author: Lewis, J. Lehman, Ch. J.

text:
    In the Matter of Fiorello H. LaGuardia, as Mayor of the City of New York, Appellant, against Alfred E. Smith, Jr., et al., Constituting a Special Committee of the Council of the City of New York, Respondents.

      Argued January 21, 1942;
    decided March 19, 1942.

      Fiorello H. LaGuardia, in person, and William, C. Chanler, Corporation Counsel (Robert H. Schaffer and Louis M. Weintraub of counsel), for appellant.
    The immunity of the executive from the subpoena power of the Legislature has been invariably and universally recognized wherever separate legislative and executive branches are found to exist. (Kilbourn v. Thompson, 103 U. S. 168; United States v. Burr, Fed. Cas. No. 14,694; Martin v. Mott, 12 Wheat. 19; People ex rel. Sutherland v. The Governor, 29 Mich. 320; People ex rel. Broderick v. Morton, 156 N. Y. 136; Matter of Donnelly v. Roosevelt, 144 Misc. Rep. 525; Springer v. Philippine Islands, 277 U. S. 189; Matter of Radio Station WNYC [Novik], 169 Misc. Rep. 502; 255 App. Div. 844; 280 N. Y. 629; State ex rel. Davern v. Rose, 140 Wis. 360.) Under the charter the Mayor and the Council are created as mutually independent co-ordinate executive and legislative branches of the city government. (Paulsen v. Portland, 149 U. S. 30; Charter of City of New York [effective Jan. 1, 1938], §§ 3, 4, 5, 21, 38, 39, 43, 121, 125; Matter of Radio Station WNYC [Novik], 169 Misc. Rep. 502; 255 App. Div. 844; 280 N. Y. 629; People v. Tremaine, 252 N. Y. 27; Hampton & Co. v. United States, 276 U. S. 394.) Section 43 of the charter cannot be so interpreted as to destroy the mutual independence of the Mayor and Council as it is established by the charter. (Matter of Herlands v. Surpless, 171 Misc. Rep. 914; 258 App. Div. 275; 282 N. Y. 647; Matter of Radio Station WNYC [Novik], 169 Misc. Rep. 502; 255 App. Div. 844; 280 N. Y. 629.)

      Emil K. Ellis, Louis Gruss, Myron A. Ellis, Jonas Ellis and Murray Forer for respondents.
    There is nothing in the Constitution of the State, the charter of the city nor in any state statute providing for such a clear separation of executive, legislative and judicial powers in the municipal government of the city as entitles the Mayor to claim immunity from the subpoena power of the local legislative body, the city Council. (Donnelly v. Roosevelt, 259 N. Y. Supp. 356; People ex rel. Broderick v. Morton, 156 N. Y. 136; City of Trenton v. New Jersey, 262 U. S. 182; Mayor of City of New York v. Miln, 11 Pet. [U. S.] 102; Demarest v. Mayor, 74 N. Y. 161; Adler v. Deegan, 251 N. Y. 467; City of New York v. Village of Lawrence, 250 N. Y. 429; Dreyer v. Illinois, 187 U. S. 71; McGrain v. Daugherty, 273 U. S. 135; State v. Lane, 181 Ala. 646; Baltimore R. Co. v. Whitney, 161 Ind. 228; Ford v. Mayor, 134 Ga. 320; Uridias v. Morrill, 22 Cal. 473; Stanton v. Board of Supervisors, 191 N. Y. 428.) The city Council is clothed with ample statutory powers to compel the attendance of any officer of the New York city government and the production by such officer of any documents or papers pertaining to the property, affairs or government of the city, and the Mayor, being an officer of the municipal corporation, is subject to such subpoena power, enjoying no immunity by legislative sanction, either express or implied, from testifying or producing documents. (City Charter, § 21; Matter of Herlands v. Surpless, 258 App. Div. 275; 282 N. Y. 647; Adler v. Deegan, 251 N. Y. 467; Matter of Radio Station WNYC [Novik], 169 Misc. Rep. 502; 225 App. Div. 844; 280 N. Y. 629; Matter of Becker v. Lunn, 200 App. Div. 178; Matter of Egan, 205 N. Y. 147.)
   Lewis, J.

The respondents are members of a special committee of the Council of the city of New York appointed to investigate the affairs and conduct of the Municipal Civil Service Commission. In the course of committee hearings, the investigation was directed to the personnel at the Information Center and to matters involving the method of selection and the qualifications of certain appointees. The inquiry adduced the fact that prior to the Council’s investigation the Mayor had directed a city employee to investigate matters which also related to the personnel at the Information Center and that upon completion of her investigation the employee had made a written report to the Mayor. Thereupon a subpoena duces tecum was issued by the committee and served upon the Mayor’s secretary demanding the production of such report. When compliance with the subpoena was refused and contempt proceedings against the Mayor’s secretary were imminent the committee was informed in writing by the corporation counsel that The Mayor is the person who has the possession, custody and control of such papers.” It was in these circumstances, and in a continued effort to secure the written report and related papers which were in the Mayor’s possession, that the subpoena duces tecum here in question was served upon the Mayor who promptly applied at Special Term for an order vacating the subpoena. The order of Special Term denying such application has been unanimously affirmed by the Appellate Division. The proceeding is here on appeal by our permission.

Accordingly our inquiry goes to the question whether records in the office of the Mayor of the city of New York, which are concededly pertinent to an official investigation by the Council as to matters relating to the affairs of a city department, are immune from the Council’s power of subpoena.

We look first to the city’s charter. By section 21 the Council is vested “ * * * with the legislative power of the city.” By section 43 — which bears the caption “ Power of Investigation ” — the Council is granted “ power from time to time to appoint a special committee to investigate any matters relating to the property, affairs or government of the city or of any county within the city. Any such committee shall have power to require the attendance and examine and take the testimony under oath of such persons as it may deem necessary.” (Emphasis supplied.)

The power of investigation thus reserved to the Council is broad — indeed, it is broader than the analogous section of the prior charter. (L. 1901, ch. 466, § 54 [Cf. Tanzer New York City Charter,” p. 45].) Neither the Mayor, nor any other city officer is beyond the scope of investigation thus authorized unless some statute or some well-defined principle of law accords to the Mayor the immunity which he now asserts.

The Mayor recognizes the broad field of investigation thus opened to the Council by the city’s charter. He asserts, however, that section 43 should not be construed so broadly as to destroy what he deems to be the mutual independence of the Mayor and Council. In support of that position the Mayor suggests that rigid independence between the functions of his office and those of the Council is in line with the theory which prompted the framers of the Federal Constitution to treat as separate the three branches of government— executive, legislative and judicial. We are told that the Federal plan, which has as one of its bases the requirement of making the three branches of government co-ordinate and independent, is also fundamental in the design for the government of cities and affords the only basis for decision in this proceeding.

Upon this subject the Supreme Court of the United States has said: Whether the legislative, executive and judicial powers of a State shall be kept altogether distinct and separate, or whether persons or collections of persons belonging to one department may, in respect to some matters, exert powers which, strictly speaking, pertain to another department of government, is for the determination of the State * * *. ‘ When we speak,’ said Story, ‘ of a separation of the three great departments of government, and maintain that that separation is indispensable to public liberty, we are to understand this maxim in a limited sense. It is not meant to affirm that they must be kept wholly and entirely separate and distinct, and have no common fink of connection or dependence, the one upon the other, in the slightest degree. The true meaning is, that the whole power of one of these departments should not be exercised by the same hands which possess the wholé power of either of the other departments; and that such exercise of the whole would subvert the principles of a free constitution.’ (Story’s Const. [5th ed.] 393.) Again: Indeed, there is not a single constitution of any State in the Union, which does not practically embrace some acknowledgment of the maxim, and at the same time some admixture of powers constituting an exception £o it.’ (Story’s Const. [5th ed.] 395.) ” (Dreyer v. Illinois, 187 U. S. 71, 84; Williams v. Eggleston, 170 U. S. 304, 310.)

As to the pattern of government adopted by the State of New York, it may be said that the design includes by implication the separation of executive, legislative and judicial powers. But when the State in turn made provision for the government of cities — which this court has defined as political institutions, erected to be employed in the internal government of the State ” (City of New York v. Village of Lawrence, 250 N. Y. 429, 437) — we find many instances, including that of the city of New York, where tripartite, independent branches of government are not prescribed.

The State Constitution provides that It shall be the duty of the legislature to provide for the organization of cities * * *.” (Art. IX, § 9.) In the charter which the Legislature provided for the city of New York (L. 1934, ch. 867 — adopted by referendum November 3, 1936, effective January 1, 1938) it did not see fit to set up tripartite, co-ordinate branches of government which are independent of each other. True, it prescribed that the Mayor shall be the chief executive officer of the city ” (Charter, §§ 3, 4, 5) and that the Council is the local legislative body of the city.” (Id. § 21.) But the fact that functions are exercised by the Mayor and the Council which are independent of each other is not enough, as we conclude, to entitle the Mayor to invoke immunities which he now asserts and which are accorded the executive under the Federal plan of government..

Under charter provisions the Mayor, when sitting as a member of the Board of Estimate, shares many executive responsibilities with the Comptroller, the President of the Council and the Presidents of the five boroughs. (Ch. 3, §§ 61, 62, 70.) As a member of the Board of Estimate he is a member of the Municipal Assembly (L. 1924, ch. 363, § 10; amd. L. 1928, ch. 671) and as such may perform certain legislative functions (Charter, § 39). And although no provision is made for a judicial branch of the city’s government, the charter contains the anomalous provision that “ The mayor is a magistrate.” (Id. § 6.)

