author: Cardozo, Ch. J.

text:
    The Jarl Company, Respondent, v. The Village of Croton-on-Hudson et al., Appellants.

      (Argued January 4, 1932;
    decided February 9, 1932.)

      Edgar A. B. Spencer and Maurice Iserman for appellants.
    The plaintiff in its individual capacity may not maintain an action attacking a municipal franchise or extension thereof valid on its face and a court may not entertain such an action. (People ex rel. Jordan v. Clark, 70 N. Y. 518; People v. Carpenter, 24 N. Y. 86; People v. Ingersoll, 58 N. Y. 1; Ayers v. Lawrence, 59 N. Y. 192; Roosevelt v. Draper, 23 N. Y. 318; Prankard v. Cooley, 147 App. Div. 145; Abell v. Hunter, 211 App. Div. 467; 240 N. Y. 702; People ex rel. Thomson v. Hinsdale, 43 Misc. Rep. 182; Village of Lynbrook v. Cadoo, 226 App. Div. 681; 252 N. Y. 308.)

      Alexander S. Andrews for respondent.
    The annexation proceedings, and the assessment based thereon, were null and void. (People ex rel. Abell v. Clarkson, 223 App. Div. 373; Bussing v. City of Mt. Vernon, 198 N. Y. 205;
      Litchfield v. Vernon, 41 N. Y. 123; Matter of Sharp, 56 N. Y. 257; Jex v. Mayor, 103 N. Y. 536; Miller v. Amsterdam, 149 N. Y. 288.) The action properly lies to remove the cloud of the void tax assessment. (Trumbull v. Palmer, 104 App. Div. 51; Tysen v. City of New York, 122 Misc. Rep. 627; 212 App. Div. 300; Alvord v. Syracuse, 163 N. Y. 158; McLean v. Jephson, 123 N. Y. 142; Monroe County v. Rochester, 154 N. Y. 570; Elmhurst Fire Co. v. City of New York, 213 N. Y. 87; Rice Hospital v. North Tarrytown, 187 App. Div. 855; Bussing v. City of Mt. Vernon, 198 N. Y. 196.) A litigant properly in court, coming there as a plaintiff with an independent jurisdictional ground created by statute or recognized by the immemorial jurisdiction of equity, can attack a void assessment and a void annexation. (Steele v. Village of Glen Park, 193 N. Y. 341; Village of Lynbrook v. Cadoo, 252 N. Y. 308; Corscadden v. Haswell, 177 N. Y. 499; People ex rel. Yost v. Becker, 203 N. Y. 201; Bradley v. Ins. Co., 45 N. Y. 422; Williams v. Boynton, 147 N. Y. 426; Mellen v. Mellen, 139 N. Y. 210; Moir v. Provident Society, 127 App. Div. 591; Ciancimino v. Man, 20 N. Y. Supp. 702; People ex rel. D. & H. Co. v. Parker, 117 N. Y. 86; Van Deventer v. Long Island City, 139 N. Y. 133; Matter of Allen Sq. Co. v. Krieger, 217 App. Div. 123; People ex rel. Littman v. Wells, 91 App. Div. 172; Union Co. v. Buffalo, 82 N. Y. 351.)

      John E. Mack, Herman Tocker and Oscar L. Gruber for Alice Davis et al., amici curiœ.

    As an action to remove a cloud from title, the complaint states facts sufficient to constitute a cause of action. (Boyle v. City of Brooklyn, 71 N. Y. 1; Matter of Sharp, 56 N. Y. 257; Litchfield v. Vernon, 41 N. Y. 123; Miller v. City of Amsterdam, 149 N. Y. 288; Jex v. Mayor, 103 N. Y. 536.) As an action brought under section 348 of the Village Law the complaint states facts sufficient to constitute a cause of action. (People ex rel. Abell v. Clarkson, 223 App. Div. 373; Latonia v. Hopkins, 47 S. W. Rep. 248; Vestal v. City of Little Rock, 15 S. W. Rep. 891.) The plaintiff has capacity to sue. (New York Infant Asylum v. Supervisors of Westchester, 31 Hun, 116; Strusburgh v. Mayor, 87 N. Y. 452; Sharp v. Speir, 4 Hill, 76; Alvord v. Syracuse, 163 N. Y. 158; Elmhurst Fire Co. v. City of New York, 213 N. Y. 87; McNamara v. City of Rochester, 124 Misc. Rep. 229.) The complaint being sufficient and the plaintiff having capacity to sue, the court has jurisdiction of the subject-matter of the action. (Mott v. Oppenheimer, 135 N. Y. 312; Valentine v. Richardt, 126 N. Y. 272; Lynch v. M. E. R. Co., 129 N. Y. 274; Madison Avenue Baptist Church v. Oliver Street Baptist Church, 73 N. Y. 82.)
   Cardozo, Ch. J.

