text:
    The People of the State of New York ex rel. Roy H. Sloane, Appellant, v. Lewis E. Lawes, as Warden of Sing Sing Prison, Respondent. In the Matter of the Application of Roy H. Sloane, Appellant; The People of the State of New York, Respondent. In the Matter of Roy H. Sloane, Appellant, against Frederick P. Close, as County Judge of Westchester County, Respondent.
    (Argued November 25, 1930;
    decided December 4, 1930.)

      Samuel L. Miller and H. Thornton Banks for appellant.
    Penal statutes are not to be so strictly construed as to deny and defeat justice; but should receive that construction necessary to promote justice and to preserve the fundamental law and the legislative intent. (Penal Law, § 21; People v. Abeel, 45 Misc. Rep. 86; 100 App. Div. 516; 182 N. Y. 415; People ex rel. Murray v. Becker, 78 Misc. Rep. 666; Cotheal v. Brouwer, 5 N. Y. 561.) Reversal and annulment of a conviction remove all consequences thereof, and in every respect restore the defendant to his original status as though no conviction had ever been had. (Code Crim. Proc. § 464; People v. Palmer, 109 N. Y. 413.) A felony conviction obtained under section 1897 of the Penal Law is contingent to and dependent upon the validity of the prior conviction on which it was essentially based; and a conviction so obtained is, therefore, nullified by acquittal of such prior conviction. (People v. Fabian, 192 N. Y. 443; People v. Schaller, 224 App. Div. 3; People ex rel. Marcley v. Lawes, 254 N. Y. 249.) The County Court had power to resentence appellant, and invaded his constitutional rights by refusing to do so. (People ex rel. Forsyth v. Sessions, 141 N. Y. 288; Furman v. Furman, 153 N. Y. 309; McGuigan v. D., L. & W. R. Co., 129 N. Y. 52; Bohlen v. Mt. St. R. Co., 121 N. Y. 546; Davidson v. Ream, 178 App. Div. 362; Lowler v. Mayor, 26 Barb. 262; Moynahan v. City of New York, 205 N. Y. 181; O’Donoghue v. Boise, 159 N. Y. 87; Matter of Bonner, 151 U. S. 242; Granger v. Craig, 85 N. Y. 619; People v.
      Gutterson, 244 N. Y. 243; People v. Gowasky, 244 N. Y. 451; People v. Voelker, 221 N. Y. Supp. 760; People v. Schaller, 224 App. Div. 3; People ex rel. Marcley v. Lawes, 254 N. Y. 249.) Mandamus may be invoked to correct a judgment of conviction or commitment. (Matter of People ex rel. Woodin v. Ottaway, 129 Misc. Rep. 120; People ex rel. White v. Alderman, 31 App. Div. 438; People ex rel. Gaslight Co. of Syracuse v. Council of Syracuse, 78 N. Y. 56; Dental Society v. Jacobs, 103 N. Y. 86; People ex rel. King v. Gallagher, 93 N. Y. 437; People ex rel. Harris v. Com. of Land Office, 149 N. Y. 26; Moose v. Town Board of Health, 116 Misc. Rep. 459; Matter of Hunt v. Epps, 70 Misc. Rep. 1; People ex rel. Mullen Cont. Co., Inc., v. Craig, 114 Misc. Rep. 216; People ex rel. Mott v. Board of Supervisors, Greene Co., 64 N. Y. 600.)

      Frank H. Coyne, District Attorney (James E. Dempsey of counsel), for the People, respondent.
    The verdict of the trial jury declaring appellant guilty of feloniously possessing metal knuckles cannot be disregarded, as such verdict has never been set aside and remains undisturbed. (People v. Gowasky, 244 N. Y. 451; People v. King, 216 App. Div. 240 ; 243 N. Y. 554; People v. Walker, 134 App. Div. 909; 198 N. Y. 329; Howell v. People, 5 Hun, 620; 69 N. Y. 620; People v. Dishler, 38 Hun, 175; People v. Upton, 38 Hun, 107; Guenther v. People, 24 N. Y. 100; People v. Fabian, 192 N. Y. 443; People v. Schaller, 224 App. Div. 3; Granger v. Craig, 85 N. Y. 619; People ex rel. Forsyth v. Sessions, 141 N. Y. 288; People ex rel. Tweed v. Liscomb, 60 N. Y. 559; Matter of Peeke, 144 Fed. Rep. 1016; United States v. Pridgeon, 153 U. S. 48; Devoe v. Kelley, 97 N. Y. 212; People v. Gutterson, 244 N. Y. 243; Foley v. Foley, 15 App. Div. 276; Becker v. Sauter, 89 Ill. 596; Smith v. Armstrong, 25 Wis. 517; McLean v. Stewart, 14 Hun, 472; Coughran v. Gutchens, 18 Ill. 390.) The only proper remedy for appellant is a motion for a new trial. (People v. Miller, 143 App. Div. 251; Wedieu v. People, 22 N. Y. 178; People v. Jordan, 96 App. Div. 33; People v. Hassan, 196 App. Div. 89; McNevins v. People, 61 Barb. 307; People v. McDounell, 92 N. Y. 657; People v. Moran, 246 N. Y. 100; Code Crim. Proc. §§ 444, 465; People v. Zerillo, 200 N. Y. 443; People ex rel. Hummel v. Reardon, 186 N. Y. 164; People ex rel. Plattuer v. Warden, 103 Misc. Rep. 330; People v. Meyer, 123 Misc. Rep. 243; People v. Willett, 213 N. Y. 368; People v. D’Argencour, 95 N. Y. 624; People v. Sheffield Farms, 206 N. Y. 79; People v. Priori, 164 N. Y. 459.) There is no power by mandamus to grant to the petitioner the relief sought. (Brown v. McCune, 5 Sandf. 224; Matter of Morgan, 114 U. S. 174; Jettinghoff v. Levy, 198 App. Div. 796; Howland v. Eldreidge, 43 N. Y. 457; Matter of Runk, 200 N. Y. 447; Matter of Morse v. Town Bd. of Health, 116 Misc. Rep. 459; Code Crim. Proc. §§ 463, 465, 466; Hebberd v. Loeb, 125 App. Div. 579; Matter of Eiss v. Sumners, 205 App. Div. 691; 236 N. Y. 638; Matter of Ottinger v. Voorhis, 213 App. Div. 561; 241 N. Y. 49; Matter of Lewis v. Graves, 127 Misc. Rep. 135; Matter of Crary v. Brady, 207 App. Div. 838; 238 N. Y. 88; People ex rel. East Side Assn. v. Hylan, 118 Misc. Rep. 341; 202 App. Div. 745; People ex rel. Breckinridge v. Village, 207 App. Div. 821; Matter of Cropsey v. Tiernan, 172 App. Div. 435; People ex rel. Benton v. Court of Sessions, 66 Hun, 550; People ex rel. Williams v. Court of Sessions, 1 Park. Cr. Rep. 369; People v. Superior Court, 5 Wend. 115.)

      Hamilton Ward, Attorney-General (Almon W. Burrell of counsel), for warden of Sing Sing Prison, respondent.
    The writ of habeas corpus was properly dismissed and the relator properly remanded to serve out the remainder of his sentence, as the judgment of conviction was a valid and subsisting judgment in full force and effect at the time the writ was issued and the sentence imposed under said judgment had not expired. (People ex rel. Childs v.
      Knott, 187 App. Div. 604; People ex rel. Scharff v. Frost, 198 N. Y. 110; People ex rel. Hubert v. Kaiser, 206 N. Y. 46; People ex rel. Price v. Hays, 151 App. Div. 651; People ex rel. Doyle v. Atwell, 232 N. Y. 96; People ex rel. Tweed v. Liscomb, 60 N. Y. 559; People ex rel. Goldstein v. Clancy, 163 App. Div. 614; People ex rel. Weick v. Warden of City Prison, 117 App. Div. 154; 188 N. Y. 549; People ex rel. Haines v. Hunt, 229 App. Div. 419; People v. Fabian, 192 N. Y. 443; People ex rel. Marcley v. Lawes, 254 N. Y. 259; State v. Sims, 19 Ky. 260; 2 Bishop Crim. Proc. § 1074; Commonwealth v. Miller, 2 Ashm. [Pa.] 61; Matter of Ah Bau, 10 Nev. 294.)
   Crane, J.

On the 14th day of December, 1927, Roy H. Sloane, the defendant, was convicted of the crime of feloniously possessing metal knuckles, and sentenced to Sing Sing State Prison at hard labor for the term of seven years. By section 1897 of the Penal Law, a person who carries or possesses metal knuckles is guilty , of a misdemeanor, and if he has been previously convicted of any crime he is guilty of a felony.” The People having charged the defendant with possessing metal knuckles as a felony, it was necessary to allege and set forth in the indictment the crime for which the defendant had been previously convicted and by reason of which the nature of the offense was raised from misdemeanor to felony. This the People did by setting forth in the indictment the fact that at the County Court of Westchester on the 14th day of March, 1927, the said Roy H. Sloane was convicted of grand larceny in the first degree, and thereupon sentenced to Sing Sing for the term of ten years. On the 31st day of December, 1928, the County Court in which the defendant had been convicted of larceny set aside that conviction and ordered a new trial on the ground of newly-discovered evidence. The new trial, on the 29th day of April, 1929, resulted in a verdict of “ not guilty.” The defendant, however, was taken back to Sing Sing, where he is still imprisoned, serving his sentence of seven years for feloniously possessing metal knuckles. The crime was made a felony because of the previous conviction of larceny, of which the defendant now stands acquitted.

Section 464 of the Code of Criminal Procedure enacts that the granting of a new trial places the parties in the same position as if no trial had been had. When the County Court set aside the conviction for larceny and granted the defendant a new trial, the conviction was at an end for all purposes. The defendant was properly convicted of possessing metal knuckles, but the question at the outset was whether the crime was a misdemeanor or a felony. For the misdemeanor the prisoner could have been sentenced to the county jail, penitentiary or State prison for not longer than one year. (Penal Law, §§ 1937, 2182.) He has been sentenced for seven years upon the assumption that he had previously been convicted of the crime of grand larceny. In the eyes of the law this was not the fact. It is true that at the time of sentence there was a record of such a conviction, but it has been wiped out, and the law has declared that such conviction did not exist. (Code Crim. Pro. § 464; People v. Palmer, 109 N. Y. 413.) A reversal on appeal or the granting of a new trial or an acquittal thereafter is the same as if no conviction had ever existed. The law deals with realities and not fictions; it punishes men for what they have done, not for formal entries or paper records not true in fact. It is abhorrent to our sense of justice to think of this defendant being confined for seven years because of a previous crime of which he was not guilty according to the verdict of a jury and a judgment of the court. He has been sentenced as a second offender when he was only a first offender. Sections 1941, 1942 and 1943 of the Penal Law provide that where a person has been convicted of a felony, his sentence must be increased, if he has been theretofore convicted. These sections, however, only apply to felonies, not misdemeanors. Sloane’s conviction here for a felony depended not upon these sections, but upon the peculiar wording to section 1897 which, as heietofore stated, makes the crime of carrying metal knuckles a misdemeanor, unless the defendant has previously been convicted of crime.

