text:
    Nathan M. Cherey, Appellant, v. City of Long Beach et al., Respondents.
    Submitted March 11, 1940;
    decided April 9, 1940.

      Lester H. Washburn and Nathan M. Cherey, in person, for appellant.
    The city of Long Beach has no power or authority to issue bonds to pay the judgments. (Wells v. Town of Salina, 119 N. Y. 280; Ketchum v. City of Buffalo, 14 N. Y. 356.) There is no general or special law which either determines or authorizes the city of Long Beach to determine the period of probable usefulness of the object or purpose for which the indebtedness evidenced by the bonds is to be contracted, for the purposes of section 2 of article 8 of the New York Constitution. (Levy v. McClellan, 196 N. Y. 178; City of Poughkeepsie v. Quintard, 136 N. Y., 275; Veatch v. Moscow, 18 Ida. 313; Bolick v. City of Winston-Salem, 202 N. C. 786; Williams v. City of Rock Hill, 177 S. C. 82.) Section 8-b of the General Municipal Law (Cons. Laws, ch. 24), in so far as it either determines or authorizes the City Council of the City of Long Beach to determine that the payment of judgments evidencing indebtedness incurred for other than capital purposes has any period of probable usefulness, is null and void. (N. Y. Const. art. 8, § 2). The issuance of the bonds will not constitute the refunding of indebtedness which has been contracted prior to January 1, 1939, and which may be refunded under section 2 of article 8 of the New York Constitution without regard to the period of probable usefulness of the object or purpose for which the indebtedness was contracted. (Ketchum v. City of Buffalo, 14 N. Y. 356; People ex rel. Peene v. Carpenter, 31 App. Div. 603.)

      Bernard H. Reich, Corporation Counsel (George Xanthaky of counsel), for respondents.
    The payment of judgments is an expenditure of money for a proper public or municipal purpose. (Levy v. McClellan, 196 N. Y. 178; Matter of Chapman v. New York, 168 N. Y. 80; Sun Printing Assn. v. New York, 152 N. Y. 257; N. Y. Const. art. 8, § 2, ¶ 4.) The city has the authority and power to issue bonds and pay judgments. (Ketchum v. City of Buffalo, 14 N. Y. 356.) The object or purpose for which the bonds will be issued has a definite period of probable usefulness. (Wooll

      cott v. Schubert, 217 N. Y. 212; McLean v. United States, 226 U. S. 374; People v. Tremaine, 281 N. Y. 1; Assn, for Protection of Adirondack v. MacDonald, 228 App. Div. 73; 253 N. Y. 234; Hutchison v. Ross, 262 N. Y. 381; Prentis v. Atlantic Coast Line Co., 211 XT. g. 210; Union Free School-District No. 3 v. Town of Rye, 280 N. Y. 469; Matter of Coombs v. Edwards, 280 N. Y. 361; Franklin Society for Home Building & Savings v. Bennett, 282 N. Y. 79.)

      William H. Emerson, Corporation Counsel (Robert R. Reed of counsel) for City of Rochester, amicus curiæ.

    The “ period of probable usefulness ” of the “ object or purpose ” of indebtedness contracted to pay a judgment or other emergency debt, or to finance current expenses against revenue, is properly measured by the time reasonably required to liquidate the debt or to collect the taxes, levied or to be levied, for its payment. The funding, of such debt is not prohibited by the Constitution. (Union Free School District No. 3 v. Town of Rye, 280 N. Y. 469; Franklin Society v. Bennett, 282 N. Y. 80; Allen v. Stevens, 161 N. Y. 122; People v. Mancuso, 255 N. Y. 463; Tilling-hast v. Tillinghast, 25 Fed. Rep. [2d] 531; Richmond v. Henrico Co., 83 Va. 204; Chadwick v. Crawfordsville, 24 N. E. Rep. [2d] 942.)

      E. J. Dimock and Richard S. Kyle for Hawkins, Delafield and Longfellow, amici curiæ.

   Lehman, Ch. J.

The Common Council of the city of Long Beach has adopted an ordinance which provides that bonds of the city in the aggregate principal amount of $373,000 shall be issued for the purpose of funding certain unpaid judgments enumerated in the ordinance. These bonds are to be designated as Judgment Funding Bonds.” They are to be dated January 1, 1940. They shall,” in accordance with the terms of the ordinance, bear interest at a rate not exceeding four per centum (4%) per annum, payable semi-annually on each January 1st and July 1st, and shall matine $264,000 of Bonds on January 1, 1941, and $109,000 of Bonds on January 1, 1942.”

The plaintiff, a taxpayer of the city of Long Beach, has challenged the power of the city of Long Beach to issue the bonds. He asserts that the Legislature has not conferred power upon the city of Long Beach to issue bonds for the purpose of funding or paying judgments and that the Constitution of the State of New York (Art. VIII, § 2) prohibits any issue of bonds for such purpose. The controversy was submitted to the Appellate Division upon an agreed statement of facts. It decided that the city had power to adopt the ordinance and to issue the bonds in accordance with its terms. Thereafter the Legislature amended the charter of the city of Long Beach (Laws of 1922, ch. 635) so as to confer upon the city express power to borrow money and to issue bonds for the payment or funding of any judgment heretofore or hereafter recovered against the city.” (Laws of 1940, ch. 92.) The parties have, upon this appeal, stipulated that the new statute leaves open only the question whether the proposed bond issue will contravene the provisions of the Constitution of the State.

Article VIII of the Constitution, entitled “ Local Finances,” regulates the manner in which local subdivisions of the State may contract indebtedness, pledge their credit, and issue bonds or other obligations. Section 2 of that article is entitled Restrictions on indebtedness of local subdivisions; contracting and payment of local indebtedness; exceptions.” It provides, among other things: “ No indebtedness shall be contracted for longer than the period of probable usefulness of the object or purpose for which such indebtedness is to be contracted, to be determined by or pursuant t'a general or special laws, which determination shall be conclusive, and in no event for longer than forty years.” The parties, in order to define the controversy submitted to the court, have stipulated that plaintiff asserts that in issuing said bonds said City will contract indebtedness for longer than the period of probable usefulness of the object or purpose for which such indebtedness is to be contracted, in contravention of Section 2 of Article VIII of the Constitution of the State of New York, since the object or purpose for which said bonds are to be issued has no period of probable usefulness.”

Experience has demonstrated that in public, as in private, business current expenses should ordinarily be paid from current income; and that when indebtedness is contracted to meet extraordinary expenditures or expenditures not expected to recur, the indebtedness should be paid within the period in which the benefit expected to result from such expenditures is enjoyed. Where public officers charged with the duty to maintain government and to provide the money required to meet its expense have unrestricted power to borrow money, there is danger that such power may be used to postpone payment of current expenses and to place upon later generations the burden of paying for benefits long after the benefits have ceased. Extravagance, waste and, eventually, impairment or destruction of the public credit may result.

The Constitutional Convention of 1938 heeded such danger and formulated amendments to the Constitution calculated to afford adequate protection. In the Constitution as it existed at that time, there was provision that, with certain exceptions not material here, no debt should be contracted by or in behalf of the State “for a period longer than that of the probable life of the work or object for which the debt is to be contracted, to be determined by general laws, which determination shall be conclusive.” (Art. VII, § 4.) With but one change, the Constitutional Convention of 1938 incorporated in section 12 of article VÍI of the proposed amended Constitution, a similar restriction upon the power of the State to contract debts; in the amended Constitution the reference is to the “ probable life of the work or purpose,” instead of the “ probable life of the work or object,” for which the debt is contracted. At the same time, the Constitutional Convention incorporated in section 2 of article VIII of the proposed amended Constitution the provision, applying to debts of local subdivisions, which is relied upon , by the plaintiff herein. There, it must be noted, the reference is to the period of probable usefulness of the object or purpose ” of the debt instead of the “ probable life of the work or object.”

The difference in language is significant and its purpose has been made patent in the proceedings of the Constitutional Convention. Argument might be made that the words probable life of the work or object,” originally used in the restriction imposed by the Constitution upon the debt-contracting power of the State, can be applied reasonably only where a debt is contracted for a physical capital improvement and that no debt contracted for any other purpose may be made payable at a later date. Indeed, when the Legislature, in obedience to the mandate of the original provision of the Constitution, passed a general law determining the “ probable life of certain works or objects of state debt,” it made no determination of the probable life of any “ work or object ” other than physical capital improvements. (Cf. § 51 [now § 49-b] of the State Finance Law [Cons. Laws, ch. 56] [Laws of 1924, ch. 23].) In 1932, however, the Legislature enacted a new section, 49-c, of the State Finance Law, “ in further compliance with the requirements of section four of article seven of the state constitution,” and provided therein that the probable life of a public activity for relieving the people of the state from hardship and suffering caused by unemployment is hereby measured by the probable duration of its public welfare effect and is hereby determined to be twenty years.” (Laws of 1932, ch. 564.) We need not pause here to consider whether the original failure to determine the probable-life of any “ work or object ” not connected with a physical improvement, constituted a legislative construction that only works or objects which involve such an improvement have a “ probable life ” which can be determined by the Legislature, or whether the belated legislative determination that the “ probable life ” of a relief activity is twenty years, transcended the scope of the discretionary power vested under the Constitution in the Legislature. That belated determination was never challenged but when the Committee on State Finances submitted to the Constitutional Convention of 1938 the draft of its proposed amendments to the Constitution, it said in its report that, “ At present a debt can be contracted only for some single work or object.’ As these terms appear to be synonymous and to relate to something physical, it is deemed wiser to substitute the word ‘ purpose ’ for the word ' object ’ and remove any doubt that may exist as to the power of the State to contract a. debt for some single objective that may relate to more than one physical structure or, indeed, as in the case of relief bonds, may not include a physical structure. This change is in accordance with the actual construction which has been placed upon the existing language.” (Report of Committee on State Finances, Constitutional Convention, Document 3, pp. 6 and 7.) In the light of that report there can be no doubt that when the Convention adopted section 12 of article YII of the amended Constitution, it intended that the words “ probable life of the work or purpose ” for which the State might contract a debt payable at a later stipulated date should include debts contracted for relief and other proper purposes, which do not involve the construction or acquisition of a physical structure.

