author: Conway, J.

text:
    In the Matter of Ralph Giannettino et al., Appellants and Respondents, against Joseph D. McGoldrick, as Comptroller of the City of New York, et al., Respondents and Appellants.
    Argued November 30, 1945;
    decided March 7, 1946.

      Leopold V. Hossi for petitioners-appellants-respondents.
    I. Provisions of the State Constitution and of the Labor Law, (§ 220), provide for the payment of not less than the prevailing rate of wage to laborers, workmen or mechanics. (Matter of Meyer, 209.N. Y. 386; Austin v. City of New York, 258 N. Y. 113; Matter of Heaney v. McGoldrick, 286 N. Y. 38; McNulty
      v. City of New York, 238 N. Y. 29; Gaston v. Taylor, 274 N. Y. 359.) II. State laws never intended or contemplated that civil service employees should pay for their own vacations and for their own pensions. (Matter of Wexler v. Dayton, 255 App. Div. 567; Matter of Meyer, 209 N. Y. 386.) III. Petitioners are entitled to the prevailing rate of wage from January 1, 1938, to February 20, 1942, without any deductions. (Campbell v. City of New York, 291 N. Y. 461; Matter of Rushforcl v. City of N. Y., 280 N. Y. 217; Dixon v. La Guardia, 277 N. Y. 84.) IV. Petitioners should be paid interest on the back-pay moneys illegally withheld from them by defendants.

      Ignatius M. Wilkinson, Corporation Counsel {Howard C. Fischbach and Francis J. Bloustein of counsel), for defendant-respondents-appellants.
    I. The rates of wages fixed by the comptroller’s determination are equal to the prevailing rates current in private employ, after deductions of the monetary value of vacation and pension benefits, exclusively received by city employees. (Matter of Watson v. McGoldrick, 260 App. Div. 77, 286 N. Y. 47; Matter of Mahon v. Bd. of Education, 68 App. Div. 154, 171 N. Y. 263; Schieffelin v. Berry, 127 Misc. 178, 217 App. Div. 451, 243 N. Y. 603; Kieran v. Hunter College Retirement Bd., 255 App. Div. 378.) II. Petitioners are not entitled to interest on prevailing rate claims since the statute (Labor Law, § 220) makes no provision therefore and because such claims are unliquidated and the amounts which may ultimately be found to be due are not readily ascertainable. (Matter of Trustees of New York and Brooklyn Bridge, 137 N. Y. 95; Matter of Ittleman [City of New York], 286 N. Y. 150; Faber v. City of New York, 222 N. Y. 255; Finn v. City of New York, 282 N. Y. 153.)
   Conway, J.

The petitioners, who are rakers, tampers, smoothers, top-shovelers and asphalt workers employed by the city, have appealed from an order of the Appellate Division, affirming as modified certain determinations of the Comptroller of the City, of New York. The -determinations involved here were entered March 9, 1945, and covered the period from October 1, 1937, to February 19, 1942. In order to indicate the manner in which the determination was made, we shall take, a specific example. The comptroller first found that the prevailing rate of wages for asphalt workers, commensurately employed in the city, was $.92 per hour for the period October 1, 1937, to September 30, 1939; $1.02 per hour for the period October 1, 1939, to September 30, 1941, and $1.12 per hour for the period October 1, 1941, to February 18, 1942. He then deducted the value of pension and vacation benefits of city employees, which he computed at 10% of the prevailing rates, and thus determined that the rates of wages payable to the petitioning asphalt workers were $.83 per hour, $.92 per hour and $1.01 per hour, respectively, for the periods mentioned above. He followed the same procedure in the case of the rakers, tampers, smoothers and top-shovelers.

In reaching the figure of 10%, the comptroller took into consideration the three weeks’ vacation with pay granted petitioners, amounting to 3/52 of a year, or approximately 6%. To that he added the value of their benefits under the City’s Betirement System by ascertaining the average share of the cost of its maintenance. He estimated that the average employee’s contribution varied between 5% and 6% of his compensation. It would follow from that that the city’s contribution, matching the employee’s, would be measured in the same terms, i.e., 5% to 6%. The comptroller then added the 6% already computed for vacation pay to a minimum of 5% for retirement benefits, thus making a total of 11%. From that he deducted a 1% contribution made by privately employed asphalt workers to the Federal Social Security System, and thus arrived at a net deduction of 10%.

The city urges that failure to make such deduction would be in effect to grant petitioners additional compensation, but we think that is incorrect. The applicable statutes are as follows :

Labor Law, § 220. Hours and wages.

“ 1. Eight hours shall constitute a legal day’s work for all classes of employees in this state except those engaged in farm

and domestic service unless otherwise provided by law. *******

“ 3. The wages to be paid for a legal day’s work, as herein-before defined, to laborers, workmen or mechanics upon such public works, shall be not less than the prevailing rate of wages as hereinafter defined. (Emphasis supplied.)

*******

“ 5-a. The ‘ prevailing rate of wages,’ for the intents and purposes of this article, shall be the rate of wage paid in the locality as hereinafter defined to the majority of workmen, laborers or mechanics in the same trade or occupation. In the event that it be determined that there is not a majority in the same trade or occupation paid at the same rate, then the rate paid to the greater number in such trade or occupation shall be the prevailing rate, provided such greater number constitutes at least forty per centum of the laborers, workmen or mechanics engaged in such trade or occupation; in the event ■there is less than forty per centum of the laborers, workmen or 'mechanics engaged in the same trade or occupation in the same locality paid the same rate, then the average paid to such laborers, workmen or mechanics in the same trade or occupation shall be the prevailing rate. Laborers, workmen or mechanics for whom a prevailing rate of wage is to be determined shall not be considered in determining such prevailing wage. ’ ’

Vacation pay and pension benefits are not gratuities. Pension annuities, after the expiration of the period of active service, are in the nature of compensation for the services previously rendered for which full and adequate compensation was not received at the time of the rendition of such services. They are in effect pay withheld to induce long-continued and faithful service. (Matter of Mahon v. Board of Education, 68 App. Div. 154, 156, affd. 171 N. Y. 263; Hoyt v. County of Broome, 285 N. Y. 402, 406. See, also, Schieffelin v. Berry, 127 Misc. 178, 182, affd. 217 App. Div. 451, affd. 243 N. Y. 603.) Moreover, the comptroller found the prevailing wages by hourly periods. It is clear that vacation pay and the city’s contribution to the pension system are not “ wages to he paid for a legal day’s work ” within the meaning of the statute quoted. The Legislature used the word “ wages ” for the money which was to be paid to laborers, workmen and mechanics by the city. It cannot be said that the Legislature intended the word to have the larger meaning of compensation or payment.

There is a cross appeal by the city from the allowance of interest by the Appellate Division. The petitioners urge that they are entitled to interest for the period from January 1, 1938, in addition to the interest allowed to them by the Appellate Division "which ran from March 19, 1942, the. date of the original determination- by the comptroller, which was concededlv erroneous and thus necessitated a new determination which, as we have seen, was made on March 9, 1945. When the comptroller made his corrected determination, he fixed the rates as of three periods: (1) October 1, 1937, to October 1, 1939; (2) from October 1,1939, to October 1,1941; and (3) from October 1, 1941, to February 19, 1942. In connection with those dates, it is well to bear in mind that the budget of the city of Hew York provided for payment at the prevailing rate of wages for the period from January 1, 1938, to June 30, 1942. Prior and subsequent to that period the budget provided fixed sums as wages for men employed in occupations such as those of the petitioners. Therefore, when the comptroller made his corrected determination on March 9, 1945, he made it retroactive to January 1, 1938, so that it covered the period from January 1, 1938, to June 30, 1942. Thereupon, the comptroller offered the petitioners wages at the rates so determined by him, less the 10% for vacation and pension benefits. That the petitioners declined to accept. The question presented, then, is: from, what date should interest run in favor of petitioners?

There is no language in the applicable sections of the Labor Law which provides that interest shall be allowed on the back wages found due, but interest should be paid when there has been a default by a person obligated to pay. (Matter of Ittleman [City of New York], 286 N. Y. 150,153.) Here the statute directs that petitioners receive as wages not less than the prevailing rate, and the comptroller by his determination decided what that prevailing rate was. From the date of entry of that determination the city became liable to pay such rate, at least to those petitioners who filed their complaints “ commencing with October 1st, 1937 ”, as alleged in their petition, and thus presumably prior to the date of the comptroller’s determination (March 19, 1942). (Campbell v. City of New York, 291 N. Y. 461.) That was the date fixed by the Appellate Division from which interest was to run, and we think that was correct.

. The order of the Appellate Division should be reversed and the matter remitted to the Appellate Division for further proceedings not inconsistent with this opinion, without costs.

Lottghran, Ch. J., Lewis, Desmond, Thacher, Dye and Medalie, JJ., concur.

Ordered accordingly,


source: Caselaw Access Project

license: Public Domain

text:
    In the Matter of Peter M. Hoof et al., Respondents, and Thomas W. Blaney et al., Appellants, against Joseph D. McGoldrick, as Comptroller of the City of New York, Appellant and Respondent.
    Argued November 20, 1945;
    decided March 7, 1946.

      T. Robert Gabrielli for Thomas W. Blaney et al., petitioners-appellants.
    I. The determination was illegal in that it unlawfully and arbitrarily excluded letterers employed in private industry engaged in outdoor advertising and theatrical work. II. The comptroller’s dismissal of the complaints as improperly verified was erroneous. (Matter of Levine [Town of Fallsburgh], 287 N. Y. 243; Evans v. Town of Bridgewater, 178 Misc. 250, 264 App. Div. 827; Matter of Rooney v. McGoldrick, 280 N. Y. 632.) III. Even if petitioners’ earlier complaints were invalid, petitioners are nevertheless entitled to the full benefits of the determination for the entire period covered by it by reason of having filed admittedly valid complaints during the pendency of the proceeding. (Campbell v. City of New York, 291 N. Y. 461; Matter of Heany v. McGoldrick, 286 N. Y. 38.) IV. The deduction of 10% from the prevailing rates of wages was unlawful and discriminatory.