The fact is, therefore, that the defendant has served in prison all the time which the law gives him for the crime he actually committed; he was convicted of carrying metal knuckles as a misdemeanor, there being no previous conviction. This is the way the matter stands at law. It is no answer to say that at the time the county judge sentenced him there was a previous conviction of record; that has been wiped out, and all the statute law provides for his punishment is at most one year in prison or a fine of $500, or both.

The official public records of the County Court of Westchester county show these facts — the judgment of that court resting upon the previous conviction is contrary to its own records, showing an acquittal. On such incontrovertible record evidence the courts should act.

The defendant being in Sing Sing, having already served a longer time than the law exacts for his offense, how can he get out? He applied to the County Court to vacate its judgment or for a new trial; this was denied.

The appellant also applied for a writ of habeas corpus and for a writ of peremptory mandamus to send the matter back to the County Court either for discharge or an amendment of the sentence. Both of these applications were denied, and the orders are before us on appeal. It has been suggested that the only relief for the defendant is an application for executive clemency, which of course is applied for as a matter of grace, never as a matter of right. (Roberts v. State, 160 N. Y. 217.) Surely, the law has not become so entangled in its own machinery that it is helpless and unable to extricate itself. There must be some relief for a prisoner who, according to the records as they now exist, is entitled as a matter of right to his liberty. While the county judge acted upon the information which he had before him at the time of sentence, yet all recognize now in the light of subsequent events that the sentence imposed should have been for a misdemeanor and not for a felony. The judgment should be corrected. We are dealing here with court records; the facts cannot be disputed or misunderstood. We do not say that this procedure would apply to facts sought to be established by other means of proof.

A similar case was before us in People ex rel. Marcley v. Lawes (254 N. Y. 249). The relator was there sentenced by the County Court of Nassau county to life imprisonment as a fourth offender. More than a year after his incarceration he applied for a writ of habeas corpus, and a judge at Special Term in Kings county set aside his conviction and remanded the prisoner to the County Court for resentence as a second offender. We affirmed this order of the Supreme Court justice, although it had not been finally determined until our decision that a suspension • of sentence did not constitute a previous conviction. (See, also, Matter of Bonner, 151 U. S. 242; People ex rel. Devoe v. Kelly, 97 N. Y. 212.)

There may be a distinction between a sentence wrong in the first instance as matter of law, as subsequently determined, and a sentence which at the time is right, but subsequently turns out to be wrong, because of the non-existence of an essential fact.

We, therefore, affirm the order dismissing the writ of habeas corpus but reverse the order refusing the peremptory writ of mandamus, and direct that the writ issue to the County Court of Westchester county directing it to resentence the relator as of the date of December 14, 1927, for the crime of possessing metal knuckles as a misdemeanor. The appeal from the order denying the application to vacate the judgment is dismissed. No costs.

Cardozo, Ch. J., Pound, Lehman, Kellogg and O’Brien, JJ., concur; Hubbs, J., not sitting.

Ordered accordingly.


source: Caselaw Access Project

author: Cardozo, Ch. J.

license: Public Domain

text:
    Severnoe Securities Corporation, Respondent, v. London and Lancashire Insurance Company, Ltd., Appellant, and Northern Insurance Company of Moscow, Respondent.

      (Argued October 15, 1930;
    decided January 6, 1931.)

      Hartwell Cabell and Milton B. Ignatius for appellant.
    The trial court had the right to and should have declined jurisdiction. (Dewitt v. Buchanan, 54 Barb. 31; Burdick v. Freeman, 46 Hun, 138; 125 N. Y. 420; Gregonis v. P. & R. Coal & Iron Co., 235 N. Y. 152; Andre v. Beha, 211 App. Div. 380; 240 N. Y. 605; Murnan v. Wabash Ry. Co., 246 N. Y. 244; Disconto Gesellschaft v. Terlinden, 127 Wis. 651; Matter of People [Northern Ins. Co.], 229 App. Div. 639; Lehigh Mining & Mfg. Co. v. Kelly, 160 U. S. 327; Southern Realty Investment Co. v. Walker, 211 U. S. 603; Kreider v. Cole, 149 Fed. Rep. 647; Marvin v. Ellis, 9 Fed. Rep. 367; Hoes v. N. Y., N. H. & H. R. R. R. Co., 173 N. Y. 435; Pietraroia v. N. J. & H. R. R. & F. Co., 197 N. Y. 434; Mahr v. Norwich Union Fire Ins. Soc., 127 N. Y. 452; Russian Reinsurance Co. v. Stoddard, 240 N. Y. 149; Steinbach v. Prudential Ins. Co., 172 N. Y. 471.)

      David Rumsey and Louis J. Wolff for Liverpool and London and Globe Insurance Company, amicus curice.

    The New York courts cannot be helpless to reject litigation imported here for a purpose which is at least inequitable, even though the technical requirements of jurisdiction are satisfied, and in view of the entanglement of political, economic and legal considerations presented and the foreign nature of the problem, the complaint should be dismissed. (Pietraroia v. N. J. & H. R. R. & F. Co., 197 N. Y. 434; Hoes v. N. Y., N. H. & H. R. R. Co., 173 N. Y. 435; Gaboury v. Central Vermont Ry. Co., 250 N. Y. 233; Morris & Co. v. Skandinavia Ins. Co., 279 U. S. 405; Mitchell Furn. Co. v. Selden Breck Co., 257 U. S. 213; Matter of People [Norske Lloyd Ins. Co.], 242 N. Y. 148; Matter of People [City Eq. Fire Ins. Co.], 238 N. Y. 147; Matter of People [Northern Ins. Co. of Moscow], 229 App. Div. 637.)

      Paul Bonynge for plaintiff-respondent-.
    The court had no discretionary power to reject an action on contract. (Murnan v. Wabash Ry. Co., 246 N. Y. 244; Russian Reinsurance Co. v. Stoddard, 240 N. Y. 149; Gregonis v. P. & R. Coal & Iron Co., 235 N. Y. 152; Petrogradsky M. K. Bank v. National City Bank, 253 N. Y. 23.)

      Ralph P. Buell for defendant-respondent.
    The assignment to the plaintiff was valid and effective. (Petrogradsky M. K. Bank v. National City Bank, 253 N. Y. 23; James & Co. v. Rossia Ins. Co., 247 N. Y. 262.)
   Cardozo, Ch. J.

The Northern Insurance Company of Moscow, dismembered by the decrees of the Russian Soviet Republic, retains a pallid life as the shade or little more of its former self. There is a cause of action in its favor growing out of transactions in England with a British insurance company, having a domicile in England, though with a branch in New York. Of the board of directors of the Moscow company, a board consisting of five regular members and two alternate members, two only survive. These authorized a manager, whose authority was confined to the transaction of current business, to assign the cause of action to the plaintiff, a domestic corporation, for the purpose of suit in the courts of this State. The validity of the assignment is the question in the case.

The surviving directors, not constituting a quorum of the board, were without authority in this State to act in its behalf except as conservators of assets that might otherwise be lost. Authority to conserve exists ex necessitate rei, and is circumscribed by the necessity that calls it into life. We find no necessity here, nor anything approaching it. The subject of the assignment was not so localized within the State as to exact the intervention of conservators to keep it from destruction. Here was no derelict to be moored while it could be seized lest the the tide carry it away. Here was an intangible asset localized, so far as common forms of speech avail to give it a locality, in countries far away. The owner corporation, acting by a quorum of the board, could have maintained an action in any jurisdiction where the debtor could be found, in the absence, at all events, of statute to the contrary. The conclusion does not follow that it has a like latitude of choice when acting by a conservator, whose position has many analogies with that of a receiver.

Tangibles have a legal situs in the State of physical location (Frick v. Pennsylvania, 268 U. S. 473). Intervention by a conservator may be necessary in that place if they are to be salvaged for the owners. The situs of intangibles is in truth a legal fiction, but there are times when justice or convenience requires that a legal situs be ascribed to them. The locality selected is for some purposes, the domicile of the creditor; for others, the domicile or place of business of the debtor, the place, that is to say, where the obligation was created or was meant to be discharged; for others, any place where the debtor can be found (Farmers L. & T. Co. v. Minnesota, 280 U. S. 204, 211, 217; Baldwin v. Missouri, 281 U. S. 586; Beidler v. South Carolina Tax Comm., 282 U. S. 1; Liverpool & London & Globe Ins. Co. v. Board of Assessors, 221 U. S. 346, 354; Wyman v. Halstead, 109 U. S. 654; Douglass v. Phenix Ins. Co., 138 N. Y. 209, 219; Harris v. Balk, 198 U. S. 215). At the root of the selection is generally a common sense appraisal of the requirements of justice and convenience in particular conditions (Safe Deposit & T. Co. v. Virginia, 280 U. S. 83, 92, 93; Powell, Business Situs of Credits, 28 W. Va. L. Quart. 89; cf. 34 Yale L. J. 652, 654, 656). What we are to determine in the case at hand is the locality to be chosen for the exercise by conservators of powers born of an emergency.

For that purpose, if not for others, the situs of the chose in action, the subject of this claim, is in England and perhaps in Russia, but certainly not here. The debt is localized in England because there contracted by a British debtor in favor of a foreign creditor doing business in England in conformity with British law. A different situation would be presented if the debtor, though domiciled abroad, were without property sufficient to satisfy the claim in the jurisdiction of the domicile. There might then be an emergency justifying an attempt by conservators to gather in assets not available at home. Nothing of the kind appears in the record now before us. The debtor is solvent, and is subject to suit in the place of its corporate life, which is also the place of the creation of the debt. No emergency exists, and no excuse for the implication of extraordinary powers. The powers of conservators should be exercised where there are assets to be conserved.

Our judgment in James & Co. v. Rossia Ins. Co. (247 N. Y. 262) is not a holding to the contrary. The derelict assets had a situs in New York as well as in other States near by. There was the risk of dissipation if they were not subjected by the conservators to unified control. Our holding was merely this, that a transfer so made was not in fraud of creditors. The suitor was to seek his remedy against the assignee corporation which had assumed the liabilities.

Even less decisive is our judgment in Petrogradsky M. K. Bank v. National City Bank (253 N. Y. 23). There the dismembered corporation acted by a quorum, and the action was maintained in the forum of the domicile of the debtor.

We do not forget that at the time of the assignment the Northern Insurance Company of Moscow had an agency in this State, where it was still engaged in business. The cause of action assigned had no relation, however, to the business there transacted, nor was collection understood to be essential for the payment of domestic creditors, or indeed of any creditors at all. On the contrary, by the terms of the assignment, the proceeds of the cause of action, when collected, were to be remitted to the surviving directors and others then resident in'France, and held by them as trustees for the benefit of the shareholders.

If the survivors were without capacity to sue in the corporate name in the absence of some emergency more urgent than any here disclosed, they could not enlarge their powers by making for the same purpose an assignment to some one else.

A liquidator in Great Britain appointed by the British courts to wind up the British agency of the dismembered corporation, will hold these moneys, if collected, for the benefit of creditors and shareholders according to their interests. The remedy is adequate in the jurisdiction of the domicile without recourse to powers that are measured by necessity.

