author: Finch, J. Loughran, J.

text:
    In the Matter of Edmund J. Donegan, an Attorney, Appellant; Association of the Bar of the City of New York, Respondent.

      Argued January 8, 1940;
    decided March 5, 1940.

      E. J. Dimock for Edmund J. Donegan, appellant.
    Since appellant was not convicted of an offense which would have been a felony under the law of New York he was entitled to a hearing in the disbarment proceedings. (Matter of Kaufmann, 245 N. Y. 423; Pearson v. Pearson, 230 N. Y. 141; Sims v. Sims, 75 N. Y. 466; People ex rel. Atkins v. Jennings, 248 N. Y. 46; Matter of Eldridge, 82 N. Y. 161; Wilson v. Manhattan Ry. Co., 2 Misc. Rep. 127; 144 N. Y. 632.) Appellant has not been convicted of a felony within the terms of section 88 of the Judiciary Law (Cons. Laws, ch. 30). (People ex rel. Atkins v. Jennings, 248 N. Y. 46; Matter of Kaufmann, 245 N. Y. 423; Matter of Biggs, 52 Ore. 433.)

      Theodore Kiendl, Einar Chrystie and Warren S. Fogel for respondent.
    The provisions of the Judiciary Law regulating the disbarment of attorneys at law include as a cause for automatic disbarment a conviction in the United States court for a felony committed in violation of a Federal statute. The appellant has been convicted of a felony within the terms of section 88 of the statute. (Barnes v.
      District Court of Appeal, 178 Cal. 500; Matter of Canter, 146 Misc. Rep. 123; State of Florida v. Mellon, 273 U. S. 12; Pollard v. Hogan, 44 U. S. 212; Hauenstein v. Lynham, 100 U. S. 483; Matter of Minner, 133 Kan. 789; Matter of Lindheim, 195 App. Div. 827; Matter of Felder, 214 App. Div. 57; Matter of Acker son, 218 App. Div. 388; Matter of Comyns, 132 Wash. 391; Commonwealth v. Porter, 242 Ky. 561.)
   Finch, J.

The decision in this case involves the interpretation of section 88 of the Judiciary Law (Cons. Laws, ch. 30), which provides for the summary and irrevocable disbarment of an attorney in consequence of his conviction of a felony.

As a result of the collapse of the guaranteed mortgage companies in the city of New York in 1933, appellant was indicted and convicted in the United States District Court for the Southern District of New York of the crime of conspiracy to use the mails to defraud. (U. S. Code, tit. 18, | 88.) The conviction has been affirmed by the United States Circuit Court of Appeals, Second .Circuit, and application for certiorari has been denied by the Supreme Court of the United States. Likewise, petition for pardon has been denied by the President of the United States.

The crime of conspiracy, of which appellant stands convicted, may be punished by imprisonment for not more than two years. (U. S. Code, tit. 18, § 88.) By the laws of the United States, All offenses which may be punished by death or imprisonment for a term exceeding one year shall be deemed felonies. All other offenses shall be deemed misdemeanors.” (U. S. Code, tit. 18, § 541.) Under the law of New York, however, unless special provision is made therefor (See Penal Law, §§ 581, 953, 1436, 2052), conspiracy to commit a crime is only a misdemeanor. (Penal Law, § 580.) Thus appellant has been convicted of a crime which is a felony under the laws of the United States but which would be only a misdemeanor when cognizable under the laws of this State.

The Judiciary Law of this State provides:

“ § 88. Admission to and removal from practice by appellate division. * * *

3. Whenever any attorney and counsellor-at-law shall be convicted of a felony, there may be presented to the appellate division of the supreme court a certified or exemplified copy of the judgment of such conviction, and thereupon the name of the person so convicted shall, by order of the court, be stricken from the roll of attorneys.

4. Upon a reversal of the conviction for felony of an attorney and counsellor-at-law, or pardon by the president of the United States or governor of this state, the appellate division shall have power to vacate or modify such order or debarment.”

§ 477. Attorney convicted of felony shall cease to be attorney. Any person being an attorney and counsellorat-law, who shall be convicted of a felony, shall, upon such conviction, cease to be an attorney and counsellor-at-law, or to be competent to practice law as such.”

Acting under its interpretation of these séctions, the Appellate Division, first judicial department, has stricken the name of appellant from the roll of attorneys upon the presentation of exemplified copies of the judgment of conviction and without further hearing upon the ground that it is constrained so to do by subdivision 3 of section 88 of the Judiciary Law.

The Judiciary Law commits to the Appellate Division in full measure responsibility for admission to and removal from practice. (Judiciary Law, § 88, subd. 2.) Only in the case of conviction of felony, however, is resort to its discretion foreclosed. (Judiciary Law, § 88, subd. 3.) Then disbarment follows de cursu upon presentation of an exemplified copy of the judgment of conviction subject to reconsideration > only after the exercise of executive clemency or reversal of the judgment of conviction on appeal. (Judiciary Law, § 88, subd. 4.) We are not concerned with the merits. The question presented is solely whether the term felony,” as employed in the above sections of the Judiciary Law, providing for summary, permanent disbarment, includes an offense defined as a felony by Federal statute, which, if cognizable under the laws of New York, would at most be a misdemeanor, since, as already noted, in general, conspiracy under the laws of this State does not rise above that category of crime.

In view of the reference to presidential pardons in subdivision 4 of section 88, appellant does not contend that the term “ felony,” as used by the Judiciary Law, be confined to the definition in section 2 of the Penal Law, which provides that a felony is “ a crime which is or may be punishable by (1) death; or (2) imprisonment in a state prison.” Obviously, the President of the United States cannot pardon offenders against the laws of this State, and, therefore, subdivision 4 of section 88 of the Judiciary Law necessarily indicates an intent to include some form of Federal crime and not to be restricted to the definition of the Penal Law of New York, for otherwise the reference to presidential pardons would be utterly meaningless.

At early common law the term felony ” was applied to describe the more serious offenses cognizable in the royal courts, conviction for which entailed forfeiture of life, limb and chattels and escheat of lands to the felon’s lord after a year and a day in the king’s hands. (2 Holdsworth, History of English Law, 357, 358.) Subsequently, however, the classification was so greatly enlarged (4 Holdsworth, op. cit. supra, 501-512), that many offenses not involving moral turpitude were included therein (e. g., fishing in a private pond by night and breaking the head of a private pond by night or day, 31 Henry VIII, ch. 2; witchcraft, 5 Eliz. ch. 16; 1 Jac. I, ch. 12; casting the queen’s nativity, 23 Eliz. ch. 2; the failure of Egyptians to leave the country within a specified time, 1, 2 Philip & Mary, ch. 4). The reception of common law in this country and the development of numerous sovereign jurisdictions resulted in many instances in complete reclassification of crimes and punishments. Naturally, the system adopted by the various legislative bodies did not coincide. Consequently, although there is in effect unity in the condemnation by the use of the term felony ” of certain basic offenses against society, e. g., murder, robbery, arson, etc., generally the meaning of the term varies with the jurisdiction. As was said in Matter of Biggs (52 Ore. 433, at p. 435): Neither the words ‘ felony ’ or ‘ misdemeanor ’ of themselves have any exactness or precision of definition * * * the word ‘ felony ’ is of itself, as said by Mr. Chief Justice Agnew, ' incapable of any definition, and is descriptive of no offense.’ Lynch v. Commonwealth, 88 Pa. 189, 192 (32 Am. Rep. 445). It is a matter of statutory provision, and what may be a felony in one jurisdiction may be a misdemeanor in another, and vice versa, and in some jurisdictions crimes may not be classified at all. * *

Similarly, in discussing the clause of the United States Constitution which authorizes Congress to define and punish felonies committed on the high seas, it was said by Madison: Felony is a term of loose signification, even in the common law of England; and of various import in the statute law of that kingdom. But neither the common nor the statute law of that, or of any other nation, ought to be a standard for the proceedings of this, unless previously made its own by legislative adoption. The meaning of the term, as defined in the codes of the several states, would be as impracticable, as the former would be a dishonorable and illegitimate guide. It is not precisely the same in any two of the states; and varies in each with every revision of its criminal laws. For the sake of certainty and uniformity, therefore, the power of defining felonies in this case was in every respect necessary and proper.” (The Federalist, No. XLII [Lodge ed.], 260, 261.)