      Ignatius M. Wilkinson, Corporation Counsel (Howard C. Fischbach and Francis J. Bloustein of counsel), for Joseph D. McGoldrick, appellant and respondent.
    I. The comptroller’s determination was made according to law and was supported by the survey and the evidence. (Matter of Watson v. McGoldrick, 286 N. Y. 47.) II. The comptroller was under no obligation to make an investigation and determination covering any period antedating the filing of a valid verified complaint. However, on his own initiative, he commenced his investigation and made his determination from January 1, 1938. (Campbell v. City of New York, 291 N. Y. 461; Matter of Heaney v. McGoldrick, 286 N. Y. 38; Matter of Carr v. Kern, 279 N. Y. 42; Matter of Simpson v. Taylor, 278 N. Y. 643; Matter of Gaston v. Taylor, 274 N. Y. 359.) III. The rates of wages fixed by the comptroller’s determination were equal to the prevailing rates current in private employ, after deductions of the monetary value of vacation and. pension benefits exclusively received by city employees. (Matter of Watson v. McGoldrick, 260 App. Div. 77, 286 N. Y. 47; Matter of Mahon v. Bd. of Education, 68 App. Div. 154, 171 N. Y. 263; Schiefelin v. Berry, 127 Misc. 178, 217 App. Div. 451, 243 N. Y. 603; Kieran v. Hunter College Retirement Board, 255-App. Div. 378; Matter of Mollett v. McGoldrick, 268 App. Div. 900.) IV. The claims of petitioners-respondents filed respectively on December 12, 1935, and June 15,1937, were properly dismissed for lack of verification. (Ponsrock v. City of Yonkers, 254 N. Y. 91; Kingston v. M. S. Construction Corp., 249 N. Y. 533; Mazarzky v. Whinston Bros., Inc., 254 N. Y. 552; Geelan v. St. Patrick’s Church, 179 Misc. 432; Rogers v. Village of Port Chester, 234 N. Y. 182; Matter of Bristol v. Buck, 201 App. Div. 100; Cotriss v. Village of Medina, 139 App. Div. 872, 206 N. Y. 713.)
   Conway, J.

These are cross appeals by petitioners and the Comptroller of the City of New York in a proceeding brought to review a determination as to the prevailing rate of wages of letterers employed by the City of New York. It is a companion case to Matter of Giannettino v. McGoldrick (295 N. Y. 208), decided herewith, and some of the matters decided there are determinative of points raised herein. Thus, the comptroller here, as in the Giannettino case, made a deduction of 10% in the prevailing rate of wages as determined by him for vacation and pension benefits. That was error and requires the remission of this proceeding to the Appellate Division.

The comptroller cross-appealed from the decision of the Appellate Division that the complaints of Hoof and Hilscher were properly verified. The order appealed from is a nonfinal order "and the appeal must be dismissed.

The comptroller found that labor performed by privately employed letterers came under three categories, viz.: 1. Commercial, 2. Outdoor Advertising, and 3. Theatrical Advertising. He was of the opinion that the work of city-employed letterers fell within the group denominated by the Brotherhood of Painters, Decorators and Paperhangers of America in one of its local unions in New York City as commercial letterers. He pointed out that in outdoor advertising and theatrical work the performance of the labor was confined almost exclusively to work on scaffolding, involving personal danger, and thus resulted in higher rates of wages. He referred to the fact that the Municipal Civil Service Commission defined the duties of a letterer as follows: “ Letferer: To be familiar with the quality and use of the different kinds of paints and varnishes; to mix paints and colors in proper proportions; to paint signs and to do lettering of any description; perform related work.” It is true that there was evidence in the record that some of petitioners used scaffolds occasionally but we cannot say as a matter of law that the comptroller’s determination was arbitrary.

It is conceded by the respective parties that if the complaints of Hoof and Hilscher were properly verified the comptroller must make a determination as to prevailing wages for the period from January 1, 1935, to January 1, 1938, by virtue of Labor Law, section 220, subdivision 5-d. Since those complaints were properly verified, such determination must be made.

As to the claims of the petitioners, Blaney, JLipari and Wabshinak, we agree with the Appellate Division that each is entitled to the benefit of the determination for the period commencing with the date of' the filing of his verified complaint. (Campbell v. City of New York, 291 N. Y. 461, 465-466; Matter of Gaston v. Taylor, 274 N. Y. 359, 366; Matter of Carr v. Kern, 279 N. Y. 42, 48; Matter of Simpson v. Taylor, 278 N. Y. 643.)

Appeal by the Comptroller of the City of New York from so much of the order of the Appellate Division as decided that the complaints of the petitioners Hoof and Hilscher were sufficient in form as verified complaints should be dismissed on the ground that that part of the order does not finally determine a special proceeding within the meaning of the Constitution; and, otherwise, the order should be modified in accordance with this opinion, and as so modified affirmed, without costs.

Lottghran, Ch. J., Lewis, Desmond, Thacher, Dye and Medalie, JJ., concur.

Ordered accordingly.


author: Lewis, J.

text:
    In the Matter of Genesee Valley Trust Company, Judgment-Creditor-Respondent, against Hannah Glazer, Judgment-Debtor-Appellant.
    Argued January 7, 1946;
    decided March 7, 1946.

      Charles A. West and Milo Thomas, 1st, for appellant.
    The portion involved herein of the proceeds of the life insurance policy left with insurer for the benefit of the judgment debtor is exempt from process under section 15 of the Personal Property Law. (Crossman Co. v. Rauch, 263 N. Y. 264; Matter of Nires, 290 N. Y. 78; Manufacturers Trust Company v. Lewis, 18 N. Y. S. 2d 714.)

      Albert Hirst for New York State Association of Life Underwriters, amicus curia, in support of appellant’s 'position.
    I. The courts below erred in adopting the proposition that what is assignable cannot also be exempt from execution. (Crossman Co. v. Rauch, 263 N. Y. 264; Barry v. Equitable Life Assur. Society, 59 N. Y. 587; Baron v. Brummer, 100 N. Y. 372; Amberg v. Manhattan Life Ins. Co., 171 N. Y. 314; F. Frazier Jelke & Co. v. Greene, 35 N. Y. S. 2d 91.) II. Section 15 of the Personal Property Law, as amended, offers the parties to the agreement the choice to prohibit transfer, commutation or incumbrance or legal process, or any two or all three of them.

      Walter J. Holloran for respondent.
    I. The portion involved herein of the proceeds of the life insurance policy is not exempt under section 15 of the Personal Property Law. (Bull v. Case, 165 N. Y. 578; Black v. N. Y. Life Ins. Co., 126 N. Y. S. 334; Latterman v. Guardian Life Ins. Co., 280 N. Y. 102; Matter of Scott, 249 App. Div. 542, 274 N. Y. 538; Jackson v. Tallmadge, 246 N. Y. 133; Amberg v. Manhattan Life Ins. Co., 171 N. Y. 314.) II. Being alienable, the fund is not exempt from, claims of creditors. (Crossman Co. v. Rauch, 263 N. Y. 264; Manufacturers Trust Co. v. Lewis, 18 N. Y. S. 2d 714; Manufacturers Trust Co. v. Miller, 288 N. Y. 534.)
   Lewis, J.

In this proceeding supplementary to judgment the judgment debtor challenges the legality of a County Court order made under section 794 of the Civil Practice Act. That order directs a life insurance company to pay to the judgment creditor a stated amount on account of an alleged indebtedness of the insurance company to the judgment debtor as the beneficiary of a life insurance policy. At the Appellate Division the order of County Court was affirmed, two justices dissenting.

In 1934 Hannah Glazer was indebted to Genesee Valley Trust Company in the amount of $1,812.25 by reason of a judgment rendered in an action upon a promissory note signed by her and by her husband, Abraham A. Glazer, as comakers. While that judgment remained unpaid there occurred the death of Abraham A. Glazer and thereupon there became payable a $10,000 policy of life insurance issued upon his life by The Equitable Life Assurance Society of the United States, to which it will be convenient to refer as Equitable.”

Upon this appeal we are concerned only with the disposition to be made of a portion of the proceeds of that policy amounting to $2,500, which, according to contractual provisions within the policy, is to be held by Equitable upon its guarantee to pay to the assured’s widow — the present judgment debtor — during her lifetime interest thereupon at the annual rate of 3% with such additional interest as may be earned and apportioned by Equitable. The payment of the guaranteed interest on the fund thus created is subject to the provision that on interest due dates ” the assured’s widow may elect to withdraw * * * all of the amount then remaining on deposit with the Society or any part thereof but no partial withdrawal may be made for less than one hundred dollars.” The policy and a certificate of deposit issued by Equitable also provide that — “ In accordance with written, request it is hereby agreed, except so far as may be contrary to the laws of any state having jurisdiction in the premises that a beneficiary hereunder shall have no right to assign, transfer, hypothecate, encumber, commute or anticipate such beneficiary’s interest in any benefits or payments under this beneficiary provision unless otherwise provided therein and that all benefits and payments under this beneficiary provision shall not in any way be subject to any legal process to levy upon or attach the same for payment of any claim against any beneficiary.”

The judgment creditor has thus far successfully maintained that the right given to the judgment debtor by the insurance contract mentioned above — viz., the right on any interest date to withdraw the entire fund then remaining on deposit with Equitable — created an indebtedness by Equitable to the judgment debtor sufficient in amount and legally available to satisfy the judgment creditor’s demand in this proceeding for payment of the amount due from the judgment debtor.

The insurance plan made by the assured and assumed by Equitable as an obligation — which, among other provisions; permitted the judgment debtor as a beneficiary to withdraw the entire fund or any part thereof on any interest date — has been viewed judicially in this proceeding as creating between Equitable and the beneficiary the relationship of debtor and creditor which gave to the beneficiary such a measure of control over the fund as to make it subject in law to seizure by the judgment creditor.

Our conclusion is that the ruling which led to the order we now review thwarts the legislative purpose expressed in section 15 of the Personal Property Law. That statute provides in part that “ * * * when the proceeds of a life insurance policy, becoming a claim by death of the insured, are left with the insurance company under a trust or other agreement, the benefits accruing thereunder after the death of the insured shall not be transferable, nor subject to commutation or incumbrance, nor to legal process except in an action to recover for necessaries, if the parties to the trust or other agreement so agree.”

In applying that statute to our present problem we must give to the exemption it creates a meaning consistent with the policy behind it. (Surace v. Donna, 248 N. Y. 18, 21.) The enactment (L. 1911, ch. 327) antedated both the judgment which is the basis of the present claim by the judgment creditor, and the policy of life insurance which was productive of the fund, which the judgment creditor is endeavoring to reach by this proceeding. As a statutory declaration of public policy the statute “ * * * is a clear and unambiguous statement of the purpose of the Legislature to exempt from legal process, except in an action to recover for necessaries, the benefits accruing after the death of the insured under a trust or other agreement relating to the proceeds of a life insurance policy left with the insurance company where the parties to the trust or other agreement agree that such benefits shall be so exempt.” (Crossman Co. v. Rauch, 263 N. Y. 264, 271.)

The debt which the judgment creditor would collect by this proceeding was not incurred for “ necessaries.” We have also seen that the portion, here in suit, of the proceeds of the life insurance policy of which the judgment debtor is a beneficiary, was left with the insurance company under an agreement by the parties that any benefits and payments thereunder shall not be subject to legal process as a means to levy,upon or attach the same for payment of any claim against a beneficiary. In those circumstances, and recognizing again that section 15 of the Personal Property Law “ * * * should be liberally construed in order to effectuate the humane purpose embodied in the statute ” (Crossman Co. v. Rauch, supra, p. 271), we conclude that the right accorded to the judgment debtor under the insurance contract — the right on any interest date to withdraw all or any part of the amount then remaining on deposit with the insurer — is within the protective provisions of the statute as one of the “ benefits accruing ” to her under the policy of insurance issued by Equitable upon her husband’s life.

