text:
    In the Matter of Leo S. Sacharoff, Respondent, against Edward S. Corsi, as Industrial Commissioner, et al., Appellants. In the Matter of Emanuel Schiffman, Respondent, against Edward S. Corsi, as Industrial Commissioner, et al., Appellants.
    Argued April 11, 1945;
    decided May 24, 1945.

      Nathaniel L. Goldstein, Attorney-General (Orrin G. Judd, William F. McNulty and Irving Galt of counsel), for appellants in each proceeding.
    I. Section 13-d of the Workmen’s Compensation Law specifically empowers the Industrial Commissioner to remove physicians from the special compensation panel either for fee-splitting, misconduct or any other violation of subdivision 2, upon his own investigation or hearing. A hearing by a medical body, subject to decision upon review by the Industrial Council binding the Commissioner, is not required unless a complaint charging “ misconduct,” as differentiated from the other infractions, has been made to, the medical body. The statute plainly differentiates “ misconduct ” from the other infractions listed in subdivision 2. Except in the case of “ misconduct,” the Industrial Council has no power to con-elude the Commissioner in determining whether to effect removal for any prescribed cause on his own investigation or hearing. (Szold v. Outlet Embroidery Supply Co., 274 N. Y. 271, 303 U. S. 623.) II. The Commissioner may also exercise independent powers of removal under subdivision 2 with respect to ‘ ‘ misconduct,” unless a complaint has been made to and heard by a medical body and conclusively decided upon review by the Council. (People ex rel. Lodes v. Dept. of Health, 189 N. Y. 187; People ex rel. Morriale v. Branham, 291 N. Y. 312, 292 N. Y. 127.) III. Assuming that the statute prescribes two alternative methods of removal, either through a hearing by one body reviewable by another, or by a single official acting on his own hearing or investigation, it does not therefore offend constitutional rights of equal protection. (Barone v. Aetna Life Ins. Co., 260 N. Y. 410; Matter of Cary v. Binghamton City Council, 290 N. Y. 247; People v. Malavassi, 248 App. Div. 784, 273 N. Y. 460.) IV. The Commissioner’s determinations should have been reinstated by the Appellate Division.

      Albert Adams for respondents in each proceeding.
    I. A construction of section 13-d of the Workmen’s Compensation Law which deprives an accused physician of notice of charges and a hearing at which he may defend himself on the merits and grants to the Industrial Commissioner the power of summary revocation is arbitrary and undemocratic and violates the due process clause of the Constitution. (Matter of Bender v. Board of Regents, etc., 262 App. Div. 627; Matter of Donegan, 282 N. Y. 285; N. Y. Water Service Corp. v. Water P. & C. Comm.. 283 N. Y. 23; Morgan v. United States, 304 U. S. 1; National Labor Relations Board v. Prettyman, 117 F. 2d 786; Matter of Heaney v. McGoldrick, 286 N. Y. 38; National Labor Relations Bd. v. Sterling Elec. Motors, 112 F. 2d 63; Inland Steel Co. v. National Labor Relations Board, 109 F. 2d 9; Matter of Rouss, 221 N. Y. 81; Matter of Whitman No. 1, 225 N. Y. 1; People ex rel. Hayes v. Waldo, 212 N. Y. 156; Matter of Hilfer v. Board of Regents, 283 N. Y. 304.) II. Even if the expression “ reasonable investigation” should be deemed synonymous with “ hearing ” the statute would still he subject to the objection that it denies to a physician the equal protection of the laws.
   Lewis, J.

The process of administering the Workmen’s Compensation Law developed the fact that, if the statute was to serve the purpose for which it was designed, there must be available to injured employee-claimants medical care of first quality which is carefully regulated. (See Szold v. Outlet Embroidery Supply Co., 274 N. Y. 271 [opinion by Loughran, J.] at pp. 276-277.) To that end the Legislature made statutory provision for the creation of a list of licensed physicians authorized to render such medical care. (Workmen’s Compensation Law, § 13-b.) The problem common to the two proceedings now before us involves alleged infractions of statutory regulations by the two respondent physicians which led in the first instance to the revocation by the Industrial Commissioner of their authority to render medical care under the statute.

By the present proceedings under article 78 of the Civil Practice Act the respondents secured at Special Term orders annulling on procedural grounds the determinations by which . their names had been stricken from the panel of physicians authorized to render medical care to injured claimant-employees. The orders of Special Term were affirmed unanimously at the Appellate Division. We have permitted appeals in the two proceedings which were argued together.

The following events gave rise to the two proceedings: after hearings on notice to the respondent Sacharoff a Deputy Industrial Commissioner found him guilty (1) of violating Workmen’s Compensation Law, section 13-d, subdivision 2, paragraph (e), in that he had “ participated in the division, transference, assignment, rebating, splitting or refunding of a fee ” and (2) of “ misconduct ” in violation of section 13-d, subdivision 2, paragraph (a), by “ failing and refusing to take the stand and offer evidence and testimony in connection with an investigation conducted by the Deputy Industrial Commissioner ”. In the Schiffman proceeding, following a notice to that respondent that there was to be an investigation, he appeared and testified and thereafter was found guilty (1) of violating section 13-d, subdivision 2, paragraph (e), in that he had “ participated in the division, transference, assignment, rebating, splitting or refunding of a fee ” and (2) of misconduct ” in violation of section 13-d, subdivision 2, paragraph (a), in that he operated a medical bureau without having secured a medical bureau ■ license. Thereupon the authority of each respondent to render medical care to compensation claimants was revoked.

The determinations so made were annulled at Special Term upon the theory that to avoid discriminatory class legislation the statute, quoted infra, must be construed as having devised a single method of removal in which subdivision 2 of section 13-d was subject to and dependent upon subdivision 1 of the same section. The construction thus placed upon the statute led to a ruling at Special Term that, in the absence of proof that such revocations had been ordered in accord with subdivision 1, after hearings before a medical society or board and upon recommendation by such society or board subject to review by the Industrial Council, the Industrial Commissioner was without statutory power under subdivision 2 to revoke the authorizations under which the respondents had rendered medical care.

The statute with which our problem is concerned — section 13-d of the Workmen’s Compensation Law (as amd. by L. 1941, eh. 307). — provides:

13-d. Removal of physicians from lists of those authorised to render medical care.
1. The medical society or board that has recommended the authorization of physicians to render medical care under this chapter shall investigate, hear and determine all charges of professional or other misconduct by any authorized physician, as herein provided, under rules and procedure to be prescribed by the industrial council of the department of labor and shall report evidence of such misconduct, with their determination thereon, to the commissioner. Such investigation, hearing, report and determination may be made by the board of an adjoining county upón the request of the medical society of the county in which the alleged misconduct or infraction of this chapter occurred. The industrial council of the department may review the determination of such medical society or board, and on application of the physician accused must do so, and may reopen the matter and receive further evidence. The decision and recommendation of such industrial council shall be final, binding and conclusive upon the industrial commissioner.
2. The commissioner shall remove from the list of physicians authorized to render medical care under this chapter the name of any physician who he shall find after reasonable investigation is disqualified because such physician (a) has been guilty of professional or other misconduct or incompetency in connection with medical services rendered under this chapter; or
“ (b) 'has exceeded the limits of his professional competence in rendering medical care under this chapter or has made materially false statements concerning his qualifications in his application' for the recommendation of the medical society in the county in which his office is located, or of the board designated by it, or of a board as provided in section thirteen-b; or
“ (c) has failed to submit full and truthful medical reports to the commissioner, the industrial board, or the employer within the time limits provided in section thirteen-a, subdivision four, of this chapter with the exception of injuries which do not require more than ordinary first aid or loss of time beyond the working day or shift; or
“(d) has rendered medical service under this chapter for a fee less than fixed by the commissioner as the minimum rate in his locality; or
“(e) has participated in the division, transference, assignment, rebating, splitting or refunding of a fee for medical care under this chapter; or
“(f) has solicited, or has employed another to solicit for himself or for another the professional treatment, examination or care of an injured employee in connection with any claim under this chapter.
“ Nothing in this section shall be construed as limiting in any respect the power or duty of the commissioner to investigate instances of misconduct, either before or after investigation, by a medical society or board as herein provided, or to temporarily suspend the authorization of any physician that he may believe to be guilty of such misconduct.”

As we read the statute quoted above it gives to the Industrial Commissioner authority which thus far has been denied in the two proceedings at bar. In reaching that conclusion, with special reference to subdivision 2 of section 13-d, we adopt the ruling which was decisive in Allen v. Stevens (161 N. Y. 122 at p. 145 “ * * * every provision of the statute was intended to serve some useful purpose, and in obedience to that rule, we now inquire whether this clause of the statute does not have a useful place therein, and yet- is not in conflict with the letter and spirit of the rest of the statute.” (See, also, Palmer v. Van Santvoord, 153 N. Y. 612, 616; People v. Dethloff, 283 N. Y. 309, 315.)

The Legislature has made the Industrial Commissioner responsible for the proper administration of the Workmen’s Compensation Law. (Labor Law, § 21, subd. 2.) Subsequent to that delegation of authority there was brought to the attention of the Legislature the fact that in the course of administering that law certain evils had developed, detrimental alike to worker and employer, which affected adversely the quality of medical care made available to injured claimants. (Szold v. Outlet Embroidery Supply Co., 274 N. Y. 271, 276-277, supra.) The remedy for such evils adopted by the Legislature (L. 1935, ch. 258, as amd. by L. 1941, ch. 307) included a statutory grant to the Industrial Commissioner of independent authority under subdivision 2 of section 13-d to deal officially with those forms of professional misconduct, specifically referred to in that subdivision, which had seriously hamperéd the proper administration of the law. (See Benjamin, Administrative Adjudication [1942], Vol. 6, p. 45, note 19.)

We are led by the unequivocal language of the statute to conclude that, in the absence of charges of professional or other misconduct filed against the respondents with a medical society or board which had set in motion procedure outlined in subdivision 1 of section 13-d, the Industrial Commissioner was not required to withhold — perhaps indefinitely — the investigation he was authorized to make under subdivision 2. Indeed, by the last sentence of section 13-d the Legislature has enjoined us to treat the method of removal by the Industrial Commissioner prescribed by subdivision 2 as independent of action by a medical society or board under subdivision 1: Nothing in this section [§ 13-d] shall be construed as limiting in any respect the power or duty of the commissioner to investigate instances of misconduct, either before or after investigation by a medical society or board as herein provided * * (Emphasis supplied.)

