regulated, defined or limited; or otherwise affecting the title to such property (Civ. Prac. Act, § 232, subd. 6). The defendant Ruby, appearing specially for the purpose of contesting jurisdiction, has moved to vacate the service of the summons on the ground that the only cause of action pleaded as to him is one incapable of enforcement unless there be personal service or a general appearance within the territory of the forum. The motion was denied, and at the Appellate Division the denial was affirmed by a divided court.

We think the plaintiff has failed to show that title to any property having a situs in New York will be affected by any judgment that can be rendered in the suit. So far as the complaint prays for the specific performance of the contract of settlement, the subject matter of the controversy is an intangible right of property, an incorporeal interest in patents and in unpatented inventions. Such an interest has no situs in the State of New York (Bryan v. University Pub. Co., 112 N. Y. 382; Stevens v. Gladding, 17 How. [U. S.] 447; Standard Gas Power Co. of Georgia v. Standard Gas Power Co. of Delaware, 224 Fed. Rep. 990; Chase v. Wetzlar, 225 U. S. 79). It certainly has none apart from the domicile of the owners (Bryan v. University Pub. Co., supra). If the owners refuse to appear and choose to suffer a default, the court will be powerless by any effective judgment to compel them to make delivery of the necessary documents. It cannot compel them to set their hands to the documents under penalty of contempt, for contempt there can be none in the absence of jurisdiction of the person. It cannot direct the execution of the documents by the sheriff or a master, for the direction will be brutumfulmén without the presence of the res, the subject of the transfer (Garfein v. McInnis, 248 N. Y. 261; Deschenes v. Tallman, 248 N. Y. 33, 37). The court, not having jurisdiction of the res, cannot affect it by its decree, nor by a deed made by the master in accordance with the decree ” (Fall v. Eastin, 215 U. S. 1, 11; Deschenes v. Tallman, supra; American Law Inst., Restatement, Conflict of Laws, §§ 55, 111).

The plaintiff argues that the jigs, fixtures, patterns and tools have a situs in this State, even if the intangibles have none, and that the presence of these chattels supplies a basis for the suit (American Law Inst., Restatement, Conflict of Laws, supra). The difficulty is that already there has been adequate performance of the contract so far as the chattels are concerned. The plaintiff concedes in its complaint that the defendant Ruby has made delivery of the jigs, fixtures, patterns and tools. As to that branch of the contract there is nothing left undone, or nothing so substantial as to call for action by the court. With the chattels in its possession, the plaintiff does not need a formal instrument of release as evidence of title. As well the buyer of a bed or a table or some other article of furniture might seek the aid of equity to obtain a bill of sale after delivery had been made to him in fulfillment of the bargain (Bosley v. National Machine Co., 123 N. Y. 550, 555). The statute (Civ. Prac. Act, § 232) in permitting an order for the publication of a summons requires a complaint with an appropriate prayer for judgment, a prayer for judgment that title to specific property be enforced or determined; but it requires something more. It is not satisfied unless the complaint is sufficient ” to justify the prayer (Paget v. Stevens, 143 N. Y. 172; Bryan v. University Pub. Co., supra). Neither of these conditions is satisfied in the complaint under review. There is no demand that the defendant do anything further with reference to the chattels, no demand for anything except as to the intangible rights. The plaintiff concedes by its silence that so far as concerns the chattels, nothing is necessary beyond what has already come to it through voluntary delivery. If this defect be overlooked and the prayer be treated as enlarged, there is still no showing of that necessity whereby equity is set in motion.

From the aspect of the complaint as one for specific performance, we pass to its aspect as a complaint for an injunction. So viewed, its defects are even plainer. In so far as it prays for an injunction restraining the manufacture of patented devices in violation of the exclusive license, the relief, if there is to be any, must be granted by the Federal courts .(Littlefield v. Perry, 21 Wall. [U. S.] 205; Independent Wireless Tel. Co. v. Radio Corp., 269 U. S. 459; New Era Electric Range Co. v. Serrell, 252 N. Y. 107). In so far as the prayer is for an injunction in respect of the development of the unpatented inventions, there is jurisdiction of the subject matter, but there can be no effective judgment without jurisdiction of the person (Bryan v. University Pub. Co., supra).

The order should be reversed and the motion granted with costs in all courts, and the question certified answered no.”

Pound, Crane, Lehman, Kellogg, O’Brien and Hubbs, JJ., concur.