Thus the classification of crimes into felonies and misdemeanors represents the view which the given jurisdiction takes of the gravity of the offense.

Section 88 of the Judiciary Law, though including at least some form of Federal crime, is ambiguous as to the following three situations: (1) Where an offense is a felony under Federal law and also a felony under the New York law; (2) where an offense is a felony under Federal law but is a crime less than a felony in this State; (3) where an offense is a felony solely under Federal law and is not cognizable at all under our laws. It is submitted that only the first of the three categories is covered by section 88 of the Judiciary Law. Otherwise, there would be the anomalous result whereby the statute would require the Appellate Division summarily to disbar for life without the possibility of modification for an offense which is a felony under the laws of the United States but which, if punished by the laws of this State, would permit of a hearing and less severe results.

Since various consequences, in addition to the punishment prescribed by the Penal Law have always been visited upon the felon (e. g., disqualification from holding positions of trust, Surr. Ct. Act, § 94, subd. 4; loss of franchise, Election Law [Cons. Laws, ch. 17], § 152; formerly, disqualification as a witness, 2 R. S. 701, § 23; harsher punishments, Penal Law, §§ 1941, 1942), the problem has arisen before in the interpretation of statutes as to whether convictions for felony, as defined by the laws of other jurisdictions, should be followed by the consequences which would result upon conviction for felony as defined by the statutes of this State. (Sims v. Sims, 75 N. Y. 466; People ex rel. Atkins v. Jennings, 248 N. Y. 46; Matter of Cohen, 278 N. Y. 584.)

In Sims v. Sims (supra), where 2 R. S. 701, section 23, provided in effect that no person “ sentenced upon a conviction for felony ” should be competent to testify in any cause, it was said, “ I think it quite clear that the disqualification created by this statute is consequent only upon a conviction in this State * * *. Crimes might be felonies in other States which did not fall within our statutory definition. ” (pp. 468, 469.)

Likewise, in construing the terms of a commutation of sentence by the Governor, it was held in People ex rel. Atkins v. Jennings (supra) that the use of the term “felony” referred to crimes which are felonies by the laws of this State. More recently, in Matter of Cohen (supra) this court affirmed a determination that the word “ felon,” as used in subdivision 4 of section 94 of the Surrogate’s Court Act, in disqualifying certain persons from holding fiduciary offices, does not include one rendered a felon by Federal statute who was not such under New York law.

But there is a further reason for such an interpretation. Although disbarment is not strictly a punishment for crime, but only the withdrawal of a privilege (Matter of Rouss, 221 N. Y. 81, 91), it cannot be denied that the requirement of automatic and irrevocable disbarment for life provided by the Judiciary Law, is in effect a consequence most severe, and partakes of the nature of punishment. Hence the statute must be interpreted in the light of the fundamental canon that penal statutes must be strictly construed. (59 C. J. p. 1113; City of Rochester v. Rochester Gas & Elec. Corp., 233 N. Y. 39, 52; U. S. v. Fruit Growers Express Co., 279 U. S. 363; Prussian v. U. S., 282 U. S. 675.) Strict construction of section 88, subdivision 3, and section 477 of the Judiciary Law requires that the term “ felony ” include only those Federal felonies which are also felonies under the laws of this State, and exclude such Federal felonies as are “ cognizable by our laws as a misdemeanor or not at all.” (People ex rel. Atkins v. Jennings, 248 N. Y. at p. 52.)

It is urged,” however, that subdivision 4 of section 88 of the Judiciary Law, in permitting modification by the Appellate Division in the event of a “ pardon by the president of the United States,” indicates that the Legislature intended that the word “ felony,” as used in subdivision 3 of section 88, include all felonies which are so under the Federal law, in addition to those which are felonies under our own statutes. But this contention is completely met by the fact that the reference to presidential pardon is given meaning by the inclusion of the first of the three categories noted above; nothing in the quoted phrase compels also its extension to acts which are not felonies under the laws of this State. Thus, under the interpretation at which we have arrived, all parts of the statute are given meaning without allowing the automatic operation of these provisions to cover a situation incompatible with a required strict construction.

Nothing in this opinion should be taken to change the discretion now lodged in the Appellate Division in dealing with an attorney under subdivision 2 of section 88.

The proceeding is remitted to the Appellate Division which may proceed under subdivision 2 of section 88 of the Judiciary Law, authorizing the Appellate Division to govern the conduct of attorneys. The judgment of conviction will constitute at least prima facie evidence of guilt of the crime charged. (Cf. State v. O’Leary, 207 Wis. 297; annotated, 81 A. L. R. p. 1193.) We do not need to go further.

The order of the Appellate Division should be reversed and the proceeding remitted to the Appellate Division to proceed in accordance with this opinion.

Loughran, J.

(dissenting). Appellant, while a member of the bar of this State, was convicted in the United States District Court for the Southern District of New York of the offense of conspiracy to use the mails to promote frauds. This offense against the United States (U. S. Code, tit. 18, § 338) is deemed to be a felony (Id. §§ 88, 541). Upon the judgment of his conviction thereof and nothing else, the Appellate Division made its order finally removing the appellant from the practice of the law.

The court assumed to act in obedience to the following provision of the Judiciary Law of this State: “ Whenever any attorney and counsellor-at-law shall be convicted, of a felony, there may be presented to the appellate division of the supreme court a certified or exemplified copy of the judgment of such conviction, and thereupon the name of the person so convicted shall, by order of the court, be stricken from the roll of attorneys.” (§ 88, subd. 3.) It is argued for the appellant that the word “felony,” as so used, excludes the Federal felony of conspiracy to commit an offense against the United States. The base of this argument is the circumstance that in this State such conspiracies as are made punishable by the Penal Law are therein generally classified as misdemeanors. (Art. 54.) The question for decision thus turns upon the scope of the foregoing provision of the Judiciary Law rather than upon any internal construction thereof; that is to say, the issue is whether that provision is applicable to the situation of the appellant.

In both the Federal criminal law and the criminal law of this State, the sole test of whether a given offense is a felony is the extent of the punishment therefor. Section 541 of title 18 of the United States Code provides that all offenses which may be punished by death or by imprisonment for a term exceeding one year shall be deemed felonies and that all other offenses shall be deemed misdemeanors. The New York Penal Law provides that a felony is a crime which is or may be punishable by death or by imprisonment in a State prison; that any other crime is a misdemeanor; that no person shall be imprisoned in a State prison if the term or maximum term of his sentence be less than one year; and that where a person is convicted of a crime for which the punishment is imprisonment for a term exceeding one year, or is sentenced to imprisonment for such a term, the imprisonment must be inflicted by confinement at hard labor in a State prison. (Penal Law, §§ 2, 2181, 2182, subd. 1, 2183.) Under the United States Code, conspiracies to commit offenses against the United States may be punished by imprisonment for not more than two years. (Tit. 18, § 88.) In a word, the statutory Federal offense of which the appellant was convicted in the Federal court called for punishment in a degree which meets the New York statutory measure of a felony.

Why, then, is that offense not included in the word felony ” as used in the foregoing provision of the Judiciary Law? Counsel for the appellant makes this answer: The Federal law says that every conspiracy is a felony, and the New York law says that no conspiracy, not even a conspiracy to commit a felony, is a felony. There is a clearly intelligible public policy behind the New York law. * * * The New York law, therefore, in effect says to the prosecutor: If you can convict this man only through the use of the 'device of a conspiracy charge, it is not so certainly a just conviction as to permit the severe penalties prescribed for felonies.’ The federal law ignores these considerations. The decision below gives no effect to this difference in policy between the two sovereignties.”