The judgment should be reversed and the complaint dismissed with costs in all courts.

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

Judgment reversed, etc.


author: Pound, J.

text:
    In the Matter of Lansing P. Reed et al., Appellants, against The Board of Standards and Appeals of the City of New York et al., Respondents, and Wilthan Realty Corporation, Respondent.

      (Argued December 4, 1930;
    decided January 6, 1931.)

      Lawrence R. Condon for appellants.
    The motion being one to quash the petition, all of its allegations must be deemed to be true. The petition is clearly sufficient as a matter of law. (People ex rel. Erie R. R. Co. v. Tax Comm., 246 N. Y. 322; People ex rel. Poor v. O’Donnel, 139 App. Div. 83; 200 N. Y. 519; People ex rel. Bonnell v. Board of Assessors, 109 N. Y. Supp. 991; 127 App. Div. 851; 193 N. Y. 248; Matter of City of New York v. Nickson, 111 Misc. Rep. 244; People v. New York Assessors, 109 N. Y. Supp. 991.) The Board of Standards and Appeals had no right, power or authority either to entertain or to grant the application of the Wilthan Realty Corporation, in the light of its denial of a prior similar application. (People ex rel. McGarry v. Walsh, 213 App. Div. 289; People ex rel. Swedish Hospital v. Leo, 120 Misc. Rep. 355; 215 App. Div. 696; Matter of Riker v. Walsh, 225 App. Div. 570; Matter of Hall v. Walsh, 221 App. Div. 756; Matter of Riverside St. Clair Corporation v. Walsh, 131 Misc. Rep. 652; 231 N. Y. Supp. 870.) The Board of Standards and Appeals was without power or jurisdiction to vary the application of the use district regulations under section 7 (c) of the Building Zone Resolution alone, there being no evidence of practical difficulties or unnecessary hardships, and no evidence of any unusual condition or emergency warranting the variation of the provisions of the Building Zone Resolution. (People ex rel. Sheldon v. Board of Standards & Appeals, 234 N. Y. 484; People ex rel. Werner v. Walsh, 212 App. Div. 640; 240 N. Y. 689; Matter of Sloane v. Walsh, 245 N. Y. 208; Peoph ex rel. Fordham Manor Reformed Church v. Walsh, 244 N. Y. 280; People ex rel. Facey v. Leo, 110 Misc. Rep. 516; 230 N. Y. 602; Matter of Riverside St. Clair Corp. v. Walsh, 131 Misc. Rep. 652; 225 App. Div. 655.) The Board of Standards and Appeals had no right, on the merits, to grant the application, and in so doing the Board of Standards and Appeals abused its discretion and acted illegally, arbitrarily and capriciously, and its decision was wholly unsupported by the evidence. (Matter of Stillman, 222 App. Div. 19; 247 N. Y. 699; Matter of 4672 Broadway Corp. v. Board of Standards & Appeals, 225 App. Div. 97; 250 N. Y. 571.)

      Arthur J. W. Hilly, Corporation Counsel (J. Joseph Lilly, Henry J. Shields and William T. Kennedy of counsel), for Board of Standards and Appeals, respondent.
    The controverted allegations of the petition may not be deemed to be true. (Bernstein v. Kritzer, 253 N. Y. 410; National Cash Register Ca. v. Remington Arms Co., 242 N. Y. 99; Newburger v. American Surety Co., 242 N. Y. 134; Schieffelin v. Hylan, 229 N. Y. 633; N. Y. Const. art. 6, § 7; Civ. Pr. Act, §§ 584, 589, subd. 2, 1304; People ex rel. L. I. R. R. Co. v. Tax Commrs., 231 N. Y. 221; People ex rel. Colgate Inn, Inc., v. Assessors, 132 Misc. Rep. 506; People ex rel. Fordham M. R. Church v. Walsh, 244 N. Y. 280; People ex rel. Werner v. Walsh, 212 App. Div. 635; 240 N. Y. 689; Prendergast v. New York Tel. Co., 262 U. S. 43.) The Board of Standards and Appeals had jurisdiction of the subject-matter of the determination. (Civ. Pr. Act, § 1304, subd. 1.) No rule of law affecting the rights of the parties was violated to the prejudice of the appellants, in the making, by the Board of Standards and Appeals, of the determination. (Seattle Trust Co. v. Roberge, 278 U. S. 116; Euclid v. Ambler Realty Co., 272 U. S. 365; Matter of Wolfsohn v. Burden, 241 N. Y. 288; Matter of Isenbarth v. Bartnett, 206 App. Div. 546; 237 N. Y. 617; City of Utica v. Hanna, 202 App. Div. 610; People ex rel. Reinert v. Miller, 188 App. Div. 113; Nectow v. Cambridge, 277 U. S. 183; People ex rel. Beinert v. Walsh, 188 App. Div. 113; Matter of Collins v. Walsh, 253 N. Y. 594; 254 N. Y. 46; People ex rel. Hotchkiss v.
      Supervisors, 65 N. Y. 222; Matter of Equitable Trust Co. v. Hamilton, 226 N. Y. 241; People ex rel. Ortenberg v. Bales, 224 App. Div. 87; 250 N. Y. 598; People ex rel. Facey v. Leo, 230 N. Y. 602; People ex rel. Helvetia Realty Co. v. Leo, 231 N. Y. 619; People ex rel. Sheldon v. Board of Appeals, 234 N. Y. 484; People ex rel. Werner v. Walsh, 212 App. Div. 635; 240 N. Y. 689; Goldenberg v. Walsh, 242 N. Y. 576; Matter of Sloane v. Walsh, 245 N. Y. 208; Matter of Wilkins v. Walsh, 225 App. Div. 774; 251 N. Y. 518.) The facts necessary to be proved in order to authorize the making of the determination were amply established by competent proof. (Matter of Plass v. C. N. E. Ry. Co., 226 N. Y. 449; Salvin v. Myles Realty Co., 227 N. Y. 51; Matter of Woodruff v. Howes Constr. Co., 228 N. Y. 276; People ex rel. Fordham M. R. Church v. Walsh, 244 N. Y. 280; People ex rel. Healy v. Leo, 194 App. Div. 97.)

      William S. Andrews, Nathan Burkan, William Klein and Leopold Friedman for Wilthan Realty Company, respondent.
    Allegations of fact contained in the' petition are not admitted. (People ex rel. Erie Ry. Co. v. Tax Commission, 246 N. Y. 322; People ex rel. Poor v. Wells, 139 App. Div. 83; People ex rel. Brownell v. Board, 127 App. Div. 851; People v. French, 6 N. Y. Supp. 431.) On the last application the aspects of the case were materially changed from those first passed upon. (Matter of Riverside, etc., Corp. v. Walsh, 131 Misc. Rep. 652; 225 App. Div. 655; Matter of Vessel v. Walsh, 225 App. Div. 742; Matter of Hall v. Walsh, 221 App. Div. 756; Matter of Ficari v. Walsh, 226 App. Div. 441; Matter of McGarry v. Walsh, 213 App. Div. 289; People ex rel. Swedish Hospital v. Leo, 120 Misc. Rep. 355; 215 App. Div. 696; Matter of Riker, 225 App. Div. 570.) Under section 7 fc) of the Zoning Resolution the Board had authority in its discretion to vary the regulation. (People ex rel. Church v. Walsh, 244 N. Y. 280; People ex rel. Smith v. Walsh,
      240 N. Y. 606; People ex rel. Sheldon v. Walsh, 234 N. Y. 484.) Under section 7 (c) the Board was justified in reaching its decision. (People ex rel. Church v. Walsh, 244 N. Y. 280; Matter of Larkin Co. v. Schwab, 242 N. Y. 330; People ex rel. Healy v. Walsh, 194 App. Div. 973.)
   Pound, J.

The question is whether the Board of Standards and Appeals of the City of New York, respondent, properly granted an application of Wilthan Realty Corporation, intervener, respondent, for leave to erect a theatre on its plot of land constituting the entire block front on the westerly side of Third avenue, running 130 feet deep on Seventy-second street and 133.4 feet on Seventy-first street. The proposed theatre is to have 204 feet, 4 inches, frontage on Third avenue, with a depth of 125 feet on Seventy-second street and 119 feet, 8 inches on Seventy-first street. Under the Building Zone Resolution all property abutting on Third avenue and for 100 feet westerly on the side streets is within the business district. A portion of the proposed theatre, therefore, extends into the residence district 25 feet on Seventy-second street and 19 feet 8 inches on Seventy-first street.

After a public hearing the application was granted under section 7 (c) of the Building Zone Resolution, which reads as follows:

. “ § 7. Use District Exceptions. The Board of Appeals, created by Chapter 503 of the Laws of 1916, may, in appropriate cases, after public notice and hearing, and subject to appropriate conditions and safeguards, determine and vary the application of the use district regulations herein established in harmony with their general purpose and intent as follows:

<< * * *

(c) Permit the extension of an existing or proposed building into a more restricted district under such conditions as will safeguard the character of the more restricted district.”

.Conditions deemed suitable by the Board were adopted to safeguard and preserve the general character of the neighborhood and to minimize the inconvenience of having the theatre extend beyond the line of business use.

This action was taken after the fair hearing to which the opposition was entitled as matter of law; (People ex rel. New York & Queens Gas Co. v. McCall, 245 U. S. 345, 348.) Although the chairman of the Board displayed at times some impatience towards the counsel for the petitioner, no evidence of bias or favoritism appears on the record.

The appellant Reed, a neighboring property owner, then obtained an order of certiorari to review the determination of the Board. Others have joined with him as interveners. After the return had been filed to the petition for the order, a motion returnable at Special Term was made on the petition, order, answer and return, for a final order quashing the order of certiorari issued herein, dismissing the petition herein and confirming the determination of said Board of Standards and Appeals on the merits and for such other and further relief as to the Court shall seem just and proper.”

The . Special Term made an order confirming the decision of the Board of Standards and Appeals and further ordered “ that the said certiorari order be and the same hereby is quashed and all proceedings thereunder dismissed.”

The appellants make the point that “ the motion being one to quash the petition (order of certiorari), all of the allegations of the petition must be deemed to be true. The petition is clearly sufficient as matter of law.” (People ex rel. Erie R. R. Co. v. State Tax Commission, 246 N. Y. 322.)

A motion to quash is in the nature of a demurrer to the petition and is not properly made after the return is filed. If the papers on which the order of certiorari was granted are insufficient in law upon their face, a motion may be made to vacate or quash the order. The hearing at Special Term in this case was not limited to an attack on the petition. It was on the merits. Subject to certain limitations not present in this case the return must be taken as conclusive and acted on as true.” (People ex rel. Lester v. Eno, 176 N. Y. 513, 518.) The hearing was upon the order and return and the papers upon which the order was granted. (Civ. Prac. Act, § 1300.) The final order confirmed the determination of the Board. (Civ. Prac. Act, § 1305.) Clearly the word “ quash ” was inadvertently used both in the moving papers and in the order in the sense of the word vacate.” Writs of certiorari are no longer granted. In certiorari proceedings the courts formerly quashed writs where they now vacate orders. The writ nomenclature has become obsolete with the writ itself.