The words “ period of probable usefulness of the object or purpose,” for which a debt is contracted, are of course of broader scope. Here, there is no possible implication that only the construction or acquisition of physical improvements can constitute an object or purpose ” which has a period of probable usefulness ” and that the Constitution permits a local subdivision to incur indebtedness payable thereafter in installments only in order to construct or acquire such physical improvements. Though it is entirely clear that some other objects and purposes ” for which indebtedness may be contracted may have “ a period of probable usefulness ” in the future and that when such period of usefulness has been determined the indebtedness may be made payable in installments during such period, it is nevertheless equally clear that not every object or purpose for which a debt is contracted does have such a period of extended usefulness. There must be some basis for a determination that the object or purpose for which the indebtedness is contracted will probably be useful in the future as well as in the immediate present. What we have said still leaves open, therefore, the question whether the plaintiff may properly challenge the determination that indebtedness contracted by a municipal corporation to pay outstanding judgments is incurred for a purpose which has a period of probable future usefulness.

A judgment for a sum of money constitutes an indebtedness but it is not an indebtedness “ contracted ” by the judgment debtor within the meaning of the constitutional restriction. That provision applies only to indebtedness voluntarily assumed and payable at a stipulated time in the future in accordance with stipulated terms. A judgment is usually imposed in invitum, though it may be for the enforcement of an indebtedness previously contracted; it is immediately payable and enforcible by execution against the property of a judgment debtor who has property which is not exempt from execution, and a municipal corporation may ordinarily be compelled to levy taxes to pay a judgment or other indebtedness which is immediately payable. Enforcement of a judgment out of the property of a judgment debtor will, at times, cause the debtor irreparable damage; and compulsory payment of large judgments against a municipal corporation out of moneys raised by a single tax levy may cause oppressive hardship to the taxpayers. The hardship may be the result of neglect of the officers of the corporation; none the less a court of equity will, at times, relieve the hardship by permitting the municipal corporation to spread over a series of years the assessment and levy of taxes to pay a judgment. So this court decided in connection with the judgments against the city of Long Beach which the city seeks now to pay out of the proposed bond issue. (County of Nassau v. City of Long Beach, 272 N. Y. 260; Matter of Coombs v. Edwards, 280 N. Y. 361. Cf. East St. Louis v. Amy, 120 U. S. 600.) Can it be said that an indebtedness incurred to pay judgments does not serve a purpose which is useful, at least for the period during which taxes might otherwise be levied to pay the judgments, or that the purpose of the constitutional restriction would be thwarted if indebtedness so contracted is made payable in installments during the same period?

Judgments, as we have said, may be granted for the enforcement of an indebtedness previously contracted and such indebtedness may have been contracted for objects or purposes which have only transient usefulness of which no trace remains when the judgment is rendered. The Constitution prohibits a municipal corporation from contracting indebtedness payable in the future for objects or purposes of purely transient usefulness and argument is made that an indebtedness contracted to pay a judgment is in effect an indebtedness contracted to pay the obligation which underlies the judgment and may not be made payable at a date when the original obligation is of no continuing use. We are told that -unless the restriction placed by the Constitution upon the debt-contracting power of the local division is so construed, officers of a municipal corporation might defeat the plain purpose of the restriction by the simple expedient of postponing payment of indebtedness until a judgment is obtained by the creditor and then issuing bonds to pay the judgment and in that manner imposing upon taxpayers in the future the burden of paying past expenses of government which no longer serve a useful purpose.

No safeguards imposed by Constitution or statute can give to the public perfect protection against misuse by public officers of powers conferred upon them. For such wrong, the only remedy often lies in the ballot. Here, the Constitution provides the rule to be applied and it has not left to the public officers plenary discretion in the application of the rule. The determination of the period of probable usefulness of the objects or purposes for which indebtedness is incurred is not left to the local subdivisions. That determination must be made “by or pursuant to general or special laws, which determination shall be conclusive.”

In obedience to that mandate, the Legislature has enacted section 8-b of the General Municipal Law (Cons. Laws, ch. 24), entitled Periods of Probable Usefulness (Laws of 1939, ch. 235, as amd. by Laws of 1939, ch. 381). That section provides that, In compliance with the requirements of section two of article eight of the state constitution the period of probable usefulness of the several objects and purposes described below for which indebtedness may be contracted by any county, city, town, village, fire district, or other organized district, except a school district, empowered by law to contract indebtedness, is hereby determined to be as follows, notwithstanding the provisions of any general, special or local law: * * *

22. Judgments. Payment of judgments against the municipality, other than for capital purposes, five years. * * *

The statute constitutes a legislative construction that the provisions of section 2 of article VIII permit a local subdivision to contract an indebtedness payable at a later date for the purpose of funding judgments, where such funding would serve a continuing useful purpose. We may not lightly cast aside such a legislative construction made within a few months after the Constitutional Convention in which members of the Legislature had an influential part and, here, reason would, indeed, constrain us to construe the Constitution in the same manner. Where a levy of taxes sufficient to pay outstanding judgments would cause such undue hardship to the taxpayers that equity will permit the tax levy to be spread over a series of years, an indebtedness incurred to fund the judgment must necessarily serve a useful purpose during the period over which the tax levy might be spread, regardless of the nature or object of the original obligations enforced by the judgments. The Constitution does not prohibit the issue of bonds to accomplish a public purpose where the bonds are payable within the period, as determined by the Legislature, in which the object for which the bonds are issued serves a useful purpose. The Legislature, which determines the period of probable usefulness of the purposes and objects for which bonds might be issued, may, in reaching its determination, weigh possible usefulness in some cases against possible harm to the public interest in others. It might refuse to find that indebtedness contracted for payment of judgments other than for capital purposes is contracted for an object or purpose which has any period of public usefulness which can properly be determined by general law. Then, under the Constitution, no bonds could be issued for such purpose. The Legislature has, however, determined that the indebtedness has a period of probable usefulness of five years and that determination is conclusive. We may not consider whether it is wise or not. Upon this appeal we pass only upon the controversy which has been submitted to the court. We do not pass upon the validity of the bonds in any other respect.

The judgment should be affirmed, without costs.

Loughran, Finch, Rippey, Sears, Lewis and Conway, JJ., concur.

Judgment affirmed.


source: Caselaw Access Project

author: Lewis, J.

license: Public Domain

text:
    In the Matter of Carl P. McKinney, Respondent, against Edmund L. Hamilton, Justice of the Peace of the Town of Brunswick, as a Magistrate in a Court of Special Sessions for the Town of Brunswick, Appellant, Impleaded with Others.
    Argued February 28, 1940;
    decided April 16, 1940.

      John J. Bennett, Jr., Attorney-General (Henry Epstein, Joseph A. McLaughlin and Sol I. Smithline of counsel), for appellant.
    The Court of Special Sessions had jurisdiction to try petitioner for a violation of section 1272 of the Penal Law since the offense is a misdemeanor. (People ex rel. Pierce v. Howe, 218 App. Div. 273; People v. Kraft, 229 App. Div. 281; People ex rel. Jaffe v. Henderson, 245 App. Div. 169; 270 N. Y. 638; Rueffer v. Department of Agriculture and Markets, 164 Misc. Rep. 803; New York Central & H. R. R. R. Co. v. Williams, 136 App. Div. 904; 199 N. Y. 108; People v. Primrose Wet Wash Laundry Co., 11 N. Y. Supp. [2d] 302; People v. Grass, 257 App. Div. 1; People ex rel. Cosgriff v. Craig, 195 N. Y. 190; People v. Bellinger, 269 N. Y. 265; People v. Kaminsky, 208 N. Y. 389; People v. Lyon, 99 N. Y. 210; People v. Reson, 249 App. Div. 54; City of Buffalo v. Murphy, 228 App. Div. 279; Chapman v. Selover, 225 N. Y. 417; Colon v. Lisk, 153 N. Y. 188.) The power to impose a maximum fine of $10,000 and in default of the payment thereof to sentence the offender to a term of imprisonment under the appropriate sections of the Code of Criminal Procedure did not transmute the misdemeanor into a felony to deprive the Court of Special Sessions of jurisdiction. (People ex rel. Gately v. Sage, 13 App. Div. 135; People ex rel. Price v. Sheffield Farms Co., 225 N. Y. 25.)

      Thomas E. Dewey, District Attorney of New York County (Stanley H. Fuld and Burr F. Coleman of counsel), amicus curiæ.

    Courts of Special Sessions possess jurisdiction to try defendants charged with violation of section 1272 of the Penal Law. (People v. Bellinger, 269 N. Y. 265; People v. Kaminsky, 208 N. Y. 389; People ex rel. Cosgriff v. Craig, 195 N. Y. 190; People v. Lyon, 99 N. Y. 210; People v. Reson, 249 App. Div. 54; People v. Hayman, 94 Misc. Rep. 624; City of Buffalo v. Murphy, 228 App. Div. 279; People ex rel. Gately v. Sage, 13 App. Div. 135; Hart v. Norman, 92 Misc. Rep. 185; Matter of Cooley v. Wilder, 234 App. Div. 256; People ex rel. Jaffe v. Henderson, 245 App. Div. 169; People ex rel. Pierce v. Howe, 218 App. Div. 273; People v. Schumann, 146 Misc. Rep. 395; People v. Peterson, 145 Misc. Rep. 324.)

      Edward J. Neary, District Attorney of Nassau County (Philip Huntington of counsel), amicus curiæ.

    Courts of Special Sessions, including such courts held by justices of the peace in the State of New York, have express power and jurisdiction to hear and determine charges of violation of section 1272 of the Penal Law. (People v. Monahan, 257 N. Y. 388; City of Buffalo v. Murphy, 228 App. Div. 279.)

      Robert T. Murray and John F. Murray for respondent.
    A justice of the peace acting as a Court of Special Sessions had no jurisdiction to try the petitioner for a violation of section 1272 of the Penal Law, since that offense is a felony. (People ex rel. Cosgriff v. Craig, 195 N. Y. 190; Mackin v. United States, 117 U. S. 348; People v. Bellinger, 269 N. Y. 265; People v. Hughes, 137 N. Y. 29; United States v. Stovall, 289 Fed. Rep. 123; Matter of Wilson, 114 U. S. 417.) Section 1272 of the Penal Law is void and unconstitutional. The penalty prescribed for its violation is in excess of punishment for a misdemeanor and greater than the minimum . prescribed for a felony. (People ex rel. Cosgriff v. Craig, 195 N. Y. 190; People v. Bellinger, 269 N. Y. 265; Code Crim. Proc. §§ 484, 718; N. Y. Const. art. 6, § 18.)
   Lewis, J.