It is thus seen that, unlike the office of President under the federal system, the powers of the office of Mayor of the city of New York are not exclusively executive. And unlike the federal system, which recognizes a separation of powers into three independent branches, the chartered plan of government for the city of New York has but two branches —■ executive and legislative —• the functions of which, as defined by the Legislature, are not always independent. This comes about, as we have seen, from the fact that a city is not sovereign, as are the federal government and the states. “ A municipal corporation is, so far as its purely municipal relations are concerned, simply an agency of the state for conducting the affairs of government, and as such it is subject to the control of the legislature.” (Williams v. Eggleston, supra, p. 310.) In the absence of express restrictions placed by the Constitution upon the exercise of its legislative powers, the Legislature may create or destroy, enlarge or restrict, combine or divide, municipal corporations.” (City of New York v. Village of Lawrence, supra, p. 437.)

It is for that reason that the theory of co-ordinate, independent branches of government has been held generally to apply to the national system and to the states but not to the government of cities. (State ex rel. Wilkinson v. Lane, 181 Ala. 646, 658; Uridias v. Morrill, 22 Cal. 474, 478; Kaufman v. City of Tallahassee, 84 Fla. 634, 639; Ford v. Mayor & Council of Brunswick, 134 Ga. 820; Sarlls v. State, 201 Ind. 88,115; Eckerson v. City of Des Moines, 137 Iowa, 452, 461-466; Bryan v. Voss, 143 Ky. 422, 427; People ex rel. Simpson v. City of Mankato, 117 Minn. 458, 467-469; Barnes v. City of Kirksville, 266 Mo. 270, 282; City of Greenville v. Pridmore, 86 S. C. 442, 443; Walker v. City of Spokane, 62 Wash. 312, 324, 325.)

The case of Springer v. Philippine Islands (277 U. S. 189), cited by the appellant, is not an authority opposed to our view in the present proceeding. There the controversy involved the validity of a law which purported to restrict the power of the Governor-General who was given the supreme executive power ” by the “ Organic Act ”— the fundamental law of the Philippine Islands. There an express provision for the separation of powers was held to be contained within the Organic Act. The questions there determined differ widely from the one now before us.

In our consideration of the present problem we must assume that the action of the Special Committee of the Council in issuing the subpoena duces tecum now challenged, had a legitimate objective. We have treated the committee’s power of inquiry, with process to enforce it, as an essential auxiliary to its legislative function. (Wilckens v. Willet, 1 Keyes, 521, 525; People ex rel. McDonald v. Keeler, 99 N. Y. 463, 481, 482, 487; McGrain v. Daugherty, 273 U. S. 135, 174; People ex rel. Karlin v. Culkin, 248 N. Y. 465, 478; Matter of Joint Legislative Committee, 285 N. Y. 1, 8.) We cannot say, as does the Mayor, that implicit in those provisions of the charter which prescribe the functions of the Mayor and the Council, is an intention by the Legislature to keep the two in a constant state of isolated independence. The scope of section'43 of the charter, already quoted, is broad. In the absence of some principle of law or some legislative declaration of public policy to the contrary, we regard that section as broad enough to apply to the Mayor of the city. We have seen that the principle of the separation of powers applies only to the sovereign authority — not to the government of cities. Accordingly we may not read into section 43 by implication a right of immunity such as the Mayor now asserts.

The order should be affirmed, without costs.

Lehman, Ch. J.

(dissenting). The Charter of the City of New York provides, in section 21, that the council shall be vested with the legislative power of the city, and shall be the local legislative body of the city, with the sole power to adopt local laws under the provisions of the city home rule law or otherwise, without requiring the concurrence of any other body or officer except as provided in sections thirty-eight, thirty-nine and forty.” Incidental to, but not limiting the general legislative power of the Council, the charter confers upon the Council certain enumerated powers. (§ 27.) It is expressly given power from time to time to appoint a special committee to investigate any matters relating to the property, affairs or government of the city or of any county within the city. Any such committee shall have power to require the attendance and examine and take the testimony under oath of such persons as it may deem necessary.” (§ 43.)

Pursuant to the provisions of that section the Council has appointed a special committee to investigate the Municipal Civil Service Commission of the City of New York. That committee has served upon the Mayor of the city a subpoena requiring him to appear before the committee “ to testify and give evidence in a certain inquiry and investigation of the said Municipal Civil Service Commission, now being conducted pursuant to the provisions of a resolution of the Council of the City of New York, adopted by said Council May 7th, 1940, as amended; and that you bring with you and produce at the time and place aforesaid a certain report, memorandum or communication made to you by one Ethel Epstein in the employ of the city of New York in or about the early part of 1940 relating to the personnel of the Information Center of the City of New York and any correspondence between yourself or your office, with the Municipal Civil Service Commission or with any other department of the city with relation to said personnel and the qualification of any of said personnel by the Civil Service Commission and the examination for the position of Assistant Director of the Information Center and the eligibility requirements for said examination now in your custody, and all other papers, records, writings and evidences which you have in your custody or control concerning the premises. And for a failure to attend and to produce and bring with you the foregoing, you will be punished as and for a contempt.” The Mayor moved in the Supreme Court for an order to vacate and quash the subpoena or, in the alternative, to modify the subpoena “so as to exclude therefrom any and all reports, memoranda, communications or other documents which the petitioner, as the chief executive officer of the city of New York, deems to be executive documents, and for such other and further relief as the Court shall deem just and proper in the premises.”

Chapter I of the charter is entitled “ Mayor.” In the first section of that chapter it is provided that “ the mayor shall be the chief executive officer of the city.” (§ 3.) The second chapter of the charter is entitled “ Council.” Section 21, already quoted herein, is the first section of that chapter. Though the power conferred upon the Council by section 43 to appoint a special committee to investigate any matters relating to the “ property, affairs or government of the city ” is subject to no express limitation, the Mayor contends that its exercise is restricted to the field of legislative powers vested in the Council and that in the exercise of the powers conferred upon the Mayor as “ chief executive officer of the city ” the Mayor is not subject to command or interference by the Council.

The principle of separation of governmental powers is as a general rule inherent in the American constitutional system.” (Springer v. Philippine Islands, 277 U. S. 189, 201.) It is inherent ” even though unexpressed in the fundamental law. Where legislative, executive and judicial powers are distributed by the fundamental law among separate departments the courts are constrained to read into the law as a logical conclusion the implied provision that the powers so distributed are to be forever separate and distinct from each other.” So, in that case, the court said that “ some of our state constitutions expressly provide in one form or another that the legislative, executive and judicial powers of the government shall be forever separate and distinct from each other. Other constitutions, including that of the United States, do not contain such an express provision. But it is implicit in all, as a conclusion logically following from the separation of the several departments.” The question presented upon this appeal is whether under the charter there has been such separation and distribution of the powers of the Mayor as chief executive and the powers of the Council as the local legislative body of the city that there is implicit, though not expressed, the rule or principle that legislative and executive powers are to be separate and distinct from each other and that neither the powers conferred upon the Mayor nor the power conferred upon the Council may be exercised in manner which would infringe upon the independence of the other.

The question so posed is purely one of statutory construction. In providing a form of government for the cities of the state the Legislature is restricted only by the provisions of the Constitution of the State and the State Constitution contains no provision, express or implied, that the form of government provided for cities shall embody the principle of governmental separation, of powers. It cannot be disputed that the Legislature may impose upon cities the commission form of government which almost completely disregards the principle of separation of powers or it may adhere to that principle in part and reject it in part. Nonetheless, if in the charter the Legislature has provided a form of government in which executive powers vested in the Mayor and legislative powers vested in the Council are intended to be kept separate, distinct and independent, that intention must be given effect. In Springer v. Philippine Islands (supra) a similar question was presented when the court was called upon to construe a statute of Congress creating a government for the Philippine Islands. No provision of the Constitution of the United States there constrained the Congress, in enacting the organic law for the Philippine Islands, to separate governmental powers in accordance with the principle embodied in state and federal Constitutions. The Congress chose, however, to do so and the Supreme Court of the United States construed the statute accordingly, saying: “That the principle is implicit in the Philippine Organic Act does not admit of doubt.” Here the charter constitutes the “ organic act ” for the city of New York. It confers executive powers upon the Mayor and it confers legislative powers upon the Council. Neither the Mayor nor the Council may exercise powers other than those conferred by the charter. As in the Philippine Islands case, the problem here presented is how far that separation of powers was intended to be complete.

The cases cited in the opinion of Judge Lewis decide that though in the State and National governments the principle of separation of governmental powers is implicit as a logical conclusion from the distribution of powers among separate departments in the Constitution establishing such governments, yet the Legislatures, vested by those Constitutions with legislative power to provide for the incorporation and government of cities or other municipal corporations, are not bound, in the exercise of that power, to distribute or to separate governmental powers. These cases do not, I think, establish or even imply that the “ theory of co-ordinate independent branches of government ” has been held, generally, not to apply to city governments. On the contrary, in these cases there was a challenge of a then novel assertion of power by the Legislature to reject a theory which for a century or more had been generally accepted though not rigidly applied in the creation of city government. These cases do not decide or, I think, even suggest that where the Legislature has distributed governmental powers among separate departments of a city government, the principle of separation of power is not implied as a logical conclusion from such distribution.

The charter confers upon the Commissioner of Investigation, appointed by the Mayor, as well as upon the Council, broad power of investigation. He is required to make any investigation directed by the mayor or the council.” (§ 803.) I recognize, of course, that upon this appeal the question is not presented whether that section empowers the Commissioner to investigate the conduct of members of the Council or to subpoena them. I point out only that the grant of power to the Commissioner is, like the grant of power to the Council, not made subject to any express limitation and that unless we read such, limitation by implication into the grant of power to one or both it will be within the power of a committee of the Council to summon the Mayor to testify in the course of a legislative investigation and within the power of an official appointed by the Mayor to summon the members of the Council in an investigation directed by the Mayor. It seems to me clear that there is necessarily implied in the grant of power to each a limitation that neither Council nor Mayor may encroach upon the field reserved for the other. Otherwise, the exercise by one of power for political or personal ends might invoke retaliation by the other. The extent of the power claimed by the Councilmanic committee and its necessary effect upon the efficiency of municipal government is well illustrated by the nature of the paper which the Mayor has been subpoenaed to produce. It is, as Judge Lewis points out, a written report made to the Mayor in regard to an investigation which the Mayor had directed the officer to make for the information of the Mayor in relation to the performance of duties by executive officers within the field where the Mayor is, by the charter, the responsible head. The Mayor challenges the right of the committee to compel its production. He does not claim that it contains information which, in the public interest, should not be revealed. He does claim that the public interest demands that reports of such investigation be treated as confidential unless declared to be public records in accordance with the provisions of section 51 of the General Municipal Law (Cons. Laws, ch. 24) or demanded upon an investigation which the State might have a right to make.