In reaching that conclusion we have not overlooked Ullman v. Cameron (186 N. Y. 339) and Amberg v. Manhattan Life Ins. Co. (171 N. Y. 314). Each of those cases was decided prior to ■the effective date of chapter 327 of the Laws of 1911 which amended section 15 of the Personal Property Law by adding those exemptive provisions quoted above which served to change the public policy of. this State and are, we think, determinative of this proceeding.

The orders should be reversed and the proceeding dismissed. • with costs to the appellant in all courts. [See 295 N. Y. 962.]

Lotjghras, Ch. J., Cosway, Desmosd, Thacher and Medalie, JJ., concur; Dye, J., taking no part.

Orders reversed, etc.


author: Dye, J.

text:
    Maria Blanco et al., Appellants, v. Teresa Velez, Respondent.
    Submitted October 23, 1945;
    decided March 7, 1946.

      Morris M. Goldnopf and Felipe N. Torres for appellants.
    I. A trust in the proceeds of the insurance upon the life of decedent was established in favor of the five sisters as beneficiaries and the defendant sister as trustee. (Woodside Presbyterian Church v. Burden, 240 App. Div. 43, 264 N. Y. 690; Brown v. Spohr, 180 N. Y. 201; Falcone v. Palotta, 29 N. Y. S. 2d 918, 262 App. Div. 875; Matter of Brunswick, 143 Misc. 573; Matter of Brown, 252 N. Y. 366; Matter of Kyte, 174 Misc. 1094; Hirsh v. Auer, 146 N. Y. 13.) II. The decision was in accordance with the weight of the evidence. III. The evidence establishes that decedent intended that all of his sisters share equally in the proceeds of his insurance in the event of his death.

      Irving Felcher for respondent.
    I. The action was properly dismissed as being within the Statute of Frauds.- (Bayreuther v. Reinisch, 264 App. Div. 138, 290 N. Y. 553.) H. The decision of the trial court was against the weight of the evidence. (Tracy v. Danzinger, 253 App. Div. 418; Matter of Sturges, 36 N. Y. S. 2d 141; Matter of Katz, 49 N. Y. S. 2d 604; Matter of Muller, 49 N. Y. S. 2d 772; Cessna v. Adams, 93 N. J. Eq. 276.)
   Dye, J.

Jose Bayonet, a merchant seaman engaged in the service of the War Shipping Administration, lost his life on the high seas due to enemy action. The Maritime Service had provided a war risk insurance to the amount of $5,000 and this has been paid to the defendant-respondent herein, one of five surviving sisters, whom the deceased, when he signed the ship’s articles, had designated as beneficiary and next of kin to be notified in the event of death or emergency. Three of the sisters, the plaintiífs-appellants herein, now bring this action to compel their sister, Teresa, to share the proceeds of the policy equally among them and a sister in Puerto Rico, on the theory that she holds it for their benefit under an oral trust. The judgment of the trial court has been reversed and the complaint dismissed because the agreement sought to be enforced was deemed to violate the Statute of Frauds (Personal Property Law, § 31, subds. 1, 8, as amd.).

When the Legislature amended section 31 of the Personal Property Law it did not intend to abrogate the well-established doctrine applicable to an express paroi trust. The agreement of Bayonet to name his sister beneficiary would not have been enforcible if he had failed to do so but, having named her pursuant to the understanding that she would share the insurance proceeds with her sisters, she received the proceeds as trustee of an express trust to carry out this understanding.

The paroi trust sought to be enforced here is that made by the defendant-respondent when she agreed with the deceased, in the presence of others, to distribute the insurance moneys, upon receipt, equally among her sisters. The right sought here is not to enforce an oral' agreement, the performance of which is not to be completed before the end of a lifetime, or to enforce an oral contract to establish a trust, but to enforce an express paroi trust which comes clearly within the rule of Hirsh v. Auer (146 N. Y. 13), and which does not come within the purñew of Personal Property Law, section 31, subdivision 1 and 8, as amended.

The judgments should be reversed and a new trial granted, with costs to the appellants to abide the event.

Lottghban, Oh. J., Lewis, Conway, Desmond and Thachee, JJ., concur; Medalie, J., deceased.

Judgments reversed, etc.


author: Lottghban, Ch. J.

text:
    In the Matter of Charles H. Sells, as State Superintendent of Public Works, Respondent, against Defense Plant Corporation et al., Appellants.
    Argued November 20, 1945;
    decided March 7, 1946.

      Harold E. Jacobson, Sol A. Liebman and Henry Fabricant for Defense Plant Corporation, appellant.
    I. This appellant, an instrumentality of the United States Government engaged in the performance of a governmental function, is immune from State regulation. (Ohio v. Thomas, 173 U. S. 276; Erie R. R. Co. v. New York, 233 U. S. 671; Hunt v. United States, 278 U. S. 96; Arizona v. California, 283 U. S. 423; Oklahoma v. Atkinson Co., 313 U. S. 508; People v. Hudson River Connecting R. R. Corp., 228 N. Y. 203; City of Newark v. Central R. Co., 297 F. 77; Emergency Fleet Corporation v. Western Union Tel. Co., 275 U. S. 415; Chesapeake & Delaware Canal Co. v. United States, 250 U. S. 123; Madden v. United States, 80 F. 2d 672, 297 U. S. 710; Clallam County v. United States, 263 U. S. 341; Wagner v. McDonald, 96 F. 2d 273; Defense Supplies Corp. v. United States Lines Co., 57 F. Supp. 291, 148 F. 2d 311.) II. The court below erred in limiting immunity solely to government officials. Third parties who have been engaged and directed by the Federal Government to perform a governmental function are responsible only to the Federal Government in accomplishment thereof. The State may not intervene between the sovereign and its agents. (McCulloch v. Maryland, 4 Wheat. 416; Oklahoma v. Atkinson Co., 313 U. S. 508; Yearsley v. Ross Constr. Co., 309 U. S. 18; United States v. Mayo, 47 F. Supp. 552, 319 U. S. 441; Lester v. Tarlton Contractors, Inc., 45 F. Supp. 994; People v. Hudson River Connecting R. R. Corp., 228 N. Y. 203; California v. Pacific Railroad Co., 127 U. S. 1.) I'll. The granting of an order of mandamus by the court below encroaches upon the jurisdiction and nullifies the decrees of the United States District Court. (De Coss v. Turner & Blanchard, Inc., 267 N. Y. 207; Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304; Haverhill v. International Railway Co., 217 App. Div. 521; Good Health Dairy Products Corp. v. Emery, 275 N. Y. 14; People v. Hudson River Connecting R. R. Corp., 228 N. Y. 203; Goldstein v. Somervell, 10 N. Y. S. 2d 747.)

      John B. Henrich, Jr., for National Lead Company, appellant.
    I. The granting of an order in the nature of mandamus under article 78 of the Civil Practice Act would conflict with and impair the jurisdiction and decrees of the.United States District Court and would encroach upon the sovereign immunity of the United States Government. II. The Defense Plant Corporation is an instrumentality of the United States Government engaged in the performance of a governmental function, and is immune from State control and regulation. (McCulloch v. Maryland, 4 Wheat. 316; Ohio v. Thomas, 173 U. S. 276; Erie R. R. Co. v. New York, 233 U. S. 671; Johnson v. Maryland, 254 U. S. 51; People v. Hudson River Connecting R. R. Corp., 228 N. Y. 203; City of Newark v. Central R. Co., 297 F. 77; Hunt v. United States, 278 U. S. 96; Arizona v. California, 283 U. S. 423; Stewart & Co. v. Sadrakula, 309 U. S. 94; Oklahoma v. Atkinson Co., 313 U. S. 508; United States v. Mayo, 47 F. Supp. 552; Pittman v. Home Owners’ Corp., 308 U. S. 21; Graves v. N. Y. ex rel. O’Keefe, 306 U. S. 466; State Tax Commission v. Van Cott, 306 U. S. 511.) III. The provisions of section- 21 of the Railroad Law do not apply to appellants. (People ex rel. Erie R. R. Co. v. Public Service Comm., 176 App. Div. 28; People ex rel. L. I. R. R. Co., v. Public Service Comm., 170 App. Div. 429.)

      Joseph Rosch and Alfred D. Kelly for Delaware and Hudson Railroad Corporation, appellant.
    I. Section 21 of the Railroad Law has no application. II. The right to cross the highways was acquired by the Federal Government under its power of condemnation. III. The granting of a directive order, under article 78 of the Civil Practice Act, should be ruled and controlled by the legal principles which have been applied to the granting of a peremptory writ of mandamus. (People ex rel. McMackin v. Bd. of Police, 107 N. Y. 235; Matter of Leitner v. New York Telephone Co., 277 N. Y. 180; People ex rel. Huntington v. Crennan, 141 N. Y. 239; Matter of Clements, 191 App. Div. 279.)

      J. Edward Williams, Roger P. Marquis and Fred W._ Smith for United States of America, amicus curiae, in support of appellant’s position.
    I. Defense Plant Corporation, as a wholly-owned agency of the United States, is not subject to State regulation of its activities in the performance of governmental functions.
      (Ohio v. Thomas, 173 U. S. 276; Hunt v. United. States, 278 U. S. 96; Arizona v. California, 283 U. S. 423; Johnson v. Maryland, 254 U. S. 51; United States v. Sanitary District of Chicago, 149 F. 2d 951.) II. State regulation is inapplicable to the construction and operation of the railroad here involved, since it is an instrumentality of the United States. (Ohio v. Thomas, 173 U. S. 276; Hunt v. United States, 278 U. S. 96; Arizona v. California, 283 U. S. 423; Johnson v. Maryland, 254 U. S. 51; United States v. Mayo, 319 U. S. 441.) III. State courts lack jurisdiction to issue mandamus against Federal agents. (McClung v. Silliman, 6 Wheat. 598; Ex Parte Shockley, 17 F. 2d 133; Schmoll, Inc., v. Federal Reserve Bank of New York, 286 N. Y. 503, 315 U. S. 818; Goldstein v. Sommervell, 170 Misc. 602; Brewer v. Kidd, 23 Mich. 440; Hinkle v. Town of Franklin, 118 W. Va. 585; Mallory v. Wheeler, 151 Wis. 136.) IV. The judgment below invades the jurisdiction of the United States District Court.