With that reasoning I cannot agree. To my mind, it means that the statutes of the United States are in this State foreign laws which for our State purposes must be taken to be limited by our local policies. Such a proposition is, of course, entirely inadmissible. The United States is not a foreign sovereignty as regards the several States, but is a concurrent, and, within its jurisdiction, paramount sovereignty.” (Claflin v. Houseman, 93 U. S. 130, 136.) The policy of the above-cited provisions of the United States Code is as much the policy of this State as if the enactment thereof had emanated from our State Legislature and is to be respected accordingly. (U. S. Const. art. VI; Second Employers’ Liability Cases, 223 U. S. 1.) That Federal policy is the only policy existent in this State in respect of offenses against the mails. Such an offense is not punishable under the New York Penal Law. (People v. Gutterson, 244 N. Y. 243.) Nobody knows that a conspiracy to misuse the mails would be classified as a misdemeanor were the foregoing provisions of the United States Code to be duplicated by the Legislature of this State. There are conspiracies that are classified as felonies by the Penal Law (§§ 581, 953, 1436, 2052).

When the appellant was admitted to the bar of this State, he took the prescribed oath that he would support the Constitution of the United States. (Judiciary Law, § 466; N. Y. Const. art. XIII, § 1.) The offense of which he was convicted in the Federal court was a violation of the supreme law of the land which he was thus sworn to administer. (U. S. Const. art. VI.) In these circumstances, his responsibility under Ms professional status was not to be diminished by distinctions based upon the duality of sovereignty in our structure of government. (See People v. Lafaro, 250 N. Y. 336, 341.)

I see no reason for saying that the word “ felony,” as used in the foregoing provision of the Judiciary Law, excludes the felony of which the appellant was convicted in the Federal court.

My vote is to affirm the order of the Appellate Division. Lehman, Ch. J., Rippey and Lewis, JJ., concur with Finch, J.; Loughran, J., dissents in opinion in which Sears, J., concurs; Conway, J., taking no part.

Ordered accordingly.


source: Caselaw Access Project

author: Lehman, Ch. J.

license: Public Domain

text:
    Mildred Goldman, Appellant, v. Robert J. Goldman, Respondent.

      Argued January 11, 1940;
    decided March 5, 1940.

      Robert Szold and Jess G. Schiffmann for appellant.
    The separation agreement, unimpeached, is conclusive and binding upon the parties. (Pettit v. Pettit, 107 N. Y. 677; Galusha v. Galusha, 116 N. Y. 635; 138 N. Y. 272; Winter v. Winter, 191 N. Y. 462; Garlock v. Garlock, 279 N. Y. 337; Carpenter v. Osborn, 102 N. Y. 552; Clark v. Fosdick, 118 N. Y. 7; Chamberlain v. Cuming, 99 App. Div. 561; Butler v. Marcus, 264 N. Y. 519; Lawrence v. Lawrence, 32 Misc. Rep. 503; Karlin v. Karlin, 280 N. Y. 32; Helvering v. Leonard, 105 Fed. Rep. [2d] 900; Grissler v. Grissler, 209 App. Div. 480; Rosenblatt v. Rosenblatt, 209 App. Div. 373; Kramrath v. Kramrath, 231 App. Div. 533; Matter of Bloomingdale, 278 N. Y. 435.)

      Horace S. Manges, Frank L. Weil and Gabriel Kaslow for respondent.
    The support provisions of a separation agreement having been inserted as alimony directions in a divorce judgment, plaintiff thereby obtained additional remedies of enforcement which would not have been available to her under the agreement. The power of the court to modify provisions for support and maintenance in a divorce judgment exists none the less where such provisions have been incorporated therein from a separation agreement. (Fox v. Fox, 263 N. Y. 68; Schnitzer v. Buerger, 237 App. Div. 622; Staehr v. Staehr, 237 App. Div. 843; Kunker v. Kunker, 230 App. Div. 641; Holahan v. Holahan, 234 App. Div. 572; Severance v. Severance, 260 N. Y. 432.) Even if the court’s power under sections 1155 and 1170 of the Civil Practice Act to modify the alimony directions should be deemed limited by the language of the judgment, the Special Term acted within such limit. Its order was a proper exercise of discretion. (Kennedy v. Kennedy, 73 N. Y. 369.)
   Lehman, Ch. J.

The plaintiff and the defendant were married on May 2, 1917, and have two children. On December 15, 1928, while living apart, they entered into a separation agreement, defining the provision which the defendant should make for the support of the plaintiff and the children. A few weeks thereafter the plaintiff obtained . a divorce from the defendant and the judgment entered in the divorce action on January 24, 1929, incorporates the stipulations of the separation agreement, fixing the manner in which the defendant should carry out his marital obligations. That was done in accordance with an express term of the separation agreement. Both the separation agreement and the judgment required that the defendant should pay to the plaintiff the sum of $21,000 per annum and, in addition, stipulated amounts to meet special expenses or charges. By order of the court made in October, 1938, the provisions contained in the final judgment, which required the defendant to pay the amounts fixed by the parties in the separation agreement, have been modified. Under the judgment as modified, the defendant is directed to pay for the support of his wife and children $14,000 per annum instead of $21,000: The plaintiff, leaning heavily upon the decisions of the court in Galusha v. Galusha (116 N. Y. 635; 138 N. Y. 272, 274), urges that the provisions for the support of wife and children incorporated in a decree of divorce pursuant to a valid agreement of the parties, may not be changed or modified without the consent of both parties.

The problem presented concerns solely the power of the court, -not the wisdom of its exercise. The evidence establishes that the defendant’s income was much greater in 1928 than it is now; and in 1928 anticipation of future income was based on foundations apparently secure. Certainly, it cannot be said that there is no evidence which justifies the invocation of the power of the court, if such power exists, to change the amount which the husband is directed to pay for the support of his wife and children as the husband’s ability to pay changes.

Though the marriage relation is created by agreement or contract of the parties, the State, and not the parties, determines the scope of the obligations arising from the marriage relation. The obligation of the husband to support his wife and to provide suitably for the maintenance and education of his children arises from the marriage relation and the wife may not release the husband from the obligation nor dimmish it; but husband and wife may agree upon the scale on which the home will be maintained, or if they five apart, they may agree on a reasonable amount which the husband should pay for the support of his wife and children. As part of the separation agreement, or of other agreement sanctioned by law, they may stipulate that either party shall assume obligations supplementing the obligations arising from the marital relation. Such agreements, lawful when made, will be enforced like other agreements unless impeached or challenged for some cause recognized by law. It is not in the power of either party acting alone and against the will of the other to destroy or change the agreement. In such case this court has said: The law looks favorably upon and encourages settlements made outside of courts between parties to a controversy. If, as in this case, the parties have legal capacity to contract, the subject of settlement is lawful and the contract without fraud or duress is properly and voluntarily executed, the court will not interfere.” (Galusha v. Galusha, 116 N. Y. 635, 646.) In that case the court held that in an action brought by the wife for divorce on the ground of adultery, the court has no power to set aside such a contract without the consent of both parties and no power to make an additional allowance for the support of the wife beyond the amount agreed upon by the parties — at least where the amount agreed upon is not insufficient for the support of the wife. In subsequent litigation between the same parties, instituted by the plaintiff for the purpose of rescinding or canceling the separation agreement, this court said that its decision in the divorce action was conclusive authority for the proposition that so long as the separation agreement remains unimpeached, it must be the measure of the allowance for the support of the plaintiff, which the defendant shall pay. It plainly suggests the necessity for a resort to the remedy which this action contemplates, if the plaintiff deems the enforcement of the agreement inequitable because of the manner in which its execution was obtained.” (Galusha v. Galusha, 138 N. Y. 272, 283.)

Nothing said or decided by this court in' any subsequent cases has weakened the authority of the two Galusha decisions. We apply, in this case, the rules formulated by the court in those cases but these rules do not solve the problem here presented. The Civil Practice Act, sections 1155 and 1170, confers upon the court the power in an action for divorce brought by a wife, to fix the amount which the husband shall pay for the support of his wife and children and to require the husband to pay the amount so fixed. In article 70 of the Civil Practice Act (§§ 1171, 1171-a, 1171-b and 1172) the Legislature has made provisions of drastic nature for the enforcement by the courts of an order or judgment of the court directing the husband to pay the amount fixed by the court. Husband and wife may by contract agree upon the amount which the husband shall pay in satisfaction of his marital obligation for support of his wife and children, and the court will not “ interfere ” with such a contract. It may be enforced like other contracts and, so long as the contract remains unimpeached, the court will not compel the husband to pay to the wife for her support a sum greater than the wife agreed to accept, at least where such sum is not plainly insufficient. So the court decided in the Galusha cases. The court did not, however, decide there, or in any other case, that the parties by voluntary contract could not only fix the amount which the husband shall pay but could also constrain the court to incorporate the terms of the voluntary agreement in a final judgment of divorce and thus make available for the enforcement of a contractual obligation voluntarily assumed the drastic remedies provided by law for the enforcement of a marital obligation created by law. That is the question that the court must now answer.