The Commission which formulated the proposed charter was attempting to devise an organic law which would provide a practical and efficient form of administration of the affairs of the city of New York, not an ideal form of administration of the affairs of an ideal city in the land of Utopia. We may assume that its members knew that even in the field where observance of the principle of separation of powers is commanded by the Constitution, “ the exigencies of government have made it necessary to relax a merely doctrinaire adherence to a principle so flexible and practical, so largely a matter of sensible approximation, as that of the separation of powers.” (Matter of Richardson, 247 N. Y. 401, 410.) We may assume, too, that they knew that though the power of the Legislature to provide a form of municipal government or administration of the affairs of a city which completely abandoned the principle of separation of powers as in the “ commission” form of government had been challenged in many jurisdictions, it had been everywhere sustained. Knowing all that they formulated a charter which did at least in large measure separate executive and legislative power and which in its first chapter conferred upon the Mayor broad powers as the “ chief executive officer of the city ” and in its second chapter conferred upon the Council broad legislative power ” as “ the local legislative body of the city.” Here we have a system in which there is at least some “ approximation ” of the principle of separation of executive and legislative power. Obviously in a city government the approximation must always be incomplete. We must decide how far there is implied in that separation the rule that the powers conferred upon the Mayor and Council are not only separate, but exclusive.

The fact that the separation of executive and legislative powers is not entirely complete does not show that the separation so far as made was not intended to create fields in which the powers of the Mayor and the Council are exclusive. That would be true even where the rule of separation of powers is mandatory. “ The existence in the various constitutions of occasional provisions expressly giving to one of the departments powers which by their nature otherwise would fall within the general scope of the authority of another department emphasizes, rather than casts doubt upon, •the generally inviolate character of this basic rule.” (Springer v. Philippine Islands, supra, p. 202.) The charter as adopted must be construed in the light of the fact that it provides a form of government which in large degree conforms to the traditional pattern of government and which recognizes a division between executive and legislative powers. In no case that has been found by either counsel has any local legislative body asserted a right to subpoena the chief executive officer of a municipality or to require him to produce documents which have been prepared for bis information in the course of the performance of his executive duties. In final analysis the question to be decided by us is whether there can be efficient government in which there has been in large degree a separation and distribution of power unless the powers so separated and distributed are deemed exclusive.

Again I point out that the Charter we are construing is intended to provide for the city of New York, not for an ideal city in Utopia. Visionary dreamers, but not men of practical experience, might have assumed that neither the Council nor the Mayor would ever attempt, for political or other reasons, to interfere with or discredit the other. I do not suggest that in this case the Council is attempting to do that, but certainly the power which it now asserts might be used for such purpose. Nor do I suggest that the Mayor has with such purpose ever asserted a power which encroached upon the field of powers allotted to the Council, but in Matter of Radio Station WNYC (280 N. Y. 629) this court held unanimously that section 38 of the charter which provides that every local law or resolution * * * after its passage by the council, shall be presented to the Mayor for approval ” does not apply to a resolution adopted by the Council for the appointment of a special committee to investigate the management of the Municipal Broadcasting System of the city. Section 38 in terms, it must be noted, applies to every resolution. We felt constrained, nonetheless, to exclude from its scope a resolution which was not analogous to a local law and was adopted in the exercise of a power merely incidental to the exercise of the Council’s general legislative power. Practical considerations and age old American traditions of government demanded the rejection of a literal construction of the charter which would give to the “ chief executive officer ” of the city the power to impede the Council in the exercise of powers conferred upon it only as an incident of its general legislative powers.” The same practical considerations and established traditions demand the rejection of a literal construction of the charter which would give to the Council the right and power to impede the chief executive officer of the city in the exercise of his executive powers.

That the powers of the Mayor as the chief executive officer are vested in him alone and are not subject to control by the Council is clear beyond dispute. Interference by one governmental department with the performance by the head of another governmental department of powers exclusively vested in him has never heretofore been sanctioned. I repeat that the Legislature might have devised a system of government without separation of governmental powers or departments, but it has not chosen to do so. The organic law of the city confers upon the Mayor alone certain executive powers, and it places upon him the burden of the responsibility which flows from governmental powers and duties. Implicit in the grant of exclusive power and exclusive responsibility is the rule that no other department of city government may interfere with the chief executive officer of the city in the exercise of his power and in carrying out his responsibility. That is true alike where the Legislature is required by the Constitution to set up separate departments of government each vested with exclusive power and where the Legislature freely chooses to do so. The charter must be construed in the light of these tried traditions of American government. The conditions created by the war have again demonstrated their wisdom. To meet those conditions the Legislature may grant to the Mayor additional powers or may limit or may withdraw powers heretofore granted to him and vest them in some other officer or department, either State or local. Where exclusive executive power and exclusive responsibility is vested in the chief executive officer of the city he should not be subjected to the possibility of being impeded or harassed by another department of the city government which shares neither his duty nor his responsibility. To give another department the power to harass or impede the chief executive is to invite disaster. We may properly find that the subpoena issued by the Committee of the Council would in this case constitute no substantial interference. So, too, we may assume for the purposes of this appeal that the Council as now constituted would not tolerate unreasonable interference with the Mayor by its Special Committee for personal or political reasons and that the Mayor would not direct or tolerate unreasonable interference with members of the Council for like reasons. That is immaterial. The question before us concerns the scope of the power of the Council, not the propriety of its exercise. Perhaps at some time in the future a chief executive officer ” and members of the Council may be elected who are temperamentally unable or even unwilling to impose upon themselves a measure of self-control so rigid, so perfect and complete.

The orders of the Appellate Division and of Special Term should be reversed and the motion to vacate the subpoena should be granted.

Loughran, Finch, Conway and Desmond, JJ., concur with Lewis, J. Lehman, Ch. J., dissents in opinion in which Rippey, J., concurs.

Order affirmed.


source: Caselaw Access Project

author: Conway, J. Lewis, J.

license: Public Domain

text:
    James Tierney, Jr., an Infant, by James Tierney, His Guardian ad Litem, et al., Appellants, v. New York Dugan Brothers, Inc., Respondent.
    Argued January 8, 1942;
    decided March 19, 1942.

      Charles Gold, Lawrence Isaacs and Joseph E. Weil for appellants.
    The driver of an electric truck parked on a public highway owes a duty to use reasonable care towards children who might enter the truck in the usual course of play. (Boylhart v. DiMarco & Reimann, Inc., 270 N. Y. 217; Long v. City of Dunkirk, 260 N. Y. 599; Kunz v. City of Troy, 104 N. Y. 344; Gallagher v. Fordham & Loring Corp., 13 N. Y. Supp. [2d] 322; Keenan v. Lawyers Mortgage Co., 254 App. Div. 348; 280 N. Y. 525; Gumbrell v. Clausen-Flanagan Brewery, 199 App. Div. 778; Albano v. Tapley & Co., 199 App. Div. 916; Lee v. Van Buren & New York Bill Posting Co., 190 App. Div. 742; Earl v. Cronch, 10 N. Y. Supp. 882; 131 N. Y. 613; Mann v. Parshall, 229 App. Div. 366; Connell v. Berland, 233 App. Div. 234; 248 N. Y. 641.) There was sufficient evidence of the defendant’s negligence shown to sustain the verdicts of the jury. (Gumbrell v. Clausen-Flanagan Brewery, 199 App. Div. 788; Lee v. Van Buren & New York Bill Posting Co., 190 App. Div. 742; Connell v. Berland, 223 App. Div. 234; 248 N. Y. 641.)

      George J. Stacy and Paul L. Murphy for respondent.
    The infant plaintiff was a trespasser. Defendant was not negligent, and plaintiffs did not prove the allegations of their complaint. (Thibodeau v. Gerosa Haulage & Warehouse Corp., 252 App. Div. 615; 278 N. Y. 551; Maloney v. Kaplan, 233 N. Y. 426; Mendelowitz v. Neisner, 258 N. Y. 181; Walker v. Bachman, 268 N. Y. 294; Morse v. Buffalo Tank Corp., 280 N. Y. 110; Palladino v. Onondaga County Sav. Bank, 255 App. Div. 929; Vincent v. Crandall & Godley Co., 131 App. Div. 200; Touris v. Brewster & Co., 235 N. Y. 226; Kaplan v. Shults Bread Co., 212 App. Div. 110.)
   Conway, J.

The plaintiff, a child of five years of age, suing through his guardian ad litem, and his father had jury verdicts for personal injuries and loss of services. The Appellate Division reversed upon the law and the facts and dismissed the complaint upon the law.

The defendant was making deliveries upon one of the streets in the county of Queens in June. Its electric truck had a platform about nine inches above the sidewalk and one could enter upon the platform from either side of the vehicle. There was a sliding door on each side which could be closed and locked. They were closed and locked in cold- but not in warm weather. There was no driver’s seat. There were, among others, two mechanical devices installed which were operable from the platform. Those were a safety switch and a power lever. There was a key for locking the safety switch. In order to start the car it was necessary to turn the safety switch and push the power lever. Both those devices were manipulated very easily.