We are to determine whether an alleged violation of sections 195 and 196 of the Labor Law (Cons. Laws, ch. 31) and section 1272 of the Penal Law, which require employers of certain types of labor to pay in cash the weekly wages of their employees, is a misdemeanor or a felony.

The petitioner-respondent McKinney was arrested and arraigned before the defendant-appellant Hamilton and pleaded not guilty to an information which charged a violation of section 196 of the Labor Law and section 1272 of the Penal Law in that he and Troy Trap Rock Corporation, of which he is an officer, failed to pay in cash the weekly wages due to nine of its employees who are named herein as defendants. Further proceedings in the prosecution were restrained by Special Term, which granted an order — formerly termed a prohibition order — under article 78 of the Civil Practice Act, upon allegations by the petitioner that the charge preferred against him before the appellant, a justice of the peace, is not a misdemeanor but a felony, and, accordingly, that the appellant, sitting as a Court of Special Sessions, is without jurisdiction to act in the matter.

The petitioner has thus far successfully maintained that, although the statute itself denominates a violation of section 1272 of the Penal Law as a misdemeanor, the punishment prescribed therein is of a character applicable to a felony. Accordingly, it is said, the appellant, as a Court of Special Sessions, with jurisdiction limited to the trial of offenses of the grade of misdemeanors ” (N. Y. Const. art. 6, § 18), is without authority to try the petitioner.

Section 1272 of the Penal Law provides in part: Each person, copartnership, corporation or joint-stock association carrying on a business by lease or otherwise, who does not pay the wages of all his or its employees in accordance with the provisions of the labor law is guilty of a misdemeanor, and upon conviction therefor, shall be fined not less than one hundred nor more than ten thousand dollars for each offense.”

To reach the conclusion that the section deals with an offense which in ultimate legal effect is a felony, the respondent points to sections 484 and 718 of the Code of Criminal Procedure, each of which provides in part: “ A judgment that the defendant pay a fine may also direct that he be imprisoned until the fine be satisfied, specifying the extent of the imprisonment, which cannot exceed one day for every one dollar of the fine.” It is said that by applying the statute last quoted to the maximum fine of $10,000, authorized by section 1272 of the Penal Law, a defendant might be imprisoned for 10,000 days — more than twenty-seven years — which is punishment befitting a felony, not a misdemeanor. We are also told that if the Legislature intended by section 1272 to define a misdemeanor it would not have provided as punishment a fine which may be double the maximum fine which can be imposed upon a corporation for the commission of a felony under section 1932 of the Penal Law.

The fallacy which we find in the argument is that, in testing the quality or classification of a crime, and after properly employing the punishment prescribed as the characterizing factor, the respondent mistakenly treats the imposition of a fine as being in the same category as a sentence of imprisonment.

A felony is a crime punishable by death or imprisonment in a State prison. Any other crime is a misdemeanor. (Penal Law, § 2.) When the sentence is for less than a year the imprisonment must be in a local prison; if for more than a year the imprisonment must be in a State prison and in either when the sentence is exactly one year. In no event may imprisonment in a State prison be reduced below one year except in cases where executive clemency is exercised. (Penal Law, §§ 2181-2183.)

The punishment provided by section 1272 of the Penal Law is a fine — not imprisonment in a State prison. The offense does not become a felony merely because by applying section 718 of the Code of Criminal Procedure a defendant may be imprisoned one day for every dollar of the fine unpaid until the fine be satisfied. The commitment authorized by section 718 for failure to pay a fine does not increase the penalty specified in the criminal statutes to which it is applicable. It follows only upon a defendant’s failure to pay the fine and is a means of bringing about collection of the same. “It is well settled that this remedy for the collection of a fine is not part of the sentence. It is simply a means of enforcing the sentence. * * * A direction, in a sentence imposing a fine that defendant stand committed until the fine is paid is no part of the penalty for the offense, but is merely a means of compelling obedience to the judgment of the court.” (City of Buffalo v. Murphy, 228 App. Div. 279, 287.)

Prior to the ruling last quoted, Mr. Justice Cullen, later Chief Judge of this court, writing in People ex rel. Gately v. Sage (13 App. Div. 135), had stated (p. 136): “ The provision that the term of imprisonment shall not exceed five years applies only to the term of absolute imprisonment which the defendant must necessarily undergo, and not to imprisonment to which he is subjected as a means to compel him to pay the fine. It has always been the practice to enforce the payment of a fine, when imposed as a punishment for crime, by a direction that the defendant stand committed until the fine be paid.” The opinion also gives in outline the historical background for the rule which was well established in the law of England. (The King v. Woolf, Chitty’s Cases on Practice and Pleading, vol. 1, pp. 401, 441-443. See, also, Report of Commissioners of Practice and Pleading, Draft of Code of Criminal Procedure, 1850, p. 260, § 549.)

In reaching a conclusion opposed to the respondent’s claim we are influenced by the fact that if a defendant refuses to pay a fine imposed as punishment- — which is the only form of punishment provided by the statute with which we are now concerned — and he is committed under section 718 of the Code of Criminal Procedure, he is not required to stand committed for a definite term in prison. The duration of his confinement is within his own control. By payment of the fine imposed he is at once set free.

We have not overlooked the rule of People ex rel. Cosgriff v. Craig (195 N. Y. 190), upon which Special Term relied. That case is to be distinguished by the fact that the relator was prosecuted for petit larceny as a second offender at a time when there were statutes expressly authorizing the court to sentence him for a term of two years. The grade of the offense was obviously a felony in view of authorized punishment of imprisonment for two years. Likewise, in People v. Bellinger (269 N. Y. 265) the decision was influenced by the fact that the prosecution was under a statute which provided for imprisonment not exceeding two years.

The conclusion we have reached makes unnecessary our consideration of appellant’s point that prohibition was not the proper remedy available to the respondent.

The order of the Appellate Division should be reversed, the order of Special Term vacated, without costs, and the petitioner-respondent directed to stand trial before the Court of Special Sessions.

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

Ordered accordingly.


author: Rippey, J.

text:
    The People of the State of New York ex rel. Hudson-Harlem Valley Title and Mortgage Company, Appellant, against Ralph T. Walker et al., Constituting the Zoning Board of Appeals of the Town of New Castle, Respondents.

      Argued February 26, 1940;
    reargued March 5, 1940;
    decided April 16, 1940.

      John J. Ryan, Arthur D. Brennan, Winthrop G. Brown and James D. Hopkins for appellant.
    The findings of fact made by the referee constitute the facts before the Court of Appeals, the Appellate Division having reversed on the law. (Heppenstall v. Baudouine, 73 Misc. Rep. 118; People v. Dwyer, 160 App. Div. 542; Petri v. Creelman Lumber Co., 199 U. S. 847; Matter of Tiffany, 179 N. Y. 455; Mark v. State, 97 N. Y. 572; Ruge v. Gallagher, 22 Misc. Rep. 572; Carroll v. McArdle, 216 N. Y. 232; Matter of Westchester Lighting Co. v. Sewer Commissioners, 219 App. Div. 377; Matter of Fammler v. Board of Zoning Appeals, 254 App. Div. 777; Matter of Runk, 200 N. Y. 447.) The reference to and the hearings before the referee were proper. (People ex rel. St. Albans-Springfield Corp. v. Connell, 257 N. Y. 73.)

      Ralph Geilich for respondents.
    The facts of this appeal are the facts presented to the zoning board of appeals and not the findings of fact made by the official referee upon a trial de nova. (Matter of Koeber v. Bedell, 254 App. Div. 584; 280 N. Y. 692; Matter of Brenner v. Bruckman, 253 App. Div. 607; 278 N. Y. 503; Matter of Foy Productions, Ltd., v. Graves, 164 Misc. Rep. 479; 253 App. Div. 475; 278 N. Y. 498; Townley v. Bruckman, 168 Misc. Rep. 422; 255 App. Div. 943; Matter of Dubow v. Ross, 254 App. Div. 706; Matter of Rubel Corp. v. Murdock, 255 App. Div. 224; 280 N. Y. 839; Matter of Dunne v. Walsh, 235 App. Div. 72.)
   Rippey, J.

The Hudson-Harlem Valley Title and Mortgage Company is the owner of certain premises situate on the southwesterly comer of King street and Greeley avenue in Chappaqua, town of New Castle, Westchester county, with a frontage of 65 feet on Greeley avenue and 31.35 feet on King street. Under the zoning ordinance of the town of New Castle the property is located in the business “ B ” district. The ordinance requires, for any building, a setback of six feet on King street and ten feet on Greeley avenue.

Application was made to the town building inspector for permission to erect a building fronting on King street twenty-five feet in width according to plans and specifications attached to the application. A building of that width would permit of a setback of only six feet from Greeley avenue. The permit was refused. Thereupon, on September 19, 1937, the owner appealed to the zoning board of appeals of the town for a four-foot variance of the ordinance on the ground of unnecessary hardship and practical difficulty. It was alleged that, if the ordinance was enforced according to its terms, the owner would be deprived of the use of one-third of its property in any event, but, in fact and under the conditions obtaining, would be deprived of the entire use of its property since it was unable to lease a building twenty-one feet in width. After hearings, at which the petitioner had a full and fair opportunity to present all of its evidence, and oral testimony had been received as well as documentary evidence and full consideration given by the board, a resolution was unanimously passed on December 6, 1937, upholding the decision of the building inspector and denying the variance on the ground that the setback requirements had been enforced on adjoining property and that the petitioner had been unable to show any unnecessary hardship or practical difficulty arising from the enforcement of the ordinance.