The court, in the final judgment dissolving the marriage in an action for divorce brought by the wife, may require the defendant to provide suitably for the education and maintenance of the children._of the marriage, and for the support of plaintiff, as justice requires, having regard to the circumstances of the respective parties; and, by order, upon the application of either party to the action, and after due notice to the other, to be given in such manner as the court shall prescribe, at any time after final judgment whether heretofore or hereafter rendered, may annul, vary or modify such a direction.” (Civ. Prac. Act, § 1155. Cf. also § 1170.) The State does not permit the husband to purchase exemption from the marital obligation to provide “ suitably ” for the wife and children, for that is an obligation which concerns the State as well as the parties to the marriage. The powers conferred by statute upon the court to require the husband in the action for divorce to make suitable provisions and the drastic remedies provided for the enforcement of such agreement or direction are justified by the public concern that wife and children shall not be left without suitable provision for support and for education. Drastic statutory provisions for the enforcement of a direction to the husband to pay an amount fixed “ as justice requires, having regard to the circumstances of the respective parties,” may be fair and reasonable when the court has the power also to “ annul, vary or modify such a direction ” as “ justice requires ” if such circumstances change, yet would be unreasonable and inappropriate if they could be invoked to enforce an obligation by the husband to pay an amount fixed by the parties and placed by the parties beyond the power of the court to change, even where the amount so fixed would provide the wife with a measure of support which, under changing circumstances, might be far beyond what justice requires.

The statute conferring upon the court power to direct the defendant to make suitable provisions “ as justice requires ” for the plaintiff’s support may not be read as a mandate or even as a grant of power to the court to insert in the judgment in an action for divorce a direction to the husband to pay the amount fixed by the parties unless that amount does constitute such suitable provision for wife and children “ as justice requires.” True, no public policy of the State prevents the parties from foreclosing by agreement a controversy between themselves as to what constitutes the amount which the husband should pay and the court will ordinarily direct the husband to pay the amount which the parties agree constitutes suitable provision for the support of the wife; but a direction so made is no more inviolate from future change by the court than a direction made by the court after a controversy between the parties as to the amount which the wife should receive has been determined by the court. The plaintiff might, if she chose, rely for her support upon the fixed contractual obligation which the defendant voluntarily assumed as part of the separation agreement and, as we have said, that contractual obligation will be given the same effect and may be enforced in the same manner as other contractual obligations. That fixed obligation required the defendant to pay the plaintiff for her support an amount which might be greater or might be less than the amount which the court would require or direct the defendant to pay if the court, pursuant to the provisions of section 1155 or section 1170 of the Civil Practice Act, determined independently the amount which would constitute suitable provision for the plaintiff’s support. So long as the contract remains in force — not impeached or canceled in manner permitted by law — the court could not, as the court decided in the Galusha case, direct the defendant to pay more or the plaintiff to accept less than the parties had agreed should be paid by the defendant for the support of the plaintiff. The court has not done so here. It has not directed the defendant to pay more than the amount agreed upon; nor has it deprived the plaintiff against her will of any benefit to which she was entitled under the contract. The plaintiff here was not content to rely solely upon the contractual obligation of the defendant. She invoked the power of the court to direct the defendant to pay her, for her support and for the maintenance of her children, a suitable sum as justice requires. The court, in the exercise of its powers conferred by statute, directed the defendant to pay the sum which both parties, at that time, agreed would be a suitable provision for his wife and children. That direction might be enforced in manner provided by the statute, though the contractual obligation could not be so enforced; and might be modified thereafter by the court, though the contractual obligation could not be so modified without the consent of both parties. The plaintiff, having invoked the power conferred upon the court by statute, to direct the defendant to make suitable provision for her support, the defendant may invoke the power of the court, conferred by that same statute, to modify its directions for the effect of the statute is to write a reservation into every final judgment of divorce.” (Fox v. Fox, 263 N. Y. 68, 70.) The direction contained in the judgment entered upon the plaintiff’s motion must be read as if it included an express reservation that it might thereafter be annulled, varied or modified pursuant to statute. Words in the judgment which might be inconsistent with such a reservation are of no effect for the court has no power to give a direction which the court has no power to change. (Cf. Severance v. Severance, 260 N. Y. 432; Karlin v. Karlin, 280 N. Y. 32; Schnitzer v. Buerger, 237 App. Div. 622; Staehr v. Staehr, 237 App. Div. 843; Kunker v. Kunker, 230 App. Div. 641; Holahan v. Holahan, 234 App. Div. 572.)

In this case the separation agreement contained a clause that “ In the event that either the husband or the wife shall at any time bring an action for divorce in this or any State of the United States, or in any foreign country, it is mutually stipulated, covenanted, and agreed by and between the husband and the wife that any decree or judgment made therein shall contain adequate provisions to carry out the purpose and intent of this agreement according to its purport and meaning. The court, however, upon the application of the husband shall have jurisdiction, power, and authority to modify the payments hereinbefore in paragraphs 3 and 4 provided to be made by this agreement by the husband only upon a showing or proof to the satisfaction of the court by the husband that he is financially unable to comply with the same, and only for the period said financial disability continues.”

The parties might agree that the plaintiff should not lose the benefit of the defendant’s contractual obligation by invocation of the power of the court to direct the defendant to pay the amount which he had voluntarily agreed to pay; but the parties could not confer upon the court jurisdiction or power which the court did not possess; nor could the parties by agreement limit the power conferred by statute. Upon this appeal we decide only that the power of the court to direct a husband to make suitable provision for the support of his wife is complemented by the power to annul, modify or vary the direction thereafter and that a party invoking the power of the court to give such direction cannot be heard to say that the direction so given is not subject to modification thereafter. We pass upon the effect of the separation agreement only so far as is necessary to support the conclusion that the agreement cannot and does not limit the power of the court conferred by statute. We point out here that the direction of the court that the defendant shall pay to the plaintiff a sum less than he agreed to pay does not relieve the defendant of any contractual obligation. The direction of the court may be enforced in manner provided by statute and the plaintiff may still resort to the usual remedies for breach of a contractual obligation if there has been such breach, but we do not now decide whether the parties intended that the contractual obligation of the defendant should survive where the court has modified a direction to the defendant to pay the sum fixed by contract.

The order should be affirmed, without costs.

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

Order affirmed.


text:
    Bush Terminal Company et al., Appellants, v. City of New York et al., Respondents.

      Argued January 16, 1940;
    decided March 5, 1940.

      Charles H. Tuttle, Harper A. Holt and Abraham Lillienthal for appellants.
    Chapter 553 of the Laws of 1931 is unconstitutional if construed as authorizing the several municipalities in the port district to grant local exemption upon such terms and for such periods as each municipality may decide for itself, or if construed as authorizing it to make donations to each of such municipalities in such amounts and on such terms and conditions and for such periods as it may decide. (Deady v. Village of Lyons, 39 App. Div. 139.) The industrial and office building is not exempted from taxation by chapter 553 of the Laws of 1931 or by any other statute; nor is the property of the Port Authority exempt merely because of ownership by the Authority. Whether or not the Authority could in New York city lawfully go into the speculative real estate business for the purpose of revenue for its activities in New York and New Jersey, it could not thereby secure local tax exemption. (People ex rel. Andrews v. Cameron, 140 App. Div. 76; 200 N. Y. 585; Helvering v. Gerhardt, 304 U. S. 405; Matter of California Toll Bridge Authority, 212 Cal. 298; Bates v. State Bridge Comm., 109 W. Va. 186; Alabama State Bridge Corp. v. Smith, 217 Ala. 311; Kelley v. Earle, 320 Penn. St. 449; Bank of United States v. Planters’ Bank of Georgia, 9 Wheat. 904; Briscoe v. The Bank of Kentucky, 11 Pet. 257; Sloan Shipyards Corp. v. United States Shipping Board, 258 U. S. 549; United States ex rel. Skinner & Eddy Corp. v. McCarl, 275 U. S. 1; Susquehanna Power Co. v. State Tax Comm., 283 U. S. 291; People ex rel. Mayor v. Tax Assessors, 111 N. Y. 505; Clark v. Sprague, 113 App. Div. 645; People ex rel. Commissioners v. Sancomb, 259 N. Y. 1.)