      Nathaniel L. Goldstein, Attorney-General (Orrin G. Judd and John R. Davison of counsel), for respondent.
    I. Corporate creatures of the Federal Grovernment are not immune from the police regulations of the States unless specifically endowed with such immunity by Congress; and Congress has neither expressly nor impliedly bestowed sovereign immunity on Defense Plant Corporation. (Stewart & Co. v. Sadrakula, 309 U. S. 94; Fort Leavenworth R. R. Co. v. Lowe, 114 U. S. 525; Keifer & Keifer v. R. F. C., 306 U. S. 381; R. F. C. v. Menihan Corp., 312 U. S. 81; Continental Bank v. Rock Island Ry., 294 U. S. 648; Federal Land Bank v. Priddy, 295 U. S. 229; F. H. A. v. Burr, 309 U. S. 242; Reagan v. Mercantile Trust Co., 154 U. S. 413; Gielow v. Eastern Shore Shipbuilding Corp., 265 F. 845; Gould Coupler Co. v. U. S. Shipping Board E. F. Corp., 261 F. 716; Penn Dairies v. Milk Control Comm., 318 U. S. 261.) II. There is no undue burden on Federal functions. (Lehigh Valley R. R. v. Commissioners, 278 U. S. 24; Matter of New York, Ontario & Western Ry. Co., 244 App. Div. 664, 271 N. Y. 567; Barna v. State, 293 N. Y. 877.) III. Unwise exercise of State power is not to be presumed. (McCulloch v. Maryland, 4 Wheat. 316; Graves v. N. Y. ex rel. O’Keefe, 306 U. S. 466; Western Union Tel. Co. v. Richmond, 224 U. S. 160.) IV. Neither National Lead-Company nor Delaware and Hudson Railroad Corporation can derive any claim to immunity through Defense Plant Corporati m. (Keifer & Keifer v. R. F. C., 306 U. S. 381; R. F. C. v. Menihan Corp. 312 U. S. 81; United States v. Baltimore & Annapolis R. R. Co., 176 Md. 383, 308 U. S. 525; Penn Dairies v. Milk Control Comm. (318 U. S. 270); James v. Dravo Contracting Co., 302 U. S. 134; Fidelity & Deposit Co. v. Pennsylvania, 240 U. S. 319; Alward v. Johnson, 282 U. S. 509.) V. The order appealed from does not encroach upon the jurisdiction of the Federal courts nor does it portend such an encroachment. (Fort Leavenworth R. R. Co. v. Lowe, 114 U. S. 525; People v. Kobryn, 294 N. Y. 192; Adams v. United States, 319 U. S. 312; People v. Vendome Service, Inc., 173 Misc. 825, 284 N. Y. 742; James v. Dravo Contracting Co., 302 U. S. 134; Stewart & Co. v. Sadrakula, 309 U. S. 94; St. Louis v. Western Union Telegraph Co., 148 U. S. 92; Western Union Telegraph Co. v. Richmond, 224 U. S. 160.) VT. Appellants are within the purview of section 21 of the Railroad Law. (People ex rel. Bacon v. N. C. Ry. Co., 164 N. Y. 289.) VII. A proceeding under article 78 of the Civil Practice Act was the proper, and indeed the only adequate, remedy for the attainment of the relief sought. (People ex rel. Harris v. Commissioners, 149 N. Y. 26; Baird v. Board of Supervisors, 138 N. Y. 95; People ex rel. Burhans v. City of N. Y., 198 N. Y. 439; People ex rel. Bacon v. N. C. Ry. Co., 164 N. Y. 289.)
   Lottghban, Ch. J.

For the sake of convenience, the corporate parties are here given new names. Defense Plant Corporation is called the Federal Agency. National Lead Company is called the Mining Concern. The Delaware and Hudson Railroad Corporation is called the Local Railroad Company.

The Federal Agency was created at the behest of the War Production Board of the United States. It was set up under the Reconstruction Finance Corporation Act (U. S. Code, tit. 15, § 606b, subd. [3]) and is owned by the Reconstruction Finance Corporation, a body corporate of the United States. The Mining Concern is a foreign corporation which is licensed to do business in this State. The Local Railroad Company is a domestic railroad corporation.

In July 1942, these parties entered into a tripartite agreement whereby (1) the Federal Agency undertook to finance the construction of a railroad line from premises of the Mining Concern at Sanford Lake, N. Y. to the terminus of the Local Railroad Company at North Creek, N. Y., a distance of thirty-three miles; (2) the Mining Concern undertook to arrange for the construction of such a railroad line, subject to the approval of the Federal Agency; and (3) the Local Railroad Company undertook to supervise the work of construction as architect-engineer and to operate and maintain the railroad line for the Mining Concern. These commitments were designed to facilitate transportation of minerals and ores of the Mining Concern that were essential to the war effort of the United States. Consequently the tripartite agreement made also the following provision: The Federal Agency was to be owner of the railroad line which was to be leased to the Mining Concern at a stated rental for a term to end thirty days after the date of termination of the unlimited emergency declared by the President of the United States on May 27, 1941, or in any event not later than June 30, 1949; but with the right to the Federal Agency to cancel the lease whenever the ores and minerals of the Mining Concern should cease to be necessary to the performance of contracts with the United States.

On October 30, 1942, the Secretary of War requested the Attorney General of the United States to institute proceedings in the United States District Court for the Northern District of New York to acquire all easements that were requisite to the establishment of the right-of-way of the planned railroad line, including rights of passage over nine public roads, three of which were State highways. Such proceedings were thereupon brought pursuant to the Second War Powers Act, 1942 (56 Stat. 177, U. S. Code, tit. 50, Appendix, § 632). Within the right-of-way area were 228 acres of the Forest Preserve of the State of New York and easements in that acreage were sought by the United States for the duration of the war emergency plus fifteen years. On November 9,1942, the Federal District Court made an order granting to the United States immediate possession of all the easements so demanded. Whether a final decree has been entered in the condemnation proceedings is not clear upon the present record. Nor does it thereby appear that the United States has acquired any definite interest in lands of the State of New York. It is indicated, however, that the State of New York interposed in the condemnation proceedings an answer “ asking that inasmuch as said railroad line will traverse the State Forest Preserve, the use of which is limited by the State Constitution, said easement shall be limited in its duration to the present emergency.” The briefs — not the record — suggest that this request was refused by the Federal court.

This present proceeding was brought by the Superintendent of Public Works of the State of New York. He insists that the railroad line of the Federal Agency is subject to requirements of the New York Railroad Law which will be stated in a moment. The Federal Agency, the Mining Concern, and the Local Railroad Company made a motion for dismissal of the superintendent’s petition. The United States of America filed a Representation of Interest and joined in that motion. At Special Term the motion was granted, but the Appellate Division reversed and ordered the Federal Agency, the Mining Concern and the Local Railroad Company (1) to ask of the New York Supreme Court “ consent and approval ” for the construction of so much of the railroad line as was to be built across public highways; (2) to submit plans and specifications for such crossings to the petitioner as Superintendent of Public Works and to the Public Service Commission; and (3) to restore the public highways at such crossings to the former condition thereof. The case is now here on separate appeals of the Federal Agency, the Mining Concern and the Local Railroad Company. From this point on, these three parties will be called the appellants.

The first and third directions in the order of the Appellate Division are predicated upon the following provisions of section 21 of the Railroad Law of this State: No railroad corporation shall # * * construct its road * * * across, upon or along any highway in any town or street in any incorporated village, without the order of the supreme court of the district in which such highway or street is situated, made at a special term thereof, after at least ten days’ written notice of the intention, to make application for such order shall have been given to the superintendent of highways of such town, or board of trustees of the village in which such highway or street is situated, and also to the superintendent of public works in case such highway or street is one maintained in whole or in part by the state. * * * Every railroad corporation which shall build its road along, across or upon any • * * street, highway * * * which the route of its road shall intersect or touch, shall restore the * * * street, highway * * * thus intersected or touched, to its former state, or to such state as not to have unnecessarily impaired its usefulness, and any such highway * * * may be carried by it, under or over its track, as may be found most expedient. ”

This text of section 21 means: (1) The New York Supreme Court has power to say whether the construction of a railroad along, upon or across a public highway in a town or village of this State is in order as a matter of public propriety. (2) The business of renewing the public highway after such a construction is a continuing duty of restoration, maintenance and care and within limits requires railroad corporations to make such alterations of their highway appurtenances as' from time to time become necessary to the public safety and convenience in keeping with regional developments and growth of traffic. (See Post v. W. S. R. R. Co., 123 N. Y. 580, 588; City of Olean, v. Pennsylvania R. R. Co., 249 N. Y. 364; Sturman v. New York Central R. R. Co., 280 N. Y. 57, 61; Matter of Keeseville, Ausable Chasm & L. C. R. R. Co., 116 App. Div. 72; Matter of H. & D. R. R. Co. v. Trustees of Dansville, 127 App. Div. 867.)

As we said at the beginning, the railroad line of the appellants was to be an instrument of war which the United States was to construct and maintain upon a right-of-way that was acquired for that one purpose by the self-sufficient means of a condemnation decree of a Federal court. Interference with the execution of such a national function cannot be taken to have been authorized by any State statute. (See Johnson v. Maryland, 254 U. S. 51, 57; Stewart & Co. v. Sadrakula, 309 U. S. 94,103-104; Anderson Nat. Bank v. Luckett, 321 U. S. 233, 248.) Hence the first of the above provisions of section 21 — the words that call for an enabling order of the New York Supreme Court — can have no valid application to the present case, and consequently the first direction in the order of the Appellate" Division must be overruled.

Enforcement against the appellants of the other above provision of section 21 — the mandate for restoration and care of streets or highways which have been touched or intersected by railroads — probably would not disturb any national purpose in this instance and would perhaps be allowable on that basis, (Stewart & Co.v. Sadrakula, 309 U. S. 94, 102-103.) But we do not reach that proposition. There is neither allegation, nor evidence, nor finding of any failure of the appellants to comply with that provision of section 21 and, that being so, the third direction in the order of the Appellate Division has no warrant in any event.

The second direction therein — that the appellants submit plans and specifications to the Superintendent of Public Works and to the Public Service Commission — is said to be sanctioned by section 52 of the New York Highway Law, section 89 of the New York Railroad Law and section 53 of the New York Public Service Law. For reasons that may be shortly stated, none of the cited sections has any apparent bearing on the present controversy. '

Section 52 of the Highway Law merely empowers the Superintendent of Public Works to prescribe conditions and regulations in respect of the construction of a railroad upon any portion of a State highway. In that section no reference’ is made to the submission of plans or specifications to the superintendent; nor is there in this record allegation or evidence or finding of failure of the appellants to heed any request by the superintendent for submission of data of that kind. Under section 53 of the Public Service Law, the Public Service Commission must give its permission and approval on the basis of necessity and convenience before a railroad may be constructed in this State. Such consent of the commission is unnecessary, however, when — as in the present case — authority to construct a railroad in this State has been obtained from another valid source. (See City of New York v. Brooklyn City R. R. Co., 232 N. Y. 463.) Section 89 of the Railroad Law applies only to railroad crossings constructed at grade and there is no showing that any crossing has been so constructed by the appellants.

The order of the Appellate Division should be reversed and that of Special Term affirmed, without costs.

Lewis, Conway, Desmond, Thacher and Dye, JJ., concur; Medalie, J., taking no part.