In accordance with and under the provisions of section 267 of the Town Law (Cons. Laws, ch. 62; Laws of 1933, ch. 751), the relator thereupon presented a petition to a Special Term of the Supreme Court, duly verified, setting forth that the decision of the zoning board of appeals was illegal in whole or in part and specifying the ground of the alleged illegality. An order of certiorari was made directed to the zoning board of appeals to review the decision and required a return to be made and served in accordance with the statute. Upon the filing of the return the parties stipulated that the issues be heard and determined by an official referee with the same force and effect as if tried at Special Term. Thereupon the official referee proceeded to hear, try and determine questions raised by the petition de nova and made an order that the petition be sustained, that a permit be issued for the erection of the building on the property in accordance with the plans and specifications filed with the building inspector and that the determination of the zoning board of appeals, in affirming the holding of the building inspector, be reversed. From that order an appeal was taken to the Appellate Division, which unanimously reversed the order of the official referee, dismissed the certiorari proceeding and reinstated and confirmed the determination of the zoning board of appeals.

The authority for the proceedings before the Special Term is found in section 267 of the Town Law, which reads as follows: “ If upon the hearing at a special term of the supreme court, it shall appear to the court that testimony is necessary for the proper disposition of the matter, it may take evidence or appoint a referee to take such evidence as it may direct and report the same to the court with his findings of fact and conclusions of law, which shall constitute a part of the proceedings upon which the determination of the court shall be made. The court may reverse or affirm, wholly or partly, or may modify the decision brought up for review.”

The purpose of that section, so far as it has been referred to, is to permit a review of the determination of the zoning board of appeals. It is specifically provided that testimony may be taken before the Special Term. It is, nevertheless, provided that the testimony so taken on the proceedings before the Special Term shall constitute only a part of the proceedings upon which the determination of the court shall be made. All proceedings before the zoning board of appeals still remained a necessary part of the record upon which the review of the proceedings of the board was to be had. Neither expressly nor by necessary implication may the Special Term hear, try and determine the issue de nova without regard to the proceedings had, testimony taken, or decision of the board of appeals.

Section 719-a of the Greater New York Charter (Laws of 1901, ch. 466, as amd.), in effect during the time of the proceedings in People ex rel. St. Albans-Springfield Corp. v. Connell (257 N. Y. 73), provided, in language identical with the provisions of section 267 of the Town Law so far as here material, for proceedings before the Special Term for a review of the determination of the Board of Standards and Appeals of the City of New York. There, as in the quotation above from the Town Law, provision was made for a certiorari to review the determination of the board. In that case the extent of the power of the Special Term to review the determination of the Board of Standards and Appeals was before this court for review. Although asserting that the courts must not trespass upon the administrative powers which existed in the board to make its discretionary determination as to whether a variance should be granted, the findings of the Special Term were modified, and, as so modified, affirmed. It appeared there, however, that the hearing before the board was largely perfunctory and without any evidence to sustain its determination. The action there taken effected no modification or departure from the rules there restated that the statutory certiorari proceeding does not permit of a trial de nova in Special Term of the question upon which evidence has been produced before the board as to whether a variance should or should not be allowed or that the court may not substitute its own judgment for the judgment of the board or that the judgment of the board may not be set aside unless it clearly appears to be arbitrary or contrary to law. Those rules have been followed in proceedings of this kind continually and consistently and strictly adhered to since that time (Matter of Leone v. Brewer, 259 N. Y. 386; People ex rel. Sullivan v. McLaughlin, 266 N. Y. 519; Matter of Ft. Greene Associates, Inc., v. Murdock, 249 App. Div. 622; affd., 273 N. Y. 506; Matter of Tenlan Realty Corp. v. Board of Standards and Appeals, 251 App. Div. 311; affd., 276 N. Y. 594; Matter of Drake Holding Corp. v. Murdock, 278 N. Y. 553; Matter of Rubel Corp. v. Murdock, 255 App. Div. 224; affd., 280 N. Y. 839). Although authorized to take testimony, the power of the Special Term was limited by the statute to reverse or affirm, wholly or partly, or to modify the decision brought up for review. No authority, was conferred to try the issue of a right to a variance of the zoning ordinance de nova or to substitute its judgment on the merits for that of the board. It is urged that the stipulation of the parties was broad enough to confer such jurisdiction upon the Special Term. Jurisdiction cannot, however, be stipulated beyond limits which the Legislature has specifically fixed.

It is urged that article 78 of the Civil Practice Act, by implication, at least, repealed section 267 of the Town Law. Nothing has been called to our attention upon which such a conclusion may be sustained. The method by which the matter might be brought before the Appellate Division cannot affect the result. This proceeding was commenced under the provisions of the Town Law and has been carried through under those provisions without objection by either party, and reached the Appellate Division without objection being raised. It is now first raised in this court. The provisions of the Town Law, under which the pro-, ceedings were brought, are adequate to furnish the relator with a full and complete review, in the first instance, of the determination of the zoning board of appeals.

The referee found “ that the proceedings before the board of appeals were regular and all parties received due and proper notice.” There was adequate evidence before the board of appeals upon which it could exercise its judgment and make its determination that the enforcement of the ordinance imposed no unnecessary hardship or practical difficulty. There was no abuse of exercise of discretion; its decision was not arbitrary or capricious or contrary to law. The evidence before the board was conflicting. Evidence of a more extensive character was introduced before the official referee. Nevertheless, it all went to the same question as that before the board and presented a fair question of fact. There having been adequate opportunity for the petitioner to present all of its evidence at the hearing before the board and a fair question of fact having been presented upon which the discretion of the board was exercised, it was error for the Special Term to substitute its judgment for that of the board (Matter of Rubel Corp. v. Murdock, supra).

The order appealed from should be affirmed, with costs.

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

Order affirmed.


text:
    The People of the State of New York ex rel. Duane L. Tower et al., as Copartners under the Firm Name of C. J. Tower & Sons, Appellants, against State Tax Commission, Respondent.
    Argued February 26, 1940;
    decided April 16, 1940.

      Paul P. Cohen and Harrop A. Freeman for appellants. .
    The firm is not engaged in an “ unincorporated business ” but, as a customhouse broker, is engaged in the practice of a profession within the meaning of section 386 of the Tax Law. (People v. Garlock, 170 Misc. Rep. 686; Flint v. Stone Tracy Co., 220 U. S. 107; State v. Oberle, Inc., 140 So. Rep. 239; United States v. Laws, 163 U. S. 258; Iselin v. Flynn, 90 Misc. Rep. 164; People v. Kelly, 255 N. Y. 396; Commissioners of Inland Revenue v. Maxse, [1919] 1 K. B. 647.)

      John J. Bennett, Jr., Attorney-General (Joseph M. Mesnig of counsel), for respondent.
    The intent of article 16-A of the Tax Law was to reach, generally, those businesses, vocations or callings which, if conducted in corporate form, became subject to taxation under articles 9, 9-A, 9-B or 9-C of the Tax Law. (People v. Ballard, 134 N. Y. 269; Town of Amherst v. County of Erie, 236 App. Div. 58; 260 N. Y. 361.) The Tax Commission acted reasonably and intelligently in classifying as professions only such as are dealt with in articles 48 to 58 of the Education Law (Cons. Laws, ch. 16). (O’Reilly v. Erlanger, 108 App. Div. 318; Bond v. Cooke, 237 App. Div. 229; People v. Kelly, 255 N. Y. 396; Matter of Recht & Kutcher v. Graves, 257 App. Div. 889; Cecil v. Inland Revenue Commissioners, 36 T. L. R. 164; Currie v. Inland Revenue Commissioners, [1921] 2 K. B. 332; Robbins Herbal Inst. v. Federal Comm. of Taxation, 32 C. L. R. 457; Bradfield v. Federal Comm. of Taxation, 34 C. L. R. 1.) Appellants were engaged in conducting a business or occupation. (Matter of Corsi, 235 Fed. Rep. 994; Matter of Landeck & Merrill, 20 Fed. Rep. [2d] 249; United States v. Vandiver, 133 Fed. Rep. 252; People ex rel. Metropolitan St. Ry. Co. v. Tax Comm., 174 N. Y. 417.)
   Lewis, J.

Does the term profession ” as employed in article 16-A, section 386, of the Tax Law (Cons. Laws, ch 60), which makes provision for the collection of the unincorporated business tax, include a customhouse broker?

The question is presented upon an appeal by leave of this court from an order of the Appellate Division in a proceeding under article 78 of the Civil Practice Act, unanimously confirming an assessment of an unincorporated business tax for the year 1935 against the appellant copartnership.

Responsive to recommendations contained in reports filed in 1922 and 1925 by the New York Joint Legislative Committee on Taxation and Retrenchment and the report filed in 1932 by the New York State Commission for the Revision of the Tax Laws, the Legislature enacted article 16-A of the Tax Law (Laws of 1935, ch. 33), known as the Unincorporated Business Tax Law. The reports mentioned above and the debates during the Legislature’s consideration of the measure indicate that the legislative purpose was not only to create a new source of revenue but also to lay a tax upon various types of non-corporate enterprise competing with corporations in this State which are required to pay a corporate franchise tax measured by net income. (Tax Law, art. 9-A, § 215. See Legislative Document [1932], vol. 18, No. 77, pp. 183, 184.)

The incidence of the unincorporated business tax is upon those businesses or vocations which, if conducted by corporations, would be subject to tax. The tax itself is “ equal to four per centum of the entire net income within this state of [any] unincorporated business and shall be payable by the taxpayer conducting the same.” (Tax Law, § 386-a.)

Our present problem arose in the course of administering section 386 which, after indicating the type of trades, businesses or occupations to be included within the term unincorporated business,” and thus subject to the tax, contains the following exclusionary clause: “ * * * but exclude the practice of law, medicine, dentistry, architecture which under existing law cannot be conducted under corporate structure, and any other case in which more than eighty per centum of the gross income is derived from the personal services actually rendered by the individual or the members of the partnership or other entity in the practice of any other profession and in which capital is not a material income producing factor.”

It is not disputed that within the terms of the statute eighty per centum of the gross income ” of the appellant copartnership is derived from the personal services actually rendered by the * * * members;” nor is it claimed that in the services which the copartnership renders capital is a material income producing factor.”

Our inquiry is thus narrowed to the question whether the appellant “ C. J. Tower & Sons,” doing business as a customhouse broker, is engaged in the practice of a “ profession ” and thus exempt by section 386 from the unincorporated business tax.