Under the caption of section 13-d — “ Removal of physicians from lists of those authorised to render medical care ” — the Législature has prescribed two forms of procedure by which such removal may be accomplished. We are not convinced that these two forms of procedure are to be merged. The procedure outlined in subdivision 1 of section 13-d — not availed of in the present proceeding — contemplates a hearing by the medical society or board with a right of review by the Industrial Council, while the procedure under subdivision 2 contemplates action by the Industrial Commissioner after reasonable investigation ”. In that connection it is suggested that, in the absence of a standard to determine which of the two procedures was to be pursued in a given case, a physician whose professional conduct was the subject of inquiry would suffer impairment of his constitutional right to equal protection of the laws. Although the two concurrent procedures may be diverse, no denial of equal protection of the laws results from such diversity. Under both subdivisions all physicians in the same class are “ * * * treated alike under like circumstances and conditions, both in the privileges conferred and in the liabilities imposed.” (People v. Havnor, 149 N. Y. 195, 205; Hayes v. Missouri, 120 U. S. 68, 72.)

In each case the orders should be reversed and the proceeding remitted to the Special Term for further consideration in accordance with this opinion, without costs.

Lehman, Ch. J., Loughran, Conway, Desmond, Thacher and Dye, JJ., concur.

Orders reversed, etc.


source: Caselaw Access Project

author: Dye, J.

license: Public Domain

text:
    In the Matter of William F. Bleakley et al., as Commissioners Appointed to Investigate the Administration of the Workmen’s Compensation Law of the State of New York, Respondents, against James F. Schlesinger, Appellant.
    Argued April 9, 1945;
    decided June 7, 1945.

      Jacob J. Rosenblum, Eugene L. Garey, Arthur A. McGivney and Wm. Francis Corson for appellant.
    I. There has been no " refusal ” to produce records, and, therefore, there can be no commitment under section 406 of the Civil Practice Act on this ground. (Boorman v. Atlantic and Pacific R. R. Co., 78 N. Y. 599; Hopson v. United States, 79 F. 2d 302; Munroe v. United States, 216 F. 107; Palmer v. United Press, 67 App. Div. 64; In re Weisberger, 43 F. 2d 258; In re Nevin, 278 F. 601; In re Taylor, 114 F. 607; In re Williams Supply Co., 77 F. 2d 909; People ex rel. Taylor v. Forbes, 143 N. Y. 219.) H. The witness cannot be compelled to answer the five questions as directed by the Appellate Division or to state the reasons for his inability to produce the books because the answers to such questions would incriminate him. (Counselman v. Hitchcock, 142 U. S. 547; Matter of Doyle, 257 N. Y. 244; People ex rel. Taylor v. Forbes, 143 N. Y. 219; People ex rel. Lewisohn v. O’Brien, 176 N. Y. 253; The People v. Hackley, 24 N. Y. 74; People v. Sharp, 107 N. Y. 427.) III. There is no applicable immunity statute, and therefore the witness cannot be compelled to give self-incriminating testimony. (Matter of Doyle, 257 N. Y. 244.)

      Herman T. Stichman, Carl E. Heilman and Herman Cohen for respondents.
    I. The rule that officers of a corporation subpoenaed as such to produce corporate boobs in their custody may not refuse to produce them because of possible self-incrimination would be completely abrogated if production were excused because of an unsupported claim of inability such as that made by appellant. Officers of a corporation must produce its records under process regardless of possible effects upon their personal interests. (Wilson v. United States, 221 U. S. 361; Essgee Co. v. United States, 262 U. S. 151; Pray v. Blanchard Co., 95 App. Div. 423; People v. Buffalo Gravel Corporation, 195 N. Y. S. 940; United States v. Austin-Bagley Corp., 31 F. 2d 229, 279 U. S. 863; United States v. Illinois Alcohol Co., 45 F. 2d 145, 282 U. S. 901.) II. The evidence was undenied that appellant, a corporate officer, last had possession ,of the books of the corporation which are sought. His unsupported allegation of inability to produce is insufficient and his conduct constitutes a refusal. (Fenlon v. Dempsey, 50 Hun 131; Perrow v. Lindsay, 52 Hun 115; Press Publishing Co. v. Associated Press, 27 Misc. 90, 41 App. Div. 493; Matter of Holley Manufacturing Co. v. Venner, 74 Hun 458, 143 N. Y. 639, 86 Hun 42; Union Trust Co. v. Driggs, 49 App. Div. 406; McCreery v. Ghormley, 6 App. Div. 170; Palmer v. United Press, 67 App. Div. 64; Dittmar v. Michelson, 281 F. 116; Oriel v. Russell, 278 U. S. 358; Matter of Epstein, 206 F. 568, 210 F. 236; In re Williams Supply Co., 77 F. 2d 909, 296 U. S. 612; In re Arctic

      Leather Garment Co., 89 F. 2d 871.) III. The right to compel production necessarily implies the correlative obligation to explain a failure to produce. Any other result would be unreal and defeat the rule requiring production of corporate books by corporate officers such as this appellant. (United States v. Goldstein, 105 F. 2d 150.) IV. We would have preferred an order providing for the commitment of the appellant until he produced the books, and have no objection to a modification of the present order so that it shall so provide.
   Dye, J.

The issue here is whether a corporate officer may be committed for contempt as provided in section 406 of the Civil Practice Act for refusing to produce certain corporate books shown to have been last seen in his possession on the ground that he is unable to do so, such officer having declined to answer questions calculated to explain his inability to produce for the reason that the answers might tend to degrade or incriminate him.

The circumstances creating the question are briefly summarized as follows:

On January 4, 1943, the Governor of the State, pursuant to section 8 of the Executive Law, appointed the respondents herein as Moreland Commissioners to examine and investigate the administration of the Workmen’s Compensation Law of the State of New York and empowered the commissioners to subpoena and enforce the attendance of witnesses and to require the production of any books or papers deemed relevant or material.

In the course of the investigation the commissioners undertook to look into the affairs and business dealings of Bendiner and Schlesinger X-Ray Laboratories, Inc., with particular reference to its practice of dividing its fees with referring physicians for X rays made of patients receiving workmen’s compensation benefits.

An examination was made of the corporate files and records, which, among other things, revealed that an item record of the fee sharing of “kickbacks ” made each year had been kept in a black book; that these yearly books were in the possession of the appellant, who was secretary-treasurer and administra-' tive head of the subject corporation, as recently as January, 1943. Under date of May 4, 1943, the commissioners issued a subpoena duces tecum addressed to the appellant, as such secretary-treasurer of the Bendiner and Schlesinger X-Ray Laboratories, Inc., which directed him to appear and testify and to produce “ all books, ledgers, documents and writings recording all details of disbursements of cash from January 1, 1940 to date The witness duly appeared, but refused to produce the black books containing the record of kickback payments, saying: “ I am unable to produce them ”.

The aforesaid commission then sought an explanation of the refusal by propounding certain questions to the witness, which with his respective answers are taken from the record as follows : “ Q. Commissioner Bleakley has directed, and I now direct you, to produce those books, Will you produce them? A. I said I am unable to produce them. Q. Why are you unable to produce them? A. I refuse to answer on the grounds that it may tend to incriminate or degrade me. Q. Have you turned those books over to anybody? A. I refuse to answer that question upon the same grounds. Q. Do you know where those books are today? A. I refuse to answer that question upon the same grounds. Q. Are you acting upon the advice of anyone in refusing to produce them? A. I refuse to answer that question.”.

An application was thereupon made at Special Term for an order directing the appellant Schlesinger to show cause why a warrant of attachment should not be issued committing him to jail until he produced the books. The Special Term entered an order denying the application, which the Appellate Division reversed and committed Schlesinger, giving him five days, however, in which to answer stated questions of the general tenor of the questions above quoted, on the ground that his refusal either to produce the books or explain his failure to do so was unreasonable within the meaning of section 406 of the Civil Practice Act.

It should be pointed out that the appellant claims no exception under the long-recognized rule that a corporate officer can not refuse to produce its books and records on the ground that the disclosure might incriminate the corporation (United States v. Austin-Bagley Corporation, 31 F. 2d 229), or that the contents of such books might incriminate an officer thereof (Wilson v. United States, 221 U. S. 361), but' seeks to justify his tenuous position by claiming that distinction exists between his refusal to produce the books on the ground that they might incriminate him, on the one hand, and his failure to produce the 'books because he is “ unable to ” plus his unwillingness to explain his inability to produce them because of his resolute conclusion that the answer would tend to incriminate him as an individual on the other. (N. Y. Const., art. I, § 6.)

The purpose of the subpoena was the production of certain corporate books last seen in the appellant’s possession in January of 1943, which possession he does not deny. Neither is there any dispute that the custodial function was an incident of his duty as a corporate officer nor that he was bound to keep the books safely and produce them on demand. The appellant’s escape-mechanism offered in defense of his refusal to produce, while ingenuously simple in its conception, if given validity, could very well circumvent the most diligent efforts of public officials in the investigation of corporate activities. When one accepts a position as an officer of a corporation, he must expect to perform, diligently and unequivocally, the ordinary and usual incidents of the office. Not the least of these official obligations is to respond promptly to reasonable, regulatory rules enacted by the State, which cannot be avoided simply because the task is unpleasant and fraught with unhappy consequences to him as an individual. A corporate officer, as an individual, does not lose the protection guaranteed him by the Constitution; nevertheless, while performing corporate functions, officers must abide by and conform to the laws applicable to the corporation. To allow him to determine that the quality and effect of his answer as to his inability to produce the books would tend to degrade or incriminate him as an individual would create an immunity for the corporation which is neither found in the Constitution nor authorized by statute.

Production of the books is a reasonable corporate requirement and the appellant herein, as a corporate officer, must either produce the wanted corporate books or give a reasonable explanation of his inability to do so, with the alternative of commitment as ordained by section 406 of the Civil Practice Act.

That does not mean, however, that in the absence of an immunity statute, and here there is none, he should be compelled to give answers that would degrade or incriminate him as an individual within the meaning of the Constitution unless he chooses that as an alternative to production of the books.