      John J. Bennett, Jr., Attorney-General (Henry Epstein of counsel), for State of New York, and Julius Henry Cohen Austin J. Tobin and Daniel B. Goldberg for Port of New York Authority, respondent.
    The Port Authority is a governmental agency of the States, performing essential governmental functions. (State v. Port of Astoria, 79 Ore. 1; Graves v. New York ex rel. O’Keefe, 306 U. S. 466; Helvering v. Gerhardt, 304 U. S. 405; Gaynor v. Marohn, 268 N. Y. 417; People ex rel. Buffalo & Fort Erie Public Bridge Authority v. Davis, 277 N. Y. 292; Boyle Holding Corp. v. Medgreen Realty Corp., 154 Misc. Rep. 189; New Jersey Interstate Bridge & Tunnel Comm. v. Jersey City, 93 N. J. Eq. 550; State Highway Comm. v. Elizabeth, 102 N. J. Eq. 221; Commissioner of Internal Revenue v. Ten Eyck, 76 Fed. Rep. [2d] 515; Callanan Road Imp. Co. v. McMullen Co., 253 App. Div. 424; 280 N. Y. 536; People ex rel. Rogers v. Graves, 245 App. Div. 452; 271 N. Y. 543; Webb v. Port Comm. of Morehead City, 205 N. C. 663.) The Port Authority property is exempt by statute from taxation. (Cons. Laws, ch. 60, § 4, subds. 2, 3; L. 1931, ch. 553; San Antonio Ind. School Dist. v. Water Works Board, 120 S. W. Rep. [2d] 861; Passaic Valley Sewerage Commrs. v. Jersey City, 93 N. J. L. 427; Knoxville Housing Authority, Inc., v. Knoxville, 174 Tenn. 76; Opinions of Justices, 235 Ala. 485; Webster v. Board of Regents, 163 Cal. 705; State Land Settlement Board v. Henderson, 197 Cal. 470; Board of Regents v. Hamilton, 28 Kan. 376; People v. Nelson, 133 Ill. 565; Paine v. Port of Seattle, 70 Wash. 294; Egan Ind. Cons. School District v. Minnehaha County, 65 S. D. 32; People ex rel. Mayor v. Assessors, 111 N. Y. 505.) The Port Authority is tax immune as the governmental agency of the States. (Lessee of Marlatt v. Silk, 11 Pet. 1; Jersey City v. Blum, 101 N. J. L. 93; Township of Tear-neck v. State Board of Tax Appeals, 110 N. J. L. 28; 111 N. J. L. 242; Doman v. Philadelphia Housing Authority, 331 Penn. St. 209; People ex rel. Mayor v. Assessors, 111 N. Y. 505; Newark v. Verona Township, 59 N. J. L. 94; Romano v. Housing Authority, 123 N. J. L. 428; New Jersey Interstate Bridge & Tunnel Comm. v. Jersey City, 93 N. J. Eq. 550.) The rental of the terminal building does not curtail its tax exemption. (People ex rel. Mayor v. Assessors, 111 N. Y. 505; People ex rel. Buffalo & Fort Erie Public Bridge Authority v. Davis, 277 N. Y. 292; People ex rel. Trustees of Masonic Hall & Asylum Fund
      v. Miller, 279 N. Y. 137; Knoxville Housing Authority, Inc., v. Knoxville, 174 Tenn. 76; Opinions of Justices, 235 Ala. 485; New York ex rel. Rogers v. Graves, 299 U. S. 401; Commissioner of Internal Revenue v. Ten Eyck, 76 Fed. Rep. [2d] 515; United N. J. R. R. Co. v. Jersey City, 57 N. J. L. 563; Newark v. Verona Township, 59 N. J. L. 94; Brocket v. Ohio & Penn. R. R. Co., 14 Penn. St. 241.) There is no valid constitutional objection to the proposed agreement under chapter 553 of the Laws of 1931. (Levy Leasing Co. v. Siegel, 258 U. S. 242; Matter of New York City Housing Authority v. Muller, 270 N. Y. 333; Mars Realty Corp. v. Sexton, 141 Misc. Rep. 622; South Carolina Power Co. v. South Carolina Tax Comm., 52 Fed. Rep. [2d] 515; 286 U. S. 525; Madera Water Works v. Madera, 228 U. S. 454; Puget Sound Power & Light Co. v. Seattle, 291 U. S. 619; Bell’s Gap R. R. Co. v. Pennsylvania, 134 U. S. 232; Citizens’ Tel. Co. v. Fuller, 229 U. S. 322; People ex rel. Buffalo & Fort Erie Public Bridge Authority v. Davis, 277 N. Y. 292.)

      William C. Chanler, Corporation Counsel (Robert M. Benjamin of counsel), for City of New York et al., respondents.
    Chapter 553 of the Laws of 1931 is constitutional. (Puget Sound Power & Light Co. v. Seattle, 291 U. S. 619; 292 U. S. 603; State Board of Tax Commissioners v. Jackson, 283 U. S. 527; People ex rel. 1170 Fifth Ave. Corp. v. Goldfogle, 254 N. Y. 476; People ex rel. Buffalo & Fort Erie Public Bridge Authority v. Davis, 277 N. Y. 292; People ex rel. Bronx Parkway Comm. v. Common Council of Yonkers, 106 Misc. Rep. 579; 190 App. Div. 957; 229 N. Y. 1.)
   Lehman, Ch. J.

The Port of New York Authority, hereinafter referred to as the Port Authority, acquired title to an entire square block of land in the borough of Manhattan, city of New York. The land had previously been divided into many parcels and, with the old buildings on it, had been subject to the general tax on real property. The Port Authority entered into a written contract with eight trunk line railroads entering the Port of New York district whereby it agreed to erect an “ Inland Terminal Building ” upon the land it had acquired and to lease to the railroads, for a term of five years, with the privilege and option on the part of the railroads to renew said lease for nine successive periods of five years each, the “ basement, portions of the ground floor * * * to be used and operated by them as a Union Inland Freight Station through such organization as may be formed by said Carriers for such purpose.” Pursuant to said contract the Port Authority has demolished the old buildings on the land and has erected a large modern building sixteen stories high, designated by the Authority as Inland Terminal No. 1. The space leased to the eight trunk line railroads is now actually in use by them as an Inland Terminal Station for the transportation, assemblage and the distribution of less-than-carload freight. In the space retained by the Authority on the street floor there are a number of stores. The upper stories of the building are suitable for manufacturing, office and other industrial and business uses, and have been rented and are being offered for rent to the public at large for private businesses in the same manner as other owners of similar buildings usually rent and offer for rental space in the buildings they own.

The Legislature, by chapter 553 of the Laws of 1931, has provided that: To the end that counties, cities, boroughs, villages, towns, townships and other municipalities in the port of New York district, may not suffer undue loss of taxes and assessments by reason of the acquisition and ownership of property therein by The Port of New York Authority (hereinafter called the Port Authority), the Port Authority is hereby authorized and empowered, in its discretion, to enter into a voluntary agreement or agreements with any county, city, borough, village, town, township or other municipality in said port district, whereby it will undertake to pay a fair and reasonable sum or sums annually in connection with any marine or inland terminal property owned by it, not in excess of the sum last paid as taxes upon such property prior to the time of its acquisition by the Port Authority.” The statute authorizes, also, every municipality to enter into such agreement and further provides that the sums so received shall be devoted to purposes to which taxes may be applied, unless and until otherwise directed by the law of the State in which such municipality is located.