The appellant copartnership was organized in 1917. It consists of three partners, all of whom devote their business hours to partnership affairs. One of the partners is admitted to the bar in this State. The other two partners studied “ customhouse law ” while attending high school and thereafter under the tutelege of their father, who founded the firm. Each of the three present partners has qualified for a customhouse broker’s license required by the United States Treasury Department. In this instance, however, the license has been issued in the name of the copartnership, as is permitted by Treasury Department regulations.

Neither admission to the bar nor special education is required of the partners to qualify themselves or the partnership for a license which permits the rendering of service as a customhouse broker. It is sufficient if the Treasury Department is satisfied that each partner bears a good reputation and is possessed of business integrity, knowledge of customs law and procedure and a fitness to render valuable service to importers and exporters. (See U. S. Treasury Dept. Circular No. 559, § 3, subds. b and f.) The record shows that the service rendered by the partnership includes consultation with patrons by the various partners and some of their assistants for the purpose of advising as to import duties upon merchandise to the end that the cost of importation may be minimized. Under the license issued to the partnership the partners may appear before the local Collector of Customs in behalf of then patrons. They do not, however, appear on appeal in either the United States Customs Court or to the United States Court of Customs and Patent Appeals. Upon such appeals it is their custom to retain special counsel.

It is important to note that under the Tariff Act of 1930, section 641 (U. S. Code, tit. 19, § 1641), the business of a customhouse broker may be conducted by a corporation. In. fact, the record discloses that one of the appellants’ competitors is a corporation. In connection with this fact it is significant that by section 386 the Legislature chose to exempt the professions of the law, medicine, dentistry and architecture for the express reason that under existing law [they] cannot be conducted under corporate structure.” The reason for such exemptions thus stated in the statute makes clear the Legislature’s intent to reach by tax those vocations which, if conducted in corporate form, would be the subject of taxation. We thus have in the reasons assigned for the exemptions an aid to construction in the present proceeding wherein it appears that a copartnership is conducting tax-free the service of a customhouse broker when concededly such service may be “ conducted under corporate structure.”

The exemption from tax by section 386 is to be granted to a partnership which, under stated conditions not material here, derives its income in the practice of any other profession ” than the law, medicine, dentistry and architecture. It may be conceded that the service rendered by a customhouse broker requires a knowledge of customs law, tariffs and Treasury Department regulations concerning customhouse matters and procedure for the purpose of assisting a patron in minimizing the cost of importing dutiable goods. The record shows that such knowledge is readily acquired — as in many vocations which might be named — by close, intelligent attention to daily transactions in the business and to current governmental regulations which control them. (See Matter of Recht v. Graves, 257 App. Div. 889; leave to appeal denied, 281 N. Y. 886.) The time required to gain a working knowledge of these matters varies with the individual. Although knowledge of tariff laws and customhouse procedure is put to daily use by a customhouse broker, there is testimony by the senior partner of the appellant firm — himself an attorney at law — that “ none of ¡his] activities were such that they required the legal education.” Indeed, we are told by the same witness, If you have normal intelligence, you can almost do it.”

We find nothing in the record to prove that the service rendered by a customhouse broker requires knowledge of an advanced type in a given field of science or learning gained by a prolonged course of specialized instruction and study. Such a requirement we regard as implicit in the term “ professional ” when given its legal application and it is read in its context in the statute here involved.

The order should be affirmed, with costs.

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

Order affirmed.


author: Loughran, J.

text:
    The People of the State of New York, Respondent, v. Arthur Edwards, Appellant.
    Argued March 5, 1940;
    decided April 16, 1940.

      Donald P. Gorman and Francis L. McElroy for appellant.
    The trial court erred in not charging the jury that James Fay was an accomplice as a matter of law. (People v. Swersky, 216 N. Y. 471; People v. McGuire, 135 N. Y. 639; People v. Elbroch, 250 App. Div. 583; People v. Clougher, 246 N. Y. 106; People v. Ledwon, 153 N. Y. 10.) There was insufficient corroboration of the testimony of the accomplices as a matter of law. (People v. O’Farrell, 175 N. Y. 323; People v. Clougher, 246 N. Y. 106; People v. Elbroch, 250 App. Div. 583; People v. Doyle, 107 Misc. Rep. 268; People v. Patrick, 182 N. Y. 131; People v. Courtney, 28 Hun, 589; 94 N. Y. 490; People v. McPorland, 191 App. Div. 795; People v. Hooghkerk, 96 N. Y. 150; People v. Owens, 148 N. Y. 648; People v. Ledwon, 153 N. Y. 10; People v. Reddy, 261 N. Y. 479; Matter of Case, 214 N. Y. 199; People v. Becker, 210 N. Y. 274; People v. Deitsch, 237 N. Y. 300; People v. Josephs, 143 App. Div. 534.) The evidence of People’s witnesses, Goode and Thompson, was incompetent and without proper foundation and constituted improper rebuttal in that it was designed to and did charge the defendant with an unrelated crime and was sufficient in and of itself to prejudice the minds of the jurors in arriving at the verdict rendered. (People v. Richardson, 222 N. Y. 103; People v. Bellinger, 265 N. Y. 149; People v. DeGarmo, 179 N. Y. 130; People v. Greenwall, 108 N. Y. 301; People v. Campbell, 232 App. Div. 825; People v. Osinski, 281 N. Y. 129; Derrick v. Wallace, 217 N. Y. 520; People v. Kennedy, 32 N. Y. 141; People v. Razezicz, 206 N. Y. 249; People v. Molineux, 168 N. Y. 264; People v. Sharp, 107 N. Y. 427; People v. Hinksman, 192 N. Y. 421; People v. Thau, 219 N. Y. 39; People v. Corey, 148 N. Y. 476; People v. Wood, 126 N. Y. 249; Coleman v. People, 55 N. Y. 81; People v. Clark, 253 App. Div. 137; People v. Marendi, 213 N. Y. 600.) It was reversible error to allow the District Attorney to show by an accomplice, over objection, that he had pleaded guilty to the crime charged herein. (People v. Van Wormer, 175 N. Y. 188; People v. Louise, 242 App. Div. 471; People v. O’Regan, 221 App. Div. 331; People v. Lashkowitz, 13 N. Y. Supp. [2d] 663; People v. Herson, 8 N. Y. Supp. [2d] 891; People v. Tavormina, 257 N. Y. 84; People v. Bleaker, 2 Wheeler Crim. Cases, 256; People v. McQuade, 110 N. Y. 284; Erben v. Lorillard, 19 N. Y. 299; People v. Fernandez, 35 N. Y. 49; People v. Marendi, 213 N. Y. 600; People v. Clark, 253 App. Div. 137; People v. Altman, 147 N. Y. 473; People v. Taylor, 11 N. Y. Supp. [2d] 876.)

      Donald M. Mawhinney, District Attorney (Jesse E. Cantor of counsel), for respondent.
    There was no error on the part of the trial court in failing to charge that James Fay was an accomplice as a matter of law. (People v. Hoyle, 107 Misc. Rep. 268.) The evidence of the People’s witnesses, Goode and Thompson, was competent and was proper rebuttal. (People v. Grutz, 212 N. Y. 72.) It was not prejudicial error for the District Attorney to show by the accomplice that he had pleaded guilty. (People v. Bloodgood [Heckheimer], 251 App. Div. 593.)
   Loughran, J.

In the night time of April 30, 1938, some person surreptitiously put emery dust into the oil supply of a motor truck of the complainant with the result that eventually the motor was ruined. Guilt of that malicious mischief (Penal Law, § 1425, subd. 11-a) has been attributed to the defendant by the verdict of a jury. The case is here upon his appeal from an affirmance by the County Court of Onondaga county of the judgment of conviction.

Defendant was head of a labor union of which the complainant was a member. There was evidence in chief for the People that on April 27, 1938, the defendant had rebuked the complainant for “ running ” a picket line maintained by another union. In supposed rebuttal of the defendant’s denial of this incident, the People were allowed to show that on an occasion wholly unrelated to the occurrence in issue the defendant had sought to induce employees of an excavating contractor to become union men. The direct examination of one of those employees went on as follows: Q. Did Mr. Edwards [the defendant] interfere with your trucks? A. He held them up. Q. What, if anything, happened to your steam shovel on that job that night? A. Emery dust was put into the motor.” This was obvious error. (People v. Loomis, 178 N. Y. 400; People v. Pettanza, 207 N. Y. 560; People v. Grutz, 212 N. Y. 77. Cf. People v. Murphy, 135 N. Y. 450.)

An alleged accomplice of the defendant became a witness for the People. On his direct examination this witness was permitted to testify that he had pleaded guilty to the crime in question and that he had received no promise of immunity. Seeming warrant for the admission of that testimony may be found in the language of the court in People v. Vane (12 Wend. 78), where Savage, Ch. J., said: The witness shows on his direct examination that he was an accomplice; his testimony is therefore suspicious; it comes from a tainted source, and may well be doubted. In such case it seems to me the principle applies, that a witness who is impeached may be supported” (p. 79). The decision in the Vane case, however, was that where a witness is an accomplice he may be corroborated by proving his prior consistent statements made at a time when there was probably no temptation to falsify.” (People v. Katz, 209 N. Y. 311, 339.) So read, the Vane case is not authority for the proposition that the natural distrust of an accomplice testifying for the People may in any case be neutralized by showing his former consistent statements.

The rule is that where the testimony of a witness is assailed as a recent fabrication, it may be confirmed by proof of declarations of the same tenor before the motive to falsify existed.” (Ferris v. Sterling, 214 N. Y. 249, 254.) This rule was not here applicable to the alleged accomplice who testified against the defendant. There was nothing to suggest that when the witness pleaded guilty he had any purpose different from his purpose in taking the stand for the People. In that situation the fact of his antecedent confession was not admissible to corroborate him. (People v. Louise, 242 App. Div. 471. See People v. Collier, 141 App. Div. 1111 and the commentary upon that case in People v. Katz, supra, p. 339.)

The judgments should be reversed and a new trial ordered.

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

Judgments reversed, etc.


text:
    The People of the State of New York, Respondent, v. Wallace and Company, Appellant.
    Argued March 7, 1940;
    decided April 16, 1940.