The driver testified that he parked the truck, threw off the power, applied the emergency brake and turned off the switch. He left both sliding doors opened and unlocked. He left the safety switch unlocked. He did not have a key to lock it. Without a key, there might as well have been no safety switch. Had either the doors been closed and locked or the safety switch locked, it would have been impossible to put the truck in motion.

As the driver left the car, in order to make a delivery, he testified that he saw three children, of whom the infant plaintiff was one, right at the truck ready to get into it ” and that he warned them not to enter it. He also testified that children generally were in the habit of playing in and about the car.

He left it so parked that, when he went to the house where he was to make a delivery, he could not see the platform with the instruments but only the rear portion of the truck.

The infant plaintiff and the other two children played in and about the truck. They set it in motion. It began to move diagonally across the street under power, but slowly, since the emergency brake was set. Two of the children jumped off. The infant plaintiff hung on to the side door and then fell or jumped and was injured when caught between the truck and curb.

We think it was a question of fact for a jury as to whether or not defendant exercised ordinary prudence under the circumstances. “ Among the members of the public to whom the duty of care was owing were children playing on the street, since their proclivities as matter of common knowledge might draw them to such objects in the course of play. (Earl v. Crouch, 57 Hun, 586; 61 Hun, 624; affd., 131 N. Y. 613; Kunz v. City of Troy, 104 N. Y. 344; Long v. City of Dunkirk, 260 N. Y. 599; cf. Restatement of the Law of Torts, § 302, subd. m.) ” (Boylhart v. DiMarco & Reimann, Inc. [Crouch, J.], 270 N. Y. 217, 221.) In that instance the objects were steel beams piled insecurely in the highway.

A dangerous attraction in a public highway may impose liability to a child on the part of the one responsible therefor, because of failure to exercise due care although there would be no liability if the attraction were upon private premises where the child had no right to go. In the instance presented here the defendant, in connection with its business, was practically using the sidewalk as a part of its automobile platform. (For the distinction indicated, see Walsh v. Fitchburg R. R. Co., 145 N. Y. 301, at 311, 312; Note on Attractive Nuisances, subdivision Attractions in Highways, 36 A. L. R. 34 at 148 et seq.; Nagle v. N. Y. Edison Co., 281 N. Y. 727 [tool cart left at night in a play street in New York city]; Morse v. Buffalo Tank Corp. [Finch, J.], 280 N. Y. 110 at 118; Long v. City of Dunkirk, supra.)

It was the duty of the operator of the motor vehicle involved here, when he permitted it to be unattended, to leave it in such condition that it could not be put in motion except by the intervention of an external cause not to be anticipated or guarded against. (Maloney v. Kaplan, 233 N. Y. 426, 430.) In that case, as was pointed out in the opinion, there was no unusual situation presented where the danger was apparent of interference by little children indulging in their natural instincts of play (Lynch v. Nurdin, 1 Adol. & El. [N. S.] 29; Walsh v. Fitchburg R. R. Co., 145 N. Y. 301), or by meddlesome or mischievous boys (Luedeke v. N. Y. C. & H. R. R. R. Co., supra)." Here a jury might say that there was and that is the determining factor distinguishing from the instant one the cases of Thibodeau v. Gerosa Haulage & Warehouse Corp. (252 App. Div. 615; affd., 278 N. Y. 551) and Mann v. Parshall (229 App. Div. 366).

In Connell v. Berland (Finch, J.) (223 App. Div. 234; affd., 248 N. Y. 641) we held that the question of negligence was for the jury where defendant parked his automobile, which was equipped with a self-starter, in a congested street, where he knew children were constantly playing, with the door unlocked and with the ignition key in the switch and it was thereafter set in motion by a boy. There the gears were in neutral so that there was required, as in the instant case, two different manipulations of mechanical contrivances to start the car. There again we had the conceded knowledge of defendant that small children were playing about the instrumentality left unattended and we held that it was a question for a jury as to whether their subsequent conduct might have been anticipated by the exercise of reasonable care and ordinary prudence under the circumstances. The situation here is indistinguishable.

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

Lewis, J.

(dissenting). I accept the statement of legal principles to be found in the prevailing opinion. I find it difficult, however, to accept the majority view because, in my judgment, the rulings cited in its support are not applicable to undisputed facts in this case which favor the ruling by the Appellate Division.

Briefly as to the facts: A route salesman was making house-to-house deliveries of the defendant’s bakery products. In doing so a light electric truck was employed which had a small cab with a .sliding door on either side and a floor which was fifteen inches above the pavement. There was no seat in the cab, the vehicle being operated by the salesman from a standing position back of the steering wheel and within reach of the control mechanism. Within but a few moments prior to the accident the defendant’s truck was passing along a level street in the borough of Queens when it stopped at the curb in front of a house where the salesman was to make a delivery. Having turned off the power by means of a switch which controls it, and having put the power lever in its neutral position, the salesman set the emergency brake, put his delivery basket on his arm and left the truck. As he did so he passed three children — including the infant plaintiff then six years old — who stood right at the truck ready to get into it.” Instead of paying no heed to the three children the salesman gave them a sharp warning which was definite and clear — “I told them not to go into the truck, they will get hurt.” A brief time thereafter — while the 'salesman was standing at the door of his customer’s home and within sight of the rear of the truck — his attention was attracted by a noise from his truck. As he turned he saw the vehicle moving slowly forward along the level pavement. With the emergency brake set the truck’s speed could not, and did not, develop more than two miles an hour. So it was that the salesman was able quickly to overtake the slowly moving truck, at the door of which stood the infant plaintiff alone. The salesman called out to him not to step off but his warning was of no avail. Personal injuries were sustained by the child when he jumped from the truck platform and fell between the truck and the 'curb.

We are thus dealing with facts which differ in vital points from those upon which rest the rulings cited by the majority opinion. Here it must be conceded a truck was stopped on a level pavement with power turned off, transmission mechanism at neutral, and the emergency brake set. In addition there is the important undisputed fact that a clear warning was given to the infant plaintiff which amounted to a command not to do the very thing which later led to personal injuries sustained by the child for which, it is said, a jury may hold the defendant liable. I find in the record no evidence from which a jury could find a breach of legal duty by the defendant’s salesman. In my opinion the standard of care which the decision about to be made demands of the defendant’s agent is more exacting than was legally due the infant plaintiff in the circumstances proven. (Maloney v. Kaplan, 233 N. Y. 426, 428, 429.)

Accordingly,-1 dissent and vote for affirmance.

Lehman, Ch. J., Loughran, Rippey and Desmond, JJ., concur with Conway, J.; Lewis, J., dissents in opinion in which Finch, J., concurs.

Judgments reversed, etc.


author: Per Curiam.

text:
    Matilda Shields, Appellant, v. New York Oil Burner Co., Inc., Respondent.
    Submitted January 5, 1942;
    decided April 16, 1942.

      John R. O’Reilly for motion.

      Frank Case Hayden opposed.
   Per Curiam.

Under the provisions of section 592 of the Civil Practice Act, the time during which the plaintiff might serve notice of appeal was limited to sixty days or thirty days after the entry of an order of the Appellate Division denying an application for leave to appeal “ on the ground that an appeal could have been taken as of right.” After the statutory period has expired it cannot be extended by the entry of an order amending an earlier order of the Appellate Division which denied leave to appeal.

Motion granted and appeal dismissed, with costs and ten dollars costs of motion.


text:
    In the Matter of O’Connor Long Island Properties Corporation, Appellant, against Henry E. Bruckman et al., Constituting the State Liquor Authority, Respondents.
    Argued February 24, 1942;
    decided April 16, 1942.

      Milton N. Mound and Herbert S. Holiner for appellant.

      Monroe I. Katcher, II, and Francis V. McHugh for respondents.
   Per Curiam.

No question of the validity of section 113 of the Alcoholic Beverage Control Law (Cons. Laws, ch. 3-B) is before us, since the petitioner-appellant has not given notice of its intention to review the intermediate order of the Appellate Division upholding the provisions of that section. (Civ. Prac. Act, § 580; Cohen, Powers of the Court of Appeals, § 70.)

The appeal should be dismissed, with costs. .

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

Appeal dismissed.


author: Lewis, J.

text:
    In the Matter of Raphael A. Petrocelli et al., Appellants, against Joseph D. McGoldrick, as Comptroller of the City of New York, et al., Respondents.
    Argued February 26,1942;
    decided April 23, 1942.

      Leopold V. Rossi for appellants.
    Appellants who are in the ungraded service of the competitive class of civil service are entitled to four annual salary increments pursuant to section B40-6.0 of the Administrative Code of the City of New York (L. 1937, ch. 929). (Matter of Beverly v. City of New York, 260 App. Div. 853; 284 N. Y. 773; Matter of Dennehy v. Kern, 253 App. Div. 877; 279 N. Y. 645; Matter of Wexler v. Dayton, 255 App. Div. 567; Lewin v. City of New York, 256 App. Div. 1063; Matter of Meyer, 209 N. Y. 386.) Appellants have protected their rights. (Matter of Cropsey v. Hylan, 199 App. Div. 218; 232 N. Y. 601.)

      David A. Savage and John F. O’Shea for Committee on Behalf of Ungraded Civil Service Employees of City of New York, amicus curiæ.

    The language of the statute is clear in itself. The interpretation given to it by the lower courts is not justifiable. (Matter of Tormey v. LaGuardia, 278 N. Y. 450.) Petitioners have a clear legal right to the benefits of subdivision 2 of section B40-6.0 of the Administrative Code. (Matter of Beverly v. City of New York, 284 N. Y. 773; Matter of Amann v. Finegan, 253 App. Div. 364; Matter of Wingate v. McGoldrick, 279 N. Y. 246.)