The Port Authority has offered to enter into a contract whereby it agrees to pay to the city of New York the sum of $60,064.10, which is equal to the taxes fixed on all the parcels in the block of land prior to the time they were acquired by the Port Authority for the construction of the terminal building. That sum is much less than the taxes would be upon the land and new building, which cost about $16,000,000, if assessed as other land and buildings in the city of New York are assessed. The plaintiffs own extensive buildings in the city of New York and offer for rental in those buildings space for warehouse, manufacturing or office use. Challenging both the validity of the statute and its application to the building constructed by the Port Authority, the plaintiffs have brought this action to restrain the Port Authority and the city from entering into the proposed contracts.

The Port of New York is commercially a single district, though it lies partly in New Jersey, and many local governmental units or municipalities are contained in it. The freight terminals of almost all the railroads which serve the port are on the New Jersey side of the Hudson river and the most important business and industrial centers of the port are in New York. The State of New York, or an agency exercising only powers which the State of New York could confer upon it, could not, acting alone, solve the problems connected with the efficient development and regulation of the commerce of the port, nor could the State of New Jersey or an agency acting under authority conferred by that State. In 1917 the Legislatures of New York and of New Jersey authorized the Governors of those States to appoint a Commission which should study and report on the problem. (L. 1917, ch. 426 of N. Y.; L. 1917, ch. 130 of N. J.) After the Commission had presented its report and recommendations the Port Authority was established by a compact made by the States of New York and New Jersey on April 30, 1921, pursuant to chapter 154 of the Laws of 1921 of New York and chapter 151 of the Laws of 1921 of New Jersey. The compact was confirmed by the Congress of the United States in August, 1921. (Public Resolution No. 17, 67th Congress; 42 U. S. Stat. [Concurrent Resolutions, 1921] p. 174.)

The compact defines the Port Authority as “a body corporate and politic,” having the power to purchase, construct, lease and /or operate any terminal or transportation facility within said district; and to make charges for the use thereof.” The powers granted were to be exercised to carry out a “ Comprehensive Plan ” for the development of the port, which the Port Authority was directed to prepare and submit to the Legislatures of the two States. The “ Comprehensive Plan ” was adopted by both Legislatures in 1922. (Laws of 1922, ch. 43, of New York; Laws of 1922, ch. 9, of New Jersey.) It provides, among other things, that The port authority shall be regarded as the municipal corporate instrumentality of the two states for the purpose of developing the port and effectuating the pledge of the states in the said compact, but it shall have no power to pledge the credit of either state or to impose any obligation upon either state, or upon any municipality, except as and when such power is expressly granted by statute, or the consent by any such municipality is given.”

The power of the Port Authority to construct and operate a “ terminal or transportation facility ” is expressly conferred by the statute. The basement and the space leased for the railroad carriers for use as a Union Inland Freight Station ” constitutes, it is plain, a terminal or transportation facility ” as defined in the compact. By the terms of the lease that space must be used by the lessees as a place named in the carriers’ tariffs at which consignees and shippers may receive and deliver less than carload freight transported or to be transported by any or all of the carriers in accordance with the applicable provisions of their respective tariffs.” The plaintiffs maintain, however, that even though the Port Authority might have power to purchase land and construct thereon a freight terminal, it has no power to construct a sixteen-story building of which only the basement and part of the first story are intended for use as a freight terminal and all the remainder of the building is intended to be offered for use to the public for factory, loft or other use. The plaintiffs further maintain that if the Port Authority has power to erect such a building, the building is subject to the same taxes as other commercial buildings.

The evidence shows convincingly that the Union Inland Terminal Freight Station facilitates greatly the transportation and delivery of freight in less-than-carload lots. The court at Special Term has found, and its finding is not challenged, “ That the construction of Inland Terminal No. 1 was intended to and has eliminated a large amount of duplication of trucking and traffic congestion and was intended to, and did bring about an enormous saving of time and expense to the merchants and consumers of the Port of New York district, and was intended to, and is contributing to the health, welfare and safety of the people of the Port district.” The erection of „ inland terminals in_order to obtain such economic benefits for the public was within the scope of the Comprehensive Plan;” yet under the compact and Comprehensive Plan the Port Authority could not impose any obligation upon either State or any municipality, even to obtain a benefit so important to the public. Facilities which save the consumer time and money must be acquired, if at all, through the sale of bonds which are not an obligation of State or city. The anticipated revenue from each proposed project must be sufficient to pay the expense of operation and maintenance as well as the interest and sinking fund requirements of the bonds issued to pay for the project. The price fixed for economic benefit must be high enough to provide that revenue, yet not so high that it becomes economically impossible for merchants and consumers to pay. The evidence established and the court at Special Term has found that without the upper stories it would have been economically impossible to construct the Inland Terminal Station. Such a terminal for efficient operation should occupy a full block of land, and land in New York is too costly to be used economically for such a purpose alone. The court has found that without the addition of upper stories which might be utilized for revenue producing purposes, the Port Authority would have been unable to borrow the funds needed to finance the erection of the Inland Terminal Station; and consequently would have been wholly unable to carry out and effectuate the mandate of the aforesaid Compact and Comprehensive Plan.”

The construction of a great building, over the space used for the freight terminal, in order to obtain revenue, might transcend the powers of the Authority if the erection of the freight terminal alone would have been feasible, but the mandate and the express grant of power to the Port Authority to construct terminals include as an incident the power to use appropriate means to carry out the mandate. Acts performed in carrying out a legislative mandate, as an incident to the exercise of a general power conferred by the Legislature, are not ultra vires where they were within the contemplation of the Legislature when it granted the general power.

In this case the evidence clearly establishes that the Legislature contemplated that in constructing inland terminals the Port Authority might erect buildings which would include additional space for rental, from which revenue might be derived and that the Legislature intended to confer upon the Port Authority power to construct such buildings. The Commission appointed, under the statutes of 1917 enacted by both States, stated in its report to the Legislatures of both States that inland terminals in Manhattan are designed with four or more floors to be rented for warehouse purposes,” and also points out that the discussion in the report of operating costs of such terminals takes cognizance of the possibility of building one or two additional floors and renting them for manufacturing or office purposes at a much higher unit rate than can be obtained from warehouse floors.” The report throws light upon the meaning and intent of the compact between the States. In that compact, after conferring upon the Port Authority power to construct any terminal or transportation facility,” the Legislature defined the word “ facility ” as inclusive of all works, buildings, structures, appliances and appurtenances necessary and convenient for the proper construction, equipment, maintenance and operation of such facility or facilities or any one or more of them.” Any possible doubt that the Port Authority, empowered to construct “ any terminal or transportation facility,” is authorized to construct terminals with additional space for other purposes is removed by the Comprehensive Plan ” prepared pursuant to the compact and adopted by the Legislatures; for that plan expressly provides “ terminals to contain storage space and space for other facilities.” (L. 1922, ch. 43, § 5.)

Of course, the power to construct terminate which incidentally contain storage space and space for other facilities ” might be transcended if, under cover of that power, the Port Authority assumed to construct "an office or loft building intended primarily for revenue and only incidentally for terminal purposes. The factors involved are often relative, not absolute, and the test may be one of degree. (Cf. Kaukauna Water Power Co. v. Green Bay & Mississippi Canal Co., 142 U. S. 254.) Here, again, the record shows persuasively that the Port Authority did not exceed the power which the Legislature intended to confer upon it. Pursuant to the provisions of the compact, Port Authority reports annually to the Governors of New York and New Jersey. These reports are public documents and through them the Governors and the Legislatures of the two States were fully informed that the Port Authority intended to erect Inland Terminal No. 1 and other similar terminals, yet the Governors and Legislatures manifested approval of the construction of the Inland Terminal Building in its present form including the use of the upper floors for office, loft and manufacturing purposes.

The question remains whether the Legislatures which empowered the Port Authority to construct such buildings also made them exempt from taxation or authorized the Port Authority or the city of New York to agree that in lieu of such taxes the Port Authority should pay a sum not greater than the taxes levied upon the block of land and the buildings on it before acquisition by the Port Authority. Arguments that the Legislature did not intend that chapter 553 of the Laws of 1931 should apply to such buildings as Inland Terminal No. 1 are refuted by the circumstances under which the statute was adopted. Previous discussions between the Port Authority and the city leave no doubt that the statute was enacted with full knowledge that the Port Authority was about to erect Inland Terminal No. 1 and in its present form, and intended to erect other terminals of the same kind if Inland Terminal No. 1 proved its usefulness and that its purpose was to meet the problem which would be created by the erection of such terminals.