Ordered accordingly.


text:
    The People of the State of New York ex rel. Alvin Untermyer et al., as Executors of and Trustees under the Will of Samuel Untermyer, Deceased, et al., Appellants, against Arthur J. McGregor, as Acting Commissioner of Assessment and Taxation of the City of Yonkers, Respondent. (1942 Assessment.) The People of the State of New York ex rel. Samuel Untermyer Pabic & Gardens, Appellant, against Arthur J. McGregor, as Acting Commissioner of Assessment and Taxation of the City of Yonkers, Respondent. (1943 Assessment.)
    Argued December 7, 1945;
    decided March 7, 1946.

      William F. Bleakley, Mitchell Salem Fisher, David Gorfinkel and Ulysses S. Adler for appellants.
    I. The certificate of incorporation, especially when read in the light of the circumstances preceding and surrounding the organization of Samuel ITntermyer Park & Gardens, demonstrates that the “ horticultural purposes ” are purposes ancillary to the use and enjoyment of the public park and gardens. (Matter of De Peyster, 210 N. Y. 216; Williams v. Gallatin, 229 N. Y. 248; National Navy Club of N. Y., Inc., v. City of New York, 122 Misc. 89; People ex rel. Trustees of Masonic Hall v. Farrell, 130 Misc. 142; Matter of Buffalo Turn Verein v. Reuling, 155 Misc. 797; Matter of Frasch, 245 N. Y. 174; Association for Colored Orphans v. Mayor, 104 N. Y. 581; Webster Apartments v. City of New York, 118 Misc. 91, 206 App. Div. 749; Matter of Corporation of Yaddo, 216 App. Div. 1; Roche’s Beach, Inc., v. Commissioner of Internal Revenue, 96 F. 2d 776; Leubuscher v. Commissioner of Internal Revenue, 54 F. 2d 998.) II. The theory of Special Term that the ITntermyer trustees held the property on the 1942 assessment date is erroneous. The property was entitled to tax exemption. (Matter of Graves, 171 N. Y. 40; Matter of Saunders, 77 Misc. 54, 156 App. Div. 891, 211 N. Y. 541; Matter of Juilliard, 238 N. Y. 499; Matter

      of Fletcher, 166 Misc. 486, 255 App. Div. 843; Matter of Graves, 171 N. Y. 40; People ex rel. Crook v. Wells, 179 N. Y. 257; People ex rel. Andrews v. Cameron, 140 App. Div. 76, 200 N. Y. 585; Matter of Le Fevre, 233 N. Y. 138.) III. Since the four parcels west of Warburton Avenue are an integral part of the public park and gardens, relators were entitled to exemption of these parcels. (Matter of Central Parkway, 140 Misc. 727; People ex rel. Outer Court, Inc., v. Miller, 161 Misc. 603, 256 App. Div. 814, 280 N. Y. 825; Matter of Mary Immaculate School, 188 App. Div. 5; Congregation Emanu-El of New York v. City of New York, 150 Misc. 657, 243 App. Div. 692.)

      John J. Broderick, Corporation Counsel, for respondent.
    I. The Tax Law (§ 4, as amd.) does not exempt the subject property from taxation for the years 1942 and 1943. (People ex rel. Andrews v. Cameron, 140 App. Div. 76, 200 N. Y. 585; Matter of Schwartzman, 262 App. Div. 635; People ex rel. N. Y. Lodge No. 1, B.P.O.E. v. Purdy, 179 App. Div. 805, 224 N. Y. 710; Matter of Board of Education of City of Jamestown v. Baker, 241 App. Div. 574, 266 N. Y. 636; Matter of Beekman, 232 N. Y. 365.) II. Relators have failed to show lots west of Warburton Avenue are exempt. (Bd. of Foreign Missions v. Bd. of Assessors, 244 N. Y. 42.)
   Dye, J.

Samuel Untermyer died March 16, 1940, leaving a last will and testament by which he attempted to give “ Grey-stone,” his country estate located on the Hudson River at Yonkers, Westchester County, N. Y., to the State of New York for use as a public park. We quote the pertinent provision of the will: Eighth: Having heretofore, on May 20, 1938, purchased from Alvin Untermyer and Irwin Untermyer, as Trustees under Trust Agreement dated September 24, 1917 and Supplemental Agreement dated May 25, 1921, the Estate known as ‘ Greystone ’ located at Yonkers in the State of New York, and being now the owner thereof, I hereby bequeath to the State of New York, absolutely and in perpetuity, as and for a public park and gardens, to be known as ‘ Samuel Untermyer Park and Gardens ’, all that portion of said estate situate and lying west of Broadway (otherwise known as ' Albany Post Road ’) together with all buildings, structures and improvements thereon, and including, but without limiting the foregoing, all lands and water-grants located or lying west of the Aqueduct or Warburton Avenue; provided, however, that either the State of New York or the appropriate authority thereof shall, within six months after my decease, agree in writing with my Executors to accept said property for the purpose aforesaid. There is not to be included in this bequest any part of the contents of the Mansion (most of which is and for the past twelve years or more has been the property of my children), or any stained-glass windows or furnishings in the Mansion or any personal property or statuary except such as, in the opinion of my Executors, forms an integral part of the buildings, structures and improvements on the property bequeathed.

“ There is now constructed on the property bequeathed an open-air theatre and walled-garden, known as the 1 Greek Gardens ’, that is now and has been for many years devoted to exhibitions of flowers and flowering plants, similar to those that have for generations characterized the exhibitions at Hampton Court Gardens in England. It is my hope (though not a condition of the foregoing bequest) that the State of New York or the appropriate authority thereof will, in connection with the acceptance by it of the bequest, arrange for the perpetuation of these exhibitions and for the maintenance of the property in a condition generally similar to that in which it has been maintained by me.

“ In that connection I suggest and recommend, though not in any sense as a condition of the foregoing bequest, that if at the time of my death my present superintendent, Mr. George H. Chisholm, is in my employ, he be retained by the State of New York or the appropriate authority thereof in a position similar to that he now occupies, because of his long and exceptional knowledge of and experience with plant life in various parts of the world and his tried integrity and capacity to maintain and improve the property bequeathed, as a park and gardens.”

The State renounced the gift. The executors and trustees thereupon petitioned the Surrogate of New York County to determine whether the cy pres doctrine was applicable to the charitable and public purpose expressed by the testator. The Surrogate held the principles of the cy pres doctrine applicable to the gift of “ Greystone ” and a decree so construing the will was entered April 24, 1941. Conformably with the decree, the executors, pursuant to the Membership Corporations Law and with the approval of the Surrogate and the Supreme Court, duly organized a non-profit membership corporation entitled “ Samuel Untermyer Park & Gardens,” a charitable membership corporation, for the purpose of carrying out the charitable and public purposes of the bequest of “ Greystone.”

On March 26, 1942, the executors and trustees transferred the fee of “ Greystone ” to the newly organized charitable corporation by deed containing a recital that it was pursuant to article Eighth of the said last will and testament as construed by the cy pres decree of April 24, 1941.

The refusal of the taxing authorities of the city of Yonkers to exempt the premises from taxation has given rise to these certiorari proceedings to review the tax assessments as levied. Proceeding No. 1 was brought by the executors and trustees to review the assessment for the year 1942 which covers the period while the executors and trustees held title from the date of the entry of the cy pres decree, April 24, lt)41, to the date Greystone was transferred to the charitable membership corporation, March 26, 1942. Proceeding No. 2 was brought by the corporation to review the assessment for the year 1943 which is for the period subsequent to the transfer. The proceedings were consolidated and referred to an official referee for hearing and report, who found that sufficient public use as a public park and playground had been established to justify exemption of the property from taxation. The Special Term refused to follow the recommendation and such refusal has been affirmed by the Appellate Division on the theory that under the provisions of the Certificate of Incorporation the Samuel Untermyer Park & Gardens Membership Corporation is not so exclusively devoted to charitable and public uses as to justify exemption within the meaning of subdivision 6 of section 4 of the Tax Law. The pertinent provision of the certificate of incorporation is “ * * * and to develop, improve, maintain and operate such land as and for a public park and gardens, and, if and to the extent so'determined by its directors from time to time, as and for a public playground and/or for horticultural purposes * * *.”

The lower courts have construed these words to mean that the trustees of the corporation may devoté the property to charitable public use or, in the alternative, horticultural purposes independent of public use and solely for the exclusive and private use and enjoyment of the members of the corporation. It should be said that no such intention is imputed to the corporate trustees but that the decision is based solely on the language as used in the certificate. From the entry of the cy pres decree of April 24,1941, until March 26,1942, when the property was transferred to the corporation, and continuously thereafter, Greystone ” has been used as a public park and garden and for no other purpose. It has been patronized by thousands of visitors, the daily attendance fluctuating with the season and the attractiveness and variety of the floral and horticultural displays.

The cy pres decree is not questioned on this appeal; it is a collateral matter which need not concern us here. Our task is limited to the specific question of whether the membership corporation, Samuel Untermyer Park & Gardens, is exempt from taxation. The issue is clear-cut and hinges on the force and effect of the meaning of the words in the certificate “ * * * and/or for horticultural purposes”.

When words are lifted from their context there is always danger that the intended meaning may be distorted if not actually destroyed. This is no exception but rather illustrates the danger of such a practice. The only safe way to avoid such a pitfall is to read the context as a whole.

The incorporation of the Samuel Untermyer Park & Gardens was for the primary and sole purpose of receiving the record title to Greystone ” and to hold it for the purpose and intent as expressed by Samuel Untermyer in article Eighth of his last will and testament and which has been construed to be within the principles of the cy pres doctrine. This, no one challenges. The public and charitable purpose is expressed in clear and understandable language; the park-like grounds are made available to the public for their use and enjoyment affording not only means for physical activity and relaxation but also aesthetic pleasure and inspiration for those less actively inclined who come to enjoy the beautiful floral and horticultural displays. To assure a successful accomplishment of this beneficent purpose a certain discretion was left with the trustees to determine the apportionment of the available lands between playgrounds and gardens. Nowhere is it said that the horticultural purpose is to be co-ordinate or equal.' It is rather an embellishment or adjunct to the successful maintenance and development of the whole project as a place of healthy and cultural enjoyment. The test as to what is and what is not an exempt charitable corporation may be gathered from the statute under which it is incorporated (Matter of De Peyster, 210 N. Y. 216),; or, when the act of incorporation is silent, from its constitution and by-laws (Assn, for Colored Orphans v. Mayor, 104 N. Y. 581) and a similar rule applies to charitable corporations created pursuant to a will (Webster Apartments v. City of New York, 118 Misc. 91, affd. 206 App. Div. 749). A careful reading of the certificate of incorporation in this case clearly indicates that it serves to implement the purposes and intent of the testator as expressed in article Eighth of his last will and testament and the cy pres decree, both of which are referred to therein, and when we take into consideration the exclusive public use to which the. executors and trustees, during their interim ownership, and the trustees of the corporation have devoted the property, it seems clear and indisputable that it is exempt from taxation under subdivision 6 of section 4 of the Tax Law.