The further point is made that the Board had no jurisdiction to entertain the application because it had in July, 1927, denied the application of the respondentintervener upon the same state of facts and that such decision was final, and not subject to review by the Board itself. Whether or not the function of the Board is to decide cases with finality on the same facts once presented for its consideration, if new plans materially change the aspects of the case, a new application may be made and a new determination had. (See Matter of Riker v. Board of Standards & Appeals, 225 App. Div. 570.) The plans on which the Board passed on July 17, 1928, were not the same as those submitted in 1927. True the Board had power in 1927 to make changes in the plans which it desired or deemed necessary as a condition of granting the application but it did not exhaust its jurisdictional powers by denying the application. If it deemed the plans inadequate to justify favorable action thereon it might wait until proper plans were submitted on a new application, or it might exercise its power to enlarge upon the plans and approve them as thus modified.

We'must assume that the new plans materially changed the aspect of the original case for they do purport to introduce numerous details which were not provided for in the original plans and which are deemed to be material until the contrary is demonstrated. The Board may give weight to slight differences which are not easily discernible.” (Matter of Larkin Co. v. Schwab, 242 N. Y. 330, 336.)

The chief contention of the appellant on the merits is: that if the premises 182 and 184 East Seventy-second street and 183 and 185 East Seventy-first street are used for residence purposes in conformity with the improvements now actually existing, they would yield a fair return on the investment of the applicant, and that in the event that the owner desired to demolish these premises, the sites upon which the improvements now stand are most adapted for high class apartment house purposes and not for any business use.” He thus seeks to refer an application under section 7 (c) of the Building Zone Resolution to the rule frequently stated where the application is made under Building Zone Resolution, section 21 ■—that is to say, that the Board may not consider the advantage to a single property owner which would come from a modification of the resolution; that whether the property under consideration is more suitable for a forbidden use than for a permitted one is immaterial. (Matter of Stillman v. Board of Standards & Appeals, 222 App. Div. 19; affd., 247 N. Y. 599.) But sections 7 and 21 are independent provisions conferring distinct and separate powers upon the Board. When the application is made under section 21, it must be shown that there are practical difficulties or unnecessary hardships in the way of carrying out the strict letter of the provisions of this resolution ” which justify a variance in a specific case, but the mere fact that the property may be put to a more profitable use is not enough to justify .the Board in granting the variance. If it were, the whole scheme of the resolution would be at the mercy of the Board. When the application is made under section 7 and the appropriate subdivision thereof the field of inquiry is restricted. It is not necessary to allege or prove the facts required when the application is made under section 21 nor for the Board to make a decision thereon. The Board must in each case act on some reasonable basis in harmony with the general purpose of the resolution. Nothing more is required. (People ex rel. Smith v. Walsh, 211 App. Div. 205; affd., 240 N. Y. 606.) Under section 7 (c) the element of public health, safety and general welfare ” is not emphasized as in section 21, although it may well be taken into consideration. The question of hardship to the individual owner becomes a more material element in the determination of the application. May he be allowed under such conditions as will safeguard the character of the more restricted district ” to extend his “ existing or proposed building into a more restricted district? ” The variation may be made to meet the specific case in order to enable the owner to make a reasonable and profitable use of his property if it can be done without violence to the general zoning plan and without causing substantial inconvenience to the immediate neighborhood, although the applicant has no right to insist upon a decision in his favor.

A theatre 100 feet deep would in a legal sense be no intrusion on the restricted district, however undesirable it might be as a neighbor. Given the proposed extension of a legal building into a more restricted district, two fundamental considerations must prevail in order to enable the Board to proceed under section 7 (c). The general purpose of the zoning resolution must be respected and the more restricted district must be safeguarded. It is probable, at least possible, that a theatre 150 feet deep with main exits on the streets in the restricted district would be, as matter of law, so out of harmony with the general purpose of the zoning resolution as to make it impossible to safeguard the character of the more restricted district. If so, a decision in favor of the applicant might be held an arbitrary act, an abuse of discretion. The question is one of degree. The line must be drawn somewhere. This case may be near the border line. If the Board may permit the building to be erected to be extended a foot or so into the more restricted district, it does not follow that it may permit the building so to be extended indefinitely. The rule of reasonableness must be applied. The Board has a wide scope in the exercise of its discretion whenever the discretion to make variances is granted to it. (Matter of Goldenberg v. Walsh, 242 N. Y. 576; People ex rel. Fordham M. R. Church v. Walsh, 244 N. Y. 280, 289.) If such an application is denied the only question for the court is whether the petitioner has been illegally oppressed. (Matter of Larkin Co. v. Schwab, supra, p. 336.) When the application is granted the question of power only is to be considered. Is the action of the Board unjustifiable as matter of law under the specific provisions of the zoning resolution relied on? As matter of law it cannot be said that the action of the Board permitting the extension of the proposed theatre into the more restricted district under section 7 (c) is without evidence to support it. As the Board acted within its jurisdiction, its determination is not to be set aside. The order should be affirmed, with costs.

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

Order affirmed.


text:
    Samuel Brustein, Respondent, v. New Amsterdam Casualty Company, Appellant.
    (Argued November 25, 1930;
    decided January 6, 1931.)

      Frederick Mellor for appellant.
    The construction placed upon section 109 of the Insurance Law so as to cover plaintiff’s cause of action for loss of services of his wife is not justified by the language of the statute nor by the obvious intention of the Legislature in enacting it. (Psota v. Long Island R. R. Co., 246 N. Y. 388; Price v. National Surety Co., 221 App. Div. 56; 246 N. Y. 586; O’Tier v. Sell, 252 N. Y. 400; Weatherwax v. Royal Indemnity Co., 250 N. Y. 281; Coleman v. New Amsterdam Cas. Co., 247 N. Y. 271; Roth v. National Automobile Mut. Cas. Co., 202 App. Div. 667; Rushing v. Commercial Cas. Co., 251 N. Y. 302; Gerka v. Fidelity & Cas. Co., 251 N. Y. 51; Exchange Mutual Ind. Ins. Co. v. Central Hudson Gas & El. Co., 243 N. Y. 75; People v. Long Island R. R. Co., 194 N. Y. 130; Johnson v. Hudson River R. R. Co., 49 N. Y. 455; McCluskey v. Cromwell, 11 N. Y. 593; Merchants Liability Co. v. Smart, 267 U. S. 126.) The defendant has paid its full liability on the policy. (Psota v. Long Island R. R. Co., 246 N. Y. 388; Price v. National Surety Co., 221 App. Div. 56; 246 N. Y. 586; O’Tier v. Sell, 252 N. Y. 400.)

      Hamilton Ward, Attorney-General (C. T. Dawes and Charles P. Butler of counsel), for Superintendent of Insurance of State of New York, amicus curiae.

    The construction placed upon section 109 of the Insurance Law by the trial court and affirmed by the Appellate Division, is not justified by the language of that statute nor by the legislative intent and makes the third standard provision unconstitutional. (Merchants Mutual Automobile Liability Ins. Co. v. Smart, 267 U. S. 126.)

      Thomas A. Shaw, Jay S. Jones and Edward J. Fanning for respondent.
    Section 109 of the Insurance Law is mandatory and requires an insurer issuing a liability policy to insure the owner against liability for damages for injuries to person. (German Alliance Ins. Co. v. Hale, 219 U. S. 307; Merchants Liability Co. v. Smart, 267 U. S. 126; Matter of Bean v. Stoddard, 207 App. Div. 276; Adam v. Manhattan Life Ins. Co., 204 N. Y. 357; Strauss v. Union Central Life Ins. Co., 170 N. Y. 349; Hopkins v. Conn. Gen. L. Ins. Co., 225 N. Y. 76; New York Life Ins. Co. v. Hardison, 199 Mass. 190; O’Tier v. Sell, 252 N. Y. 400.) The loss of service of plaintiff’s wife is an injury to person and the attempt of the defendant to limit its liability to bodily injuries is in conflict with section 109 of the Insurance Law. (Psota v. Long Island R. R. Co., 246 N. Y. 388; Price v. National Surety Co., 221 App. Div. 56; 246 N. Y. 586; Gorlitzer v. Wolffberg, 208 N. Y. 475; Riddle v. McFadden, 201 N. Y. 215.) The defendant has not paid its full liability on the policy. (Martin v. Home Bank, 160 N. Y. 190; Muck v. Hitchcock, 212 N. Y. 283; McCann v. City of Albany, 158 N. Y. 634.)
   Pound, J.

Section 109 of the Insurance Law (Cons. Laws, ch. 28) is entitled: “ Standard Provisions for Liability Policies.” It contains certain provisions which must be included in a liability policy covering loss or damage caused by motor vehicles. The first provision is the familiar standard bankruptcy clause which gives the injured person a cause of action against the insurance carrier if the insured is bankrupt or insolvent, “ under the terms of the policy for the amount of the judgment * * * not exceeding,the amount of the policy.” The next provision relates to notice. Then comes the provision in question in this case, which reads as follows:

“No such policy shall be issued or delivered in this state on or after July, first, nineteen hundred and twenty-four, to the owner of a motor vehicle, by any corporation or other insure (r) authorized to do business in this state, unless there shall be contained within such policy a provision insuring such owner against liability for damages for death or injuries to person or property resulting from negligence in the operation of such motor vehicle, in the business of such owner or otherwise, by any person legally using or operating the same with the permission, express or implied, of such owner.”

The section concludes as follows: “A policy issued in violation of this section shall, nevertheless, be held valid but be deemed to include the provisions required by this section, and when any provision in such policy or rider is in conflict with the provisions required to be contained by this section, the rights, duties and obligations of the insurer, the policyholder and the injured person shall be governed by the provisions of this section.”

The action is brought by the husband of Bessie Brustein to recover $2,634, the amount of a judgment for the loss of services resulting from injuries to his wife recovered by him against Sol Pion. Previously the wife had ■recovered a judgment for $8,145 against Pion for personal' injuries sustained by her in an automobile accident. Pion was insured with defendant against such liability and was insolvent. The company paid her $5,000 and costs, which it claims fully discharges its liability under the policy. The policy insured against loss in respect to “ bodily injuries or death ” only. The liability was limited to $5,000 for one person injured or killed and to a total liability of $10,000 on account of any one accident resulting in bodily injuries or death to more than one person.

In Psota v. L. I. R. R. Co. (246 N. Y. 388, 396) it was held that the words injuries to the person ” as used in section 282-b of the Highway Law included the husband’s loss of services of the wife. In Price v. National Surety Co. (221 App. Div. 56; revd., on dissenting opinion of Proskauer, J., 246 N. Y. 586) it was held that no distinction in this regard can be drawn between the words injury to person ” and personal injury.” The policy in suit covers accidents resulting in “ bodily injuries or death.” The language limits the coverage to such injuries only and does not include all injuries to person or personal injuries as the term is defined by General Construction Law (Cons. Laws, ch. 22), section 37-a. Obviously the husband receives no “ bodily injury ” from the loss of his wife’s services; nor is his wife his property so that an injury to her person is an injury to his property.