The orders should be reversed and the matter remitted to Special Term with directions to issue a warrant committing the respondent to jail, there to remain until such time as he produces the books or gives a reasonable explanation of his inability to do so.

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

Ordered accordingly.


author: Lehman, Ch. J. Dye, J.

text:
    Ethel J. Williams, Respondent, v. Long Island Railroad Company, Appellant.
    Argued March 7, 1945;
    decided June 7, 1945.

      Ralph E. Hemstreet and Louis J. Carruthers for appellant.
    Plaintiff was a trespasser as a matter of law. The complaint should have been dismissed at the close of the plaintiff’s case. There was no proof of negligence, willful or otherwise. (Heskell v. Auburn L. H. & P. Co., 209 N. Y. 86.)

      Robert McGowan Smith and James S. Brown for respondent.
    The plaintiff was not a trespasser as a matter of law. There was proof of negligence. (Illinois Central R. v. Hammer, 72 Ill. 347; Grimshaw v. Lake Shore & M. S. Ry. Co., 205 N. Y. 371; Barrett v. Brooklyn Heights Railroad Co., 188 App. Div. 109; Lombardi v. New York State Railways, 224 App. Div. 438; Tompkins v. Interborough Rapid Transit Co., 88 Misc. 20; Gardner v. Central Park, N. & E. R. R. R. Co., 218 N. Y. 753; Futoransky v. Nassau Electric R. R. Co., 227 N. Y. 638; Chicago, M. & St. P. Ry. Co. v. Harrelson, 14 F. 2d 893.)
   Lehman, Ch. J.

At the terminus.of the defendant’s railroad, the plaintiff alighted safely from the train and proceeded along the platform towards the stairs leading to the street level. As she walked along the platform she saw, through the window of a car in front of the ear she had left, a copy of a newspaper which her grandson, who accompanied her, wanted to read. The doors of the car were still open and the lights in the car had not been turned off. The plaintiff stepped into the car through one of the open doors. So far as appears there were no passengers in the car, but according to the plaintiff’s testimony, the man “ who collected the tickets ” was there, gathering up newspapers the passengers had left. Without objection from him the plaintiff picked up the paper she had seen and started to leave the car. As she was stepping from the car, the train “ gave a lunge ” and the plaintiff was thrown down on the platform by the unexpected movement. She recovered judgment for the consequent damages which the Appellate Division affirmed by a divided court.

The defendant railroad company by its contract of carriage assumed an obligation towards the plaintiff to transport the plaintiff carefully to its terminus and to furnish a safe place for the plaintiff to alight and safe means of egress from the railroad premises. After the railroad company had transported the plaintiff to its terminus and after the plaintiff had alighted safely upon the platform, the railroad company’s obligation was only to furnish the plaintiff with a safe means of egress from the station. Her return to the train was for a purpose which had no connection with the defendant’s obligations to transport her. The defendant had not invited her to return to the train after the other passengers had left and was under no duty to give her a second opportunity to leave the train safely or to warn her that the train might start suddenly unless it knew or at least had reasonable ground to believe that, without invitation, a passenger who had left the train would return to the train and would expect a warning before the train was backed out of the terminus.

It does not appear that the employee of the railroad company “ who collected the tickets ” was clothed with authority to invite the plaintiff to return to the train or to sanction her return after the passengers had left, and his failure to object to the plaintiff’s presence there, even assuming that he knew that she had returned, did not constitute an invitation or a license which would impose an additional obligation upon the defendant — nor does it appear that he was employed to perform any duty connected with starting or stopping the train. Knowledge by him that the plaintiff was present would not under these circumstances be imputed to the defendant. We find no basis then for a finding that the plaintiff’s injuries were caused by the defendant’s negligence.

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

Dye, J.

(dissenting). There was a clear issue of fact in this case properly submitted to the jury. When the plaintiff voluntarily left the station platform where she had a right to be as a passenger and without objection re-entered the defendant’s open and lighted car in charge of one of its trainmen, reasonable men might well differ as to whether as a matter of fact, she thereby became a trespasser or a licensee; and when she was injured while stepping from the train to the platform by a sudden movement of the train, the negligence of the defendant and the contributory negligence of the plaintiff also became issues of fact. We cannot now, under all the circumstances, say as a matter of law that there was no evidence to support the verdict of the jury.

The judgment appealed from should be affirmed, with, costs.

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

Judgments reversed, etc.


text:
    In the Matter of the Accounting of Bank of New York, as Trustee under the Will of Andrew R. Culver, Deceased. Bank of New York, Appellant; Rush Taggart, as Special Guardian for Helen M. Greene and Others, Infants, et al., Respondents.
    Argued April 2, 1945;
    decided June 7, 1945.

      George W. Martin and Thomas B. Fenlon for appellant.
    I. The decree below arbitrarily limits the general power of appointment. (Matter of Roth, 291 N. Y. 1; Estate of Cary, February 17, 1938; Irving Trust Co. v. Hitt, N. Y. L. J. July 25, 1940; Matter of Barker, 230 N. Y. 364.) II. The parties did not intend that the commission letter should apply to trusts to be set up by the daughter’s will. (Matter of Stewart, 140 Misc. 155.)

      Rush Taggart, special guardian for Helen M. Greene and others, respondents.
    . I. The trustee is debarred by its contract with the original testator from receiving commissions at the rate fixed in the donee’s will. The meaning of the contract was clear. (Bishop v. Bishop, 257 N. Y. 40; Matter of Harbeck, 161 N. Y. 211; Genet v. Hunt et al., 113 N. Y. 158; II. Even if there be an ambiguity in the contract, it must be resolved against the trustee. Williston on Contracts [Rev. ed.], § 621; Taylor v. United States Casualty Co., 269 N. Y. 360; Raw Silk Trading Co., Inc., v. Katz, 201 App. Div. 713; Bristol v. Cornell University, 237 App. Div. 771.)

      Edward Hymes, Jr., Lester R. Bachner and Samuel S. Koenig, special guardian, for Donald Kennedy and another, respondents.
    I. The will of the donee of a power -is annexed to the will of the donor, and the two documents read together. Applying this principle to the instant case, it clearly appears that the donee could not modify or abrogate the agreement between the -donor and the trustee as to commissions. (United States v. Field, 255 U. S. 257; Matter of Terwilligar, 135 Misc. 170, 230 App. Div. 763; Matter of Wickham, 139 Misc. 729; Hillen v. Iselin et al., 144 N. Y. 365.) II. Despite the provisions of the donee’s will, the trustee is not entitled to commissions on principal or to commissions on income at the prevailing statutory rates. (Matter of Coutts, 260 N. Y. 128; Matter of Williams, 172 Misc. 430; Matter of Reckford, 181 Misc. 211; Matter of Hayden, 172 Misc. 669.)
   Dye, J.

The Bank of New York, during Andrew R. Culver’s lifetime and prior to the execution of his will, wrote him a letter as follows:

“ October 4, 1900.
Andrew R. Culver, Esq.
Dear Sir,
This Company will accept and discharge the duties of Executor and Trustee under the will you have left with us or any will which you may substitute for the same and will charge the following commissions: viz, The legal commissions upon the Principal and Income received and paid over by us as Executor at the following rates, i.e. 5% on $1,000, 2%% on $10,000, and 1% on the balance to be charged when this Company is discharged as Executor. No further commission will be charged upon the Principal. This Company will charge as Trustee annually upon each years gross income collected the legal commissions as follows: viz, 5% on $1,000, 2%% on $10,000; and 1% on the balance.
Yours truly,
(Signed) Henry Parish,
Prest.”

Thereafter Andrew R. Culver executed his will, dated April 15, 1903. He died in 1906. The will was duly admitted to probate, and the bank was named as executor and trustee and has been acting as such.

By the terms of his will the decedent set aside one half of his estate in trust for the life use of his daughter, Fanny C. Buxton and provided that upon her death “ the principal thereof and any income which has not been paid to her shall go to such person or persons and in such proportions as she may direct by her will, which I hereby empower her to make.” Provisions were made to cover the contingency of her death without a will exercising the power of appointment and disposition.

Fanny C. Buxton died July 13, 1942, leaving a last will and testament by which she devised her estate equally in trust for her'surviving son and daughter. She then directed: “ Ninth: Under and pursuant to any and all powers of appointment by will or otherwise, which are now or may hereafter be vested in me by virtue of the Last Will and Testament of my father, Andrew R. Culver, I direct that all real and personal property held in trust at the time of my death by the Bank of New York of the City of New York, as trustee under the Last Will and Testament of my father, Andrew R. Culver, deceased, and with respect tó which I have' the power of appointment or disposition, shall be divided as soon as practicable after my decease by said Bank of New York of the City of New York, as trustee under the Last Will and Testament of my father, Andrew R. Culver, deceased, into two equal parts or shares.”

The Bank of New York and one Harriette Burch were named, as executors and provision for their commissions was made in the following language: “ I hereby expressly direct, and provide that the commissions to be paid to my corporate executor and corporate trustee above named shall be commensurate and equal to a full commission allowed to a sole executor and trustee under the statute of the State of New York in effect at the time such commissions are due and payable, * * *.”

Upon its accounting as trustee under Andrew R. Culver’s will the Bank of New York asked for a-ruling as to whether it would be entitled to receiving commissions when the trust property was paid over to itself and Mrs. Burch as cotrustees under the Fanny C. Buxton will, which the Surrogate answered by limiting it to the rate of commissions specified in its letter of October 4,1900. This we think was error.