      William C. Chanler, Corporation Counsel (Charles F. Murphy and Paxton Blair of counsel), for respondents.
    The statute was enacted solely for the benefit of employees in the lower salary brackets. In fixing a ceiling beyond which employees in the ungraded service could not receive increments, the court below properly construed the intent behind the enactment of that act by limiting its benefits to employees within that compass. (Matter of Beverly v. City of New York, 284 N. Y. 773; Matter of Dennehy v. Kern, 279 N. Y. 645; Archer v. Equitable Life Assur. Society, 218 N. Y. 18; Matter of Beggs v. Kern, 284 N. Y. 504.)
   Lewis, J.

The petitioners-appellants are investigators and institutional inspectors in the Department of Welfare and Hospitalization in the city of New York. Prior to July 1, 1937, they were appointed to their present positions which are in the ungraded service of the competitive class of civil service. At the time of their appointment their salaries were fixed at $1,800 per annum or less. Thereafter some received salary increases with the result that on July 1, 1937 — a date which is important to our decision — a few of the petitioners were receiving more than $2,280; others were receiving less than $2,280 but more than $1,800.

On July 1,1937, there became effective Local Law No. 45 of 1936 (Local Laws 1936, p. 172), which is now section B40-6.0 of the Administrative Code of the City of New York (L. 1937, ch. 929 [ch. 40, tit. B, § B40-6.0, p. 1169]):

“ § B40-6.0. Employees; certain civil service; annual increment. a. In each annual expense budget, there shall be included and provided annual salary increments of at least one hundred twenty dollars for each employee in the competitive class, as defined by section fourteen of the civil service law as more particularly hereinafter described and provided:
1. For each employee who has served at least one year in a grade or rank of a position in the graded service of the competitive class, the minimum annual salary of which is one thousand eight hundred dollars per annum or less, there shall be provided and paid an annual salary increment of at least one hundred twenty dollars until the maximum salary of the grade or rank shall have been reached.
2. For each employee who has served at least one year in a position of the ungraded service of the competitive class, the entrance appointment salary of which is one thousand eight hundred dollars per annum or less, there shall be provided and paid an annual salary increment of at least one hundred twenty dollars until four such annual increments shall have been reached. * * (Emphasis supplied.)

Beduced to its simplest terms the section of the Administrative Code quoted above — to which reference will be made as “ § B40-6.0 ”— provides (1) that the city budget shall include annual salary increments of not less than $120 for each employee in the competitive class; (2) that employees in the graded service, who have served at least one year and whose appointment salary was $1,800 or less, shall be paid such annual salary increments “ until the maximum salary of the grade or rank shall have been reached; ” (3)" that employees in the ungraded service who have served at least one year — which includes the petitioners — whose , appointment salary was $1,800 or less, shall be paid such annual salary increments until four such annual increments shall have been reached.” For example: an employee in the graded service, whose appointment salary was $1,600 and whose grade entitled him to a maximum salary of $2,400, shall receive annual salary increases of $120 until the maximum of $2,400 is reached. It is thus seen that if — although such employee entered the graded ' service at $l,-600 — he had been increased to $2,000 prior to July 1, 1937 (the effective date of § B40-6.0), he would be entitled I to three annual increments of $120 each and a fourth of $40, thus bringing his annual salary to his grade maximum of $2,400. There is no dispute that as to graded employees this is the statutory scheme.

■ The particular problem presented by this appeal concerns employees in the ungraded service. The problem is exemplified by the case of an employee who entered the ungraded service at an entrance appointment salary of $1,600 and thereafter received such salary increments that by the time section B40-6.0 became effective on July 1, 1937, his annual salary was $2,000. Unlike the graded service, there is in the ungraded service no fixed maximum salary. \ Accordingly, if we apply subsection 2 of section B40-6.0, already quoted, to the case of the ungraded employee, it follows, from language there employed, that he would be entitled to four annual increments of $120. In other words, he would continue to receive increases until his salary amounts to $2,480. .

The respondent city authorities, however, in their administration of this law, have refused to pay employees in the ungraded, service any increase beyond $2,280. ' That figure is arrived at by proceeding on the assumed premise that section B40-6.0, in effect, fixes a maximum for salaries paid in the ungraded service. (Cf. Matter of Callahan v. McGoldrick, 171 Misc. Rep. 573; affd., 259 App. Div. 883.) Such a maximum, it is said, has been fixed at a figure arrived at by taking as a basis the maximum appointment salary of $1,800 and adding thereto four annual increments of $120 each, thus producing the maximum figure of $2,280. ,

We find in the governing statute no basis for the interpretation adopted by the city authorities. There is no indication from the language employed in subsection 2 of section B40-6.0 of a legislative intent to establish a maximum annual salary for ungraded employees. And it may be added that, even though it be claimed that such an interpretation is expressed in subsection 2, there is no evidence from which to determine what that maximum should be. The language, as we read it, authorizes no definite figure. The maximum annual salary attainable under subsection 2 of section B40-6.0 cannot be reached in ungraded service “ until four such annual increments [of $120 each] have been reached.”

The difference between “ grade ” and rank ” and between graded and ungraded service was clearly pointed out by Chief Judge Lehman in Matter of Beggs v. Kern (284 N. Y. 504, 509, 513). There seems to be no express provision in the Civil Service Law (Cons. Laws, ch. 7) for the grading of civil service employees. However, the Municipal Civil Service Commission has adopted rules to effect such grading, which rules have the force of law. (Civ. Serv. Law, § 6, subd. 1.) Where there is a large group of employees doing similar work, they are graded on the basis of salary, which grading serves as a means of aiding the administration of the Civil Service Law with special reference to the promotion of employees. If the salary for a certain type.of work shall be between $1,800 and $2,400, it is that range of salary which establishes the grade for employees who do that type of work. Ungraded employees are such as do work so varied in character that there are no large groups which may be so typed as to place them within a single salary range.

In the case at bar we assume that the petitioners are properly in the ungraded service for which, as indicated above, there is no maximum salary. We conclude, however, that section B40-6.0 gives to employees in the ungraded service the right to be paid, in addition to the salary received by them on July 1,1937, four annual increments of $120 each. But we are told that, under such an interpretation an employee might have entered the ungraded service at a salary of $1,700 and by salary increments might have been raised prior to July 1, 1937, to an annual salary of as much as $5,000 and thereafter be entitled to four annual increments of $120 each. In contrast there is cited as an example the case of an employee in the graded service who could receive such a salary increase only by taking promotional examinations.

In the absence of language in subsection 2 of section B40-6.0, expressly fixing a maximum salary for ungraded service the respondent city authorities assert that the law was passed to enable employees in the lower salary brackets to secure annual increases. We are told that it could not have been the intention of the law makers to enact a measure which would grant annual salary increases which would be effective in the higher salary brackets. The example referred to above — of the employee who entered service at a salary of $1,700 and was increased to $5,000 before July 1, 1937 — is suggested by the respondents to demonstrate the alleged unreasonableness of the petitioners’ interpretation. It must be admitted that, under the petitioners’ interpretation — which we believe to be correct — such an employee would be entitled, under subsection 2 of section B40-6.0 to increases “ until four such annual increments shall have been reached ”— viz., until he receives $5,480. Such a result, say the respondents, could not have been the intention of the law makers. That argument, as we view it, loses force in view of the absence in the governing statute of an expressed intention, or one fairly to be implied from its language, to establish a maximum salary for ungraded employees. We find no provision in section B40-6.0 declaring the rights of employees in the graded and ungraded service to annual salary increments, which indicates an intention to consider only the positions of those receiving less than $2,280.

An example of the injustice which might result from the interpretation adopted by the city is found in the case of an employee who enters the ungraded service at an annual salary of $1,800. At the same time an employee enters the graded service at the same' salary. If both had received the same increases and were receiving $2,000 on July 1, 1937, the employee in the ungraded service would be entitled thereafter to four annual increments, not of $120 each, but in such amounts as in total would give him a salary limited to $2,280. Meantime, however, the employee in the graded service, whose grade carried a maximum salary of $2,400, would be entitled under subsection 1 of section B40-6.0 to increments up to $2,400.

■ The city has arbitrarily limited the salary for ungraded employment at $2,280 by adding four increases of $120 each to $1,800, because $1,800 is the maximum entrance salary for positions to which section B40-6.0 applies. With as good reason the city could have chosen, instead of $1,800, the salary which the employee was receiving on July 1, 1937, the date when the law became effective. If, as in subsection 1, which refers to graded employment, subsection 2 expressed a clear intention to recognize some maximum, no fault could be found with the city’s position. In the absence of an indication of such legislative intention, we cannot accept as determinative of this appeal the interpretation urged by the respondents.

The petitioners-appellants have preserved their rights by accepting their salaries under protest.

The orders should be reversed and the [petition granted in accordance with this opinion, with costs to the appellants in all courts.

Lehman, Ch. J., Lottghran, Finch, Rippey, Conway and Desmond, JJ., concur.

Orders reversed, etc.


author: Desmond, J.

text:
    The People of the State of New York ex rel. Wallington Apartments, Inc., Appellant, against William S. Miller et al., as Commissioners of Taxes and Assessments of the City of New York, Respondents.

      Argued February 26, 1942;
    decided April 23, 1942.

      Julius Zizmor for appellant.
    The findings of value by the Appellate Division are contrary to the uncontradicted testimony and against the weight of evidence. (People ex rel. Amalgamated Properties, Inc., v. Sutton, 274 N. Y. 309; Boyd v. Boyd, 252 N. Y. 422; People ex rel. Manhattan Square Beresford, Inc., v. Sexton, 284 N. Y. 145; People ex rel. Parklin Operating Corp. v. Miller, 287 N. Y. 126.)

      William C. Chanler, Corporation Counsel (Morris Handel and Arthur A. Segall of counsel), for respondents.
    The determination of the referee, confirmed by Special Term, disregards the defendants’ testimony which fully sustains the assessments, and the determination of value is clearly against the weight of the evidence. (People ex rel. Parklin Operating Corp. v. Miller, 287 N. Y. 126.)
   Desmond, J.