The courts below have held that the policy is inconsistent with the requirements of section 109 above quoted and that it must be deemed by operation of law to include a provision insuring the owner against liability for death or injuries to pe son or property, without limitation or qualification, and so to cover plaintiff’s cause of action for injuries to person as above defined. We find no warrant in the statute or in its history for- such a conclusion. While the courts hesitate to depart from the letter of a statute, a construction may be adopted in harmony with what is thought to be the spirit and purpose of the act in order to give effect to the evident legislative intent. (Church of the Holy Trinity v. United States, 143 U. S. 457.) In this case the unreasonableness of the construction contended for is so gross as to shock the general common sense. (Crooks v. Harrelson, 282 U. S. 55.) Only when policies are capable with equal reason of more than one interpretation are they construed against the insurer. The fair and reasonable reading will always be preferred. (Aldrich v. N. Y. Life Ins. Co., 235 N. Y. 214, 224.)

The standard provisions provided for in section 109 are three in number and are aimed at separate recognized evils. The standard bankruptcy provision gives the injured person a remedy over against the insurance company when the judgment against the insured is uncollectible by reason of bankruptcy or insolvency. (Merchants Mutual Automobile Liability Ins. Co. v. Smart, 267 U. S. 126.) It puts an end to the rule that a contract of liability insurance is to be regarded as one of indemnity only. The second provides a standard rule as to the time and manner of notice to the insurer instead of leaving such matters to be covered by the individual contract. The third is an “ additional interest ” clause aimed to protect the public against the operation of a car by others than the owner, provided they have the owner’s consent, express or implied. The primary purpose of this requirement is to meet the defense in an action on the policy that the owner was not at the time of the accident operating the car personally or by his agent, although it was being operated by a member of his family or another with his consent express or implied. (Van Blaricom v. Dodgson, 220 N. Y. 111; cf. Vehicle & Traffic Law; Cons. Laws, ch. 71, § 59.)

Compulsory insurance is not provided for by the laws of the State. Indemnity bonds or insurance policies are required of the operators of motor vehicles for hire in certain cases. (Vehicle & Traffic Law, § 17.) Aside from this provision, the owner of an automobile may elect whether to carry any insurance, and, if he elects to insure he may determine the amount and coverage thereof. To select this one class of liability and to say that here alone the insured is required to cover in a single policy liability for death, injuries to person and injuries to property is to attribute to the Legislature a capricious and unreasonable act, not to be comprehended as within the legislative intention and possibly without the legislative power. (Merchants Mutual Automobile Liability Ins. Co. v. Smart, supra.) To say that the owner may go uninsured entirely; that if he takes out insurance it may be limited as to coverage and amount in all cases except where the car is legally used or operated by a person with his permission is not to regulate the affairs of insurance companies to prevent them from committing wrongs or injustice in the exercise of their corporate functions.” The wrong or injustice aimed at by section 109 is the defense of non-liability on the grounds above stated, not the limitation of coverage and amount. The companies do no wrong or injustice in writing policies of insurance of limited amount and coverage like the one in suit. Such is the common practice. A wrong is done to them if the terms of their policies are thus enlarged by legal construction. The construction given to the clause by the courts below would amount to this: An insured owner, operating his car, whether personally or by agent, may limit the coverage of his insurance to injury to person or to property, or to bodily injuries or death. When he allows another to operate it, while he need not insure, if he does insure, the policy, however written, must be read as if it covered death, injuries to person and injuries to property. In the absence of a direct legislative mandate that the owner of a car must insure against all such injuries, a reasonable construction of the provision in question is that the policy must be read as if it contained an extended liability clause, but that it may be limited in amount and coverage as the parties may agree.

The judgment should be reversed and the complaint dismissed, with costs in all courts.

Cardozo, Ch. J., Crane, Lehman, Kellogg and O’Brien, JJ., concur; Hubbs, J., not sitting.

Judgment reversed, etc.


author: Crane, J.

text:
    Village of Stillwater, Respondent, v. Hudson Valley Railway Company et al., Appellants.
    (Argued October 23, 1930;
    decided January 6, 1931.)

      Charles E. Hughes, Jr., William W. Owens, Francis C. Reed, James McPhillips and C. E. Fitzgerald for appellants.
    The rails and ties of defendant railway in the village of Stillwater do not constitute a trespass or nuisance on account of which the plaintiff is entitled to judgment compelling their removal and the restoration of the pavement so as to correspond with the rest of the street. (Chicago v. Sheldon, 9 Wall. 50; City of New York v. Dry Dock, E. B. & B. R. R. Co., 135 Misc. Rep. 678; 225 App. Div. 794; 251 N. Y. 583; City of New York v. New York City Ry. Co., 132 App. Div. 156; City of New York v. Montague, 145 App. Div. 172; Boyd v. Boyd, 252 N. Y. 422; York Mortgage Corp. v. Clotar Construction Corp., 254 N. Y. 128; Griffin v. Mayor, 9 N. Y. 456; Davis v. Mayor, 14 N. Y. 506; People v. Kerr, 27 N. Y. 188; Peck v. Schenectady Ry. Co., 170 N. Y. 298; Village of Hempstead v. Ball Electric Co., 9 App. Div. 48; City of New York v. Rice, 198 N. Y. 124; Village of Oxford v. Willoughby, 181 N. Y. 155; Detroit United Railway v. City of Detroit, 172 Mich. 136; 229 U. S. 39; City of Mt. Vernon v. Berman & Reed, 100 Ohio St. 1; City of Buffalo v. International Ry. Co., 135 Misc. Rep. 504; People v. Bleecker Street & Fulton Ferry R. Co., 67 Misc. Rep. 577; 140 App. Div. 611; 201 N. Y. 594; City of New York v. Bryan, 196 N. Y. 158; New York Central & H. R. R. R. Co. v. City of New York, 202 N. Y. 212; Beekman v. Third Avenue R. R. Co., 153 N. Y. 144; Bradley v. Degnon Construction Co., 80 Misc. Rep. 90.) Even if the plaintiff is entitled to the removal of the tracks and ties and the repavement of the street, the cost of such work does not constitute a lien upon all the property of the defendant railway company prior to the lien of the trust mortgage. (Ithaca Trust Co. v. Ithaca Traction Corp., 248 N. Y. 322; Platt v. New York & Sea Beach Ry. Co., 9 App. Div. 87; 153 N. Y. 670; Pintsch Compressing Co. v. Buffalo Gas Co., 280 Fed. Rep. 830; Farmers’ L. & T. Co. v. Bankers & Merchants Tel. Co., 148 N. Y. 315; Guarantee Trust Co. v. Philadelphia, R. & N. E. R. R. Co., 31 App. Div. 511; Westinghouse Electric Mfg. Co. v. Barre & Montpelier, etc., Co., 98 Vt. 130; Flint v. Danbury Street Ry. Co., 101 Conn. 13; City of Denver v. Stenger, 295 Fed. Rep. 809; Provisional Municipality of Pensacola v. Northrup, 66 Fed. Rep. 689; Boisot v. Faller, 249 Fed. Rep. 193; Boisot v. Amarillo Street Ry. Co., 244 Fed. Rep. 838; Marshall v. New York, 254 U. S. 380; Wise v. Wise Co., 153 N. Y. 507; Matter of Carnegie Trust Co., 206 N. Y. 390; United States v. Hool, 3 Cranch, 73; Conard v. Atlantic Ins. Co., 1 Pet. 386; Field v. United States, 9 Pet. 182; Brent v. Bank of Washington, 10 Pet. 596.)

      Robert Frazier and Sidney W. Hewitt for respondent.
    A street railway corporation upon discontinuing its railway operations in a public highway, may be compelled to remove its unused property from the highway, since unused rails and poles are a nuisance in the street. (City of New York v. Montague, 145 App. Div. 172; Village of Hempstead v. Ball Electric Light Co., 9 App. Div. 48; Transit Commission v. Long Island R. R. Co., 253 N. Y. 345; Detroit United Ry. Co. v. Detroit, 229 U. S. 39; City of Buffalo v. International Ry. Co., 135 Misc. Rep. 497; City of Mount Vernon v. Berman & Reed, 100 Ohio St. 1.) An action by a village to compel a railway company to remove its rails, ties and poles which are a nuisance in the street, is not an action for the forfeiture of a franchise, which must be maintained by the people of the State, nor does the fact that the franchise was given by plaintiff to defendant to maintain and operate a street railway constitute a bar to the action. (Village of Hempstead v. Ball Electric Light Co., 9 App. Div. 49; City of New York v. Rice, 198 N. Y. 124; City of New York v. Montague, 145 App. Div. 172; People v. Tax Commrs., 174 N. Y. 417; City of New York v. Bryan, 196 N. Y. 158.) The expense of removing the poles, rails and ties of the defendant railway company and restoration of the pavement is an equitable lien or claim upon the property of said railway company prior to the hen of the trust mortgage. (Southern Ry. Co. v. Carnegie Steel Co., 176 U. S. 257; Hale v. Frost, 99 U. S. 389; Fosdick v. Schall, 99 U. S. 235; Mittenberger v. Railroad, 106 U. S. 286; Burham v. Bowen, 11 U. S. 776; Union Trust v. Illinois M. R. Co., 117 U. S. 43; Guaranty Trust Co. v. Philadelphia, R. & M. E. R. Co., 31 App. Div. 512; Boisot v. Faller, 249 Fed. Rep. 193; Penescola v. Northrup, 66 Fed. Rep. 689.)

      John A. Slade for City of Saratoga Springs, amicus curios.

    The mortgaged property is chargeable with the cost of removing the tracks, poles, etc., from the streets. (City of Mt. Vernon v. Berman & Reed, 100 Ohio St. 9.)
   Crane, J.

The village of Stillwater brought this proceeding to get rid of abandoned street railroad tracks on its principal thoroughfare, and to make the cost of their removal a preferred hen on the corporate property.

The Board of Trustees of the village of Stillwater, on December 6, 1882, and on June 15, 1893, by resolution authorized, allowed and permitted the Stillwater and Mecharhcville Street Railway Company to construct, maintain and operate a street railroad through and upon said Main Street of said village. The consent, taking the form of a contract, by the acceptance and written approval of the railroad, provided for the nature of the' roadbed, the grade of the street and the gauge of the road, and stated: Said roadbed shall at ah times be constructed, operated and maintained in such manner, as not to impair the use of the streets through which it runs.” The resolution of June 15, 1893, in similar form contained the further provision that the said company shall keep, maintain and operate its road according to the provisions contained in the laws of the State of New York, and especially those contained in the Railroad Law of 1892.

On May 3, 1899, the Board of Trustees of the village passed a resolution authorizing the Greenwich and Schuylerville Electric Railroad to construct, maintain and operate and use its railroad together with necessary sidings and switches upon and along Main street to connect with the tracks of the Stillwater and Mechanic-ville Street Railway Company. This resolution was in similar form to the others, and contained the provision that the road shall at all times be kept and operated in compliance with the laws of the State of New York. These resolutions, or consents, were given pursuant to the provision of the State Constitution, article III, section 18, that no law shall authorize the construction or operation of a street railroad except upon the condition. that the consent of the local authorities be first obtained. The authorized practice has been for the local authorities to annex certain conditions to the giving of their consents. (Matter of Quinby v. Public Service Commission, 223 N. Y. 244, 259, and cases cited.) The three resolutions or consents giving to the two railroads the right to construct tracks in Main street were conditioned upon the maintenance and use of them in the operation of a street surface railroad. The tracks were to be used, and street surface cars were to be operated over them. This is the clear intent and meaning of these resolutions, although the words “ on condition ” were not always used.