In the distribution of estates, by will, the intention of the testator is the controlling factor. This intention is best arrived at from the language of the will and, when in harmony with the policy of the State as expressed in its statutes, will be given effect. In the instant case, there is no difficulty in arriving at the intention of the testator, Andrew R. Culver. He was no doubt well satisfied with the proposal submitted by the bank in reference to its commissions as it led to its appointment as executor and trustee. The trust created by his will was clear and was given effect. There was no expression of desire or intention to limit his daughter in the exercise of the power of appointment granted - to her. When his daughter, Fannie'. C. Buxton, exercised the power of appointment, she too expressed her testamentary intention in clear and understandable language. It is conceded by all the parties in the instant case that Mrs. Buxton exercised her power of appointment in full harmony with the donor’s expressed intention. Everything she did was well within her authority and she has accomplished thereby what the donor, Culver, intended, i.e., a distribution of her share of his estate “ to such person or persons and in such proportions as she may direct by her will ”. The donee was entitled to name whoever she wished as executors and trustees of-her will and when they qualified their duties were derived from the provisions of her will insofar as they were not incompatible with the will of Andrew B. Culver and here, as we have seen, there is complete compatibility. Under these circumstances, it would seem clear and undisputable that the bank’s duties as trustee under the Culver trust ended when it took up its duties as cotrustee under the will of Fannie C. Buxton. It was forthwith entitled to the commissions authorized by law as then existing. The coincidence of naming the bank as cotrustee should not be construed as a continuance of the Culver trust and so to hold is to disregard the clear and fundamental fact that Fannie C. Buxton fully and finally disposed of the Culver trust for her benefit. It is for these reasons that we feel that the conclusion reached by the courts below that the commissions of the cotrustee are controlled by the letter written in 1900, is erroneous.

Perhaps some comment is desirable upon the cases relied upon by the Surrogate as authority for the proposition that under these circumstances, “ a trustee is entitled to but one commission because he is rendering but one service ”. These, we think, are clearly distinguishable. The fundamental and vital distinction between those cases and the instant case is that in each of them, one settlor set up one continuing trust for a two-life term by a single instrument. Under those circumstances, it could be said that there was but one trust and that a trustee thereof would be entitled to but one set of commissions. Here, however, there are two settlors, two instruments of trust, two actually different trusts and two sets of trustees.

We are satisfied that insofar as the question of commissions is concerned, the bank was thus entitled to the legal commissions on the trusts created by Mrs. Buxton’s will as specifically directed by the settlor thereof.

The order of the Appellate Division and the decree insofar as appealed from should be reversed and the matter remitted to the Surrogate’s Court for further proceedings, not inconsistent with this opinion, with costs to all parties filing separate briefs payable out of the estate.

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

Ordered accordingly.


text:
    Samuel N. Tonkin, Appellant, v. California Insurance Company of San Francisco, Inc., Respondent.
    Submitted April 18, 1945;
    decided June 7, 1945.

      Samuel Sumner Goldberg and Irving Hatterer for appellant.
    Plaintiff is entitled to recover the full amount of damage established, since under the terms of the policy every consequence attendant upon and which was the proximate cause of the fire was insured and covered under the risks insured against. The statement in the policy that the loss by collision was excluded must be construed to mean that where damage resulted independently from collision there was no coverage, but where collision resulted from fire, the coverage of fire loss extended to collision as well. (Bird v. St. Paul F. & M. Ins. Co., 224 N. Y. 47; Hustace v. Phenix Ins. Co., 175 N. Y. 292; Delametter v. Home Ins. Co., 233 Mo. App. Div. 645; Tracy v. Palmetto Fire Ins. Co., 207 Iowa 1042; American Indemnity Co. v. Haley, 25 S. W. 2d, 911; Block v. Standard Ins. Co. of N. Y., 292 N. Y. 270; Katzenstein v. Merrimack Mutual Fire Ins. Co., 268 App. Div. 782.)
    * John L. Fletcher for respondent.
    In an action on a policy of insurance, the causa próxima is alone considered in ascertaining the cause of loss. (Bird v. St. Paul F. & M. Ins. Co., 224 N. Y. 47; Aktiebolaget M. Bank v. Hanover Fire Ins. Co., 211 App. Div. 608; Neilson v. Commercial Mutual Insurance Co., 3 Duer 455; Patrick v. Commercial Insurance Co., 11 Johns. 9; Hustace v. Phoenix Ins. Co., 175 N. Y. 292; Beakes v. Phoenix Ins. Co., 143 N. Y. 402; Shahin v. Niagara Fire Insurance Co., 39 N. Y. S. 2d 887.)
   Dye, J.

For purposes of this controversy it is undisputed that while the plaintiff was driving his car in the second or fast lane of traffic on Queens Boulevard in the city of New York near the intersection of 69th Street, he noticed that his car was “ smoking and burning under the dashboard ”. As he attempted to get his vehicle under control by applying the brake and pulling over to the right side, a gust of smoke came up from the dashboard, and he collided with another vehicle which was standing still waiting for the traffic signal to change. The plaintiff’s vehicle was damaged to the extent of $515.30, divided into a fire loss of $38.00 and a collision loss of $477,30.

The plaintiff had insured his automobile in the defendant company. • The defendant concedes the fire loss but disclaims liability for that portion of the damage resulting from the collision on the ground that it was not covered by its policy. The policy of insurance contained, among other things, a coverage clause in the following language:

Coverages (as hereinafter defined)
A. Comprehensive — Loss of or Damage to the Automobile,
Except by Collision but including Fire, Theft and Windstorm
*******
Insuring Agreements
(Subject to the -limits of liability, exclusions, conditions and other terms of this policy.)
Insurance Coverages Defined
Coverage A — Comprehensive — Loss of or Damage to the Automobile, Except by Collision

Any loss of or damage to the automobile except loss caused by collision of the automobile with another object or by upsc-t of the automobile or by collision of the automobile with a vehicle to which it is attached. Breakage of glass and loss caused by missiles, falling objects, fire, theft, explosion, earthquake, windstorm, hail, water, flood, vandalism, riot or civil commotion shall not be deemed loss caused by collision or upset.”

The language of this policy presents a novel question of construction. In attacking the problem we are not unmindful of the well settled principle “ that if a policy of insurance is written in such language as to be doubtful or uncertain in its meaning, all ambiguity must be resolved in favor of the policyholder and against the company ” (Hartol Products Corp. v. Prudential Insurance Co., 290 N. Y. 44, 49, and cases cited therein). We know of no better guide in a situation of this sort than/ “ the reasonable expectation and purpose of the ordinary business man when making an ordinary business contract.” (Bird v. St. Paul F. & M. Ins. Co., 224 N. Y. 47, 51; Silverstein v. Metropolitan Life Ins. Co., 254 N. Y. 81, 84; World Ex. Bank v. Com. Casualty Ins. Co., 255 N. Y. 1, 5; Johnson v. Travelers Insurance Co., 269 N. Y. 401, 408; Hartol Products Corp. v. Prudential Insurance Co., supra; Block v. Standard Ins. Co. of N. Y., 292 N. Y. 270.) Applying this general principle it is reasonable to suppose that the plaintiff in purchasing insurance for his automobile sought coverage against the named risks and that the fair meaning and use of the word “ comprehensive ” included those damages which an ordinary individual would reasonably and naturally regard as incidental to or flowing from the hazard insured against.

The policy language is definite enough to exclude loss when collision is the primary and exclusive cause, and it would do so here except for the fact that fire — the hazard insured against — was the factor causing the driver to lose control of the vehicle and was so closely associated with it in point of time and character as to constitute the proximate producing cause of the collision.

Analogous situations have arisen under fire policies which exclude damage by explosion, wherein the courts have held that damage from an explosion caused as an incident to a fire was within the coverage clause of the policy. (Wheeler v. Phenix Ins. Co., 203 N. Y. 283.) Damage from concussion caused by explosion resulting from fire has been deemed covered. (Cook v. Continental Ins. Co., 124 So. 239 [Ala.].) Also, a policy insuring against direct loss by theft excluding collision has been held to cover collision damages occurring while a car was in possession of the police and before return to owner. (Bolling v. Northern Ins. Co., 280 N. Y. 510.)

The judgments should be reversed and judgment directed for the plaintiff in accordance with this opinion, with costs in all courts to the appellant.

Lehman, Ch. J., Loughran, Lewis and Conway, JJ., concur; Desmond and Thacher, JJ., dissent and vote to affirm on the ground that the damage to plaintiff’s automobile was from collision, a cause plainly excluded from the coverage of the policy sued upon, by specific language therein contained.

Judgment accordingly.


author: Lehman, Ch. J.

text:
    The People of the State of New York ex rel. Alphonse Dote, Appellant, against Walter B. Martin, as Warden of Attica State Prison, Defendant. The People of the State of New York, Respondent.
    Argued April 19, 1945;
    decided June 7, 1945.

      George W. Black and Edward A. Wolff for appellant.
    I. Relator was entitled to be credited with the time spent on parole from the date of his release, March 2,1936, until declared delinquent November 9,1937. (People ex rel. Sormberger v. Martin, 266 App. Div. 48; People ex rel. Ingenito v. Warden, etc., Auburn Prison, 267 App. Div. 295.) II. Appellant is being held for an additional period of time because of the failure properly to credit him with time legally on parole.

      Nathaniel L. Goldstein, Attorney-General (Wortley B. Paul, Wendell P. Brown, Patrick H. Clune and Herman N. Harcourt of counsel), for respondent.
    Relator is not entitled to credit for the time elapsed between November 9, 1937, the date of the second declaration of delinquency, and April 23, 1940, the date of his recapture. (People ex rel. Ingenito v. Warden, etc., Auburn Prison, 267 App. Div. 295; People ex rel. Patterson v. Bockel, 270 N. Y. 76; People ex rel. Newton v. Twombly, 228 N. Y. 33; People ex rel. Atkins v. Jennings, 248 N. Y. 46; Matter of Magistro v. Wilson, 253 App. Div. 48.)
   Lehman, Ch. J.

The relator, Alphonse Dote, was convicted of the crime of burglary, first degree, on April 28, 1922, and sentenced to Auburn Prison for not less than thirteen nor more than twenty years. He was paroled on November 21, 1931. He was declared delinquent as of February 14, 1934, and returned to State prison on March 2, 1934. He was again paroled on March 2,1936. On February 17, 1938, he was again declared delinquent as of November 9, 1937, on a finding that he had “ absconded from supervision.” He was not returned to State prison until April 23, 1940. He pleaded guilty on April 22, 1940, to the crime of violation of section 1694 of the Penal Law upon an indictment found on January 14, 1938, and was sentenced to Attica State Prison for a term of not less than one year nor more than two years -upon that plea. Service of that, sentence can begin only after he has served the time owing upon his original sentence.