Ordered accordingly.


text:
    In the Matter of the Claims of Nunziato Di Donato et al., Respondents, against Morris Rosenberg et al., Respondents, and Employers’ Liability Assurance Corporation, Ltd., Appellant. State Industrial Board, Respondent.
    (Argued May 12, 1931;
    decided June 2, 1931.)

      Rowland H. Long for appellant.
    The State Industrial Board had plenary power to reopen the case in the interests of justice and upon the rehearing to modify its former award and decision. (Matter of Post v. Burger & Gohlke, 216 N. Y. 544; Fischer v. Genesee Constr. Co., 187 App. Div. 850; Spaduccino v. Hayes & Co., 180 App. Div. 37; Schaefer v. Buffalo Steel Car Co., 205 N. Y. 507; Ziegler v. Cassidy’s Sons, 220 N. Y. 98; Beckmann v. Oelerich & Son, 174 App. Div. 353; People ex rel. Gas Light Co. v. Common Council, 78 N. Y. 56.) The State Industrial Board was justified in relieving the appellant from the stipulation. (Barry v. Mutual Life Ins. Co., 53 N. Y. 536; Dillon v. Cockcraft, 90 N. Y. 649; Clanson v. Baldwin, 152 N. Y. 204; Morris v. Press Pub. Co., 98 App. Div. 143; Stemmler. v. Mayor, 179 N. Y. 473.) No contract existed at any time between the employer and the appellant. (McCotter v. New York, 37 N. Y. 325; Commercial Tel. Co. v. Smith, 47 Hun, 494; Grierson v. Mason, 60 N. Y. 394; Nundy v. Matthews, 34 Hun, 74.) The contractor and its insurance broker did not assume to act for the employer but acted for the contractor and for its sole benefit. (Hamlin v. Sears, 82 N. Y. 327; Ramsay v. Miller, 202 N. Y. 72; Condit v. Baldwin, 21 N. Y. 291.)

      Joseph F. Donovan and Alfred W. Andrews for respondents.
    The former award of the State Industrial Board having been affirmed by order of the Appellate Division was res adjudicóla and the Industrial Board was without jurisdiction to disturb it. (Anderson v. Lighterage Co., 214 App. Div. 743; 241 N. Y. 523.) The stipulation that the appellant was a coinsurer was binding on both the State Industrial Board and the appellant, and the Industrial Board had no jurisdiction to set it aside. (Stemmier v. Mayor, 179 N. Y. 473; Morris v. Press Pub. Co., 98 App. Div. 143.) The appellant assumed a contractual as well as a statutory obligation to the employer when it issued its policy covering the employer. (Dale v. Saunders Bros., 171 App. Div. 528; 218 N. Y. 59; Haddon v. Stanton, 177 App. Div. 938; Lawrence v. Fox, 20 N. Y. 68; Lewis v. Home Ins. Co., 199 App. Div. 556; 234 N. Y. 498; Smart v. Merchants Mutual A. L. Ins. Co., 206 App. Div. 630; 236 N. Y. 577; Coster v. Mayor, 43 N. Y. 399; Seaver v. Ransom, 224 N. Y. 233; Rector of St. Mark’s Church v. Teed, 120 N. Y. 583; Little v. Banks, 85 N. Y. 258; Vrooman v. Turner, 69 N. Y. 280; Warrington v. Marine Trust Co., 249 N. Y. 526.) The appellant having failed to cancel its policy prior to the accident is hable as insurance carrier of the employer. (Aioss v. Sardo, 249 N. Y. 270.)
   Crane, J.

The Kulok Realty Corporation was the owner of premises Nos. 39-41 Eldridge street, in the borough of Manhattan, city of New York, and prior to March 30, 1923, entered into a contract with Morris Rosenberg to make extensive alterations by tearing down and reconstructing the buildings. On that day Jerry Di Donato, an employee of the contractor, was seriously injured by a collapse of the building, and subsequently died. An award for death benefits was made to the widow and infant children which later took the form of a lump sum award to the widow. The Zurich General Accident and Liability Insurance Company, Ltd., had issued its policy to Morris Rosenberg and in the first instance appeared before the State Industrial Board as the sole insurer. Later in the proceedings it was ascertained that the Employers’ Liability Assurance Corporation, Ltd., had also insured Rosenberg, and that company appeared on the application of the widow for the full award. The Board having both policies before it, running in favor of Morris Rosenberg, made a joint award against both companies as insurance carriers. Each was directed to pay one-half of the award. Both insurance carriers appealed to the Appellate Division, and, on August 1, 1928, entered into the following stipulation:

“ It is Hereby Stipulated and Agreed by and between the attorneys for the respective parties hereto that the Employers’ Liability Assurance Corp., Ltd., concede that it is a coinsurer with the Zurich General Accident and Liability Insurance Co., Ltd., in so far as the claim herein is concerned, of the employer Rosenberg; that in view of this fact the only question left for determination on the appeal is the question of the advisability of a lump sum award.”