Thereafter, the Stillwater and Mechanicville Street Railway Company and the Greenwich and Schuylerville Electric Railroad constructed and operated, as contemplated and intended by the village consent, an electric street railway on Main street, until July 1, 1901, when they were consolidated into the defendant, the Hudson Valley Railway Company. Operations were continued until December 1, 1928, when, pursuant to a resolution of its stockholders, the Hudson Valley Railway Company discontinued all its railway operations, which have not since been resumed. It sold all of its feed, trolley and span wires and poles on Main street, and they have been partly removed by the vendee. Fifteen poles only remain standing. The company has also sold its rails extending out of the village to other townships, exclusive of rails in paved streets, and has either dismantled, burned or sold all of its cars. The village now asks to have the remaining tracks and rotting ties — unused, unrepaired — removed from its streets. The Appellate Division, upon ample evidence, has found that the Hudson Valley Railway Company in the year 1926 abandoned and ceased to operate its line from the city of Meehanicville to the village of Ballston Spa, and has since at various times abandoned and discontinued the operation of various portions of its railway system.

Previous to the bringing of this action, the village had demanded of the railroad that it fix and repair the street and highway in accordance with the provisions of the Railroad Law (Cons. Laws, ch. 49), or wholly remove its rails. The company has failed and refused to repair its roadway or remove its tracks and restore the street to its previous condition.

The Hudson Valley Railway Company having abandoned its railroad, given up the operation of its surface cars by a formal resolution, and having sold and disposed of all its equipment, has deliberately failed and refused for over a year and a half to meet the terms and conditions upon which the consent to the use of Main street was given. The action of the village is sufficient indication that it has now withdrawn that consent; in fact, the abandonment of all its operations and property by the railroad company under the conditions of this case has terminated its rights in the street. In New York Electric Lines Co. v. Empire City Subway Co. (235 U. S. 179, at p. 194) Mr. Justice Hughes, writing the opinion, said: '' It is a tacit condition annexed to grants of franchises that they may be lost by mis-user or non-user. Terrett v. Taylor, 9 Cranch, 43, 51; Chicago Life Ins. Co. v. Needles, 113 U. S. 574, 580; Given v. Wright, 117 U. S. 648, 656, The condition thus implied is, of course, a condition subsequent. The same principle is applicable when a municipality under legislative authority gives the permission which brings the franchise into being; there is necessarily implied the condition of user. The conception of the permission as giving rise to a right of property in no way involves the notion that the exercise of the franchise may be held in abeyance for an indefinite time, and that the right may thus be treated as a permanent lien upon the public streets, to be enforced for the advantage of the owner at any time, however distant. Although the franchise is property, ' it is subject to defeasance or forfeiture by failure to exercise it (People v. Broadway R. R. Co. of Brooklyn, 126 N. Y. 29), or by subsequent abandonment after it has been exercised (People v. Albany & Vermont R. R. Co., 24 N. Y. 261).’ If 'no time is prescribed, the franchise must be exercised within a reasonable time.’ City of New York v. Bryan, 196 N. Y. 158, 164.”

In New York Electric Lines Co. v. Gaynor (218 N. Y. 417) this court said regarding permission granted by the city of New York to use its streets: The failure to exercise the permission as contemplated is ground for the revocation or withdrawal of it. It was a tacit condition annexed to the permission as granted that it might be lost by mis-user or non-user.” (See, also, City of Detroit v. Detroit United Railway, 172 Mich. 136; 229 U. S. 39; City of Mt. Vernon v. Berman & Reed, 100 Ohio St. 1.)

The secondary franchise, which in these cases is the consent or permission given by local authorities for the use of its streets or highways, is not the franchise by and under which the corporation exists and has the right to function as a corporate being. To destroy or take away this latter franchise it may be necessary to resort to an action by the people of the State through the Attorney-General. (Matter of Brooklyn Elevated R. R. Co., 125 N. Y. 434, 440.) Cases which refer to the corporate franchise as being one grant from the sovereign State have reference to property interests which survive the dissolution of the corporation itself. (People v. O’Brien, 111 N. Y. 1; City of New York v. Bryan, 196 N. Y. 158.) This is not such a case, as we are dealing here with the consent of a village granted to the Hudson Valley Railway Company to use its streets upon terms and conditions which it now fails and refuses to meet. The consent is at an end, and the tracks of the railroad company in the street are there without authority, and constitute a trespass or a public nuisance. They must be taken up. (City of Detroit v. Detroit United Railway, 172 Mich. 136; 229 U. S. 39; City of Mt. Vernon v. Berman & Reed, 100 Ohio St. 1; People ex rel. Metropolitan Street Ry. Co. v. Tax Commissioners, 174 N. Y. 417; Transit Commission v. Long Island R. R. Co., 253 N. Y. 345; Village of Hempstead v. Ball Electric Co., 9 App. Div. 48.)

With this conclusion counsel for the appellant does not seriously differ. The main contention, we gather, is over the second point in the case — the right to charge the expense of the removal of these tracks to the bondholders under the trust mortage.

On the 1st day of July, 1901, the defendant railway executed a trust mortgage to the Merchants Trust Company as trustee, covering all its real and personal property, including after-acquired property, to secure an issue of not exceeding $4,000,000 of its bonds. The defendant Bankers Trust Company succeeded to this trust on October 26, 1905, and has since acted as successor trustee under the consolidated mortgage and under subsequent supplementary mortgages, dated January 16, 1914, and April 10, 1916, covering certain additional property. Bonds to the amount of $3,518,000 were issued and are now outstanding in the hands of bona fide holders for value. The railway was never operated at a profit and never paid a dividend. Since 1923 its operating revenues have not been 'sufficient to pay its actual operating expenses and taxes, exclusive of interest on its funded and unfunded debt. The defendant railway is insolvent and its property is insufficient to pay the amount due on its outstanding consolidated mortgage bonds, with interest, exclusive of its substantial unsecured liabilities. Foreclosure of the trust mortgage for non-payment of interest was begun on April 3, 1929.

The judgment directed to be entered by the Appellate Division requires the Hudson Valley Railway Company to remove its rails, ties and poles on Main street in the village of Stillwater, and, in the event of its failure so to do, the village is authorized to remove the property and restore the surface of the street to correspond to the remaining portion thereof. The expense of removing the rails, ties and poles and span wires and' restoring of the brick pavement is to be an equitable lien upon the property of the defendant, the Hudson Valley Railway Company, in the hands of the Bankers Trust Company, prior to the lien of the trust mortgage and the mortgages supplemental thereto. “ The principle involved,” said the Appellate Division, " is akin to that which fixes a prior lien to the mortgage upon the insolvent estate to pay current debts.” (229 App. Div. 41, 44.) That principle, in our judgment, cannot be extended to the facts of this case.

“ The current debt fund ” rule is that creditors who have supplied labor, materials or equipment essential to the operation of a railroad before an adjudication of insolvency will be entitled to a lien upon the railroad properties prior to the hen of pre-existing mortgages, if they can show that current operating revenues have been diverted to the payment of principal or interest on the mortgages, or to the enhancement of the mortgage security before current operating expenses have been met. In Southern Railway Co. v. Carnegie Steel Co. (176 U. S. 257, 285) the court summed up the decisions upon the subject in saying: “ This court has uniformly refrained from laying down any rule as absolutely controlling in every case involving the right of unsecured creditors of a corporation, whose property is in the hands of a receiver, to have their demands paid out of net earnings in preference to mortgage creditors. But it may be safely affirmed, upon the authority of former decisions, that a railroad mortgagee when accepting his security impliedly agrees that the current debts of a railroad company contracted in the ordinary course of its business shall be paid out of current receipts before he has any claim upon such income; that, within this rule, a debt not contracted upon the personal credit of the company but to keep the railroad itself in condition to be used with reasonable safety for the transportation of persons and property, and with the expectation of the parties that it was to be met out of the current receipts of the company, may be treated as a current debt; that whether the debt was contracted upon the personal credit of the company, without any reference to its receipts, is to be determined in each case by the amount of the debt, the time and terms of payment, and all other circumstances attending the transaction; and that when current earnings are used for the benefit of mortgage creditors before current expenses are paid, the mortgage security is chargeable in equity with the restoration of any funds thus improperly diverted from-their primary use.” As to time limitation usually six months, see St. Louis & S. F. R. R. Co. v. Spiller (274 U. S. 304, 311). (See, also, a denial of a preference in Lackawanna Iron & Coal Co. v. Farmers’ L. & T. Co., 176 U. S. 298.)

The same underlying principle applies to the preference sometimes given to receivers’ certificates issued for money or supplies to keep a railroad going. (Knickerbocker Trust Co. v. Oneonta, C. & R. S. Ry. Co., 201 N. Y. 379; Central Trust Co. v. Pittsburg, S. & N. R. R. Co., 223 N. Y. 347.) These instances of preference are exceptions to the general rule that a secured prior lien is paramount to the claims of all other creditors, and as such, are strictly limited to the necessities of the situation and the preservation of the res. “ The right of a creditor, of an insolvent corporation in the hands of a receiver to have a preference over bondholders under a first mortgage is strictissimi juris.” (Farmers’ L. & T. Co. v. Bankers & Merchants Tel. Co., 148 N. Y. 315, 323; Lackawanna Iron & Coal Co. v. Farmers’ L. & T. Co., 176 U. S. 298.)

The underlying thought in this preference rule is that for the sake of the public the railroad or public utility must be kept in operation and maintained as a going concern. (Matter of Cornell Co., 201 Fed. Rep. 381, 388.) This is also, in most instances, beneficial to the mortgagee. Money and supplies are necessary to accomplish this purpose, and to procure them or to obtain credit, the sum or value advanced is given a preference under what is termed the “ current debt fund” rule. “ Like supplies advanced or repairs made to a vessel, they had been actually necessary to preserve the existence of the res itself, upon the existence of which res all other hens depended.” (Central Bank & Trust Corp. v. Cleveland, 252 Fed. Rep. 530.)

The expenses that may be incurred by the village of Stillwater in removing the tracks and property of the railway in Main street are for a purpose quite the contrary to that of this preference rule. The money is not to be expended for the benefit of the railroad or of the mortgagee, but for the benefit of the village; not to keep the railroad in operation, but to accomplish its final removal; not to facilitate transportation by rail, but to clear the streets of a nuisance. Priority cannot be given over the trust mortgage for such claims. (Westinghouse Elec. Mfg. Co. v. Barre & Montpelier Traction & Power Co., 98 Vt. 130; Provisional Municipality of Pensacola v. Northrup, 66 Fed. Rep. 689; Toledo, D. & R. R. R. Co. v. Hamilton, 134 U. S. 296.)