Plaintiff, a corporation, a landowner in the county of Westchester, brings this action to set aside a tax assessment imposed upon its land by the defendants, the trustees of the village of Croton-onHudson, the basis of its complaint being that the land subjected to the assessment is not a part of the village.

Section 348 of the Village Law (Cons. Laws, ch. 64) prescribes the mode in which territory not within a village may be annexed thereto. The petition for annexation to be presented to the trustees shall be signed by a majority of the persons qualified to vote for town officers within the territory to be annexed or by the owners of a majority in value of the property therein according to the last preceding town assessment roll. Accompanying the petition, there must be the written consent of the majority of the town board residing outside the village. The trustees are then required to submit the proposition to the voters at a village election. If the proposition is adopted, annexation becomes complete upon the filing of a map with the Secretary of State and the filing of his certificate with the village clerk. A substantial compliance with the provisions of the section is to be deemed sufficient, and no action or proceeding shall be taken by any person questioning the validity of such annexation unless so taken within one year.”

In June, 1930, there was presented to the trustees of the village of Croton-on-Hudson a petition praying that neighboring territory, multiplying many times the size of the incorporated village, be annexed thereto. The plaintiff complains that this petition was not signed by a majority of the residents of the territory to be annexed who were qualified to vote for town officers therein, nor by the owners of a majority in value of the property therein according to the last preceding assessment roll. The trustees upon receipt of the petition submitted the proposition to the electors of the village who voted to accept it. No complaint is made of any defect or omission in the maps or other documents required from then on. Annexation being thus complete on the face of the record, the trustees of the village, in November, 1930, imposed an assessment upon the land within the territory annexed. They did this against the protest of the plaintiff who maintained that the annexation was void because the requisite number of voters or owners in the territory annexed had not given it their support by signing the petition. In February, 1931, this action was begun.

There is faint, if any, dispute by the defendants that the annexation is invalid if the petition has not been signed in accordance with the statute (cf. Bussing v. City of Mt. Vernon, 198 N. Y. 196, 205; Litchfield v. Vernon, 41 N. Y. 123). The referendum was submitted to the voters of the village as originally constituted, and not to any others. The residents of the annexed territory have never had an opportunity to give expression to their wishes except to the extent that they may have done so by becoming parties to the petition. If the interests represented by the signatures fall short of the minimum exacted by the statute, the defect is one of substance. All this may be conceded, and there yet remains the question as to the remedy available. It is here that the defendants have chiefly aimed their fire. They take the ground that the annexation, though it be subject to avoidance at the instance of the State, is not subject to that infirmity when challenged by a private suitor. The challenge, they insist, must be direct and not collateral.

There is little authority on the subject in this State, and not a few of the decisions in other States are confused and contradictory. Many are collated in McQuillan on Municipal Corporations (Vol. 1, § 307). Statements are abundant to the effect that the validity of proceedings looking to the incorporation of a village may not be challenged by a property owner who has slept upon his rights, and that proceedings for annexation are subject to like rules (McQuillan, supra). At times the ruling has been broader, at all events if the words of the opinions are taken at their face value without relation to the facts. So taken they seem to say that capacity to avoid the annexation is denied to private suitors altogether, however prompt the challenge and however grievous the defect (Mason v. Kansas City, 103 Kan. 275). Not infrequently irregularities are grouped with jurisdictional omissions, or at least no sharp distinction is made between them.