The statute does not in express terms confer tax exemption. Its language indicates that the Legislature assumed that such buildings, erected in accordance with the provisions of the compact and Comprehensive Plan, are exempt from taxation. The withdrawal of large blocks of land from the taxing power of a municipality might seriously cripple the municipality. The Port Authority had previously indicated that it recognized the problem and the city of New York had previously indicated its concern. The expressed purpose of the statute was to enable the Port Authority to arrive at an agreement with a municipality by which the Port Authority would assume an obligation to pay to the municipality a sum which might equal but could not exceed the taxes received by the municipality from the land while it was still subject to taxation. The validity of the statute is not open to challenge by the plaintiffs if, in fact, as the Legislature apparently assumed, the land and building of the Port Authority is exempt, for the plaintiffs would certainly not be aggrieved by a voluntary payment made by the Port Authority to the city of New York.

The Port Authority is “ a body corporate and politic ” created by two States to exercise the powers of both States for a public purpose in which the people of both States are interested. Property held by the Port Authority for a public purpose might be taxed by the State in which the property is situated unless by the compact creating the joint agency both States agreed expressly or by fair implicacation that the property of the joint agency used to carry out the public purpose should not be taxed by either State. There is no express provision in the compact that property held by the joint agency for a joint public purpose should be withdrawn from the taxing power of the States, acting directly or through local tax districts; but we are told that the tax exemption must be read into the compact by necessary implication. From the start there has been difference of opinion in regard to whether the States have jointly conferred upon the property of the agency exemption from taxation and from the start there has been general recognition that such exemption, if applied to all the property of the Port Authority, might at times work undue harm to municipalities within the Port District.

Though ordinarily only clear and unequivocal language can create a special exemption from a general tax, yet property of a State or an agency of the State, held for a public purpose, is ordinarily not subject to a tax, and a tax imposed by a statute, though general in terms, will not be held to apply to such property. The property held by the State, or by any of its municipal divisions, for public purposes, is not, and never has been subject, to taxation * * *. It is never supposed to be included in the terms of any law providing for the imposition of taxes, however general it may be, not because it is exempt, in the sense in which that term is generally understood, but for the reason that in the nature of things it never was and never can be taxable.” (Matter of Hamilton, 148 N. Y. 310, 313.) The Tax Law (Cons. Laws, ch. 60) of the State of New York provides that “ all real property within this state is taxable unless exempt from taxation.” (§ 3.) By subdivisions 2 and 3 of section 4, “ property of this state ” and property of a municipal corporation of the state held for a public use ” are declared exempt. The exemption so declared is based on common law principles. (Cf. People ex rel. City of Amsterdam v. Hess, 157 N. Y. 42, 45.) Though the Comprehensive Plan declares that the Port Authority shall be regarded as “ the municipal corporate instrumentality of the two States for the purpose of developing the port,” it is not in strict sense a municipal corporation ” of the State of New York, and under a strict literal construction of the Tax Law its property might be subject to taxation. A municipal corporate instrumentality ” of two States is a creature of statute and is unknown to the common law; but argument, certainly not without force, may be made that on common law principles the property of an agency created by two States should be free from taxation by either State and that into the compact creating the municipal corporate instrumentality there must be read by implication a provision that.the property of the municipal corporate instrumentality so created should be entitled to the same immunity from taxation which property of a municipal corporation created by each State would enjoy.

Both States might have removed possible doubt on that subject if they had chosen to state, expressly, whether or not such property would be subject to tax. Perhaps the omission was not inadvertent. Under the Comprehensive Plan a vast field of possible activity was outlined. With the approval of both States the Port Authority might build or acquire bridges, tunnels, wharves and buildings. Though all the property would be held by a joint agency of the two-. States for a common public purpose, there would, it was clear, be great variation in the nature of the property and the expected benefits. In some cases the taxation by one State or local division might be so unfair that it might reasonably be regarded as a violation of the spirit, if not the letter, of the compact; while in other cases the withdrawal of great parcels of real property from the taxing power of the locality might unfairly cause hardship to the locality, without adequate benefit in return. The two States, when approving a project, might agree that property required for that project should be subject to taxation, even though otherwise exempt under the compact, or might, if they chose, exempt the property from taxation even though otherwise it would be subject to taxation. The tax status of the property of the Port Authority under the compact might at any time be defined in unequivocal language by statutes of the two States or might be varied in particular cases by such statutes in accordance with considerations of expediency.

A Commission appointed in 1925 to report upon the tax status of property held by the Port Authority stated in its report: “ We are agreed, however, that the determination of these questions either by learned briefs or by court decisions is of doubtful importance because the statesmanlike handling of the problem of the taxation of Port Authority property should rest upon inescapable facts of economics and public opinion, and not upon legal theories or judicial decisions. We are agreed that certain Port Authority property must be made taxable by the legislatures of the two states regardless of its present legal status; we are also agreed that certain types of property must be made tax free, unless the entire conception of the Port Authority as a self-supporting joint agency of the two states is to be abandoned.” (New York Legislative Documents, 149th Session, vol. 17, Document No. 90, p. 9.)

Since that time the Legislatures of the two States have joined in defining the tax status of property held by the Port Authority for particular projects. The status under the compact of the property held for other forms of public use becomes important only where the Legislatures of the two States have failed to provide by an appropriate statute what status such property should have.

In this case they have not failed to so agree. The State of New Jersey has enacted a statute identical with chapter 553 of the Laws of 1931, here challenged. Mr. Justice Frankenthaler has pointed out in his opinion at Special Term: “ That the Legislatures of both States regarded the property of the Port Authority as Immune from taxation is confirmed by the very language of chapter 553 of the New York Laws of 1931 and of chapter 69 of the New Jersey Laws of 1931.” They might have, as we have said, withdrawn that immunity if it existed. They chose not to do so. Instead, they authorized the Port Authority to enter into a voluntary agreement to pay to a municipality a sum which might in some measure compensate the municipality for loss of taxes which would have been paid if the Port Authority had not acquired the property. We need not now weigh the arguments intended to convince that under the compact the property of the Port Authority is or is not immune from taxation, nor need we decide whether the Inland Terminal No. 1 might be taxed if the Port Authority should not make the agreement which chapter 553 of the Laws of 1931 purports to authorize. There may, perhaps, be some doubt on those questions. There can be no doubt that the Legislatures of the two States, in unequivocal language, have manifested an intention that at least where such an agreement is made the property shall be exempt. The court must give effect to the legislative intent so manifested. We find no basis for the claims that the statute so construed constitutes an unlawful delegation of legislative power or deprives the plaintiff of the equal protection of the law.

Property held by an agency of the State is ordinarily immune from taxation only while it is used for a public purpose. Property used primarily to obtain revenue or profit is not held for a public use and is not ordinarily immune from taxation, but property held by a State agency primarily for a public use does not lose immunity because the State agency incidentally derives income from the property. (2 Cooley on The Law of Taxation [4th ed.], § 640; Inhabitants of Wayland, v. County Commrs. of Middle-sex, 4 Gray [Mass.], 500. Cf. People ex rel. Mayor v. Board, of Assessors, 111 N. Y. 505.) Here the evidence and the findings and conclusions of the court at Special Term establish beyond possibility of successful challenge that the use of the building above the terminal for purposes of revenue is purely incidental to the purpose of the Port Authority to operate a terminal facility at a charge which the consumer can pay. There is here no purpose to make a profit and without the use of the upper stories of the building for revenue the public purpose could not be carried out.

A municipality or agency of the State carrying out a public purpose may at times compete with private business. Those owning the private business are not deprived of their right to the equal protection of the law, guaranteed by the Constitution of the United States, because the private business is subjected to a tax from which the State agency is immune. (Puget Sound Power & Light Co. v. County of King, 264 U. S. 22.) The general principles stated in the opinion in that case justify the exemption from taxation of property held by a public agency for a public purpose and not primarily for revenue, though as an incident of the execution of its public purpose the public agency derives revenue from a use of the property in competition with property put to similar use by private owners. (Cf. State Board of Tax Commissioners v. Jackson, 283 U. S. 527, 537.)