The mortgage in this case covers all the property of the railway of every description including after-acquired property, and consequently covers the cash proceeds from the sale of any of the mortgaged property. (Ithaca Trust Co. v. Ithaca Traction Corp., 248 N. Y. 322.)

The judgment obtained against the railroad by the village for the expense of removing the tracks and restoring the street is not, therefore, to be given a preference over the mortgage or secured bondholders, but will be of the same nature and force as any other judgment recovered for debt, or for tort.

That part of the judgment appealed from which gives a preference to the village of Stillwater for the expense of removing the tracks in Main street is reversed and stiicken from the judgment.

The judgment should be modified as directed in the opinion and as modified affirmed, without costs.

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

Judgment accordingly.


author: Kellogg, J. Crane, J.

text:
    Wilbur F. Amies et al., Respondents, v. John Wesnofske et al., Appellants.

      (Argued November 18, 1930;
    decided January 6, 1931.)

      Charles I. Wood and Harry W. Moore for appellants.
    The meaning and intent of the agreement between the parties as to the amount and payment of commissions was a question for the jury properly left to and determined by them. (Reis Co. v. Zimmerli, 224 N. Y. 351; Farrell v. Massapequa Holding Corp., 222 App. Div. 815; Eaton v. Canniff, 228 App. Div. 757; North Sea Developments, Inc., v. Burnett, 228 App. Div. 244; Coughlan v. Frankel, 216 App. Div. 565; Morgan v. Calvert, 126 App. Div. 327; Levy v. Forster, 224 App. Div. 463; Colvin v. Post Mortgage & Land Co., 225 N. Y. 510; Blevin v. Lighthouse, 231 N. Y. 64; MacDowell-Peterman Co. v. Independent P. Co., 211 App. Div. 781; Caldwell Co. v. Connecticut Mills Co., 225 App. Div. 270; 251 N. Y. 565; Lougheed Co. v. Suzuki, 216 App. Div. 487; 243 N. Y. 648; Larson v. Burroughs, 131 App. Div. 877; Mann v. Gobel, 221 App. Div. 775; Seymour v. St. Luke’s Hospital, 28 App. Div. 119; Condict v. Cowdrey, 139 N. Y. 273; Weiner v. Infeld, 116 Misc. Rep. 323; Windsor Investing Corp. v. McLaughlin’s Sons, 130 Misc. Rep. 730; 224 App. Div. 715.)

      Henry Vollmer, Jr., and George C. Wildermuth for respondents.
    The trial court should have directed a verdict for the plaintiffs. (Reis Co. v. Zimmerli, 224 N. Y. 351; Fieck v. McKenna, 115 App. Div. 701; Sibbald v. Bethlehem Iron Co., 83 N. Y. 378; Gilder v. Davis, 137 N. Y. 504; Collyer & Co. v. Moulton, 9 R. I. 90; Benedict v. Pincus, 134 App. Div. 555; Kellogg v. Olmsted, 25 N. Y. 189.) The contract entered into "between the plaintiffs and defendants, if valid, merely fixes a time when the contract was to be performed and does not make a condition precedent to the plaintiffs’ rights to their commissions, and as a matter of law referred to the time when the commission which had been earned by the plaintiffs should be paid to them. (Colvin v. Post Mortgage & Land Co., 225 N. Y. 510; Seymour v. St. Luke’s Hospital, 28 App. Div. 119; Larson v. Burroughs, 131 App. Div. 877; Levy v. Forster, 224 App. Div. 465; Morgan v. Calvert, 126 App. Div. 327; North Sea Developments, Inc., v. Burnett, 228 App. Div. 449; Coughlan & Co. v. Frankel, 216 App. Div. 565.) The voluntary releasing of the vendee by the vendor from his contract, which contract might have been enforced, does not preclude the broker from the recovery of his commissions. (Zittel & Sons v. Schwartz, 192 App. Div. 353; Nuer v. Jaffe, 179 App. Div. 37; Sibbald v. Bethlehem Iron Co., 83 N. Y. 378; Phillips v. Kraft, 136 App. Div. 859; McQuillan v. Carpenter, 72 App. Div. 595; Pullich v. Casey, 43 App. Div. 122; Corbin v. Mechanics & Traders Bank, 121 App. Div. 744; Alt v. Doscher, 102 App. Div. 344; Slocum v. Ostrander, 141 App. Div. 380; 205 N. Y. 617; Gilder v. Davis, 137 N. Y. 506.)
   Kellogg, J.

The defendants, on December 9th, 1925, entered into a written contract with Harry F. de Riesthal and Charles E. Crawford, whereby the former agreed to sell to the latter certain real estate at a named price per acre, totaling approximately $124,000 for the entire acreage. The sum of $10,000 was presently paid; $30,000 was made payable on April 9th, 1926, when the deed was to be delivered; the balance was to be paid by the execution and delivery of a purchase-money mortgage. The plaintiffs, Amies and Stephen J. Hines, whose estate is represented by the plaintiff J. Emma Hines, were a brokerage firm, doing business as Amies & Hines. They introduced de Riesthal and Crawford to the defendants, by whom they were accepted as purchasers ready, willing and able to buy. Simultaneously with the execution of the contract of sale, the defendants executed and delivered to Amies & Hines a writing recognizing the employment of the partners as their agents. The writing stated that we agree to pay for their services in bringing about such sale the sum of Five Thousand ($5,000) Dollars, one-half of which is paid this date and the balance to be paid on the closing of title.” The closing of title was adjourned from April 9th to June 1st, 1926, when de Riesthal and Crawford, for lack of funds, declined to complete the purchase. Accordingly, it was agreed between the buyers and the sellers that the sellers might retain the $10,000 already paid, and that the obligations of the contract should otherwise cease. In this action a recovery of $2,500, the balance of the commissions remaining unpaid, is sought.

Self-evidently the writing delivered to Amies & Hines does not integrate the original contract of employment made by them with the defendants; nor is it an exclusive memorial of the defendants’ promises originally made. The defendants recognize ” Amies & Hines as the agents who brought about the sale of our farm to de Riesthal and Crawford, with whom a contract is entered into this day.” Here is an acknowledgment of a prior employment of Amies & Hines to render services now already performed; not a memorandum of a contract yet to be performed. Nor can the writing bind the brokers, who accepted it, as the integration of a new contract entered into on the day of its making. The brokers, having already performed the services they had undertaken, were presently possessed of a chose in action entitling them to- recover commissions according to the express or implied terms of an agreement precedently made. Therefore, a new agreement, involving a surrender of the chose in action and the substitution of a promise to pay upon new terms, without consideration paid, would have been unenforcible. (Reis Co. v. Zimmerli, 224 N. Y. 351.) Not being conclusive upon the plaintiffs, as an exclusive memorial of the original contract, or as an embodiment of the terms of an enforcible contract newly made, the writing, as to the defendants, was likewise inconclusive. It may have been intended to have force as a written admission of the defendants’ original promise. Also, the acceptance of the writing by the brokers may have constituted an admission by them that the writing correctly stated the terms of the original contract of employment. However, regarded as admissions, neither the writing nor its acceptance conclusively bound the parties to the action. For these reasons, resort to parol proof was reasonable and necessary, in order that the terms of the original contract of employment might be determined.

Proof was given by the plaintiffs that the defendants, at the time when the contract of employment was made, unconditionally promised to pay the brokers the sum of $5,000 as their commissions for procuring a sale. Proof was given by the defendants that, at the very moment of employment, the defendants agreed to pay and the brokers agreed to accept the sum of $5,000, “ half on the contract and half on the closing of the deal,” as stated by the defendant Johanna Wesnofske; “ twenty-five hundred to get when we draw the contract and the other half they get when they close the deal, after the deal is closed,” as stated by the defendant John Wesnofske. The testimony of the defendants is in precise accord with the writing delivered to the brokers whereby the defendants admitted an obligation to pay one-half of the commissions on the closing of title.” The trial judge charged the jury that the plaintiffs might recover if the defendants unconditionally promised to pay the sum of $5,000 for commissions; that they might not recover if the defendants promised to pay $2,500 on the signing of the contract, and “ the other half of it when the title was closed.” The jury, in reporting a verdict for the defendants, necessarily found that- the agreement, as stated by them, was the agreement entered into. As the Appellate Division reversed on the law only, we must assume it to have been the established fact that the defendants promised to pay the balance of the commissions, or $2,500, on the closing of title,” and not otherwise. The first question to be decided is whether or not this was a promise to pay upon a condition which has not been fulfilled; the second, whether or not the fulfillment of the condition, assuming that the promise was conditional, has been waived.

The employment of such words as “ when,” after,” or as soon as,” clearly indicate that a promise is not to be performed except upon a condition. (Williston on Contracts,vol. 2, § 671.) Promises to pay broker’s commissions, for the procurement of sales of real estate, are conditional when expressed to be performable “ on the day of passing title ” (Leschziner v. Bauman, 83 N. J. L. 743); “ when the sale is completed ” (Sams v. Olympia Holding Co., 153 Wash. 254); upon delivery of the deed and payment of the consideration” (Tarbell v. Bomes, 48 R. I. 86); at settlement ” of the total consideration (Simon v. Myers, 284 Penn. St. 3); when the sale is consummated ” (Alison v. Chapman, 36 Cal. App. 759); at the date of passing title ” (Baum v. Goldblatt, 81 Penn. Sup. Ct. 233); “ at the time of the consummation ” of the sale (Morse v. Conley, 83 N. J. L. 416); if the deal is completed ” (Pratt v. Irwin, 189 S. W. Rep. 398 [Mo.]); if the deal now pending ” is consummated (Goodwin v. Siemen, 106 Minn. 368); only when the seller ” has received her full purchase price” (Norris v. Walsh, 71 Col. 185). In Alder v. Boyle (4 Mann. G. & S. 635) the agreement was to pay an agent, for the procurement of an exchange of advowsons, the sum of £100, “ one-third down, the remaining two-thirds when the abstract of conveyance is drawn out.” The third party failed to deliver his abstract to the defendant and the exchange fell through. It was held that commissions were not recoverable, Wilde, C. J., saying: “ It appears to me to be perfectly plain, that the money was to be paid only upon the happening of an event that has not occurred.” It has been suggested that a promise to pay “ when ” a named event happens, or “ upon ” the happening of the event, may be differentiated from a promise to pay “if” the event happens; that the promise to pay is absolute, and the words “ when ” or “ upon ” refer only to the time of performance. Certainly, whether the one construction or the other be correct, the result must be the same; since, if the event does not befall, or a time coincident with the happening of the event does not arrive, in neither case ■may performance be exacted. Nor will it do to say that a promise to pay “ on the closing of title ” is a promise to pay on the date fixed by the contract of sale for the closing of title. No such thought is expressed by the words. It is the event itself, not the date fixed for its happening, which makes the promise to pay performable. We think that reason and authority compel the conclusion that we have here a promise to pay a broker upon a condition which has not been fulfilled.