In July, 1944, the relator obtained a writ of habeas corpus claiming that he had served the maximum term of imprisonment upon both the sentence of thirteen to twenty years imposed upon his conviction in 1922 and the sentence of one to two years imposed upon his plea of guilty in 1940. In his return to the writ the warden of Attica Prison stated that the relator was “ reparoled on delinquent time owing upon the sentence ” (imposed in 1922) “ on May 12, 1944, to commence serving the sentence ” .(imposed for his later crime). The writ was sustained by the justice at Special Term and the warden of Attica Prison was directed to release the relator from custody on the ground that the relator’s term'of imprisonment of thirteen to twenty years imposed in 1922 could not be extended by a release on parole and subsequent declaration of delinquency and expired not later -than ■ twenty years after the sentence was- imposed. (Citing People ex rel. Ingenito v. Warden, etc., Auburn Prison, 267 App. Div. 295, affd. 293 N. Y. 803.) The order of Special Term was reversed by the Appellate Division and the relator remanded to the custody of the warden.

Upon the declaration of delinquency by the Board of Parole the relator owed the unexpired;portion of his original sentence from the date - of the ■ delinquency. (Correction Law, § 218.) ■He could not be compelled to serve the additional time between the date of his release on parole and the date as of which he was declared delinquent. He was entitled to credit for that time. (People ex rel. Ingenito v. Warden, etc., Auburn Prison, supra.) He is not entitled-to credit for the time which elapsed between the date of his delinquency as fixed by the Parole Board and the date when he was returned to prison. During that time his absence from the prison was unlawful and he was no longer in the custody of the Board of Parole and the time does not constitute actual or constructive service of his time of imprisonment. An order directing that the relator serve the full term, of imprisonment under his sentence does not change or extend that term. The relator does not challenge the validity of the declaration of delinquency and concededly as of the date of the delinquency he still owed four years, two months, and twenty-one days on his original sentence. Service of that time began when he was returned to prison.

In 1944 when the writ of habeas corpus was sustained and the relator released from custody he had not served in full the time owing upon the original sentence at the date of his delinquency and in addition the maximum term- of the new sentence. Upon this appeal the appellant, does not contend otherwise. His imprisonment is concededly lawful until such service is complete. The order of the Appellate Division- dismissing the writ and remanding the relator to custody must therefore be affirmed. The relator, however, contends that the Board of Parole’s order or direction that he begin service of his second sentence on May 12, -1944, is based upon an erroneous computation of the time owing upon his original sentence when he was returned to prison. We are told that in making that computation the Board of Parole failed to give' credit for the time between the relator’s parole and the delinquency which violated the conditions of the parole and that if such credit were allowed the relator' would be entitled to discharge from imprisonment in the near future. As we have said, the relator is entitled to such credit, but the question when the relator -will be entitled to discharge from custody is-not properly presented upon this appeal and the record does not sufficiently disclose the manner in which the time owing has been computed or whether he has received the credit he now claims. Affirmance of the order, of the Appellate Division presently remanding the relator to custody does not preclude the relator from challenging in the future the continuance of such custody after the expiration of service of the maximum ■terms of imprisonment with credit allowed in accordance with this opinion.

The order should be affirmed.

Loughran, Lewis, Conway, Desmond, Thacher and Dye, JJ., concur.

Order affirmed.


author: Lewis, J.

text:
    Vera Bennett, as Administratrix of the Estate of John Bennett, Deceased, Appellant, v. New York and Queens Electric Light and Power Company, Respondent.
    Argued April 19, 1945;
    decided June 14, 1945.

      Joseph F. Hanley and Richard P. Charles for appellant.
    I. The trial court properly submitted to the jury the question as to whether or not respondent was negligent. (Van Leet v. Kilmer, 252 N. Y. 454; Casualty Co. v. Swett El. L. & P. Co., 230 N. Y. 200; Ferrari v. New York Central Railroad Co., 224 App. Div. 182.) II. The Appellate Division erred in reversing the judgment and dismissing the complaint. (Braun v. Buffalo General Electric Co., 200 N. Y. 484; Ward v. New York State Electric & Gas Co., 290 N. Y. 325.)

      John M. Keegan and Thomas H. Beardsley for respondent.
    I. Defendant was not negligent. The accident was caused solely by the negligence of the contractor’s employees and plaintiff’s intestate. (Holland v. Turner, 189 App. Div. 566, 232 N. Y. 518; Morton v. Smith Hoisting Co., 166 App. Div. 436; Stackpole v. Pacific Gas & Electric Co., 186 Pac. 354; Aljoe v. Penn Central L. & P. Co., 126 Atl. 759; Danville Street Car Co. v. Watkins, 97 Va. 713; Arkansas P. & L. Co. v. Hubbard, 181 Ark. 886; Hickock v. Auburn Light, Heat & Power Co., 200 N. Y. 464; Buell v. Utica Gas & Electric Co., 259 N. Y. 443; Leeds v. New York Telephone Co., 178 N. Y. 118; Rowley v. Newburgh Light, Heat & Power Co., 151 App. Div. 65; Malatesta v. Atlantic City S. R. Co., 96 Atl. 54; Boudreaux v. Louisiana Power & Light Co., 135 So. 90; Troidle v. Adirondack P. & L. Corp., 252 N. Y. 486.) II. The Appellate Division properly reversed the judgment in favor of plaintiff and dismissed the complaint. (Buell v. Utica Gas & Electric Co. 259 N. Y. 443; Conroy v. Sara-

      toga Springs Authority, 259 App. Div. 365, 284 N. Y. 723; Flour City Nat. Bank v. Widener, 24 App. Div. 330, 163 N. Y. 276.)
   Lewis, J.

In the course of excavation upon a sewer projpct in the city of New York the boom attached to a caterpillar crane moved close enough to one of defendant’s overhead high voltage wires to produce a short circuit which electrocuted plaintiff’s intestate. By the present action damages are sought by the decedent’s widow, as administratrix, who claims her husband’s death was caused by the defendant’s negligence in the operation and maintenance of its high tension electric lines.

A judgment in plaintiff’s favor entered upon a jury’s verdict at Trial Term has been reversed on the law at the Appellate Division where findings of fact implicit' in the jury’s verdict were considered and affirmed. Upon her appeal to this court the plaintiff asserts that the facts adduced upon the trial and 'affirmed by the Appellate Division presented a question which was properly submitted to the jury, viz., whether the fatality resulted from the defendant’s negligent failure properly to safeguard workmen — of whom the decedent was one — who, to the knowledge of the defendant, were "within a zone of danger created by its high tension wires.

The accident occurred on°164th Street between 71st and 72d Avenues in Queens County. At that point a caterpillar crane, on which was mounted a boom forty feet in length, was engaged in removing timber sheathing from a sewer trench which had been freshly dug in the northbound lane of traffic. The trench itself, which had been back-filled with loose earth, was parallel to and twenty-five feet west of the easterly curb along which the defendant had erected poles and had strung six high tension wires. Of these wires the one most westerly — and thus nearest the- caterpillar crane —-was thirty-four feet above the ground and carried electricity of 2300 volts. Because the back-filling had left soft earth in the trench the operator had so stationed the crane that its weight of twenty-two tons had the support of solid ground east of the trench and was thus brought closer to the easterly curb above which defendant’s wires were strung. While the crane boom was being raised and lowered in the process of extracting sheathing timbers from the trench and depositing them on trucks, the decedent while standing on the ground was seen to take hold of a chain attached to the boom cable and used to lash the timbers. Although there is positive testimony by one of the plaintiff’s witnesses that the cable did not touch the defendant’s wire it appears that when the decedent grasped the chain a “ buzzing ” sound was heard, a flashing light was seen between the cable and the wire for a substantial period of time, and there was “ blazing ” in the chain. In the meantime the decedent had fallen to the ground. He had met his death when the oscillating boom and its attached cable had passed close enough to the defendant’s westernmost wire to permit that wire’s voltage to pass to the ground by short-circuit through the cable, the chain and the decedent’s body.

There was also evidence • from which the jury could have found that prior to the accident a representative of the defendant, accompanied by a member of the contractor’s organization, had gone over the site of the work involved in the sewer project. At that time the contractor’s representative had noted the presence of the defendant’s wires over the street curb and had asked — How about those wires there.” To that inquiry the defendant’s representative replied — They won’t bother you, they are away high.” The defendant conceded that its inspectors were at the site of the work “ practically every day.” There was also proof that they were present when the crane — from a position on the firm soil east of the filled trench and closer to defendant’s wires — was recovering and loading the sheathing timbers and that at no time during the progress of the work did the inspectors stop the crane’s operations near the wires. Nor were the contractor or its employees informed that the defendant’s wires, strung above the easterly curb of 16‘4th Street, carried a high voltage of electricity.

We cannot say as matter of law, as has the Appellate Division, that upon the evidence of record before us the defendant was free from actionable fault. The standard of care required of one maintaining a dangerous agency must be commensurate with the risk therefrom reasonably to be foreseen. In the present case the vigilance required of the defendant depended upon the likelihood of danger to which those near its wires would be exposed by reason of the voltage of electricity which those wires carried. That voltage proved to be a death-bearing current which required of the defendant protective measures which, in existing circumstances, were proportioned to the danger which its transmission created. (Dowd v. N. Y., O. & W. Ry. Co., 170 N. Y. 459, 467; Larkin v. N. Y. Telephone Co., 220 N. Y. 27, 33; Adams v. Bullock, 227 N. Y. 208, 210-211; Palsgraf v. Long Island R. R. Co., 248 N. Y. 339, 344; Ferrari v. New York Central Railroad Co., 224 App. Div. 182, 186, affd. 250 N. Y. 527; Van Leet v. Kilmer, 252 N. Y. 454, 457; Payne v. City of New York, 277 N. Y. 393, 395; Ward v. New York State Electric & Gas Corp., 290 N. Y. 325, 328.)

In the record at hand we find evidence of risk to the decedent and his fellow workers within the range of reasonable apprehension. The question was for the jury whether the decedent met his death by reason of the fact that, with knowledge of conditions under which the decedent was working the defendant failed to take those precautions dictated by the danger to which he was exposed.

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

Loughran, Conway, Desmond, Thacher and Dye, JJ., concur; Lehman, Ch. J., dissents.

Judgment accordingly.


text:
    In the Matter of Joseph Russo, Respondent, against Lewis J. Valentine, as Police Commissioner of the City of New York, et al., Appellants.
    Argued April 19, 1945;
    decided June 14, 1945.