In this certiorari proceeding there have been reviewed the assessed valuations, for several years, of relator’s apartment house in the borough of Queens, New York city. Special Term, confirming a referee’s report, fixed values somewhat less than those placed on the property by the assessors. The Appellate Division, however, made new findings to the effect that the value in each year had been correctly determined by the assessors, and so dismissed the certiorari proceedings. The weight of evidence supports that determination of the Appellate Division, and the order appealed from is affirmed. There would be no need for an opinion in this case were it not for a conclusion of law in the Appellate Division’s decision that the relator herein has failed to overcome the presumption in favor of the correctness of the said assessments.” (263 App. Div. 843.) There is danger, we think, that this statement and similar mentions in other decisions, of this presumption, may be misunderstood.

There is a presumption of sorts that the assessors’ valuations are not excessive. The assessors are sworn officers, and as such, in absence of evidence to the contrary, are presumed to have done their duty.” (People ex rel. Manhattan Ry. Co. v. Barker, 146 N. Y. 304, 313.) This rule so stated is an application, almost a translation, of the ancient maxim “ omnia prsesumuntur rite et solemniter esse acta donee prdbetur in contrarium.” (Broom’s Legal Maxims [10th ed.], p. 642; see Wood v. Morehouse, 45 N. Y. 368, 376.) The important qualifying phrase in absence of evidence to the contrary ” must not be overlooked. If the opponent does offer evidence to the contrary the presumption disappears. (5 Wig-more on Evidence [2d ed.], § 2491.) Thereupon “ the case ceases to be one for presumptions, and becomes a case for proof.” (Cardozo, Ch. J., in Matter of Magna v. Hegeman Harris Co., 258 N. Y. 82, 84, construing a statute which directs that certain facts be presumed in the absence of substantial evidence to the contrary.”)

Such a presumption is not evidence but serves in place of evidence until the opposing party comes forward with his proof, whereat it disappears. It has no weight as evidence and is never to be considered in weighing evidence. In other words, it merely obviates any necessity, on the part of the assessors, of going forward with proof of the correctness of their valuation. So understood, the presumption of correctness ” is merely another way of saying that the burden of proof in a proceeding to review an assessment is on the relator-taxpayer. On him that burden has always rested. (People ex rel. Westchester Fire Ins. Co. v. Davenport, 91 N. Y. 574, 582; People ex rel. Burke, Ltd., v. Wells, 184 N. Y. 275, 279.)

So when we say that the burden of proof in such cases is on the relator and that there is a presumption that the assessment is correct, we are not saying two things, but saying the same thing twice. Once such a proceeding goes to trial and the relator goes forward with evidence, the presumption has no further place or effect of any sort in the proceedings.

The order should be affirmed, with costs. (See 288 N. Y. 672.)

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

Order affirmed.


author: Loughran, J.

text:
    In the Matter of the Claim of Max H. Weinstein, Respondent, against Eisenberg & Weinstein, Inc., Appellant and Respondent, and Globe Indemnity Company, Respondent and Appellant. State Industrial Board, Respondent.
    Argued January 7, 1942;
    decided April 23, 1942.

      Abraham Rotwein and Jack Plotnikov for Globe Indemnity Company, appellant.
    The claimant was excluded from coverage as a matter of law. (Orr v. Doubleday, Page & Co., 223 N. Y. 334; Stetson v. Advance Metal Lithographing, Inc., 263 App. Div. 771.) The claimant was excluded from coverage pursuant to the terms of the policy and by virtue of subdivisions 4 and 6 of section 54 of the Workmen’s Compensation Law (Cons. Laws, ch. 67). (Matter of Bowne v. Bowne Co., 221 N. Y. 28; Matter of Pettit v. Reges, 242 N. Y. 272.)

      Frank F. Bergenfeld for Eisenberg & Weinstein, Inc., appellant.
    If it is determined that the claimant did elect to be excluded from coverage, then he is. not entitled to compensation, and the award should be reversed not only as against the carrier, but also as against the employer. (Workmen’s Compensation Law, § 54, subd. 6; Cons. Laws, ch. 67.)

      John J. Bennett, Jr., Attorney-General (Roy Wiedersum and Joseph A. McLaughlin of counsel), for State Industrial Board, respondent.
    The claimant, an executive officer, was covered by the policy issued by the carrier in 1938 and in force at the time of the accident. (Kocak v. Metropolitan Life Ins. Co., 237 App. Div. 780; 263 N. Y. 518; People ex rel. Westchester Fire Ins. Co. v. Davenport, 91 N. Y. 574; Matter of Leef v. Dainty Kiddie Cap Co., 251 App. Div. 764; Gassman v. S. & A. Service Corp., 256 App. Div. 868; 281 N. Y. 706; Matter of Katz v. Pollyanna Trading Corp., 257 App. Div. 1093.)

      Murray M. Brodsky for claimant, respondent.
    Claimant was within the provisions of the policy. (Matter of Yeannelis v. Menides, 259 N. Y. 513.) The award was properly made in favor of the claimant. (Gassman v. S. & A. Service Corp., 256 App. Div. 868; 281 N. Y. 706; Matter of Leef v. Dainty Kiddie Cap Co., 251 App, Div. 764; Kocak v. Metropolitan Life Ins. Co., 237 App. Div. 780; 263 N. Y. 518; Matter of Katz v. Polyanna Trading Corp., 257 App. Div. 1093.)
   Loughran, J.

Carrier and employer appeal from an affirmance of an award of workmen’s compensation. The employer is a domestic corporation. The claimant Max H. Weinstein was its secretary and treasurer when he suffered in July, 1938, the injuries for which the award was made. On that date a standard workmen’s compensation policy which the carrier had issued to the employer was in force. Whether this policy covered the claimant is the single question presented.

This policy was the third of a continuous sequence of three such contracts between the carrier and the employer. The term of each was one year. The first became effective on April 2, 1936. Subdivision 6 of section 54 of the Workmen’s Compensation Law (Cons. Laws, ch. 67) at that time provided: “ Every executive officer of a corporation shall be deemed to be included in the compensation insurance contract unless he elects not to be brought within the coverage of this chapter. The election shall be made in writing on a form prescribed by the industrial commissioner and filed with the insurance carrier.” (L; 1930, ch. '316.)

The claimant Max H. Weinstein made in writing an election to be excluded from the coverage of the first policy and any renewal or re-issuance of the said contract, unless or until the election is withdrawn or cancelled.” This election was made on a form prescribed by the Industrial Commissioner and was filed with the carrier. This election was not withdrawn or canceled.

, No further election of non-coverage was made by the claimant Max H. Weinstein. The second and third policies were issued respectively on April 2, 1937, and April 2, 1938. Each of these two policies contained this endorsement: “It is agreed that * * * the following executive officers of this Employer shall be wholly excluded from all the provisions of this policy * * * Max H. Weinstein Secretary * * * Max H. Weinstein Treasurer. The executive officers named above shall each personally subscribe his name to the notice of election prescribed by the Industrial Commissioner pursuant to Subdivision 6, Section 54 of the Workmen’s Compensation Law. It is agreed that the [carrier] Company will make no premium- charge on the remuneration earned by said executive officers, and the Employer will save the Company harmless, indemnifying the Company for any loss sustained because of any claims arising from injuries to any of the executive officers named in this Endorsement.” No premium on the remuneration paid by the employer to the claimant Max H. Weinstein was collected by the carrier during the term of any of the three policies.

We agree with the carrier and employer that the second policy was a renewal of the first and the third a renewal of the second with the result that the claimant Max H. Weinstein was excluded from the coverage of the second and third policies by operation of his unrecalled election to be excluded from the coverage of the first policy and any renewal or re-issuance of the said contract.” (Cf. Workmen’s Compensation Law, § 54, subd. 6, as amd. L. 1939, ch. 241.)

Matter of Gassman v. S. & A. Service Corp. (256 App. Div. 868; 281 N. Y. 706) is not authority to the contrary. The policy there sued on was not a continuance of the earlier policy in respect of which the claimant had made his election of non-coverage, and the antecedent notice of election made no reference to renewals of that earlier policy.

The order of the Appellate Division and the award of the State Industrial Board should be reversed and the claim dismissed, with costs in all courts against the State Industrial Board.

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

Ordered accordingly.


text:
    Peter J. White, Appellant, v. Richard J. Barry, Respondent.
    Argued February 25, 1942;
    decided April 23, 1942.

      Jay Leo Rothschild and Warren C. DuBois for appellant.
    There was an issue of fact as to whether whatever was done by plaintiff’s attorney’s assistant was attributable, as a matter of law, to the plaintiff. (McKane v. Dady, 128 App. Div. 190; 201 N. Y. 574; Anderson v. McAleenan, 15 Daly, 444; Wertheimer v. N. Y. Railways Co., 177 App. Div. 448.) A mere general statement of the truth of the allegations of the complaint is a conclusion and does not constitute a sufficient answer. (Bingham v. Gaynor, 203 N. Y. 27; Wachter v. Quenzer, 29 N. Y. 547; Schieffelin v. Hylan, 205 App. Div. 360; Jacobs v. Herlands, 257 App. Div. 1050; Brush v. Blot, 16 App. Div. 80; Levy v. Annenberg, 140 Misc. Rep. 317; Vosbury v. Utica Daily Press Co., 105 Misc. Rep. 134.)

      Frederick W. Ritter and Charles H. Wald for respondent.
    The partial defenses are adequate in law. (Fleckenstein v. Friedman, 266 N. Y. 19; Dolgorouky v. Daily Mirror, Inc., 248 App. Div. 486; Gressman v. Morning Journal Assn., 197 N. Y. 474; Lanpher v. Clark, 149 N. Y. 472; Hains v. N. Y. Evening Journal, Inc., 138 Misc. Rep. 504; Russo v. Howard, 127 Misc. Rep. 762; Davis v. News Syndicate Co., 141 Misc. Rep. 673; Mattice v. Wilcox, 147 N. Y. 624; Hamilton v. Eno, 81 N. Y. 116; Wachter v. Quenzer, 29 N. Y. 547.)
   Per Curiam.