We also hold that the exemption extends to the assessment for the year 1942 when the property was in the hands of the executors between. the cy pres decree of April. 24, 1941, and the transfer to the corporation, March 26, 1942 (Matter of Le Fevre, 233 N. Y. 138; People ex rel. Crook v. Wells, 179 N. Y. 257; Matter of Craves, 171 N. Y. 40).

There is one further question involved and that is whether the property west of Warburton Avenue should also be exempt. Part of it is under water and inaccessible to the public for playground use. From the record it appears that the. property affords a view of the Hudson River beyond Tappan Zee north and south to the George Washington Bridge which might and -> could be destroyed if the property were sold and buildings erected. We feel that it should' be treated as an integral part of the park and while so used, exempt from taxation.'

In each proceeding, the orders should be reversed, with costs in all courts to the appellants, and the matter remitted to the

Special Term for further proceedings not inconsistent with this opinion.

Lewis, Conway, Thacher and Medalie, JJ., concur; Lotjghran, Ch. J., and Desmond, J., dissent upon the ground that the corporation “ Samuel Untermyer Park & Gardens ” was not organized exclusively for one or more of the purposes specified in subdivision 6 of section 4 of the Tax Law and its land is not used exclusively for carrying out thereon one or more of such purposes. It is used for “horticultural purposes” — purposes not exempted from taxation under the statute.

Ordered accordingly. (See 295 N. Y. 893.)


author: Thacher, J.

text:
    Frederick J. Helterline, Appellant, v. The People of the State of New York, Respondent.
    Argued January 16, 1946;
    decided March 7, 1946.

      Alfred D. Dennison for appellant.
    I. The total invalidity and nullity of the tax deed was indisputably established. (People v. Hagadorn, 104 N. Y. 516; Saranac L. & T. Co. v. Roberts,
      195 N. Y. 303; Crommelin v. Finn, 129 Misc. 252, 223 App. Div. 868.) II. The premises were not vacant and were in the actual occupancy of plaintiff’s predecessor in title. (People v. Durey, 126 Misc. 642.) III. The invalidity is not cured by any of the so-called curative acts. (People ex rel. Barnard v. Wemple, 117 N. Y. 77; Joslyn v. Roclcwell, 128 N. Y. 334; Cromwell v. MacLean, 123 N. Y. 474; Wallace v. McEchron, 176 N. Y. 424; People v. Ladew, 189 N. Y. 355; People v. Witherbee, 199 App. Div. 272; People v. Faxon, 111 Misc. 699.) IV. The action is not barred by any statute of limitations. (Whitman v. City of New York, 85 App. Div. 468; Joslyn v. Rockwell, 128 N. Y. 334; People v. Turner, 145 N. Y. 451; Meigs v. Roberts, 162 N. Y. 371; People v. Ladew, 189 N. Y. 355; People v. Turner, 145 N. Y. 451; Saranac L. & T. Co. v. Roberts, 195 N. Y. 303; Ostrander v. Bell, 199 App. Div. 304, 234 N. Y. 566.) V. Plaintiff had title and both actual and constructive possession entitling him to maintain the action. (Nehasane Park Assn. v. Lloyd, 25 Misc. 207, 45 App. Div. 631,167 N. Y. 431; Whitman v. City of New York, 85 App. Div. 468; House v. McCormick, 57 N. Y. 310.) VI. The court had no power to impose the payment of any money as a condition for granting the relief to which the plaintiff is entitled by law. (Village of Massapequa Park v. M. P. V. Sites, 278 N. Y. 28; Crommelin v. Finn, 129 Misc. 252, 223 App. Div. 868; People v. Hagadorn, 104 N. Y. 516; Saranac L. & T. Co. v. Roberts, 195 N. Y. 303; Colonial Trust Co. v. Central Trust Co., 243 Penn. 268; Magniac v. Thomson, 15 How. 281; Hedges v. Dixon County, 150 U. S. 182; Price v. Price, 128 A. L. R. 1088; Bryson v. Lee, 160 So. 797; Seif v. City of Long Beach, 286 N. Y. 382.)

      Nathaniel L. Goldstein, Attorney-General (David Belkin, Orrin G. Judd and Warren H. Gilman of counsel), for respondent.
    I. The 1875 tax deed to the People conveying lot 91, in Jerseyfield Patent, is valid and binding on the plaintiff. (Dunkum v. Maceck Building Corp., 256 N. Y. 275; Mabie v. Fuller, 255 N. Y. 194; Baker v. Oakwood, 123 N. Y. 16; Lightfoot v. Davis, 198 N. Y. 261; Bicknell v. Comstock, 113 U. S. 149; People v. Ladew, 237 N. Y. 413; Saranac L. & T. Co. v. Roberts, 195 N. Y. 303; People v. Pulver,. 226 App. Div. 416; People v. Turner, 145 N. Y. 451; Meigs v. Roberts, 162 N. Y. 371; Bryan v. McGurk, 200 N. Y. 332; Baud, v. Huntington Hebrew Congregation, 178 App. Div. 748; Turner v. New York, 168 U. S. 90; Robbins v. Abrew, 275 N. Y. 233; Halleran v. Manzione, 166 Misc. 679, 281 N. Y. 845.) II. Plaintiff has not been in possession of the property for one year prior to the commencement of the action, and therefore could not bring this proceeding under section 500 of article 15 of the Eeal Property Law as it existed in 1929. (Young v. Stone, 61 App. Div. 364, 174 N. Y. 517; Vanderveer Crossings v. Rapalje, 133 App. Div. 203.) III. The Trial Justice had power to impose conditions upon his decision. (Comstock v. Johnson, 46 N. Y. 615; Thomas v. Evans, 105 N. Y. 601; Sharon v. Tucker, 144 U. S. 533; Haffey v. Lynch, 143 N. Y. 241; Van Allen v. N. Y. E. R. R. Co., 144 N. Y. 174; Westphal v. City of New York, 177 N. Y. 140; Kinney Oil Co. v. Kieffer, 277 U. S. 488; Camp v. Boyd, 229 U. S. 530; Walden v. Bodley, 14 Pet. [U. S.] 156; Burnes v. Burnes, 137 F. 781; Lynch v. Burt, 132 P. 417; Miner v. Beekman, 50 N. Y. 337; Reed v. Tyler, 56 Ill. 288.)
   Thacher, J.

Plaintiff brought suit under article 15 of the Eeal Property Law to determine the ownership of the southern half of lot number 91, Jerseyfield Patent, in the town of Stratford, county of Pulton, claiming to have acquired title thereto from one Lena M. Levitt by deed received for record January 15, 1929. Having proved this conveyance, plaintiff traced his title through mesne conveyances back to 1852. This chain of title is complete notwithstanding an assignment for the benefit of creditors by one of plaintiff’s predecessors in title on April 5, 1880. True, the record fails to show any reassignment but there was a reversion of title by operation of law on April 5, 1905 (L. 1875, ch. 545; Matter of Vietor (Ruth), 295 N. Y. 665). The State denied that plaintiff was in possession of the property for one year prior to the commencement of the action — a statutory prerequisite to the maintenance of suit under article 15, section 500, of the Eeal Property Law — but proof of an unbroken chain of title for more than twenty years established prima facie ownership of the land in plaintiff and constructive possession thereof under Civil Practice Act, section 335. The statutory requirement is satisfied by constructive possession, that is, “ possession in law, which follows in the wake of title ” (Churchill v. Onderdonk, 59 N. Y. 134, 136; Vanderveer Crossings v. Rapalje, 133 App. Div. 203, 206; Clason v. Stewart, 23 Misc. 177, 180).

To defeat plaintiff’s claim of title the State relied upon a tax deed from the State Comptroller to the People of the State recorded May 30, 1877, pursuant to a tax sale of 1871. At this tax sale the whole of lot 91 consisting of a thousand acres was sold for unpaid taxes levied upon its nonresident assessment for the years 1861, 1862 and 1863 and also for unpaid taxes levied upon a nonresident assessment of the north half of the lot in the years 1864 and 1865, In the latter two years the south half of lot 91 (the lands here in question) was assessed as resident lands and the taxes levied thereon were in fact paid. This sale was wholly void and the tax deed did not confer title on the State (People v. Hagadorn, 104 N. Y. 516, 524). To cure this defect the State relied upon the Tax Law of 1896, chapter 908, section 132, contending that under the provisions of that section the comptroller’s deed, having been recorded for more than two years, was conclusive evidence that the sale and. proceedings prior thereto were valid and regular. Section 132 made such a deed subject to cancellation on direct application to the comptroller or in an action brought before a competent court, provided such appplication be made or such action be brought, in the case of all sales held prior to the year eighteen hundred and ninety-five, within one year from the passage of this act ” (May 27, 1896).

At a Trial and Special Term the tax deed was held to be wholly void and plaintiff’s title was sustained, but the court considered it equitable that the plaintiff should pay to the defendant the unpaid taxes upon the south half of the lot for the years 1861, 1862 and 1863, with interest, and should also reimburse the State equitably for the taxes it had paid thereon from and including the year 1886 to date, provided a fair and just apportionmentiof the latter amount could be arrived at by proof of the relative assessed valuation of the north and south halves of said lot during said period. An interlocutory decree provided for an apportionment and the final decree required payment in accordance with the referee’s apportionment.

The Appellate Division reversed this decision, holding that section 132 of chapter 908 of the Laws of 1896 was not only a curative act but a statute of limitations which barred the plaintiff’s assertion that the sale was wholly void and that the tax deed did not confer title on.the State.

In People v. Hagadorn (supra) it was held that a sale of land for taxes of several years, the assessment for one of which is void, is an excess of jurisdiction and renders the sale entirely void. In that case this court said (p. 524): There can be.no division of the sum payable, and no separation which can validate a'part and reject the rest. It is either wholly bad or altogether good.” Nehasane Park Assn. v. Lloyd (167 N. Y. 431, 437) and Saranac L. & T. Co. v. Roberts (195 N. Y. 303, 311) are to the same effect. If this were not the rule the owner’s privilege of redemption would be conditioned upon payment of an illegal tax. The purpose of the prescribed statutory process for assessment, sale and redemption is to compel payment of taxes overdue and, in default of such payment, to transfer the title of real estate from the owner thereof to another without the owner’s consent. This being the nature of the process, the owner’s title may not be divested unless statutory requirements are strictly observed. Nor may the Legislature by its fiat make legal a deed which was theretofore absolutely void because of jurisdictional defects. A curative act enacted for such a purpose is unconstitutional and void. It is an attempt to deprive the owners of the land of their property without due process of law. (Dunkum v. Maceck Building Corp., 256 N. Y. 275; Marx v. Hanthorn, 148 U. S. 172; Wallace v. McEchron, 176 N. Y. 424; Cromwell v. MacLean, 123 N. Y. 474.)