At the time of making this stipulation the Employers’ Liability Assurance Corporation, Ltd., assumed that it was liable upon the Rosenberg policy to his injured employees, and that the policy had been properly and legally issued so as to' cover his liability. Harry E. Wieting, in charge of the compensation department of the Employers’ Liability Assurance Corporation, testified, “ Did you assume at the time that you had these conversations with Mr. Byrne, which culminated in this stipulation, that there was a valid and subsisting contract between The Employers’ Liability and Morris Rosenberg? A. Yes, certainly.”

Before the Appellate Division the only question presented by the appealing companies was the justification for the lump sum award. The action of the State Industrial Board was affirmed and the matter was carried no further. Both carriers then made payment of the award and continued to pay death benefits to the infant children of the deceased.

Some seven months after the affirmance by the Appellate Division, the Employers’ Liability Assurance Corporatian, Ltd.., made this application to the State Industrial Board to reopen the case and to relieve it from all liability, upon the ground that it had received information leading it to believe that its policy did not cover Morris Rosenberg, but only the Kulok Realty Corporation. The facts upon which it sought relief were that the Kulok Realty Corporation had taken out its policy with the company covering its own liability in the nature of workmen’s compensation and had included Morris Rosenberg without his knowledge or request; that it was not the intention of the owner to protect others than itself. The evidence before the Board on the application showed that the policy was issued at the request of the insurance broker for the Kulok Realty Corporation covering “ Morris Rosenberg &/or Kulock Realty Corporation.” The intention of the owner and of the broker was to cover the contractor’s liability as well as that of the owner. Samuel Kulok testified that Mr. Andron, the broker, said “ that I should have insurance behind Mr. Rosenberg or his company.” Andron testified, “ I also suggested they — for a little additional premium you can add your contractor on that policy, so that if anything happens to him, if he is not financially liable or isn’t properly insured, why you will be protected.”

The insurance company issued its policy thereupon, at the request of the broker, covering Rosenberg’s liability as stated in the policy, and with the intention that his loss should be insured against, and his employees, for the period stated, covered by workmen’s compensation. The premium was paid by the Kulok Company for Rosenberg’s insurance and the policy remained in full force and effect, never having been canceled. Although at the time Rosenberg did not know that this insurance existed, or that the policy had been taken out in his favor, yet subsequently, and after the injury to Di Donato, he took the policy and turned it over to his attorney, Albert Conway, who in turn informed the Zurich General Accident and Liability Insurance Company, Ltd., the coinsurer, of its existence. It was upon this information that the Employers’ Liability Assurance Corporation, Ltd., was made a party at the hearings before the State Industrial Board on the widow’s application for lump sum payment, as above stated.

Rosenberg never repudiated the insurance or refused to accept it; the Kulok Company took out insurance for him, intending to cover his liability, and did so on the advice of its insurance broker; the premium was paid by the Kulok Company for Rosenberg’s insurance and has been kept by the company; the policy has never been canceled. Under these circumstances the insured employee Di Donato, or his widow and children, were entitled to an award against the Employers’ Liability Assurance Corporation, Ltd. The policy was a contract with the employee, binding on the company until canceled, as provided in section 54 of the Workmen’s Compensation Law (Cons. Laws, ch. 67). (Matter of Aioss v. Sardo, 249 N. Y. 270.)