The action is one for libel. The parties are lawyers. In an action brought by plaintiff’s wife against him, she was represented by the defendant and the plaintiff by Mr. Henry A. Uterhart. Respecting an order made in that action, the defendant wrote to Mr. Uterhart a letter the body of which is in this text:

White v. White
Dear Mr. Uterhart:
“ The enclosed notice of resettlement is made necessary by reason of the fact that your client, Mr. Peter White, either personally or through his representative, had the audacity to submit to the Court an order now on record, backed up with a plain backer and with my name and address typewritten thereon. In other words, Mr. White led the Court to believe that the order submitted had been prepared by me.
I simply advise you of this fact for the reason that knowing of you as I do, I feel definitely certain that you had no knowledge of this action upon Mr. White’s part.
“ Very truly yours,
“ RICHARD J. BARRY.”

The pleadings show that such an order was made up and submitted to the court by employees of Mr. Uterhart in his absence and in the absence of the plaintiff. In our judgment, these circumstances did not necessarily establish that the letter was true in substance.

To constitute a complete defense the justification was bound to be as broad as the actionable significance of the words. “ A workable test is whether the libel as published would have a different effect on the mind of the reader from that which the pleaded truth would have produced.” (Fleckenstein v. Friedman, 266 N. Y. 19, 23.) We think it is for a jury to say whether the defendant in fact defamed the plaintiff by charging him with conscious sharp practice either personally or through his representative.” It is, of course, for the plaintiff to say whether he will stand upon his rights in a matter that may seem trivial to others. (Morningstar v. Lafayette Hotel Co., 211 N. Y. 465, 468.)

The judgment of the Appellate Division should be reversed, and the order of Special Term affirmed, with costs to the appellant in this court and in the Appellate Division. (See 288 N. Y. 669.)

Loughran, Finch, Rippey, Lewis and Desmond, JJ., concur; Lehman, Ch. J., and Conway, J., dissent.

Judgment accordingly.


author: Rippey, J.

text:
    In the Matter of the Application of the People of the State of New York by George S. Van Schaick, as Superintendent of Insurance, for an Order to Take Possession of the Property of and Rehabilitate the Lawyers Westchester Mortgage and Title Company. Frederick H. Hurdman et al., Comprising the Firm of Hurdman & Cranstoun, Appellants; Oliver W. Birckhead et al., as Trustees, et al., Respondents.

      Argued November 27, 1941;
    decided April 23, 1942.

      Monroe J. Calm for appellants.
    The claims on the guaranty were constituted part of the trust estate by the declaration of trust and thereby the dividend thereon was rendered applicable to the payment of the debts of the trust estate. (Cundill v. Millhauser Corp., 257 N. Y. 416; Matter of Title & Mortgage Guaranty Co., 275 N. Y. 347; Pink v. Thomas, 282 N. Y. 10; People v. Dethloff, 283 N. Y. 309; O’ Neil Supply Co. v. Petroleum H. & P. Co., 280 N. Y. 50; Becker v. Frasse & Co., 255 N. Y. 10; Outlet Emb. Co. v. Derwent Mills, 254 N. Y. 179; Farmers L. & T. Co. v. Callan, 246 N. Y. 481; Atwater & Co. v. Panama R. R. Co., 246 N. Y. 519; Pfohl v. Simpson, 74 N. Y. 137; Guffanti v. National Surety Co., 196 N. Y. 452; Tyndall v. Pinelawn Cemetery, 198 N. Y. 217.) Chapter 745 of the Laws of 1933 constitutionally authorized the inclusion of the claim on the guaranty as part of the trust estate. (Matter of People [Union Guaranty & Mortgage Co.], 285 N. Y. 337; Matter of People [Title & Mortgage Guar. Co.], 264 N. Y. 69; Matter of New York Title & Mortgage Co., 251 App. Div. 415; 277 N. Y. 66; Preston Co. v. Funkhouser, 261 N. Y. 140; 290 U. S. 163; Kuehner v. Irving Trust Co., 299 U. S. 445; Gelfert v. National City Bank, 313 U. S. 221.)

      Charles Segal and William A. Davidson, in person, for William A. Davidson et al., respondents.
    The claims on the guaranty were not class claims and did not constitute part of the trust estate. (Mittlemann v. President & Directors of Manhattan Co., 248 App. Div. 79; 272 N. Y. 632; Matter of New York Title & Mortgage Co., 257 App. Div. 19; Rabinowitz v. President & Directors of Manhattan Co., 275 N. Y. 453; Weil v. President & Directors of Manhattan Co., 275 N. Y. 238.) Chapter 745 of the Laws of 1933 did not authorize the inclusion of claims on the guaranty, as part of the trust estate. (Weil v. President & Directors of Manhattan Co., 275 N. Y. 238; Matter of New York Title & Mortgage Co., 257 App. Div. 19; Mittlemann v. President & Directors of Manhattan Co., 248 App. Div. 79.)

      R. Emmet Digney for Mount Kisco National Bank and Trust Company, respondent.
    The claims based upon the primary indebtedness of the mortgage company to the certificate holders do not constitute part of the trust estate. (Matter of People [Title & Mortgage Guaranty Co.], 264 N. Y. 69; Mittlemann v. President & Directors of Manhattan Co., 248 App. Div. 79; 272 N. Y. 632; Weil v. President & Directors of Manhattan Co., 275 N. Y. 238; Brenner v. Title G. & T. Co., 276 N. Y. 230.)

      Oliver K. King and Bruce A. Hood for Oliver W. Birckhead et ah, as trustees, respondents.
   Rippey, J.

In 1931 the Lawyers Westchester Mortgage & Title Company issued and sold mortgage participation certificates in a bond and mortgage on Westchester real estate, known as Issue No.' 5-7902, aggregating in face value $50,000, that being the principal amount of the security, and therein guaranteed to the holders of such participations payment of principal and interest at the rate of five and one-half per cent per annum. All of such guaranteed mortgage participation certificates were in identical language except as they varied in dates and amounts. On August 11, 1933, the Superintendent of Insurance was appointed rehabilitator of the title company and took possession of its business, property and assets under former article XI of the Insurance Law (Cons. Laws, ch. 28).

On June 7,1935, an order of liquidation was made by the Supreme Court in accord with applicable statutes wherein it was provided, among other things, (1) that all creditors and holders of mortgage participation certificates guaranteed by the title company were enjoined and restrained from bringing or further prosecuting any action at law, suit in equity, special or other proceeding against the corporation or its assets, or against the Superintendent of Insurance, or his successors, or from making or executing any levy upon its assets, or in any manner interfering with the Superintendent in his possession, control or management of the property of the corporation, or in the discharge of his duties under article XI of the Insurance Law, (2) that all persons who had claims against the title company should be notified in the manner specified in the order to present such claims to the liquidator on or before October 15, 1935, which was fixed as the final date for presenting claims, and (3) that all claimants failing to file claims within the time required by the order should be barred from sharing in any distribution of the assets of the title company until all allowed claims, proof of which were filed on or before the last filing date, had been paid in full.

In special proceedings instituted by the Superintendent for the purpose of readjustment, modification or reorganization of the rights of the holders of the mortgage instruments represented by guaranteed mortgage certificates in the aforesaid mortgage, an order was made at an Additional Special Term of the Supreme Court for Westchester County, on April 23, 1935, upon the consent of ten certificate holders representing $34,500, or sixty-nine per cent of the issue, promulgating a plan therefor in accordance with the provisions of chapter 745 of the Laws of 1933, as amended (McKinney’s Uncons. Laws [Book 65], §§ 1796-1805), known as the Schackno Act, and trustees were appointed of all the property of every description constituting the trust estate as defined in. the declaration of trust which was annexed to the plan as promulgated. The declaration of trust defined the “ Trust Estate ” as including not only all property and choses in action of the title company properly applicable as security for Issue No. 5-7902 but also all rights, claims and choses in action which the Certificate Holders as a class have or may have against Lawyers Westchester Mortgage and Title Company upon its guaranty of said Certificates and/or of the bond(s) and mortgage^) underlying the same ” (Italics ours). Among other things, the declaration of trust also provided that the trustees were “ vested with all the rights and powers of absolute owners of the Trust Estate * * * and “ may, in their discretion, exercise any and all of the following rights and powers: * * * (j) Enforce any and all rights and claims which the Certificate Holders as a class may have against the Lawyers Westchester Mortgage and Title Company, its officers, directors and employees and against any other corporation, person or persons, including all rights and claims upon the guaranty and upon all other agreements contained in Issue No. 5-7902 Certificates” (Italics ours). Asserting that the certificate holders had claims “ as a class ” upon the guaranties and exercising their option under the declaration of trust, the trustees filed a claim for the holders of the guaranties as a class and also for each individually on his separate guaranty with the liquidator. On October 10, 1935, the class claim was allowed by him and approved by the court in the amount of $56,171.37, and the Superintendent of Insurance was authorized by the court to distribute dividends thereon to the trustees as the liquidation of the title company progressed. A dividend of five per cent has been declared. It arose out of the liquidation of general assets of the title company, not out of liquidation of the securities underlying the participation certificates of Issue No. 5-7902.