Other objections raised by the appellants to the right of the defendants to. enter into any contract as authorized by the statute have been considered by the court and rejected. We do not now consider or decide whether the proposed contract which the plaintiffs seek to enjoin is authorized in all parts by the statute or whether exemption would continue even if the building should cease to be used as an inland terminal. No such questions are properly before us. We decide only that the parties may make a contract in accordance with the provisions of the statute.

The judgment should be affirmed, with costs.

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

Judgment affirmed.


author: Per Curiam.

text:
    In the Matter of Randolph D. Ragsdale, Respondent, against Board of Education of the City of New York, Appellant.
    Argued January 23, 1940;
    decided March 5, 1940.

      William C. Chanler, Corporation Counsel (Samuel J. Silverman and Paxton Blair of counsel), for appellant.
    Local Law No. 26 of 1937 does not apply to employees of the Board of Education. (Matter of Ryan v. Kaplan, 213 App. Div. 131; 240 N. Y. 690; Matter of Divisich v. Marshall, 281 N. Y. 170; City of New York v. Village of Lawrence, 250 N. Y. 429; Matter of Brennan v. Board of

      Education, 245 N. Y. 8; People ex rel. Wells & Newton Co. v. Craig, 232 N. Y. 125; Matter of Hirshfield v. Cook, 227 N. Y. 297.)

      Maurice Weiss and Thomas B. Dyett for respondent.
    Petitioner’s reinstatement salary as of July 1, 1937, should be held to be $4,260 per annum. (Matter of Farrar v. Board of Education, 254 App. Div. 733.)
   Per Curiam.

Petitioner is an employee of the Board of Education of the city of New York which fixed his salary under the authority provided in sections 883 and 887 of the Education Law (Cons. Laws, ch. 16). The right of the Board so to do was exclusive. The Board of Education is not a department of the city of New York (Matter of Divisich v. Marshall, 281 N. Y. 170, 173). Under those circumstances, petitioner is not a person in the service of the city re-employed or reinstated * * * to the same or similar position he formerly held in the same or any other department of the city ” within the salary protection of the provisions of Local Law No. 26 of the City of New York for the year 1937 (Administrative Code, § B40-6.1, p. 1170; L. 1937, ch. 929).

The orders should be reversed and the petition dismissed, with costs in all courts.

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

Orders reversed, etc.


text:
    In the Matter of the Claim of Samuel Braiter, Respondent, against Addie Co., Inc., Appellant. State Industrial Board, Respondent.
    Argued January 22, 1940;
    decided March 5, 1940.

      John J. Bennett, Jr., Attorney-General (Roy Wiedersum of counsel), for respondent.
    The evidence establishes that claimant was employed in violation of the Labor Law (Cons. Laws, ch. 31) and the findings of the State Industrial Board were amply supported by the evidence. (People ex rel. Price v. Sheffield Farms Co., 225 N. Y. 25; Matter of Cross v. General Motors Corp., 249 N. Y. 522; Matter of Kociolowicz v. Tonawanda Corrugated Box Co., 252 App. Div. 716; Matter of Davidowicz v. Klipstein, 272 N. Y. 543; Miller v. Jost, 217 App. Div. 810; Matter of Dixon v. Pequot Mfg. Co., 235 App. Div. 882; Matter of Foyt v. Daigler, 236 App. Div. 420; Matter of Labish v. De Noyelles Brick Co., 231 App. Div. 484; Dekanski v. Duttenhofer Sons, Inc., 226 App. Div. 710.)

      Lester Lewis Jay and Philip F. Jacobs for appellant.
    The evidence that the employer acted with reasonable care and prudence in ascertaining the age of claimant, especially where it is found that such claimant had, at the time of employment, deliberately misrepresented his age, and where his physical appearance and general demeanor substantiated such misrepresentation, should not have been disregarded. Therefore, the award was against the weight of the evidence and should be modified by striking out the award of double indemnity as against the employer. (Koester v. Rochester Candy Works, 194 N. Y. 92; Boshaw v. Newberry Co., 259 Mich. 333.) The imposition of a penalty without giving the employer an opportunity to defend by showing exercise of due diligence in ascertaining minor’s age violates due process of law clauses of the Federal and State Constitutions. (Colon v. Lisk, 153 N. Y. 188; Wright v. Hart, 182 N. Y. 330; Tenement House Dept. v. Whitney, 145 N. Y. Supp. 1011; Tenement House Dept. v. McDevitt, 215 N. Y. 160; Nebbia v. People, 291 U. S. 502; Stuart v. Palmer, 74 N. Y. 183; Matter of Carroll v. Knickerbocker Ice Co., 218 N. Y. 435; Matter of Tesar v. National Ventilating Co., 227 App. Div. 333.) The imposition of a penalty without giving the employer an opportunity to defend by showing exercise of due diligence in ascertaining minor’s age, violates section 16 of article 3 of the Constitution of the State of New York. (Koester v. Rochester Candy Works, 194 N. Y. 92; Stenson v. Flick Constr. Co., 146 App. Div. 66; Lee v. Sterling Silk Mfg. Co., 134 App. Div. 123; Solomon v. Royal Art Glass Co., 83 Misc. Rep. 53; Kircher v. Iron Clad Mfg. Co., 134 App. Div. 144; Rubino v. Schenk & Schlichte, Inc., 77 Misc. Rep. 188.)
   Per Curiam.

In the absence of proof that an employment certificate, vacation work permit or a certificate of age was on file in the place of claimant’s employment (Labor Law [Cons. Laws, ch. 31], §§ 131, 132), it is no defense to a claim for double compensation under section 14-a of the Workmen’s Compensation Law (Cons. Laws, ch. 67), by a claimant employed in violation of section 131 of the Labor Law, that the employer was not negligent in determining the age of the claimant at the time of employment. (Matter of Davidowicz v. Klipstein, 272 N. Y. 543; Matter of Kociolowicz v. Tonawanda Corrugated Box Co., 252 App. Div. 716; leave to appeal denied, 276 N. Y. 689.)

The order should be affirmed, with costs.

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

Order affirmed.


text:
    The People of the State of New York, Respondent, v. Ralph Perkins, Appellant.
    Argued January 22, 1940;
    decided March 5, 1940.

      Charles P. O’Brien for appellant.
    The prior non-conforming use invalidates the ordinance as to defendant’s property. (Matter of Collins v. Moore, 125 Misc. Rep. 777; People v. Leo, 178 N. Y. Supp. 851; Matter of Empire

      City Racing Assn. v. City of Yonkers, 132 Misc. Rep. 816; Wightman v. Foster, 261 N. Y. Supp. 1002.)

      A. E. Gold and Frank E. Thomas for respondent.
    The ordinance is not invalid as to defendant’s property by reason of prior non-conforming use. (Matter of Collins v. Moore, 125 Misc. Rep. 777; Town of Ramapo v. Bockar, 151 Misc. Rep. 613.)
   Per Curiam.

The defendant has been convicted of a violation of the zoning ordinance of the village of Port Dickinson in conducting a business within a zoned restricted residential district. The defendant is the owner of two adjoining lots, on one of which there is a house which is the defendant’s residence, and on the other of which there is a greenhouse. Before the zoning ordinance was adopted by the village in June, 1924, the greenhouse had already been built and the defendant was engaged in a business of selling plants and flowers, vegetables and fruits grown on his premises, and also vegetables and fruit that he purchased for resale. We construe the second section of article one of the zoning ordinance as permitting the continuance of nonconforming uses which had dated from a time previous to the enactment of the zoning ordinance. The business which the defendant conducted and which has been found violative of the ordinance is the same business in character as that conducted by the defendant before the ordinance was adopted. To be sure the business has increased in volume. He buys and sells considerably more than he did before 1924. He has added the sale of some novelties, consisting of pottery and wooden lawn ornaments. He has made use of the space on the lot on which his house is built. In essence, the business is the same. We find no evidence in the record to justify the finding that the defendant was doing more than continuing the permitted non-conforming use.

The judgments should, therefore, be reversed, and the information dismissed.

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

Judgments reversed, etc.