The State Industrial Board, therefore, was not justified in granting this application and relieving the insurance company from its liability on this policy and as a coinsurer with the Zurich Company to pay the award made to the widow and to the children. While we must affirm the order of the Appellate Division reversing this action of the State Industrial Board, we cannot do so for the reason stated by that court. The Appellate Division was of the opinion that its previous decision was res adjudícala on this application of the insurance company for relief. As I have already stated, the two insurance companies joined in an appeal to the Appellate Division from the lump sum award made in behalf of the widow, the Employers’ Liability Assurance Corporation conceding in written stipulation its Lability as coinsurer. The affirmance by the AppeUate Division did not deprive the State Industrial Board of its power thereafter to reopen the proceeding and vacate its previous awards upon facts justifying such action. Section 123 of the Workmen’s Compensation Law gives to the Board the continuing power to make such modification or change with respect to any award or decision as in its opinion may be just. (See, also, § 22.) The extent of these powers we have recently discussed in Royal Indemnity Company v. Heller (256 N. Y. 322), handed down May 12, 1931. The previous decision of the Board and of the Appellate Division fixing the awards was not, therefore, res adjudicóla and binding upon any subsequent action of the Board. The previous decision was binding, however, until sufficient facts were presented to the Board to justify a change. Such facts were not presented upon this application, and it is for this reason that we sustain the reversal by the Appellate Division.

The order should be affirmed, with costs.

Cardozo, Ch. J., Lehman, O’Brien and Hubbs, JJ., concur; Pound and Kellogg, JJ., dissent.

Order affirmed.


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    Erich Stephan, on Behalf of Himself and Other Stockholders of the Merchants Collateral Corporation, Respondent, v. Merchants Collateral Corporation et al., Appellants, Impleaded with Others.

      (Argued May 14, 1931;
    decided June 2, 1931.)

      Forrest M. Anderson, Harry A. Bostrom and Herbert P. Carter for appellants.
    Title to the cause of action sued on was in the trustee in bankruptcy and the plaintiff as stockholder of the bankrupt corporation has no standing to maintain this action. (First Nat. Bank v. Lasater, 196 U. S. 115; Matter of Lighthall, 221 Fed. Rep. 791; Scruby v. Norman, 91 Mo. App. 517; Matter of Wiseman & Wallace, 159 Fed. Rep. 236; Nevins v. Brooklyn Citizen, 171 App. Div. 643; Matter of Graff, 255 Fed. Rep. 241.) A stockholders’ suit is essentially a suit by the bankrupt corporation. If the corporation may not sue, neither may its stockholders. (Kavanaugh v. Commonwealth Trust Co., 181 N. Y. 121.) Plaintiff did not show any demand upon the trustee to bring this action. (Planten v. National Nassau Bank, 174 App. Div. 254; 220 N. Y. 667.) Plaintiff’s proper procedure would have been to apply to the District Court for the administration of the asset in bankruptcy. (Matter of Graff, 255 Fed. Rep. 241.)

      Edwin J. Dryer for respondent.
    The action is derivative in nature brought by a stockholder for and on behalf of himself and all other stockholders. (Godley v. Crandall & Godley Co., 227 N. Y. 656; Continental Securities Co. v. Belmont, 206 N. Y. 7; O’Connor v. Virginia Passenger & Power Co., 184 N. Y. 46; Kavanaugh v. Commonwealth Trust Co., 181 N. Y. 121; Bissell v. Taylor, 229 App. Div. 369; Planten v. National Nassau Bank, 174 App. Div. 254; Hanna v. Lyon, 179 N. Y. 107; Brinckerhoff v. Bostwick, 88 N. Y. 52; Young v. Equitable Life Assur. Soc., 112 App. Div. 760; Jacobson v. Brooklyn Lumber Co., 184 N. Y. 152; Sage v. Culver, 147 N. Y. 241; Security Trust Co. v. Pritchard, 201 App. Div. 142; Seagrist v. Reid, 171 App. Div. 755.) At the time of the institution of the action the former trustee in bankruptcy had no right to, interest in or claim upon the property involved in the action. (Matter of Scruggs, 205 Fed. Rep. 673; Matter of Frazin, 183 Fed. Rep. 28; Dushane v. Beall, 161 U. S. 513; Felming v. Courtenay, 98 Me. 401; Sparhawk v. Yerkes, 142 U. S. 1.) The bankruptcy proceedings did not defeat the right to recover on the part of the plaintiff. (Matter of Roth, 181 Fed. Rep. 667; Melnick v. Commercial Casualty Ins. Co., 221 App. Div. 599; Johnson v. Norris, 190 Fed. Rep. 466; Hanson v. Center First Nat. Bank, 128 S. W. Rep. 1147; Matter of Paine, 127 Fed. Rep. 246.)
   Pound, J.

Plaintiff commenced this representative action on behalf of himself and all other stockholders of the Merchants Collateral Corporation by the service of the summons on January 28, 1929. He seeks a judgment that the other defendants pay to the defendant Merchants Collateral Corporation the damages sustained by reason of alleged misconduct of defendant officers and directors of the corporation, and that a receiver be appointed of the property of the corporation.