In the meantime the trustees resigned and successor trustees were duly elected who qualified and entered into possession and control of the property of the trust estate with the exception of certain cash retained by the original trustees for the purpose of paying administration expenses. Upon an accounting by the original trustees, an order was made on June 14, 1938, settling their accounts and directing payment of various claims then alleged to be due creditors (including appellants) as expenses of administration which, were directed specifically to he a charge upon, and to he paid in full out of, the assets of the trust estate. The amounts so allowed and directed paid were not broken down into separate items so as to indicate what part, if any, might, perhaps, be properly allocable for services of claimants to, and a charge upon, dividends payable to the various holders of the contracts of guaranty. The dividend of five per cent on the contracts of guaranty was paid by the Superintendent of Insurance to the successor trustees less foreclosure costs of the mortgage and service fees incurred in servicing the mortgaged property accruing during the period from August 11, 1933, to August 25, 1935, while the bond and mortgage was still in the possession and under the control of the Superintendent of Insurance. Creditors and employees of the trustees who allegedly performed services in the administration of the trust estate also demanded payment of their claims as allowed by the court in its order of June 14, 1938, out of the dividend on the theory that the dividend was part of the trust estate. Thereupon, the successor trustees petitioned the Additional Special Term for instructions concerning distribution of the fund arising out of the dividend, making creditors (including appellants) whose claims had been allowed and directed paid out of the assets of the trust estate in the order settling the accounts of the original trustees and other claimants parties to the proceeding. Upon the hearing on that petition it was held that the dividend fund was not subject to the payment of the foreclosure costs and servicing fees or to the payment of the claims of appellants and other claimants and an order was entered to that effect. The court directed the Superintendent of Insurance to pay to the trustees the amount he had deducted from the dividend. No party has appealed from that order except appellants, the firm of Hurdman & Cranstoun, accountants who rendered services to the trustees in connection with their administration of the trust estate, the value of which services, including those rendered in the preparation and prosecution of the claim of guaranty holders, has been fixed by the court. The Appellate Division unanimously affirmed the order and granted leave to appeal to this court.

The decisive question to be answered is whether the dividend received by the trustees upon the guaranty claims constitutes part of the trust estate which they were authorized to receive and distribute under the deed of trust and the orders of the court. If (1) the provision of the deed of trust authorizes the trustees to prosecute the rights of the certificate holders as a class against the guarantor and liquidate their claims and (2) the Schackno Act authorizes the formulation of a plan which includes a transfer of, and the exercise of power to enforce, such rights, the dividend now in the hands of the trustees constitutes a part .of the trust estate and is subject to payment of appellants’ claim. The wording of the plan and declaration of trust is clear and unambiguous. In such a case the intent of the parties, which is the decisive factor in a determination of the relative rights and obligations of the parties to written instruments, is to be found in the words which the parties themselves employ to express that intent. Prom the words used it seems clear that the parties intended that the trustees should take over, manage and liquidate the contracts of guaranty as well as the participations in the underlying security. By apt words, the definition contained in the declaration of trust, to which we have referred above, leaves no doubt that the trust estate included all rights, claims and choses in action which the certificate holders as a class had against the guarantor upon its guaranty and that the trustees were authorized to enforce any and all such rights and claims.

To sustain the decisions of the courts below, stress is laid upon the words “ as a class ” and it is said that the rights under the guaranty do not belong to the certificate holders as a class. Reliance is placed upon our decisions in Mittlemann v. President and Directors of Manhattan Co. (272 N. Y. 632) and Weil v. President and Directors of Manhattan Co. (275 N. Y. 238) as establishing that a class action cannot be maintained in behalf of all the certificate holders to enforce the guaranty. But the intent of the interested parties was that the trustees should be empowered and obligated to act for the holders of the guaranty contracts in the matter of collecting their claims against the guarantor. In neither the Mittlemann nor the Weil case did this court hold that all of the certificate holders could not enforce, their guaranties in a class action. In neither case was the action brought to enforce the contract of guaranty. Both actions were brought to enforce tort liabilities allegedly arising from wrongs which caused damage to the holders of the certificates at the time the torts were committed. The question before us is not whether, technically, a class action could be brought, but whether the certificate holders’ rights belong to them as a class within the meaning of the trust indenture and intent of the parties. The words “as a class ” are not a term of art and, even if they were, they would necessarily yield to a contrary meaning if that were indicated by the context (Cundill v. Millhauser Corp., 257 N. Y. 416, 422). The claims arising by reason of the guaranties were unmistakably identified in the declaration of trust as claims which might be enforced by the trustees. Whether otherwise they might be enforced by the individual certificate holders or by the certificate holders as a class is beside the point. It is, of course, true that each certificate holder acquired an individual right to enforce his guaranty contract when he purchased his certificate, but in the declaration of trust here involved it is clearly indicated that the words as a class ” were used merely in the sense that the claims were common to all certificate holders.

In the declaration of trust and under all the circumstances of the case heretofore adverted to, the trustees obligated themselves to present and prosecute the claims at least of those assenting to the plan existing by virtue of the contracts of guaranty. They would not have been justified in taking no action at all in behalf of the guaranty holders. Subsequent to its execution by the trustees, by implication and ratification, all those not originally parties to it became bound by its terms. The claim was filed for all and enured to the benefit of all and all holders of guaranteed participation certificates now seek their pro rata share of the dividend procured by the trustees. Aside from the question, which we are presently to consider, whether the plan and declaration of trust were authorized by the provisions of the Schackno Act, those not originally consenting cannot now complain (Buford v. Tobacco Growers Co-op. Assn., 42 Fed. Rep. [2d] 791, 792).

The Schackno Act provides that the Superintendent of Insurance may promulgate a plan or agreement for the readjustment, modification or reorganization of the rights of all the holders of such mortgage investments (L. 1933, ch. 745, §§ 1 and 6 [1]; now McKinney’s Uncons. Laws [Book 65], §§ 1796 and 1801). Under the existing emergency the inadequate remedies of certificate holders under previous laws were specifically recognized. It was declared to be essential for the public interest to provide a procedure under which such bonds, mortgages or other security may be liquidated in an orderly manner and under which the assets of the guaranty corporations may be administered and conserved equally and ratably in the interests of holders of mortgage investments.” Mortgage investments ” as used in the statute include'“ all interests in bonds, notes and other evidences of indebtedness of individuals, partnerships, associations or corporations, secured by mortgage or mortgages upon, or deed or deeds of trust or similar, evidences of an interest in, real property, situated in this state or outside of tins state, guaranteed by a guaranty corporation, and all collateral trust bonds or notes of a guaranty corporation which are secured by pledge or assignment of any such interest; but shall not include any such bond, noté or other evidence of indebtedness when the same shall be held entirely by only one person, firm or corporation or any such collateral trust obligations when all of them having the same security are held entirely by only one person, firm or corporation.” The Superintendent of Insurance is authorized to “ take over, administer, exercise, conduct, execute and- manage, or he may restrict, limit, govern, control, direct and regulate, any or all of the functions of any guaranty corporation with respect to any mortgage investment sold or guaranteed by such guaranty corporation, whenever in his opinion such action is necessary or advisable for the protection of such guaranty corporation or of the holders of such mortgage investment, in the event (1) that such guaranty company has been taken over by the superintendent for rehabilitation or liquidation, or (2) that there is a default under such mortgage investment, or under any bond, mortgage or other security against which such mortgage investment has been issued ” (L. 1933, ch. 745, §§ 2 and 3; now McKinney’s Uncons. Laws [Book 65], §§ 1797 and 1798).

It was to the interest of the holders of such investments, which the Legislature by statute has undertaken to safeguard, to have the assets of the guaranty corporation administered and conserved equally and ratably for their benefit (L. 1933, ch. 745, § 1, now McKinney’s Uncons. Laws [Book 65], § 1796). There could be no assurance to the certificate holders of a ratable distribution of the assets of the insolvent corporation if each were to prosecute an action upon his own certificate alone. There must necessarily be proof, of the value of the underlying mortgage which had been guaranteed before the claims of the certificate holders could be determined. Each certificate holder has a definite share in the guaranteed mortgage and has a claim against the guarantor upon its guaranty, the amount of which can be calculated only after the value of the mortgage has been fixed. Varying values of the mortgaged premises may be offered in separate actions upon the claims of the several certificate holders and different determinations made as to such value. Not only would separate actions by individual guaranty holders involve confusion and a multiplicity of actions but such procedure would impose upon each or upon many of them prohibitive burdens and costs. It was consequently reasonably within the purpose and intent of the statute that the Superintendent of Insurance should procure an order, as he did in the order of liquidation, enjoining the holders of guaranties from bringing any action at law or other proceeding to enforce their claims under the guaranties and subsequently procure in the adopted plan a provision for a trust indenture which would establish an orderly mechanism for the presentation and enforcement of their common claims. Although the scope of the language of the statute may not be changed or enlarged by the court, nevertheless, we may not restrict its scope in a manner which would thwart the declaration of legislative policy if the language of the statute is susceptible of other reasonable construction.

In view of those considerations and the declared legislative purpose, the language of the statute may not be so narrowly construed as to bar the enforcement of rights of all holders of contracts of guaranty against an insolvent guaranty corporation through proceedings instituted for the benefit of all. The certificate holders had no vested right to any individual remedy on the guaranty where the guarantor was insolvent and was being liquidated (Preston Co. v. Funkhouser, 261 N. Y. 140; affd., 290 U. S. 163). The statute did not go so far as to authorize a plan of reorganization which would alter the contract rights of the holders of the guaranties, but provided merely for the orderly and uniform enforcement of the obfigation by authorizing the vesting of the power of enforcement in trustees. This, the Legislature had power to do (Matter of People [Title & Mortgage Guarantee Co.], 264 N. Y. 69, 82; Honeyman v. Hanan, 302 U. S. 375, 378).

It follows not only that the declaration of trust authorized, empowered and obligated the trustees to enforce the common claims of the holders of the contracts of guaranty against the obligor, but that those provisions of the declaration of trust were authorized by the provisions of the Schackno Act.

The orders should be reversed, with costs to the appellant in all courts and the matter remitted to the Special Term to proceed in accordance with this opinion.

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

Ordered accordingly.