      Joseph M. Lonergan for appellant.
    Defendant did not keep the canned grapes for sale. Mere possession is not sufficient. (People v. Timmerman, 79 App. Div. 565; 179 N. Y. 550; People v. McDermott, 126 N. Y. Supp. 1141; People v. Capone, Inc., 254 App. Div. 235; People v. Foremost Butter & Egg Corp., 239 App. Div. 773; People v. Woolworth Co., 246 App. Div. 838; 250 App. Div. 864; People v. Williams, Inc., 172 App. Div. 68; People [Levinson] v. Waldorf System, Inc., 257 App. Div. 626; People v.
      Soiefer Farms, Inc., 251 App. Div. 174; Bell v. Moen’s Asphaltic Cement Co., 32 App. Div. 362; People v. Sommer, 55 Misc. Rep. 55; People v. Friedman, 132 App. Div. 61.) The regulation as interpreted is not reasonable. (People ex rel. Knoblauch v. Warden, 216 N. Y. 154.)

      William C. Chanler, Corporation Counsel (Stanley Buchsbaum and Silas S. Lippman of counsel), for respondent.
    The evidence . amply establishes a violation of section 163 of the Sanitary Code. (People v. Kibler, 106 N. Y. 321; People v. Bowen, 182 N. Y. 1; People v. West, 106 N. Y. 292; People [Goldberg] v. Reeves, Inc., 168 Misc. Rep. 70; Metropolitan Board of Health v. Heister, 37 N. Y. 661; People ex rel. Lieberman v. Vandecarr, 175 N. Y. 440; People ex rel. Knoblauch v. Warden, 216 N. Y. 154; People v. Friedman, 138 App. Div. 29; 200 N. Y. 591; People v. Lewis, 138 App. Div. 673; People v. Greenberg, 134 App. Div. 599; People v. Deber Pastry Mfg. Co., 248 App. Div. 571; People v. Sweet Life Food Corp., 254 App. Div. 573; People v. Kramer Markets, Inc., 254 App. Div. 827.) Section 163 of the Sanitary Code, as interpreted herein, is reasonable. (People v. Girard, 145 N. Y. 105.)
   Loughran, J.

The defendant corporation appeals from the affirmance of a judgment convicting it of a violation of section 163 of the Sanitary Code of the city of New York. The relevant provisions of section 163 are these: No meat, vegetables or milk not being then healthy, fresh, sound, wholesome, or safe for human food * * * shall be brought into the City of New York or held, kept, offered for sale or sold as such food or kept or stored anywhere in the said City * * * Any meat, vegetables or milk packed in cans, the contents of which have become fermented as evidenced by swelling or bulging * * * shall be deemed not healthy, fresh, sound, wholesome or safe for human food. The term meat as used herein shall include fish, birds, eggs and fowl. The term ‘ vegetables ’ shall include any product, substance or article used as and for human food other than milk or meat.”

In a storeroom of defendant’s factory an inspector of the Health Department of the city found twelve cans that were swollen and bulging and contained grapes that had become unwholesome. Those cans had been in the storeroom for at least one month. This was the case against the defendant.

The proof in defense was that the defendant was a manufacturer of candy; that it made no use of the foodstuffs kept under lock in its storeroom without first inspecting them, and that any article found on inspection not to be wholesome was put aside for return to the seller. We take it the trial court credited that evidence. Upon adjudging the defendant guilty the court said: “ The methods that they follow in this place — of course, it is a high class place according to the president and I assume it is. * * * Even in the best places there are imperfections which develop in the course of doing business.”

This commentary, as we understand it, was a finding that the defendant had possession of the cans in good faith and with intent not to use or sell the contents should inspection disclose an unwholesome condition. There was no proof in respect of the time when the grapes had become fermented. Nor was it shown that anything in respect of the time of fermentation could have been validly inferred from the swollen and bulging shape of the cans.

On this record, then, the judgment of guilt must mean that the defendant’s mere possession of the containers made it answerable as for a crime once the ensealed grapes became unwholesome. The argument of the Corporation Counsel takes the case that way and, indeed, the broad text of section 163 — that no unwholesome food shall be “ kept or stored anywhere in the said City ”— appears to go a long distance in that direction. But a penal statute is not necessarily to be liberally applied in all circumstances. For the rule that penal statutes are to be construed strictly something may be said. When acts are to be made penal and are to be visited with loss or impairment of life, liberty or property, it may well be argued that political liberty requires clear and exact definition of the offense.” (Pound, 21 Harvard Law Rev. 383, 387. See People v. Shakun, 251 N. Y. 107.) It is our best judgment that no considerations of expediency require such unfairness as would result were section 163 of the Sanitary Code to be so freely construed as to force its application to the facts which in this case were found below. (Cf. People v. Kibler, 106 N. Y. 321.)

The judgments should be reversed and the information dismissed.

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

Judgments reversed, etc.


text:
    In the Matter of the Will of Ellen C. McManus, Deceased. Jane F. Whitaker, Individually and as Executrix of Edward Whitaker, Deceased, Appellant; Annie M. Verry, Respondent.

      Argued February 28, 1940;
    decided April 16, 1940.

      Francis D. Higson for appellant.
    The testamentary direction to pay the “ accrued income ” to the remainder-man is not an express stipulation against the apportionment of income. (Equitable Trust Co. v. Miller, 197 App. Div. 391; 233 N. Y. 650; Matter of Juilliard, 238 N. Y. 499; Matter of Dreicer, 155 Misc. Rep. 817; Matter of Dexter, 134 Misc. Rep. 195; Matter of Watson, 262 N. Y. 284;
      Matter of Lamb, 182 App. Div. 180; 224 N. Y. 577.) The estate of the deceased life beneficiary is entitled to a share of the proceeds of the salvage operations in the defaulted mortgage investments which operations were commenced prior to the death of the life beneficiary and were uncompleted at the time of his death. (Matter of Chapal, 269 N. Y. 464; Matter of Otis, 276 N. Y. 101; Meldon v. Devlin, 31 App. Div. 146; .167 N. Y. 573; Matter of Marshall, 43 Misc. Rep. 238; Matter of Scott, 168 Misc. Rep. 531; Scott on Law of Trusts, § 241.6; Matter of Alston, [1901] 2 Ch. 584; Lawrence v. Littlefield, 215 N. Y. 561; Furniss v. Cruikshank, 230 N. Y. 495; Matter of Jackson, 258 N. Y. 281; Matter of Pinkney, 208 App. Div. 181; 238 N. Y. 602; Matter of Densen, 163 Misc. Rep. 232; Matter of Schaeffer, 178 App. Div. 117; 222 N. Y. 533; Matter of Watson, 144 Misc. Rep. 213; 262 N. Y. 284; Matter of Myers, 161 N. Y. Supp. 1111; Matter of Rogers, 22 App. Div. 428.)

      Theodore Berger for respondent.
    The language of the will contains an express stipulation against apportionment of income. (Suit. Ct. Act, § 204; Matter of Dreicer, 155 Misc. Rep. 817; Matter of Dexter, 134 Misc. Rep. 195; Matter of Juilliard, 238 N. Y. 499; Matter of Watson, 262 N. Y. 284.) All the income, including the income arising from the salvage operations, is “ accrued income ” which, by reason of the language in the will, belongs solely to the remainderman. (Hascall v. King, 162 N. Y. 134; Schoellkopf Aniline & Chemical Works v. United States, 3 Fed. Supp. 417; Matter of Chapal, 269 N. Y. 464; Matter of Otis, 276 N. Y. 101; Meldon v. Devlin, 31 App. Div. 146; Matter of Scott, 168 Misc. Rep. 531; Matter of Jackson, 258 N. Y. 281.)
   Lewis, J.

We are to determine whether an express stipulation against apportionment, under section 204 of the Surrogate’s Court Act, is present in the following clause of the will of Ellen C. McManus, deceased:

“ The remaining one of said equal one-twelfth parts, I give, devise and bequeath to my executors hereinafter named or their successors in trust nevertheless, to receive, hold, manage, invest, re-invest and keep invested, to collect and receive the income therefrom and after deducting the necessary and proper charges and expenses of this trust to pay the net income thereof to my grand nephew Edward Whitaker during his life and upon his death to divide the principal of said trust together with any accrued income thereof equally among and to pay the same to my nieces and nephews who may be living at the time of the expiration of said trust * *

The life beneficiary, Edward Whitaker, died June 22, 1938, leaving a widow, Jane F. Whitaker, the appellant herein, who appears in this proceeding individually and as executrix of her deceased husband’s estate. The respondent, Annie M. Verry, a niece of the testatrix, is the sole remainderman.

Upon the trustee’s petition for an accounting and for a construction of the will the Surrogate ruled that the clause quoted above did not contain an express stipulation against apportionment and that all income accruing upon the principal of the trust up to the date of death of the life beneficiary was payable upon his death to his personal representatives. The order of the Appellate Division, which is now before us for review, reversed on the law the Surrogate’s decree and remitted the proceeding to Surrogate’s Court with directions that a decree be entered adjudging that the clause in controversy constitutes in effect an express stipulation that accrued income should not be apportioned, and that the testamentary trustee account accordingly.

In administering the trust, with special reference to the disposition of income between the estate of the deceased life beneficiary and the remainderman, the trustee was governed by section 204 of the Surrogate’s Court Act which, so far as material here, provides as follows:

“ § 204. * * * All rents * * * and other payments of every description made payable or becoming due at fixed periods * * * shall be apportioned so that on the death of any person interested in * * * such payments * * * shall be entitled to a proportion of such * * * payments, according to the time which shall have lapsed from the commencement or last period of payment thereof, as the case may be, including the day of the death of such person, or of the determination of his or her interest, after making allowance and deductions on account of charges on such * * * payments * * *. This section shall not apply to any case in which it shall he expressly stipulated that no apportionment he made. * *

The language employed by the testatrix serves clearly to fix the date when payment of income to the life beneficiary shall cease and payment thereof to the remainderman shall begin. It was only during his life ” that the life beneficiary was to receive the net income from the trust fund created in his favor. Upon his death ” the principal of that fund “ together with any accrued income thereof ” was directed to be paid to certain named remaindermen of whom concededly the present' respondent is the only one entitled thereto. The language thus chosen is clear and unequivocal and leaves us in no doubt as to the decedent’s testamentary intent. It constitutes an express stipulation against apportionment within the statutory exception to be found in section 204 of the Surrogate’s Court Act. (Matter of Juilliard, 238 N. Y. 499, 506, 508, 510. See, also, Matter of Dreicer, 155 Misc. Rep. 817, 818; Matter of Dexter, 134 Misc. Rep. 195, 196.)