      Ignatius M. Wilkinson, Corporation Counsel (Morris Shapiro and James Hall Prothero of counsel), for appellants.
    The right of examination by the Police Commissioner as to the justness of petitioner’s claim is not lost by the institution of the City Court action since the examination under the statute is independent of any proceedings taken by a claimant. (Administrative Code, § 434a-33.0; § 435-4.0, subd. a, pars. 1, 3, subd. b; Matter of Hirshfield v. Craig, 239 N. Y. 98; Matter of Edge Ho Holding Corp. 256 N. Y. 374; Matter of Scheer Realty Co. v. Higgins, 257 N. Y. 541; Matter of Hoyt, 258 N. Y. 569; Lamport v. Smedley, 213 N. Y. 82; People v. Federated Radio Corporation, 244 N. Y. 33; White v. Cotzhausen, 129 U. S. 329;
      Ayers et al. v. Lawrence et al, 59 N. Y. 192; Allen v. Stevens, 161 N. Y. 122; Casey v. City of New York, 217 N. Y. 192; Tolchinsky v. City of New York, 164 App. Div. 636, 220 N. Y. 633; Simpson et al. v. St. John, 93 N. Y. 363.)

      Nathaniel H. Kramer for respondent.
    I. The motion to vacate and quash. the subpoena was properly granted. II. The Police Commissioner issued his subpoena after the commencement of the action and after the joinder of issue and after the case had been noticed for trial and set down for trial for a day certain thus bringing it clearly within the rule of law laid down. (Matter of Grout, 105 App. Div. 98; Reynolds v. Village of Nyack, 258 App. Div. 667.)
   Lehman, Ch. J.

The petitioner-respondent was arrested on or about February 25, 1944, on a charge of vagrancy. At the time of his arrest the sum of $2,600 was taken from his person and was deposited with the property clerk of the Police Department pursuant to the provisions of section 435-4.0 of the Administrative Code. The petitioner was acquitted of the charge against him and then demanded the return of the money from the property clerk. His demand was refused and the petitioner-respondent thereupon commenced an action for conversion of his property against the property clerk in the City Court of the City of New York. Issue was joined on March 23d, twenty-seven days after the petitioner’s arrest.

The same section of the Administrative Code which provides that “ property or money taken from the person and possession of a prisoner ” shall be deposited with the property clerk, also provides that “ The property clerk shall have power to administer oaths to and take affidavits and depositions of any person or claimant in all matters pertaining to the powers and duties of the property clerk, and property and money in his custody and claims thereto ” (Administrative Code, § 435-4.0, subd. a, par. 3, as amd. by Local Laws, 1943, No. 47). On April 7, 1944, the property clerk sent a letter to petitioner notifying him to ‘‘ appear before the undersigned for examination with reference to your claim for $2600 covered by voucher 44K852, at his office at 400 Broome Street, Borough of Manhattan, City of New York, on April 14, 1944 at 2 p. m ” At the same time the property clerk sent a letter to the attorney for the petitioner enclosing a copy of several notices of examination, including that- of Joseph Russo, and stating: “ Enclosed are copies of notices for your clients to appear for examination before the undersigned ón the 14th inst. at 2 p. m. I have notified the Corporation Counsel to direct the examination and you may cross examine.” The attorney replied stating that his clients would not appear and informing the property clerk: “ I am of the opinion that you lack such authority to examine my clients in any of these cases, by reason of the fact that they are not claimants within the meaning of the local law upon which you pretend to act. These persons are plaintiffs in respective actions and you are not entitled to examination before trial of these plaintiffs unless ordered by the Court. The cases are governed by the Civil Practice Act and not by the local law that you profess to exercise.”

The property clerk of the Police Department, though empowered “ to administer oaths to and take * * * depositions * * * in all matters pertaining to * * * property and money in his custody and claims thereto ” is not expressly empowered to issue subpoenas to compel persons .to attend before him for examination; but power to issue such subpoenas is conferred upon the Commissioner and his deputies by section 434a-33.0, subdivision a, of the Administrative Code. Accordingly, the Commissioner on April 25th issued a subpoena requiring the petitioner to appear and be sworn before the property clerk on April 28th, “ to answer orally as to any facts relative to the justness of a certain account or claim against the Property Clerk, * * * the said sum being for $2600:00,-as indicated on vottcher #44K852 ”. In the proceedings which we are now reviewing the petitioner moved for an order quashing and canceling the subpoena. The motion was granted at Special Term and the Commissioner and the property clerk have appealed, by permission of the Appellate Division, from the order of the Appellate Division affirming the order of Special Term.

The money taken from the person of the petitioner at the time of his arrest was lawfully placed in the custody of the property clerk of the Police Department and the petitioner claims that money as his own and has demanded its return. The Administrative Code in plain language empowers the property clerk to administer oaths to “ any person or claimant in all matters ” pertaining to “ property and money in his custody and claims thereto ”. Until the petitioner, was discharged and began an action against the property clerk to recover damages for conversion of the property placed in the custody of the property clerk, the right to examine not only a claimant but any person ” concerning the ownership of the property was not open to challenge. The section of the Administrative Code which authorizes such examination does not in terms provide that the authority to examine ceases when a claim is: rejected and an action commenced to enforce the claim, but we are told that such a limitation must be read by necessary implication into the - statute as written (citing Matter of Grout, 105 App. Div. 98, and Reynolds v. Village of Nyack, 258 App. Div. 667).

We-have frequently pointed out that it is the duty of the courts to give effect to statutes as they are written and that we may not limit or extend the scope of the statute as written unless literal construction of the statute would produce a result which the Legislature plainly did not intend. In .the cited cases the Appellate Division of the Second Department held that where a statute confers upon a municipal officer power to examine a claimant or other persons upon matters connected' with or pertinent to a claim which under the statute must be-presented to the official at least thirty days before an action can be brought upon such claim against the municipal corporation, the power to examine must be exercised before the action is begun. The cited cases were not reviewed in this court, and we now point out only that under the statutes "'as construed'by the courts in those cases the requirement that an action might not be begun until thirty days after presentation of the claim,-served no purpose except to give to the appropriate municipal officer time to investigate the claim; and the power to examine the claimant" or other persons upon matters pertaining to-or connected with such claim was conferred upon the Official solely ” for the purpose of obtaining facts or information which would enable such official to intelligently determine whether to adjust, settle and-pay it * * * or, in the event of doubt, after asserting such facts as to its legality, excessiveness, inability to settle or compromise for a reasonable amount * * *, to reject it ”. (Matter of Grout, supra, p. 106.) Under the statute upon which the appellants rely in the case now under consideration, presentation of a claim is not made a condition precedent to the bringing of an action; there may be many claims made upon the property clerk for the property in his custody, and the power to examine conferred upon him is not limited to ascertainment of the justness of a claim in order to enable the clerk to determine whether he should recognize it but extends to “ all matters pertaining to the powers and duties of the property clerk, and property and money in his custody ” as well as to “ claims thereto ”. None of the factors which induced the Appellate Division in the cited cases to read a limitation into the statute there construed are present here. The statute as written confers upon the property clerk a broad power of examination in regard to matters and to claims which may never become the subject of an action, and we find no sufficient reason to read into the statute as written an unexpressed limitation that the power to examine may be exercised only during the period when no claimant has brought an action to enforce his own claim. Indeed, it seems to us that the purpose of the Legislature might at times be thwarted if such a limitation were read into the statute.

The order of the Appellate Division should be reversed, with costs, and the application to quash the subpoena dismissed.

Dye, J.

(dissenting). This proceeding challenges the jurisdiction of the Police Commissioner and the property clerk of the New York City Police Department to subpoena and examine the petitioner in the exercise of their investigatory powers as to moneys in their custody, it being claimed by the petitioner that such powers do not survive the commencement of a civil suit to determine the same issue.

When the petitioner was arrested on a charge of vagrancy, he had in his possession the sum of $2,600 in cash, which the arresting officer said the petitioner had stated was being delivered to a bookmaker, and he was required to deposit it with the property clerk (Administrative Code, § 435-4.0, subd. b) who still has it in his custody. Upon acquittal of the vagrancy charge and release from custody, the petitioner demanded return of the money and was refused. He thereupon commenced an action-in the City Court of the City of New York for return of the money and conversion. The City joined issue by filing an answer and the case was set for trial.

Before the case was reached for trial, the property clerk served upon the petitioner a 'demand to appear before him for examination with reference to the subject matter of the pending action. The petitioner refused to comply. Whereupon the Police Commissioner issued a subpoena (Administrative Code, § 434a-33.0) requiring the petitioner to appear before the property clerk on a date and time certain to answer orally as to any facts relative to the justness of a certain account or claim against the Property Clerk * * * for $2,600.00 * * * ”.

The instant proceeding was thereupon commenced to quash the subpoena.

The use of the word “ claims ” in the statute conferring power on the property clerk to determine ownership of funds in his custody (Administrative Code, § 435-4.0, subd. a, par. 3) and the absence of the words “ any action or proceeding ” as used in the statute relating to the establishment of a lawful right (Administrative Code, § 435-4.0, subd. f) clearly indicate a legislative intent to draw a distinction between claims submitted in person to the property clerk and actions and proceedings brought through the medium of a civil process in a. court of law. Had the Legislature intended otherwise it could have said so by the simple device of including the words action or' proceeding ” (Reynolds v.. Village of Nyack, 258 App. Div. 667). These words cannot be read into the statute for by so doing the Commissioner of Police and the property clerk could circumvent the judicial process by proceeding to a disposition of the issue as a claim, which, of course, is not the legislative intent.'

, That a distinction was contemplated by the Legislature is further strengthened' by the statutory requirement that in any action or proceeding * * * a claimant * * * shall establish that he. has a lawful title or property right in such * * * money and lawfully obtained possession thereof and that such , * * * money was held and used in a lawful manner.” (Administrative Code, § 435-4.0, subd. f), which thus defines the elements of a prima facie case necessary to i establish a lawfiul property right in a civil suit.

The service of the answer by the Corporation Counsel put the various elements essential to establish the petitioner’s lawful right to the money in issue for ■ determination by the court, the judgment of which the property clerk was bound to accept.