Although the Legislature may legally enact a statute of limitations to prevent the assertion of a right to question the validity of a tax title of vacant and unoccupied lands because of jurisdictional defects in the sale and in the proceedings leading thereto, this it may not do unless a reasonable time is given for the assertion of the right before the statute becomes operative (Dunkum v. Maceck Building Corp., supra; Meigs v. Roberts, 162 N. Y. 371, 378; Doud v. Huntington Hebrew Congregation, 178 App. Div. 748; Halsted v. Silberstein, 196 N. Y. 1).

In applying these rules to this case the Appellate Division failed to note that there was no right to bring an action against the State to determine title to the property in question within one year after the enactment of the statute on May 27, 1896. Section 132 of the Act of 1896, chapter 908, had its origin in chapter 448 of the Laws of 1885, which amended chapter 427 of the Laws of 1855 and gave conclusive effect to the comptroller’s conveyance. On the same day that this law was passed, the Legislature enacted a further amendment to chapter 427 of the Laws of 1855 by adding the following provision (L. 1885, ch. 453, § 4): “ From and after the advertisement, once a week for three successive weeks, of a list of wild, vacant or forest lands, to which the state holds title from a tax sale or otherwise, in one or more newspapers to be selected by the comptroller, published in the county in which such lands may be located, all of such wild, vacant or forest lands shall be deemed, and are hereby declared to be, in the actual possession of the comptroller of this state; and such possession shall be deemed to continue until he has been dispossessed by the judgment of a competent tribunal.” It was by this provision and this provision only that the State gave its assent to an action against the comptroller in a competent tribunal. Prior to this amendment, the title to the land was held by the State under the tax sale deeds and there was no statute which authorized a suit to be maintained against it, or to oust it from possession, and the amendment was designed to permit an action against the State to try title to wild, vacant or forest lands held by the State under tax sales. This was accomplished by vesting in the comptroller actual possession of the lands which would permit the maintenance of an action to try title and by the assent of the State to such an action being brought against the officer in whose possession the lands were declared to be. (Saranac L. & T. Co. v. Roberts, 195 N. Y. 303, 314, 315.) These provisions were carried into section 133 of the Act of 1896, and we are faced with the question whether within one year from May 27,1896, there was any right to bring action against the State or its officer to determine title to the land here in question. That question depends upon whether or not section 133 of the Act of 1896, which is in substance the same as section 4 of chapter 453 of the Laws of 1885 quoted above, applied to a claim of title predicated upon a so-called tax sale which was not only wholly void but was for taxes which had in fact been paid.

Section 133 applies only to “ wild, vacant or forest lands, to which the state holds title from a tax sale or otherwise Here the defect in the sale was such that the State never held title to the lands. The owner’s title was never divested. Consequently section 133 could have no application and gave no right to bring action to recover possession or determine the title. Accordingly, publication of the comptroller’s advertisement did not start the running of any statute of limitations. An action against the State under article 15 of the Real Property Law was first authorized April 9, 1925 (L. 1925, ch. 565). This action was commenced July 30, 1929, and it is not contended that it was barred by any statute of limitations other than section 132 of the Act of 1896. The application to this case of the short period of limitation prescribed by section 132 without any opportunity to bring a suit against the State or the comptroller would deprive the owner of the land of his property without due process of law by failing to provide any time for the assertion of his title before the statute barred the proceeding. To apply a curative act to such a situation would deprive the owner of his property by legislative fiat without due process of law.

Plaintiff appealed from that part of the decree which imposed upon plaintiff an obligation to pay a portion of the back taxes to defendant. We think it clear that this imposition was erroneous. The statutory action was brought under article 15 of the Real Property Law to determine title to land. No counterclaim for the recovery of taxes was interposed and the question was not litigated. We do not think that in such an action the court may condition determination of the question of title upon the payment of back taxes.

The judgment of the Appellate Division should be reversed and that of the Trial and Special Term should be modified by striking out the second numbered decretal paragraph thereof and, as so modified, affirmed, with costs to the appellant in this court and in the Appellate Division.

Loughban, Oh. J., Lewis, Conway, Desmond, Dyb and Medalie, JJ., concur.

Judgment accordingly.


author: Desmond, J. Lewis, J.

text:
    The People of the State of New York, Appellant, v. Murray M. Gassman, Myer Kaufman, William Pucciarelli, Max Rosenthal, Larry Mendelsohn, Max Kleitzel, Frank Goldberg, Jimmy Messina, Mike Stern, Philip Moss, Herman Rheingold, David Elkin, Louis Goldberg and Samuel Haker, Respondents.
    Reargued October 22, 1945;
    decided April 18, 1946.

      Nathaniel L. Goldstein, Attorney-General (William F. McNulty, Orrin G. Judd, John P. Powers, Vincent A. Marsicano
      and Samuel A. Hirshowitz of counsel), for appellant.
    I. The grand jury’s conclusion that Local 324 “ was not and .'is not a bona-fide labor union ” was amply supported by the evidence and should not have been disturbed on a motion to dismiss the indictment on the minutes of the grand jury. (People v. Glen, 173 N. Y. 395; People v. Sexton, 187 N. Y. 495; People v. Sweeney, 213 N. Y. 37; People v. Bob, 233 App. Div. 94; People v. Booth, 52 Misc. 340; People v. Steinhardt, 47 Misc. 252; People v. Melvin, 2 Wheel. Cr. Cas. 262; Columbia River Co. v. Hinton, 315 U. S. 143; People v. Distributors Div., Smoked Fish Workers Union, 169 Misc. 255; Matter of Wilson Sullivan Co., Inc., 289 N. Y. 110; Matter of Electrolux Corporation, 288 N. Y. 440; Board v. Hearst Publications, 322 U. S. 111; People v. Masiello, 177 Misc. 608.) II. In the absence of a showing that the findings contained in paragraph “ 10 ” of the indictment are unsupported by the evidence before the grand jury, it is immaterial that the independent laundrymen coerced into joining and remaining members of Local 324 are “ workingmen ” in the sense that they perform manual labor or that they may he performing the same economic function as employee drivers. With equal propriety, the argument thus advanced by the defendants could be applied to a host of other independent businessmen in numerous other trades and industries. (Railway Mail Assn. v. Corsi, 293 N. Y. 315.)

      Robert Ssold, Irvine J. Shubert and Irving Michael Atkin for respondents.
    I. Agent drivers are workingmen and may combine in labor unions. (People v. Muller, 286 N. Y. 281; United States v. Hutcheson, 312 U. S. 219; Cafeteria Union v. Angelos, 320 U. S. 293; Met. Life Ins. Co. v. Labor Relations Board, 280 N. Y. 194; Goldstein v. State of New York, 281 N. Y. 396; Bernstein v. Madison Baking Co., 186 Misc. 474, 266 App. Div. 839, 291 N. Y. 827; Bakery Drivers Local v. Wohl, 315 U. S. 769; Drivers’ Union v. Lake Valley Co., 311 U. S. 91.) II. Agent drivers are realistically and legally workingmen at common law. (Matter of Goodman v. Ralph, 294 N. Y. 169; Matter of Electrolux Corporation, 288 N. Y. 440; Matter of Morton, 284 N. Y. 167; Matter of Scatola, 282 N. Y. 689; Matter of Glielmi v. Netherland Dairy Co., 254 N. Y. 60; Jones v. Goodson, 121 F. 2d 176; Gulf Refining Co. v.
      Brown, 93 F. 2d 870; Matter of Wieder [Buffalo Evening News], 292. N. Y. 609; Bates Motor Transport Lines v. Mayer, 213 Ind. 664; Matter of Beach v. Velzy, 238 N. Y. 100; Texas Co. v. Zeigler, 177 Va. 557.) 111. Even if the driver agents are deemed to be independent contractors, the labor union provisions of the Donnelly Act (General Business Law, art. 22) apply because, unionization of the agent drivers is part of the unionization of the workingmen in the industry. Inside laundry workers have a lawful interest in unionization of laundry drivers. (Bossert v. Dhuy, 221 N. Y. 342; A. F. of L. v. Swing, 312 U. S. 321; Exchange Bakery & Restaurant, Inc., v. Rifkin, 245 N. Y. 260; May’s Furs & Ready-To-Wear, Inc., v. Bauer, 282 14. Y. 331.) IY. Unionized laundry workers have the right to unionize the agent drivers. (Drivers Union v. Lake Valley Co., 311 U. S. 91; Bakery Drivers Local v. Wohl, 315 U. S. 769; Angelos v. Mesevich, 289 N. Y. 498; Bernstein v. Madison Baking Co., 186 Misc. 474, 266 App. Div. 839, 291 N. Y. 827; Schwartz v. Laundry & Linen Supply Drivers’ Union, Local 187, 339 Pa. 353.) Y. When bona fide unions are interested in what is for them legitimate objectives, the entire situation is protected by the labor union, exemption of the Donnelly Act. (Bernstein v. Madison Baking Co., 186 Misc. 474, 266 App. Div. 839, 291 N. Y. 827; American Fur Manufacturers Association, Inc., v. Associated Fur Coat & Trimming Manufacturers, Inc., 161 Misc. 246, 251 App. Div. 708; Weitzberg v. Dubinsky, 173 Misc. 350, 259 App, Div. 1008; Sainer v. Affiliated Dress Manufacturers, Inc., 168 Misc. 319.) VI. The Donnelly Act does not cover home laundry service. (People v. Epstean, 102 Misc. 476; Finnegan v. Butler, 112 Misc. 280; Standard Engraving Co. v. Volz, 200 App. Div. 758; N. Y. Clothing Mfrs’. Ex., Inc., v. Textile Fins. Assn., Inc., 238 App. Div. 444; People v. Shakun, 251 14. Y. 107; People v. Horvatt, 237 App. Div. 289; People v. Mangan, 262 N. Y. 508.) VIE. That some driver agents have combined in corporations or partnerships, and that others use stores is of no significance. (Bora Park Market v. Seller, 280 N. Y. 481; Cafeteria Union v. Angelos, 320 U. S. 293.)
   Desmond, J.

An indictment against these defendants has been dismissed on the Grand Jury minutes, and the People appeal. The indictment is a long one but we do not have to work our way through its seventy-three counts. The parties agree that the whole indictment must fall unless there'- was evidence before the Grand Jury to support this allegation contained in one of the counts: “ That the members of said alleged union are persons independently engaged in the business on their own account, duly licensed as such by the City of New York, having no employers, soliciting their own customers and independently engaging in the business of soliciting laundry trade for profit, and that none of the so-called laundry agents who became and are members of said alleged union are employees or have employers, but are engaged in business for themselves and that the said alleged union was not and is not a bona-fide labor union.”