The defendant Merchants Collateral Corporation was adjudicated a bankrupt on the 25th day of January, 1928, by the United States District Court of the Eastern District of Pennsylvania, and a trustee was appointed on February 17, 1928. The trustee accounted and was discharged of his trust on September 24, 1928. Thereafter on January 28, 1929, this action was instituted.

Generally speaking, the title to all the property of the bankrupt passed to the trustee. The question is whether the stockholder’s action will lie.

Section 2 (8) of the Bankruptcy Act (11 U. S. C. A. § 11 [8]) invests courts of bankruptcy with jurisdiction to “ close estates, whenever it appears that they have been fully administered * * * and reopen them whenever it appears they were closed before being fully administered.” Section 11-d (11 U. S. C. A. § 29 [d]) provides that suits shall not be brought by or against a trustee of a bankrupt estate subsequent to two years after the estate has been closed.” But section 11-d was never meant to allow the bankrupt to appropriate property which the trustee should have taken possession of before the estate was closed, and a motion to reopen the estate may at any time be addressed to the sound discretion of the District Court (Matter of Schreiber, 23 Fed. Rep. [2d] 428) and in any event two years had not elapsed before the estate was first closed.

A new trustee should be elected for the purpose of administering the unadministered assets. (Matter of Minners, 253 Fed. Rep. 300.) The application to reopen should be made by the creditors. There must be not only a reasonable prospect of unadministered assets but also evidence that creditors or other parties in interest would be benefited by the success of the reopening. (Matter of Graff, 250 Fed. Rep. 997.)

A claim against directors of a bankrupt corporation for damages due to their misconduct passes to and may be enforced by the trustee. (Bynum v. Scott, 217 Fed. Rep. 122.)

In these circumstances, how may a stockholder maintain a derivative action in the right of a bankrupt corporation?

Trustees in bankruptcy are not bound to accept property which in their judgment is of an onerous and unprofitable nature calculated to burden rather than benefit the estate but they should make such election with knowledge of the nature of such property so that the bankrupt court may compel a different course. (Dushane v. Beall, 161 U. S. 513.) But here it does not appear that the claim was brought to the attention of the trustee or that any such election was made by him. Therefore, it cannot be said that the trustee elected not to accept the claim in suit. (Sessions v. Romadka, 145 U. S. 29.)

This right of action of the corporation against the directors passed to the trustee in bankruptcy. The ■trustee might have declined to accept it. If such election had been made, the bankrupt could assert title thereto. If it in turn did not elect to proceed to enforce it the stockholder might maintain its action. But that doctrine can have no application when the trustee is ignorant of the existence of the property and has had no opportunity to make an election. It cannot be that a bankrupt, by omitting to schedule and withholding from his trustee all knowledge of certain property, can, after his estate in bankruptcy has been finally closed up, immediately thereafter assert title to the property on the ground that the trustee had never taken any action in respect to it. If the claim was of value (as certainly this claim was according to the judgment below) it was something to which the creditors were entitled, and this bankrupt could not, by withholding knowledge of its existence, obtain a release from his debts and still assert title to the property.” (First Nat. Bank v. Lasater, 196 U. S. 115, 119.) If the corporation could not assert title to this claim the stockholder could not for his right is of a derivative character.

It follows that the action will not lie.

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

Cardozo, Ch. J., Crane, Lehman, Kellogg, O’Brien and Htjbbs, JJ., concur.

Judgment accordingly.


text:
    In the Matter of the Estate of Mary Porianda, Deceased. Charles M. Miller, as Administrator, Appellant; Annie Wrona, Respondent.
    (Submitted May 15, 1931;
    decided June 2, 1931.)

      Abraham Benedict and David Gorfinkel for appellant.
    There is no evidence to sustain the Surrogate’s implied finding that the decedent intended to or did create a joint tenancy of her savings bank deposit. (Moskowitz v. Marrow, 251 N. Y. 380; Marrow v. Moskowitz, 255 N. Y. 219; Scanlan v. Meehan, 216 App. Div. 591; Brumer v. Brumer, 223 App. Div. 186; Newhouse v. Harrinck, 227 App. Div. 392; Matter of Wilkins, 131 Misc. Rep. 188; Van Alen v. American Nat. Bank, 52 N. Y. 1; Roca v. Byrne, 145 N. Y. 182.)