By limiting the property clerk’s investigatory powers to “ claims ” not in issue the statute does not leave him without a remedy for “ in any action or proceeding ” there is still available to him, in a proper case, the examination before trial as prescribed by the Civil Practice Act. (Civ. Prac. Act, § 288 et seq.)

The order appealed from should be affirmed, with costs.

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

Order reversed, etc.


author: Desmond, J.

text:
    Alta C. Brundige et al., Respondents, v. Dorothy C. Bradley et al., Individually and Claiming to be Trustees, Appellants, et al., Defendants.
    Argued May 24, 1945;
    decided July 19, 1945.

      James A. Deckop for appellants.
    I. Under section 347 of the Civil Practice Act, plaintiffs should not have been permitted to testify against defendants-appellants regarding communications and personal transactions claimed to have taken place between them and their brother; this error not only requires a reversal of the judgment, but also the dismissal of the first cause of action. (Pope v. Allen, 90 N. Y. 298; Farjeon v. Fulton Securities Co., 225 App. Div. 541; Brown v. Spohr, 180 N. Y. 201; Steinway v. Steinway, 112 App. Div. 18, 197 N. Y. 522; Carpenter v. Romer & Tremper Co., 48 App. Div. 363; Blumenthal v. Kelsey, 95 Misc. 136, 176 App. Div. 369; Mullins v. Chickering et al., 110 N. Y. 513; Brown v. Crossman, 206 N. Y. 471; Levy v. Louvre Realty Co., 222 N. Y. 14.) II. The Statute of Limitations is a bar to the maintenance of the fraud cause of action. (Buttles v. Smith, 281 N. Y. 226; Gobel, Inc., v. Hammerslough, 263 App. Div. 1, 288 N. Y. 653; Hearn 45th St. Corp. v. Jano, 283 N. Y. 139; Pitcher v. Sutton, 238 App. Div. 291, 264 N. Y. 638; Matter of Di Crocco, 170 Misc. 826; Ziring v. Corrugated Container Corporation, 49 N. Y. S. 2d 686; Stewart v. Penn. Mutual Life Ins. Co., 266 App. Div. 617. 293 N. Y. 674; Schmidt v. Merchants Despatch Trans. Co., 270 N. Y. 287; Seligson v. Weiss, 222 App. Div. 634; Schlimbach v. McLean, 83 App. Div. 157; Higgins v. Crouse, 147 N. Y. 411.) III. The ’ defense of laches should be sustained. (Sielcken-Schwarz v. American Factors, Ltd., 265 N. Y. 239; Kellogg v. Kellogg, 169 App. Div. 395, 224 N. Y. 597.) IV. The trust agreements do not violate the statute of perpetuities and the Court of Appeals should pass upon this point so as to leave no part of the controversy unsettled. (Matter of Fenton, 123 Misc. 658, 214 App. Div. 754; People’s Trust Co. v. Flynn, 188 N. Y. 385; Buchanan v. Little, 6 App. Div. 527, 154 N. Y. 147; Orr v. Orr, 147 App. Div. 753, 212 N. Y. 615; Matter of Squiers, 161 Misc. 257, 253 App. Div. 732, 278 N. Y. 580; Union Trust Co. v. Owen, 77 App. Div. 60; Equitable Trust Co. of N. Y. v. Miller, 197 App. Div. 391, 233 N. Y. 650; Arthur v. Arthur, 3 App. Div. 375.)

      Elijah W. Holt for respondents.
    I. Section 347 of the Civil Practice Act has no application and plaintiffs were competent witnesses to give testimony to the fraudulent acts of Sherman L. Cary which resulted in the trusts in question. (Frank v. Witlin, 201 App. Div. 709; Ward v. N. Y. Life Ins. Co., 225 N. Y. 314; Melkon v. Kirk & Co., 220 N. Y. S. 551; Heartwell v. Berliner, 207 N. Y. S. 737.) II. The Statute of Limitations is not a bar. (Dumbadze v. Lignante, 244 N. Y. 1; Rosenberg v. Rosenberg, 241 App. Div. 510; Otier v. Neiman, 96 Misc. 481; Roulston v. Warner, 134 Misc. 459; MacEwen v. City of New Rochelle, 149 Misc. 251.) ILL To deny relief because of delay in bringing this suit would be an act of patent injustice. IV. The trusts in suit violate the statutes against perpetuities. (Matter of von Kleist, 265 N. Y. 422; Herzog v. Title Guarantee & Trust Co., 177 N. Y. 86; Matter of Grace, 232 App. Div. 76.)
   Desmond, J.

Plaintiffs in 1909 conveyed to their brother Sherman L. Cary (now dead) in trust, nearly all of plaintiffs’ respective shares of the estate of their father, who had died earlier in the same year. The father’s will had provided for trusts for the benefit of plaintiffs and others, but those trusts were invalid and were ultimately so declared in legal proceedings before competent courts. The living trusts above referred to were arranged for in agreements between plaintiffs and their brother, made after the father’s death but before the invalidity of the father’s testamentary trusts had been adjudicated. The formal transfers in trust were made by plaintiffs to their brother after those adjudications (or, to be'accurate, after one of such adjudications). The brother, Sherman L. Cary, took and administered the living trusts so set up by plaintiffs, his sisters, until 1933, when Sherman L. Cary resigned and his two daughters, defendants-appellants Mrs. Bradley and Mrs. Hudson, became the successor trustees. That succession was accomplished by an agreement to that effect, signed by all concerned. At the time of that substitution of trustees,- the new trustees were, as they are now if the trusts be valid, the potential remaindermen of the living trusts. Those trusts, in ultimate effect, named as remaindermen such children of the respective plaintiffs and such children of their brother Sherman L. Cary, as should survive plaintiffs. Both plaintiffs were married but childless when the trusts were written in 1909, and neither has ever had children. Defendants, the only children of Sherman L. Cary, were both born before 1909, so it was always the probability that they in the end would take the remainders. The original trustee, Sherman L. Cary, died in 1936.

The Trial Judge found on testimony which he accepted as true and which was sufficient for the purpose, that in 1941 plaintiffs learned for the first time that certain information as to the meaning and effect of the testamentary trusts, given plaintiffs by their brother in 1909 before the living trusts here involved were created, was false. The court found also that it was because of plaintiffs ’ reliance on those falsehoods that plaintiffs had complied with their brother’s suggestion that they turn over to him in trust their shares of their late father’s property. The present suit was brought against the successor trustees in 1943. The complaint contained several causes of action but only two of them survive for our consideration: one based on fraud and the other seeking relief, on the ground that the living trusts were unlawful as offending against the New York Statute (Personal Property Law, § 11) as to “ two lives in being ”. The trial court found that the necessary elements of a fraud suit had been proven and gave judgment for plaintiffs directing that the trust corpora, the amounts, etc., of which are not in dispute, be delivered up by defendants to plaintiffs. The trial court did not, since he had given plaintiffs a judgment for fraud, consider it necessary to pass on the other, or “ perpetuities ”, cause of action for the same relief. The Appellate Division affirmed, three to two.

We pass first on the alleged defense pleaded as against the first above-described cause of action, that it was not sued on within the time limited by statute. We hold that it was not so barred. Despite the allegations and proof as to a fiduciary relationship between plaintiffs and their brother, there were also allegations and proof of fraud, so as to make the count one “ to procure a judgment on the ground of fraud ” within section 48, subdivision 5, of the Civil Practice Act. (See Mannaberg v. Klausner, 269 App. Div. 682, affd. 294 N. Y. 859; Nasaba Corp. v. Harfred Realty Corp., 287 N. Y. 290.)

The next question, still dealing with the fraud case, is as to the applicability to plaintiffs’ testimony of section 347 of the Civil Practice Act, which makes incompetent the testimony, of such interested persons concerning transactions with a deceased person, as against certain other persons. Plainly, plaintiffs were “ interested in the event ”. They have been allowed to testify, over objection, to transactions with their deceased brother, Sherman L. Cary, the original trustee. That testimony was, under the statute, incompetent if defendants, the successor trustees, are persons “ deriving his (their) title or interest from, through or under ” Sherman L. Cary, “ by assignment or otherwise ”, Our views, and those of the law commentators, as to the justice or utility of section 347, are beside the point. The Legislature has left the law on the books,, indeed has revised it in recent years. Defendants took the trusts in 1933 by transfer from their father. Those transfers needed, and had, the consent of plaintiffs as beneficiaries, but the transfers were by the father, nonetheless (see discussions in Scott on Trusts, § 110, and Restatement of Trusts, §§ 106 et seq). Before 1933 the full title to the trust assets was in Sherman L. Cary as trustee, and that same title, by his grant, passed to his daughters, the defendants. True, no personal claim is being made against Sherman L. Cary’s estate, and that estate is not affected by the judgment below, but the applicability of the statute does not depend on whether the deceased person’s estate gains or loses by the outcome of the case. In Carpenter v. Romer & Tremper Co. (48 App. Div. 363), plaintiff, successor of a deceased executor, objected to testimony of a defendant’s witness, interested in the event and who with deceased had owned all the stock of a corporation. That witness was allowed at the trial to describe a transaction with a former executor, then deceased, who was plaintiff’s predecessor, as to an alleged agreement reducing the amount due from defendant to the estate represented by plaintiff. On appeal that evidence was ruled incompetent (followed in Blumenthal v. Kelsey, 95 Misc. 136, see discussion in Greenfield’s “ Testimony under sec. 347, C. P. A.”, at pp. 228-229). Another case in which the successor of a deceased person was successful in ruling out testimony as to transactions with the deceased, although the property rights of the deceased other party to the transaction were not being affected, is Levy v. Louvre Realty Co. (222 N. Y. 14). How far the courts have gone in interpreting the language of section 347 which defines the persons protected, is illustrated by Pope v. Allen (90 N. Y. 298), and Mullins v. Chickering et al. (110 N. Y. 513). We conclude that plaintiffs’ testimony as to their brother’s alleged deceptions and false statements was incompetent. This requires a new trial, but such a trial would serve no purpose if plaintiffs are entitled to judgment on their other cause of action, in which they assert the invalidity, as involving a suspension of absolute ownership for more than two lives, of the living trusts.