The reference is to section 340 of the General Business Law. Section 340 is part of the Donnelly Act, now article 22 of the General Business Law. Passed originally in 1899 (ch. 690), the act declared illegal and penalized every contract or combination whereby a monopoly in this State of any commodity in common use is or may be created or maintained or whereby competition in the supply or price of such commodity may be restrained or whereby, in order to create or maintain such a monopoly,"the free pursuit of any business, trade or occupation is or may be restricted or prevented. The Donnelly Act is little more than a codification of the common law upon the subject ’ ’ (Matter of Davies, 168 N. Y. 89, 101). Under the common law it had-been held that a combination of workingmen to obtain increased compensation for themselves was a criminal conspiracy “ injurious to trade or commerce ” (People v. Fisher, 14 Wend. 9, 15). In 1933, the Legislature added the word service ■” to the first paragraph of section 340, apparently because of court decisions that the act prior to that amendment had no application to price fixing on services ”. In the same year there was put into the act a statement that it should not apply to certain co-operative associations nor to bona fide labor unions •”. Still later, in 1935, there was added, as subdivision 3 of section 340, these significant words, taken from the Federal Clayton Act (U. S. Code, tit. 15, § 17): the labor of human beings shall not be deemed or held to be a commodity or article of commerce as such terms are used in this section ’ ’ and the further pronouncement that “ nothing herein contained shall be deemed to prohibit or restrict the right of workingmen to combine in unions, organizations and associations, not organized for the purpose of profit.” And not only the Legislature but the People of this State have declared in unmistakable terms that our antimonopoly laws are not to be used against workers seeking to better their lot. Article I, section 17, of the Constitution, adopted by popular vote in 1938, declares: “ Labor of human beings is not a commodity nor an article of commerce and shall never be so considered or construed.” One would look far for a flatter statement than that.

Our question is thus a simple one. If defendants did no more than organize and operate a bona fide labor union ” or an “ association ” of workingmen ”, and through it further the aims lawful for such a union or association, then the Donnelly Act, by precise exclusion, has nothing at all to do with their acts (see discussion of the Clayton Act in Allen Bradley Co. v. Union, 325 U. S. 797). If that be the situation in this case, defendants could not validly be indicted for a violation of the act and this indictment had to be dismissed (People v. Glen, 173 N. Y. 395; Code Crim. Pro., § 258).

Although some fifty witnesses, including most of the defendants, testified before the Grand Jury, the basic facts are few and undisputed. Until about twenty years ago the laundry companies in New York City had their bundles picked up from, and delivered back to, their customers by drivers employed by the companies.. Then some of the laundry companies conceived the- idea -of changing the status of these drivers so as to avoid the payment- of certain insurance premiums and other charges. Under: the new plan the driver had to own his own truck and ceased to be an'employee. These men, now called agents ”, became in- time more and more independent and began to shop around among the various laundry companies for the best terms. Some of them combined together to operate their own laundries. Others, singly or in groups, conducted stores where customers brought laundry and called for it when finished. Some of these storekeeper’s carried-the bundles to and from the laundries; in other- cases"..the • laundry company picked up the bundles at the store..:: A thousand or more of these drivers, agents and storekeepers were. organized by defendants into Local 324 of the Amalgamated Clothing Workers of America. The so-called “inside workers ” in the laundries — that is, the employees who do the actual laundry work — are members of other locals of the parent union, so that practically all the domestic laundry workers in New York City are organized under the Amalgamated Clothing Workers of America. There are closed shop agreements between the laundry companies and the various locals, by the terms of which the laundry companies are forbidden to do business with drivers, agents or storekeepers who are not union members. Driver-agents and storekeeper-agents are not permitted to shift from one laundry to another except upon consents, procured from committees set up under the closed shop agreements. All but three of the defendants are officers of Local 324 — the other three are connected with the parent organization, the Amalgamated Clothing Workers of America. All, except the three last mentioned are, or have been, laundry truck or wagon drivers.

The members of Local 324, though no longer employees, still drive the vehicles, pick up and mark the bundles, carry them between customers and laundry companies, collect the charges and account to the companies for those collections, receiving as their compensation the difference between the amounts •charged by the laundry and the amounts paid by the householders. Their physical activities and their economic function are the same as before. True, they have some of the marks or qualities of independent contractors, such as a measure of independence and some small investment of capital. But in common speech and common sense, they are still “ workingmen ” just as are window cleaners or furnacemen who' go from house to house and are not employees of anyone. Wé find no controlling definitions of “ labor union ” or “ workingmén ” but we are here dealing not with niceties of language but with a broad policy, strongly expressed, of exempting workers from the antimonopoly statutes. The policy of protecting and encouraging the right of workers to organize and bargain is as well settled in this State as any policy could be. It finds further expression in the anti-injunction statute (Civ. Prae. Act; § 876-a) passed in 1935, and in our State Labor. Relations Act (Labor Law, art. 20), which was enacted in 1937. For sufficient reasons the Legislature limited the coverage of those two statutes to “ employees ”. The 1935 amendment of subdivision 3 of section 340 of the General Business Law, however, used the broader word <£ workingmen ” and that amendment, as well as the 1939 addition to the Constitution, refers to £‘ labor of human beings ”. The word ££ worker ” has a wider range than the word ££ employee ”, and ££ worker ” is the genus of which ££ employee ” is a species (Restatement of Torts, Vol. 4, par. 776). ££ Workingmen ” means people who perform certain tasks, rather than people in certain contractual relationships. The members of this local union are workingmen who do part of the job of washing household linens. As such, their organized activities for self-betterment are specifically exempted from the Donnelly Act, and no grand jury had any right to indict them for violating that act.

We find no controlling court decisions strictly in point except Bernstein v. Madison Baking Co. (266 App. Div. 839, leave to appeal denied, 291 N. Y. 827), which in essentials cannot be distinguished from this case. That was an injunction case but it would be strange if the courts should find criminal liability for acts not constituting a civil wrong. The conclusion'here reached is consistent, also, with cases extending other labor laws to independent ££ non-employee ” workers (see Drivers’ Union v. Lake Valley Co., 311 U. S. 91; Board v. Hearst Publications, 322 U. S. 111; Bakery Drivers Local v. Wohl, 315 U. S. 769; see, also, Columbia River Co. v. Hinton, 315 U. S. 143, 145, where an opposite result was reached because, as the court said in a note in the Allen Bradley case in 325 U. S. at page 807, the Columbia Packers case was ££ a dispute between groups of. business men revolving solely around the price at which one group would sell commodities to another group ”, and see the similar case of People v. Distributors Div., Smoked Fish Workers Union, 169 Misc. 255).

We are deciding this case only. We do not attempt to fix a point at which a person becomes so much an enterpriser that he can no longer enjoy the statutory privileges of a £< workingman.” <£ This is one of those classes of cases where it is safer to prick out the contour of the rule empirically, by successive instances, .than to attempt definitive generalizations ” (Hand, J., in All Star Feature Corp. case, 231 F. 251, 252, discussing the meaning of “ workman ” and <£ servant ” in the Bankruptcy Act priority provisions).

Judge Medahe, before Ms death, voted for affirmance of the order here appealed from, and expressed views similar to those stated herein. •

The order should be affirmed.

Lewis, J.

(dissenting). The public policy of this State as declared by the Legislature in section 340 of the General Business Law — commonly known as the Donnelly Act — pronounces as illegal all agreements for monopoly or in restraint of trade, except associations of designated types including “ bona fide labor unions.” In that connection subdivision 3 of that statute provides: The labor of human beings shall not be deemed or held to be a commodity or article of commerce as such terms are used in tMs section and notMng herein contained shall be deemed to proMbit or restrict the right of workingmen to combine in unions, organizations and associations, not organized for the purpose of profit.” (Emphasis supplied)

By the indictment, the dismissal of which is about to be affirmed, the Grand Jury of New York County has charged that, in violation of the provisions of the Donnelly Act, the defendants have associated themselves in an alleged labor umon (hereinafter referred to as Local No. 324) for purposes of monopoly and in restraint of trade —not for the purposes of forming a bona fide union of worMngmen — and have conspired to restrict competition in the supply of laundry service in New York County and elsewhere by preventing independent business people from having their laundry processed in laundries of their own selection. A majority of the court have concluded, as a matter of law, that the membership of Local No. 324 comprises workingmen and, accordingly, that the acts of the defendants were not in violation of the Donnelly Act.

We find it difficult to accept the majority view believing, as we do, that the record of evidence before the Grand Jury met the statutory test for the legal sufficiency of an indictment. That test is: “ The grand jury ought to find an indictment, when all the evidence before them, taken together, is such as in their judgment would, if unexplained or uncontradicted, warrant a conviction by the trial jury.” (Code Grim. Pro., § 258.)

It is our belief that — within the statutory requirements last quoted above — there was presented before the Grand Jury evidence which “ when * * * taken together * * * if unexplained or uncontradicted ” was sufficient to “ warrant a conviction by the trial jury ” of the conspiracy charged. There was evidence that within the membership of Local Ho. 324 are those individuals who, with their own capital and their own equipment operated by their own employees, conduct laundry enterprises for their own account and are not subject to the control of the bulk laundries. That evidence presented a question of fact as to whether such members are workingmen, viz,., employees, or entrepreneurs — in this instance the conductors of business independent of the bulk laundries.

We do not conceive it to he a function of the court to determine whether the evidence before the Grand Jury establishes that the membership of Local Ho. 324 comprised workingmen rather than employers or entrepreneurs. Such action by the court usurps the .statutory function of the Grand Jury which body, as we have seen, is given power to indict in those circumstances where the evidence is such as “ in their judgment ”, if unexplained or uncontradicted, would warrant a conviction by a trial jury.

It is not for the court to exercise that judgment. In this instance the decisive inquiry by the Grand Jury was whether the defendants had formed a bona fide union of workingmen within the terms of the Donnelly Act, or, in violation thereof, had formed a combination in restraint of trade. In pursuing that inquiry the Grand Jury had the right to review both the facts before them and the law applicable thereto as means by which to formulate “ their judgment ” as to whether such evidence would warrant a conviction by a trial jury. As to the functions thus exercised this court has had occasion to say: The grand jury is an institution that we inherited with the common law. It is for many legal purposes rather difficult of classification. It is neither a regularly organized tribunal, nor yet an entirely informal body. While in a certain sense a part of the court in connection with which it conducts its deliberations, it is, for many-purposes, free from any restraint-by that court. A grand jury is clothed with power to determine both the facts and the law, and its methods of procedure, so far as they are not discretionary, are fixed by statute and not by rules of courts.” (Emphasis supplied.) (People v. Glen, 173 N. Y. 395, 400-401.)

Upon the record before us we believe it is error to rule as a matter of law that the acts of the defendants proven before the Grand Jury were in furtherance of a legitimate union purpose within the esclusory provision of section 340, subdivision 2, of the General Business Law. Accordingly, we dissent and vote to reverse the orders of the Appellate Division and the Court of General Sessions and to reinstate the indictment.

Loughran, Ch. J., Dye and Medalie, JJ., concur with Desmond, J.; Lewis, J., dissents in opinion in which Conway and Teacher, JJ., concur.

' Order affirmed, etc.