It is not disputed that prior to his death there had been paid to the life beneficiary all net income actually received by the trustee. Among the investments made by the trustee are bonds and mortgages which were not in default on the date of the life beneficiary’s death and upon which interest was accruing but had not been received by the trustee. Such interest within the terms of the will is accrued income ” from the trust fund which, in view of the presence in the will of an express stipulation against apportionment, is to be paid by the trustee to the remainderman.

The trustee had also invested a portion of the trust funds in four mortgages upon each of which a subsequent default had occurred. Thereafter title to each property which constituted security for _ the mortgage debt was acquired by the trustee either at foreclosure sale or by purchase of a deed thereof in lieu of foreclosure. In two of such instances the property thus acquired was sold by the trustee after the death of the life beneficiary. The remaining two properties had not been sold on the date of the filing by the trustee of its account on March 20, 1939.

In each of these four instances where the mortgaged property was acquired by the trustee, the property had served as security not jdone for trust principal thus invested but also for any unpaid interest upon the mortgage investment. Accordingly, viewing the process of salvaging the four mortgage investments in the light of the requirements of proper administration and fiduciary accountancy the trustee should be guided by the rule which was clearly stated by Judge Loughran in Matter of Chapal (269 N. Y. 464, 472-473). “ On a sale, * * * the proceeds should be used first to pay the expenses of the sale and the foreclosure costs and next to reimburse the capital account for any advances of capital for carrying charges not theretofore reimbursed out of income from the property. Then the balance is to be apportioned between principal and income in the proportion fixed by the respective amounts thereof represented by the net sale proceeds. In the capital account will be the original mortgage investment. In the income account will be unpaid interest accrued to the date of sale upon the original capital.”

We thus reach the problem of determining the rights of the estate of the life beneficiary and the remainderman respectively in the amount credited to the income account resulting from the trustee’s effort to save the mortgage investments. We have seen that by reason of defaults in four mortgages and the course taken by the trustee to salvage those investments there came into its hands prior to the death of the life beneficiary title to properties which in each instance had afforded security not alone for the principal indebtedness but for interest upon the mortgage debt. Had such defaults not occurred “ during his life ” the mortgage interest would have been payable to the life beneficiary as a part of income due to him under the terms of the testamentary trust. In these circumstances the trustee should pay to the estate of the life beneficiary from funds received upon the sale of the four properties such portion thereof as equals the amount of mortgage interest which would have been paid to the life beneficiary — in the proportion represented in the salvaged investments — up to the dates of transfer to the trustee, had no defaults in the mortgage investments occurred. The reason the life beneficiary is entitled to the portion mentioned above is that the transfer of the property to the trustee works a payment of income represented therein. We treat such income as neither accrued nor accruing — it has been paid. All that remains is the administrative act by which the trustee makes distribution thereof.

In thus charting the course for adjusting between the estate of the life beneficiary and the remainderman the payment of income, we have treated as personalty the four properties bought in by the trustee either on foreclosure of investment mortgages or in lieu of foreclosure. The trustee is thus made accountable for the proceeds of the sale of each property so acquired and for the disposition of such proceeds according to the direction of the testatrix. (Lockman v. Reilly, 95 N. Y. 64, 71.) We have thus followed the suggestion to be found in the opinion by Judge Bapallo writing in the case last cited (p. 71) that * * * land thus purchased by an executor or administrator is regarded as a substitute for the mortgage foreclosed and takes its place for all purposes as between the executor or administrator and the parties interested in the estate. It is not treated as land belonging to the testator.” Again, in Haberman v. Baker (128 N. Y. 253 at p. 261) this court said, though it is true that he held the property in trust, nevertheless the premises so acquired [by foreclosure] took on the character of the mortgage indebtedness, and were as personalty in the administrator’s hands, which he could dispose of and was liable to account for as such.” (See, also, Matter of Miller, 257 N. Y. 349, 355; Matter of Scott, 168 Misc. Rep. 531, 533.) The same subject was reviewed in 2 Scott on Trusts ([1939], § 241.6 at p. 1382) with the following comment — “ * * * where a trust is created under which the income is payable to one beneficiary for life and the principal is to be distributed to others on his death, and the trust estate includes -unproductive property which is not sold until after the death of the life beneficiary, the estate of the life beneficiary is entitled to a portion of the proceeds of sale as delayed income. Until the property is sold the trustee has not completed the performance of his duties and is not justified in making distribution of the estate. It would be -unfair to the estate of the life beneficiary who had been deprived of income with respect to the unproductive property to deprive him or his estate permanently of such income because of the accidental circumstance that the trustee failed to sell the property prior to the death of the beneficiary.”

The order of the Appellate Division should be modified by providing that the proceeding be remitted to Surrogate’s Court with directions to enter a decree adjudging that the trustee proceed with the administration of the testamentary trust involved herein in accord with this opinion and thereafter to account, and as thus modified affirmed, with costs to each party filing a brief, payable out of the estate.

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

Ordered accordingly.


text:
    In the Matter of Michael H. Grae, an Attorney, Appellant. Harold M. Kennedy, Respondent.
    Argued March 4, 1940;
    decided April 16, 1940.

      Stephen Callaghan and Ralph Stout for appellant.
    Appellant was justified in refusing to sign the waiver of immunity presented for his signature upon the investigation, and his refusal in good faith to sign such a waiver of immunity affords no basis for a disciplinary proceeding against him. (Matter of Palmieri, 221 N. Y. 611; Matter of Zanger, 266 N. Y. 165; Matter of Solovei, 250 App. Div. 117; 276 N. Y. 647; Matter of Schneidkraut, 231 App. Div. 109; Matter of Cohen, 115 App. Div. 900; Matter of Kaffenburgh, 188 N. Y. 49; Matter of Rouss, 221 N. Y. 81; People ex rel. Karlin v. Culkin, 248 N. Y. 465; Matter of Eldridge, 82 N. Y. 161; People ex rel. Taylor v. Forbes, 143 N. Y. 219.)

      Harold M. Kennedy, in person, Robert Abelow and Murray M. Halwer for respondent.
    Appellant endeavored to thwart and impede the investigation ordered by the Appellate Division and such action on his part was in bad faith. (Matter of Kaffenburgh, 188 N. Y. 49; Matter of Rouss, 221 N. Y. 81; Matter of Solovei, 250 App. Div. 117; 276 N. Y. 647; Matter of Levy, 255 N. Y. 223; People ex rel. Karlin v. Culkin, 248 N. Y. 465; Matter of Fenn, 128 S. W. Rep. [2d] 657.)
   Lewis, J.

We review an order of the Appellate Division suspending the appellant from the practice of the law upon proof of a single charge that, upon an inquiry, ordered by that court, into certain alleged unlawful and unethical practices impairing the administration of justice, he refused to sign a waiver of immunity.

On June 8, 1938, the Appellate Division, second department, in response to a petition by the Richmond County Bar Association, ordered an inquiry “ * * * into certain alleged unlawful and unethical practices impairing the due administration of justice, including the practice of so-called ' Ambulance Chasing ’ and the conduct of attorneys with reference thereto, the solicitation by attorneys or their agents of claims in condemnation proceedings and the prosecution of damage actions, and the solicitation by attorneys or their agents in criminal cases, including also, the state of calendars and the trial of causes in the County of Richmond.” It will be convenient to refer to the investigation thus ordered as the inquiry.”

In the course of proceedings which followed and on July 14, 1938, the appellant was called before a Special Term of the Supreme Court designated to conduct the inquiry, at which time he was asked whether he would be willing to waive immunity. Appellant replied_that he did not intend to do so but that he was willing to answer all questions at the direction of the Presiding Justice and would bring to the hearings his office records and everything that the Court desires.” Then occurred the following colloquy between the special prosecutor and the appellant: Q. And you know, as a lawyer, that if that course is followed that you will have immunity from any prosecution? A. I do, yes. Q. And your purpose in refusing to waive immunity here is to secure that immunity, is that it? A. Well, I don’t know how I can answer that question to you. I think I am entitled to my constitutional rights the same as any other person. Q. But you told me before you thought you were entitled to immunity? A. Yes, I am entitled to it -under the Constitution. Q. And that is the position that you take? A. Yes.”

Thereafter the special prosecutor sent to the appellant a letter stating that under instructions by the Presiding Justice and in view of appellant’s expressed willingness to furnish his office records, request was made that he produce (1) a complete list of personal injury cases in his office for the last three years with certain data in reference to each case; (2) his office ledger or docket showing disbursements made against each of said cases, and (3) his check book and canceled vouchers for that period. The appellant responded by letter stating that upon receiving a notice to appear at the inquiry he would bring with him the records which the special prosecutor had requested provided he was permitted to explain them before the Presiding 'Justice. No response was received to this offer by the appellant. In fact he received no communication from any one connected with the inquiry until November 21, 1938, when he was served with a copy of the petition in the disciplinary proceeding now before us which petition is signed by the special prosecutor who had acted as counsel to the inquiry at Special Term. It is addressed to the Appellate Division and asks that disciplinary action be taken against the appellant by reason of his refusal to waive immunity from prosecution for any of his acts in connection with his practice or otherwise. It asserts that by his course of conduct the appellant willfully and knowingly concealed facts connected with his practice or otherwise which were incriminating and degrading;” that his conduct and concealment were in part a mere pretext to enable him to withhold information which he was in duty bound to divulge in accord with the provisions of section 88 of the Judiciary Law (Cons. Laws, ch. 30) and that such conduct served to impede and defeat the inquiry ordered by the Appellate Division. The appellant’s answer alleges that upon being called as a witness at the inquiry conducted by the Special Term he had stated his willingness in good faith to answer fully all questions that might be asked of him; to produce for inspection and examination his office records and to assist the inquiry to the fullest extent, but that he had respectfully declined to sign a waiver of immunity basing such declination upon his constitutional rights and privileges and the advice of counsel.