Although, as aforesaid, the trial justice did not pass, one way or the other, on that second cause of action, we can and do decide it. Ho questions of fact are involved in it, only an examination of the two independent and separate transfers in trust, one by each plaintiff, to the brother. We will not describe the provisions of those indentures in detail, but state only our conclusion, that, despite the references therein to plaintiffs’ mother and to their brother, there were in each living trust only two measuring lives, the lives of plaintiffs themselves. Bach trust was to. terminate at the end of those two lives. We see no contravention of the statutory rule against perpetuities.

Our conclusion that, on the undisputed documents, these are not unlawful trusts, makes it unnecessary to decide what, if any, statute of limitations is applicable to such a cause of action pleaded by a cestui against the trustee of an express trust. (See Decouche v. Savetier, 3 Johns. Ch. 190; Lammer v. Stoddard, 103 N. Y. 672; Merritt v. Merritt, 32 App. Div. 442, 453, affd. 161 N. Y. 634; Spallholz v. Sheldon, 216 N. Y. 205, 209.)

The defense of laches urged by defendants against each cause of action, and overruled by the trial court as to the fraud count, raises no question of law.

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

Lehman, Ch. J., Loughran, Lewis, Conway, Thacher and Dye, JJ., concur.

Judgments reversed, etc.


text:
    Angelica Balabanoff, Appellant, v. Hearst Consolidated Publications, Inc., Respondent, et al., Defendants.
    Submitted May 15, 1945;
    decided July 19, 1945.

      Otto A. Samuels and S. Sidney Heller for appellant.
    I. The article is libelous per se. (People ex rel. Bryant v. Zimmerman, 213 App. Div. 414, 241 N. Y. 405; Gardner v. Home Life Publications, Inc., 237 App. Div. 200; Wulfsohn v. Russian Republic, 234 N. Y. 372; Sokoloff v. National City Bank, 239 N. Y. 158; Russian Republic v. Cibrario, 235 N. Y. 255; Nankivel v. Omsk All Russian Government, 237 N. Y. 150; Russian Reinsurance Co. v. Stoddard, 240 N. Y. 149; Hays v. American Defense Society, 252 N. Y. 266; Corrigan v. Bobbs-Merrill Co., 228 N. Y. 58.) II. If the article is capable of a meaning which is defamatory or one which is innocent, it is a question for the jury whether it was uttered and understood in its libelous rather than its harmless significance. (Demos v. N. Y. E. J. Publishing Co., 210 N. Y. 13; Breen v. New York Herald Co., 55 Misc. 567; Cassidy v. Gannett Co., Inc., 173 Misc. 634; Turrill v. Dolloway, 17 Wend. 426.) III. The charge is much more than that plaintiff was an officer of a department or agency of a foreign government. (Washington Times Co. v. Murray, 55 App. D. C. 32.)

      Charles Henry for respondent.
    I. The publication is not libelous in that it merely charges plaintiff with holding a public office which, so far as appears from the complaint, she had a right to hold. (Crashley v. Press Publishing Co., 179 N. Y. 27; Connelly v. McKay, 176 Misc. 685; Hallock v. Miller, 2 Barb. 630.) II. Special damage must be alleged when a defamatory meaning depends- on facts extraneous to the publication itself. (O’Connell v. Press Publishing Co., 214 N. Y. 352; Kuhn v. Veloz, 162 Misc. 948; Brodek v. Jones, 212 App. Div. 247; Tower v. Crosby, 214 App. Div. 392; Werstein v. Postal Telegraph-Cable Co., 131 Misc. 763; Cortright v. Anderson, 208 App. Div. 1; National Variety Artists, Inc., v. Mosconi, 169 Misc. 982; Gates v. New York Recorder Co., 155 N. Y. 228; Sydney v. MacFadden Newspaper Pub. Corp., 242 N. Y. 208; Braun v. Armour & Co., 254 N. Y. 514.)
   Dye, J.

The order of Special Term denying a motion to dismiss the complaint has been reversed by the Appellate Division, Second Department, as a matter of law, and is now before us on the question of whether the complaint states a cause of action.

The words complained of appeared in an article published by the defendant in the July 26,1943, issue of its newspaper, New Yorh Journal-American, as follows": “ Mussolini found haven in Lausanne and a job sweeping out the Cafe le Lion d’Or, hangout for Russian revolutionaries, then headed by Angelica Balabanoff, who was later to become secretary to the dread Cheka.”

In brief, the complaint alleges: that the plaintiff is the same person referred to as Angelica Balabanoff; that the publication was willful; that the subject matter was false and untrue; that the plaintiff was a person of good repute and is widely known as a writer, lecturer and translator, earning her livelihood therefrom; that, before, during and after the 1914 — 1918 World War, she held highly respectable and envied positions of trust and confidence throughout Europe and was well known by a large number of persons throughout the world and enjoyed their respect and esteem; that the plaintiff has never headed or belonged to any department or organization which summarily arrested, judged and executed people or which was known as either the “ Cheka ” or “ Extraordinary Commission ”, but that, on the contrary, the plaintiff has ever been known as being highly critical of, and opposed to, the methods of such “ Cheka ” or “ Extraordinary Commission ”, all of which the defendant knew or could have readily ascertained prior to the publication of the article in question.

The complaint further alleges that prior to the publication of the subject matter “ the defendants and the public generally knew and understood that the word Che-ka was formed from the initials of the Russian words ‘ Extraordinary Commission ’; that the Cheka department was organized in Russia in December, 1917 to deal with sabotage and other ‘ Counter-Revolutionary ’ manifestations and to crush opposition at any price; that as internal difficulties increased in Russia its activities were extended to cover speculation, smuggling, and political and military counter-espionage; that its power grew, accordingly, to include summary arrest, judgment, and execution and it was thus ready to conduct the Terror; that on August 30, 1918, a member of the Social Revolutionary party shot and wounded Lenin; that on the following day Uritzky, chief of the Petrograd Cheka, was shot dead by the Social Revolutionaries; that in revenge for the wounding of Lenin, five hundred of the most prominent figures of the old regime were shot that night in Moscow; that the killing of Uritzky led to similar reprisals in Petrograd; that Latsis, a high official of the Cheka, defined the principles of the Red Terror, which could be summed up in two phrases: ‘ Strike Quick! ’ and ‘ Strike Hard! that ‘ Strike Secretly! could be added for arrests were carried out at night, and families of prisoners were rarely given news of them until they were condemned or. freed; that the very name Cheka ’ became a word of terror, and rumor fantastically exaggerated the number of its agents and its victims; that it spread terror among all classes of people and was not subject to any constitutional control; that its officers and leaders were looked at askance, with distrust, apprehension, contumely, scorn, fear, resentment and vengence; that it was continued until its substitution by a state political administration (Gosudarstvennoye Polititsekoe Upravleniye) popularly known as G. P. U. (gaypayu) which was organized in its stead and to take its place, afterwards known as O. G. P. U. (ogpu) (the ‘ 0 ’ signifying unified after the 1923 formation of the U. S. S. R.).”

The complaint also contains allegations, in substance, that by reason of the publication of the subject article the plaintiff has been brought into public scorn and disgrace and there has been falsely created a suspicion and belief that the plaintiff, in her private and professional life, has participated in and committed vile, scandalous and shameful acts of misconduct, and that by reason of such publication she has been damaged in the sum of $50,000.

Concededly, the plaintiff has alleged no special damage. This, however, is not fatal as it is well established that a complaint in a libel action is sufficient if the false publication complained of is libelous per se. (Sydney v. Maefadden Newspaper Pub. Corp., 242 N. Y. 208; O’Connell v. Press Publishing Co., 214 N. Y. 352.)

The test applicable to the sufficiency of the complaint narrows down then to the single proposition of whether the publication complained of is libelous per se. The defendant, in support of its contention that the publication is not libelous per se, argues that, although the “ Cheka ” was everything the complaint alleged, it was, nevertheless, a legally constituted instrumentality of the Russian Government and, as such, presumably performed its functions in a lawful manner through its duly authorized officers and agents; that the statement that plaintiff was an officer of the “ Cheka ”, which so far as appears from the complaint she had a right to be, is not tantamount to charging her with the commission of a crime or other misconduct; and that, under such circumstances, there can be no libel regardless of how good her reputation was or how false the publication, particularly as there is no allegation that she was not a Russian citizen. This line of reasoning seems to be predicated on the general proposition that an article is not libelous per se if the act complained of is not illegal in the country where committed. (Crashley v. Press Publishing Co., 179 N. Y. 27.)

The article in question goes much further than merely charging appellant with having been an officer or agent of a foreign government. She is charged with association with Mussolini in a hangout for Russian revolutionaries, headed by her, as well as later becoming secretary to the dread “ Cheka ”. In Restatement of the Law of Torts, section 563, subdivision d, it is stated: ‘ In determining the meaning of a communication, words, whether written or spoken, are to be construed together with their context. Words which standing alone may reasonably be understood as defamatory may be so explained or qualified by their context as to make such an interpretation unreasonable. So too, words which alone are innocent may in their context clearly be capable of a defamatory meaning and may be so understood. The context of a defamatory imputation includes all parts of the communication which are ordinarily heard or read with it.”

The allegations of the complaint describing the organization, functions and practices of the “ Cheka ” are essential to an understanding of the significance of the language of the subject publication and do not, in our opinion, constitute extrinsic facts of such a character as to necessitate allegations of special damage.

Given a fair reading, we feel that the article in question, taken in its entirety, fairly raises a question as to whether the plaintiff was held up to public contempt and disgrace; and, if so found, such an article is libelous per se without alleging special damages. (Hays v. American Defense Society, 252 N. Y. 266; Kimmerle v. New York Evening Journal, Inc., 262 N. Y. 99.)

In Katapodis v. Brooklyn Spectator, Inc. (287 N. Y. 17, 20), in which a newspaper article describing the poverty of the plaintiff was held libelous per se, Lóughban, J. said: “ The reason is that in libel the matter is defamatory not only if it brings a párty into hatred, ridicule or contempt by asserting some moral discredit upon his part, but also if it tends to make him be shunned or avoided, although it imputes no moral turpitude to him.”

Whether the false publication in the instant case, in and of itself, is sufficient to bring the plaintiff into disrepute and subject her to the hatred and contempt of her friends and associates is a matter within the province of the jury, and we are unwilling to say, as a matter of law, that the language used is not libelous per se.

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

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

Judgment accordingly.