The question remains whether the condition qualifying the promise, that it should become performable only upon “ the closing of title,” has remained unfulfilled, because of any fault upon the part of the defendants. If a promisor himself 'is the cause of the failure of performance of a condition upon which his own liability depends, he cannot take advantage of the failure. (Williston on Contracts, vol. 2, § 677; Dolan v. Rodgers, 149 N. Y. 489; Matter of Casualty Co. [Bliss Co. Claim], 250 N. Y. 410, 419.) “ It is a well-settled and salutary rule that a party cannot insist upon a condition precedent, when its non-performance has been caused by himself.” (Young v. Hunter, 6 N. Y. 203.) It is as effective an excuse of performance of a condition that the promisor has hindered performance as that he has actually prevented it.” (Williston on Contracts, vol. 2, § 677.) The American Law Institute, in its Restatement of the Law of Contracts ” (Tentative Draft No. 6, § 289), under the heading “ Excuse of Condition by Prevention or Hindrance,” says: If a promisor prevents or hinders the occurrence of a condition, or the performance of a return promise, and the condition would have occurred or the performance of the return promise been rendered except for such prevention or hindrance, the condition is excused, and the actual or threatened non-performance of the return promise does not discharge the promisor’s duty.” The doctrine is purely one of waiver; active conduct of the conditional promisor, preventing or hindering the fulfillment of the condition, eliminates it and makes the promise absolute. No such doctrine can be efficacious to compel positive action by the promisor to bring about the performance of the condition. For that result the implication of a promise would be requisite. The vendor of property makes no contract with his broker to procure from the vendee the performance of a contract of sale. (Fox Co. v. Wohl, 255 N. Y. 268.) The situation justifies no implication to that end, for the broker, in placing reliance upon the self-interest of the vendor in procuring performance from the vendee, is ordinarily secure. On principle, then, the duty of a vendor to his broker is fulfilled if he remain passive and neutral; the condition, upon which the payment of commissions is made to depend, is waived only where the vendor is active to prevent or hinder its performance. The principle has been applied in many jurisdictions.

It has been very generally held that a vendor is under no duty to his broker to enforce specific performance by the vendee, when commissions are conditioned upon performance; that the vendor may accept forfeiture by the vendee, retain the down payment made, and not become liable thereby to pay his broker. (Ash v. Oppman, 199 Ill. App. 573; Sams v. Olympia Holding Co., supra; McPhail v. Buell, 87 Cal. 115; Dunne v. Colomb, 192 Cal. 740; Laird v. Elliott, 219 S. W. Rep. 499 [Tex.]; Norris v. Walsh, supra; Simon v. Myers, supra; Seymour v. St. Luke’s Hospital, 28 App. Div. 119.) The decisions in Haber v. Goldberg (92 N. J. L. 367) and Dermody v. New Jersey Realties, Inc. (101 N. J. L. 334) are not necessarily at variance with the decisions cited. In the first case, the vendor sued the vendee and obtained damages for non-performance. In the second case, the vendor was not content to accept a forfeiture; in addition to retaining the down payment made, he exacted and received, upon a settlement, a substantial sum in lieu of damages. In each case, the vendor made use of the contract, secured for him by his broker, to obtain an advantage from the defaulting vendee. Although he did not secure actual performance of the contract, he received, in the one case, an award representing the benefit lost; in the other, an agreed payment which presumably measured it with approximate accuracy. It might well have been reasoned that the precise equivalent of performance was received in each case; therefore, that the condition had in effect been performed. However that may be, the two cases do not derogate from the principle that to establish a waiver by a vendor of a condition of payment of commissions to his broker, viz., that an actual sale be consummated, there must be a positive act by the vendor hindering or preventing performance.

In this instance, on the day fixed for the closing of title, as postponed by mutual agreement, the vendees declined to proceed with performance. The forfeiture, unequivocally declared by the vendees, was accepted by the vendors. True, the parties entered into a new agreement whereby the vendors were to retain the $10,000 previously paid and the vendees were to be released from their contract obligations. However, the vendors received from the agreement no right or thing which the law had not already given them, viz., the sum of $10,000 and the right to retain it. The defendants, therefore, neither prevented nor hindered performance. Non-performance was already, without their aid, an established fact. Passive acquiescence in a declared • default and its consequences was not an act of prevention or hindrance. Neither did the defendants receive an additional advantage, bargained for in lieu of non-performance. Consequently a case of waiver was not made out. The condition upon which payment was made to depend, not having been performed or waived, no recovery may be had.

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

Crane, J.

(dissenting). The defendants were the owners of seventy acres of farm land situated at Hieksville, Long Island, which they sold to de Riesthal and Crawford for $124,000, of which $40,000 was to be paid in cash, and the rest secured by bond and mortgage. Amies & Hines were the real estate brokers putting through the deal, for which the usual commission of five per cent would have been $6,200. After some bickering, the brokers agreed to take $5,000 “ as a flat commission.” When the contract was signed and executed, the brokers took $2,500 in part payment, and agreed to wait for the balance until title was closed. The defendants, at the time of executing the contract with the purchaser, also signed the following memorandum:

“ We, the undersigned, do hereby recognize Amies & Hines, of 163-18 Jamaica Avenue, Jamaica, N. Y„ as the agents who brought about the sale of our farm to de Biesthal and Crawford, with whom a contract is entered into this day, and we agree to pay for their services in bringing about such sale the sum of Five thousand ($5,000) Dollars, one-half of which is paid this date and the balance to be paid on the closing of title.”

The purchasers procured adjournments from time to time, and finally entered into an agreement with the defendant owners to be relieved of their contract. One of the purchasers, de Riesthal, testified that although they were financially able to carry out the contract, they did not have the available cash to meet the required payment. He said that they had sufficient property at that time, but not sufficient cash, yet they did not want to be sued for specific performance. Under these circumstances, the defendants agreed, through their lawyer, to take $10,000 as liquidated damages, keep their property, and exchange releases with the purchasers. The release is in evidence and is mutual, signed by all parties. The purchaser releases the seller, and the seller terminates the contract. The brokers knew nothing about this release and- were not consulted.

What liquidated damages did the defendants, sellers, suffer? Through the efforts of the brokers, they have received $10,000 cash in settlement of something. Did this include the commission to be paid to their brokers, or did it represent their profit on the transaction? Whatever it is, the defendants by a formal written agreement have substituted one contract for another, and in place of giving a deed and taking mortgages, have kept their property and taken cash. Under these circumstances, are the brokers entitled to their commission?

Brokerage to be paid on the closing of title does not as a matter of law create a condition precedent. Whether it merely fixes the time of payment of a sum admittedly due, or whether the commission is dependent upon the passing of title is generally a question of fact. (North Sea Developments, Inc., v. Burnett, 254 N. Y. 374.) Ordinarily, a broker is entitled to his commission when the parties have agreed upon terms and executed the contract of sale. His work is then done, and he is entitled to his pay. If the parties agree otherwise, it is an exception to this general rule. The fact that a purchaser may fail or refuse to carry out his contract is a risk which ordinarily the seller, and not the broker, assumes. The law furnishes protection to the seller, even beyond that which is ordinarily furnished vendors of securities or other personal property. (Colvin v. Post Mortgage & Land Co., 225 N. Y. 510.) The assertion, therefore, that the postponement of the payment of an earned commission to the closing of title creates as a matter of law a condition precedent does not receive my acceptance. It is a question of fact, not a question of law, and was such in this case.

Passing this point, however, and assuming that the commission was not to be paid unless title closed, the action of the defendants estops them from making such a claim. They have received the benefit of the broker’s services. Through his efforts they keep their property and $10,000 in cash, which they asserted paid all their damage. This sum was accepted as liquidated damages and the contract of sale canceled. Damages would ordinarily include the broker’s commission, and there is nothing in this case to indicate that the $10,000 was not accepted with this in view. There is no evidence that the property was worth more or less than the purchasers agreed to pay for it, or to indicate what damages the defendants suffered. We must, therefore, assume that it included the one element we do know constituted a liability, to wit, the broker’s commission. As before stated, the purchaser was not insolvent, but financially responsible; specific performance was to be avoided, and by the exchange of mutual releases the contract of purchase was canceled. The sellers participated in terminating the contract, and cannot now claim that the brokers did not earn their commission. The principle involved is clearly apparent when we change the incidents of the transaction and assume that the seller agreed with the purchaser to keep his property and accept $100,000 profit. Under such circumstances no one would insist that the broker lost his commission because title did not close. (Morgan v. Calvert, 126 App. Div. 327; Coughlan & Co., Inc., v. Frankel, 216 App. Div. 565; Haber v. Goldberg, 92 N. J. L. 367; Neff v. Schrader, 49 N. D. 213; Myers v. Buell, 142 Ill. App. 467.) In Dermody v. New Jersey Realties, Inc. (101 N. J. L. 334) it is said: Where a real estate agent produces a purchaser able to buy, who is accepted by the vendor, with whom he enters into a contract, but afterwards defaults and settles with the vendor by the payment of a sum of money as damages for his breach of the contract, the agent’s commission under his contract with the vendor is earned, notwithstanding it was stipulated to be paid at the time of passing title, which did not pass, because the contract of settlement substitutes payment of damages to the vendor, in the place of the purchase-money stipulated in the contract of sale and purchase, which contract was brought about by the agent’s services.” (See, also, Pinkerton v. Hudson, 87 Ark. 506; Tarbell v. Bomes, 48 R. I. 86.)

At least it would be a question of fact whether the settlement with the purchaser was to the advantage and profit of the defendants or whether the purchaser being unable to perform, the defendants in good faith merely accepted payment of the damage they had sustained. (Boysen v. Frink, 80 Ark. 254.)

As to the record before us and the exceptions which raise these various points of law: The Appellate Division reversed as a matter of law and directed judgment for the plaintiff upon the theory that the words of the brokerage contract merely postponed time of payment and did not create a condition precedent. We are agreed, I think, that these words at least, for the circumstances of this case, created a question of fact, and the matter should have been submitted to the jury as such. The trial judge held just the contrary, and charged the jury as matter of law that if the plaintiff stipulated that he was to be paid the other $2,500 when the title was closed, the title never having closed, that part of the commission was not earned and the verdict should be for the defendant.” To this an exception was taken. This was error. As above stated, the use of the word “ when ” may create a condition precedent having the significance of if,” or it may merely refer to the time of payment, the payment itself not being dependent upon the happening of any event, such as the closing of title. The question as to the intention of the parties in using the word •“ when ” is for the jury. The fact is that the contract says to be paid “ on the closing of title,” but I take it that the words “ on ” and “ when ” are here synonymous.

The Appellate Division, therefore, was justified in reversing the judgment for the defendant for this error in the charge, although a new trial should have been ordered instead of judgment for the plaintiffs directed.

This being so, the case should now go back for a new trial, and this matter of the settlement by the defendants submitted to a jury, under proper instructions, even though the point was not clearly raised in the trial record before us. The judgment should be reversed and a new trial granted, with costs to abide the event.

Cardozo, Ch. J., Pound and O’Brien, JJ., concur with Kellogg, J.; Crane, J., dissents in opinion in which Hubbs, J., concurs; Lehman, J., dissents on the ground that the seller released the buyer from his obligation.

Judgment accordingly.