Thereupon the Appellate Division appointed an Official Referee to take testimony in the present disciplinary proceeding. The record comprises only testimony by the appellant, including a transcript of his testimony, outlined above, which he had given at the inquiry. It appears from his testimony herein that prior to his appearance as a witness upon the inquiry at Special Term he had learned from news articles in the current local press and from other sources, that those in charge of the inquiry were investigating matters of a criminal nature in connection with the practice of attorneys in Staten Island. Thereafter, upon his appearance at the inquiry, he was asked to sign a written waiver of immunity which provided that, pursuant to section 2446 of the Penal Law, the signer waived all immunity, and the privilege which he would otherwise obtain by giving testimony at the inquiry, from indictment, prosecution, punishment, penalty or forfeiture, on account of any transaction concerning which he might testify or produce evidence in the inquiry ordered by the Appellate Division, “ * * * or in any other investigation, or on any inquiry, trial, action, investigation or other proceeding, before any magistrate, judge or Justice, counsel or attorney, court or other tribunal, grand jury or otherwise, conducting an inquiry, investigation or legal proceeding relating to the matters embraced in the said order of the said Court, dated the 13th day of June, 1938, or matters connected therewith or related thereto.” The waiver alsojrrovided that the signer waived any and all privilege given to him by sections 381 and 584 of the Penal Law and any and all privilege which he would otherwise “ obtain against the use against [him] of the testimony so given or the evidence so produced upon any criminal investigation, prosecution or proceeding.”

In explanation of why he had refused to sign a waiver of immunity the appellant testified that although he had no fear that there was anything in the conduct of his professional life which would be productive of either criminal or disciplinary charges, he had practiced law in Staten Island for a period of fifteen years during which time his work as an attorney might have engendered in the minds of certain individuals an unfriendly attitude toward him of such a nature as to produce charges of a criminal nature of which he was innocent. It is his testimony that by reason of that fact and upon advice of counsel, he refused to sign the written waiver of immunity which was presented to him for signature when he was called to testify at the inquiry ordered by the Appellate Division.

In considering appellant’s reason for refusing to sign a waiver of immunity we note the fact that the verified petition by which the present disciplinary proceeding was instituted and which was signed by the special prosecutor appointed to aid the Special Term in conducting the inquiry, contains the allegation that by refusing upon the inquiry to sign a waiver of immunity the appellant “ wilfully and knowingly concealed and intended to conceal facts, acts and deeds, either connected with his practice of law or otherwise, some of which facts, acts and deeds were incriminating and degrading.” It is thus made to appear that the risk of prosecution, apprehended by the appellant, for acts connected with his practice and of a nature alleged to be “ incriminating,” was not unreal.

Finding in the circumstances disclosed by the record reasonable ground for appellant’s belief that his own professional acts might become the object of the inquiry and might eventually subject him to criminal prosecution, we reach the question, did his refusal to sign a waiver of immunity constitute conduct prejudicial to the administration of justice, within the provisions of section 88, subdivision 2, of the Judiciary Law, sufficient to warrant disciplinary proceedings against him?

A waiver of immunity is a means authorized by statute (Penal Law, § 2446 [L. 1912, ch. 312]) by which a witness, in advance of giving testimony or producing evidence, may renounce the fundamental right and privilege guaranteed to him by the Constitution, that no person shall “ be compelled in any criminal case to be a witness against himself.” (N. Y. Const. art. I, § 6.)

It has been suggested that the inquiry ordered by the Appellate Division was not strictly a criminal proceeding. But where inquisition in such a proceeding may expose a witness to punishment for crime, he may invoke as his protection the constitutional privilege. (Matter of Rouss, 221 N. Y. 81, 86.) He may not claim the privilege when he is clearly contumacious, not acting in good faith but making the claim as a mere pretext to avoid giving non-incriminating answers.” (Matter of Levy, 255 N. Y. 223, 225.) But our courts have recognized the difficulty in most cases of anticipating the effect upon a witness of his answer to a given line of inquiry and so it has been ruled that, in the absence of conduct by a witness which is clearly contumacious, the witness must be permitted to judge for himself as to the effect of his answer. (People ex rel. Taylor v. Forbes, 143 N. Y. 219, 230, 231. Cf. Matter of Levy, supra, p. 225.)

The finding by the Official Referee that the refusal by the appellant to sign a waiver of immunity constituted bad faith finds no supporting proof in the record. On the contrary, his willingness, expressed in open court upon the inquiry, to answer fully all questions at the direction of the court and to produce his office records, eliminates bad faith as a factor in this proceeding. (Matter of Solovei, 250 App. Div. 117, 120; affd., 276 N. Y. 647.) Nor do we find proof to support the finding that appellant’s conduct was part of a concerted endeavor with others to thwart and impede the investigation.

The privilege against seff-incrimination is a constitutional guaranty of a fundamental personal right. Long regarded as a safeguard of civil liberty it was firmly imbedded in the law of England and by the Fifth Amendment to the Federal Constitution became a basic principle of American constitutional law. “ It is- a barrier interposed between the individual and the power of the government, a barrier interposed by the sovereign people of the State; and neither legislators nor judges are free to overleap it.” (Matter of Doyle, 257 N. Y. 244, 250.) Applying this basic principle to our present problem we have no doubt that when the appellant, as a witness upon the inquiry at the Special Term, declined to sign a waiver of immunity and thus refused to relinquish in advance a privilege which the Constitution guarantees to him, he was within his legal right. As was said by Presiding Justice Lazansky in Matter of Ellis (258 App. Div. 558, 572), expressing the minority view at the Appellate Division: ‘‘ The constitutional privilege is a fundamental right and a measure of duty; its exercise cannot be a breach of duty to the court.”

It follows that, upon the facts disclosed by the record, the present disciplinary proceeding instituted against the appellant, wherein the single offense charged is his refusal to yield a constitutional privilege, is unwarrantable.

The order of the Appellate Division should be reversed, without costs, and the proceeding dismissed.

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

Order reversed, etc.


author: Per Curiam.

text:
    In the Matter of Jerome O. Ellis, an Attorney, Appellant. Harold M. Kennedy, Respondent.
    Argued March 5, 1940;
    decided April 16, 1940.

      Harold H. Corbin, Edward J. Bennett, Ira L. Tilzer and James J. McLoughlin for appellant.
    Where an immunity statute applies, the testimony of a witness may be had upon a mere direction to answer. A bare refusal to waive iminunity cannot conceal facts or deceive a court. No question of good or bad faith arises. No inference of guilt may be drawn from the refusal. (Matter of Rouss, 221 N. Y. 81; Matter of Solovei, 250 App. Div. 117; 276 N. Y. 647; Boyd v. United States, 116 U. S. 616; People v. Bermel, 71 Misc. Rep. 356.)

      Harold M. Kennedy, Robert Abelow and Murray M. Halwer for respondent.
    Appellant endeavored to thwart and impede the investigation ordered by the Appellate Division and such action on his part was in bad faith. (Matter of Kaffenburgh, 188 N. Y. 49; Matter of Rouss, 221 N. Y. 81; Matter of Solovei, 250 App. Div. 117; 276 N. Y. 647; Matter of Levy, 255 N. Y. 223; People ex rel. Karlin v. Culkin, 248 N. Y. 465; Matter of Fenn, 128 S. W. [2d] 657.)
   Per Curiam.

This is a disciplinary proceeding which was argued with Matter of Grae (282 N. Y. 428), a proceeding of similar, character decided herewith.

On June 8, 1938, the Appellate Division, second department, upon petition by the Richmond County Bar Association, ordered an inquiry into certain alleged unlawful and unethical practices impairing the administration of justice in Richmond county. The order also directed that the inquiry should be conducted by a Special Term of the Supreme Court, Mr. Justice Francis G. Hoolet, presiding, and designated Harold M. Kennedy, Esq., as counsel.

Upon the present appeal from an order of the Appellate Division suspending the appellant from practice, we regard the single question of law involved as controlled by our decision in Matter of Grae (supra). It appears from the records in both Matter of Grae (supra) and the present proceeding that disciplinary action was sought because of the fact that, when called as a witness upon the Richmond county inquiry, each appellant declined to sign a waiver of immunity. The only substantial difference in the two records is that it appears in the present proceeding that on July 11, 1938, Mr. Ellis, appearing as a witness at the inquiry, not only declined to sign a waiver of immunity — which was the only charge against Mr. Grae — but in addition Mr. Ellis declined to answer any questions upon the ground that such answers would tend to incriminate or degrade him. However, it is not disputed that on July 14, 1938, three days after such declination, the appellant Ellis wrote to Mr. Justice Hooley as Presiding Justice at the inquiry, stating in part: “My position was then, and is now, that while I should not in justice to myself sign a waiver of immunity, I am, nevertheless, perfectly willing, if you so direct, to appear at any time and place fixed by Your Honor and will answer whatever questions are asked of me concerning the matter under inquiry, but, as stated before, I will not sign a waiver of immunity.”

Receiving no response to his letter to Mr. Justice Hooley, the appellant on July 21, 1938, wrote a letter to Harold M. Kennedy, Esq., the special counsel appointed to aid the Special Term upon the inquiry, stating in part: “ It has always been my intention to cooperate fully with the investigation that is now being" conducted by you so long as I am not obliged to sign a waiver of immunity as expressed to you and Mr. Justice Hooley at our first interview.

“ I have always been and I now am entirely willing to afford you all available information which may aid you in your objectives.”

On the following day, July 22, 1938, the appellant received a reply from Mr. Kennedy, stating in part: “ You will of course appreciate that your position was spread upon the record. You further appreciate that under the circumstances Mr. Justice Hooley feels that your testimony should not he taken unless it is preceded hy a waiver of immunity.”

In our view of the record in the present proceeding, with special reference to those portions thereof quoted above, the question to be determined is reduced to the same question determined in Matter of Grae (supra), viz.: Did the appellant’s refusal to sign a waiver of immunity constitute conduct prejudicial to the administration of justice within the

provisions of section 88, subdivision 2, of the Judiciary Law (Cons. Laws, ch. 30), sufficient to warrant disciplinary proceedings against him?

The order of the Appellate Division should be reversed, without costs, and the proceeding dismissed.

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

Order reversed, etc.