      William R. Hogan, Charles J. Wallace and John A. Wallace for respondent.
    The finding that the deceased created a joint tenancy with the respondent was correct. (Heiner v. Greenwich Savings Bank, 118 Misc. Rep. 326; Moskowitz v. Marrow, 251 N. Y. 380.) The court erred in admitting any testimony in regard to the $3,000 withdrawal. (Marrow v. Moskowitz, 255 N. Y. 219.)
   Kellogg, J.

Mary Porianda was the owner of a deposit of $5,113.35, credited to her individual account in the Yonkers Savings Bank. On the 24th day of October, 1928, she sent a letter to the bank, requesting it to add the name of her sister, Annie Wrona, to the account, making it a joint account during life; either one to have full power to deposit therein or draw therefrom, and the balance payable to the survivor, in case of death.” In accordance with her request, the account was credited to Mary Porianda or Annie Wrona, Joint account, either survivor to take all.” On January 7th, 1929, during the lifetime of Mary Porianda, Annie Wrona withdrew 13,000 from the joint account and deposited the same in the Yonkers National Bank to the credit of five accounts, one in her own name, two in the name of her son John, and two in the name of her son Mike. Mary Porianda afterwards died and the administrator of her estate, in discovery proceedings, now seeks to recover possession of the sums withdrawn. The Surrogate has held that the form of the deposit conclusively determined that there was a joint tenancy created; that, after the death of Mary Porianda, the withdrawn moneys became the absolute property of Annie Wrona, the survivor; that the proceedings should be’ dismissed. He was of the opinion that the evidence given, in support of the contention that no joint tenancy was intended by the depositor, was wholly immaterial, citing Moskowitz v. Marrow (251 N Y. 380).

We stated in the case cited that section 249 of the Banking Law (Cons. Laws, ch. 2) sets up two presumptions. The first, reversing the common-law rule, requires a holding, in the absence of other proof, that a deposit made in the names of the depositor and another person in form to be paid to either or the survivor of them ” becomes “ the property of such persons as joint tenants.” This presumption is not conclusive and may be overcome by proof that the depositor, when making the deposit, had no intention to create a joint tenancy. The second presumption, that title passes to the survivor, where applicable, is irrefutable by proof, and, therefore, a rule of substantive law. The form of the deposit is “ conclusive evidence,” in any action or proceeding to which either the savings bank or the surviving depositor is a party,” of the intention of both depositors to vest title to such deposit and the additions thereto in such survivor.” To be applicable, however, there must have been survivorship; and, even then, its application is limited to the moneys still on deposit in the savings bank, credited to the depositors under the original formula payable to either or the survivor.” This presumption does not apply in respect of any moneys withdrawn by either during life ” (Moskowitz v. Marrow, supra, at p. 397); it applies only “ in favor of the survivor in respect of any moneys then left in the account.” (Marrow v. Moskowitz, 255 N. Y. 219, 221.) The withdrawal of moneys from the joint account does not destroy the joint tenancy, if one was created; it merely opens the door to competent evidence, if available, that no joint tenancy was originally intended or created. (Id.)

Annie Wrona herself testified that her sister, the original depositor, Mary Porianda, became ill in June, 1928; that she told an official of the savings bank that she wanted the change in the deposit made; that she said, I can’t go to the bank and take money and my sister she go same like me, that right; ” that her sister requested her to withdraw the $3,000 and deposit it in the Yonkers National Bank, in the manner employed. The record discloses the following answers made by Annie Wrona to the following questions: “ Q. Whose money was it you put in Yonkers National Bank, $3,000, whose money was it? A. My sister before. Q. Your sister’s money? A. Yes, before. Q. When your sister told you to put the $3,000 in bank? A. Yes, she told me that. Q. Did you understand that was to be her money? A. Yes. She.understand it is her money. Q. You understood it was her money? A. Sure. She trust me everything like herself.” This proof, unlike that offered from the witness Kushwaia, concerning self-serving declarations of Mary Porianda made after the establishment of the deposit, which the Surrogate correctly declined to receive (Marrow v. Moskowitz, supra), directly bore upon the original intention of Mary Porianda in making the deposit, and tended to prove that a joint tenancy was not created, or intended to be. This proof should have been considered by the" Surrogate and a decision made upon the issue of fact to which it gave rise.

The order should be reversed and a new hearing ordered, with costs to abide the event.

Cardozo, Ch. J., Pound, Crane, Lehman, O’Brien and Hubbs, JJ., concur.

Ordered accordingly.