We think the key to the solution of the problem is to be found in the principles that regulate the recognition of de facto corporations. If a village has been organized or territory has been annexed to it with color of adherence to existing forms of law and if there has been user for a substantial time of the franchise or jurisdiction supposed to be acquired, there arises a corporation de facto, whose existence may not be challenged by any one except the State (Methodist Episcopal Union Church v. Pickett, 19 N. Y. 482, 485). Color of compliance with the statute does not suffice, however, if user has not followed. This is the law for private corporations (Von Lengerke v. City of New York, 150 App. Div. 98, 102; 211 N. Y. 558; Methodist Episcopal Union Church v. Pickett, supra; Emery v. De Peyster, 77 App. Div. 65; Card v. Moore, 68 App. Div. 327, 337; 173 N. Y. 598). It is the law for public corporations also. Two cases in Illinois develop the doctrine neatly. In one, People ex rel. Rice v. McKinnie (277 Ill. 342), territory was annexed to a city in 1904, and a taxpayer waited until about 1917 to challenge an assessment. The city in the meantime had exercised continuous and unquestioned jurisdiction over the territory annexed. The ruling was that after such an interval the validity of the annexation was not subject to attack except in a direct proceeding at the instance, of the State. In the other case, People ex rel. Moyer v. Hausen (276 Ill. 204), the ordinance declaring annexation was passed in April, 1915, the tax levy ordinance was passed in August of the same year, and the taxpayer’s resistance promptly followed. The ruling was that the period of user was too short to establish a defacto franchise, and that the legality of the proceeding might be challenged by a private suitor.

What was held in these cases is in accord with the decision of this court in a very recent case, where the point had not been made, however, that capacity to avoid the annexation was restricted to the State (Village of Lynbrook v. Cadoo, 252 N. Y. 308). Cadoo, sued by a village, made the defense that he was not a resident within it for the reason that there had been a shortage of a single day in publishing the notice to enlarge the village limits. The annexation proceeding was taken in 1921, and the landowner did not object to it till five years afterwards, paying village taxes and otherwise acquiescing in the interval. We held that the objection came too late. Whether capacity to avoid the annexation would have belonged to the objecting owner if the challenge had been timely, there was no occasion to determine. The opinion is, however, instinct with the assumption that his standing would have been recognized if objection had been prompt.

The plaintiff now before us contested the validity of the annexation and of the assessment laid thereunder with persistence and dispatch. The village at the time of the contest had not acquired the quality of a de facto corporation in the territory annexed, for it had not exercised its franchise there without resistance or protest for a substantial space of time. If the annexation was a nullity, the tax imposed by the trustees of the village was the act of mere intruders, and the plaintiff was at liberty to vacate it as a cloud upon the title.

What we have written has confirmation in the concluding sentence of section 348 of the Village Law to the effect that no action or proceeding shall be taken by any person questioning the validity of such annexation unless so taken within one year of the annexation as above provided.” This provision is pregnant with the implication that if the action or proceeding be begun within the year, the right to maintain it is not peculiar to the State.

The order should be affirmed, with costs, and the questions certified answered yes.”

Pound, Crane, Lehman, Kellogg,- O’Brien and Hubbs, JJ., concur.

Order affirmed, etc.


source: Caselaw Access Project

author: Pound, J.

license: Public Domain

text:
    Rose Schindler, Respondent, v. Royal Insurance Company, Appellant.

      (Argued January 4, 1932;
    decided February 9, 1932.)

      Louis Bevier for appellant.
    The facts set up in the second defense are sufficient to constitute a bar to the action. (King v. Warden of the Fleet, 12 Mod. Rep. 337; Gibson v. McCarty, Lee Rep. 311; Petrie v. Nuttall, 11 Exch. 568; Maybee v. Avery, 18 Johns. 352; Eagle, Star & British Dominions Ins. Co. v. Heller, 149 Va. 82.)

      Maxwell Slade, David H. Slade and C. Saul Port for respondent.
    The defendant’s second defense, which alleges that plaintiff’s criminal conviction for filing a false proof of loss constitutes a bar and makes res adjudicata the present civil action, is not sufficient. (Leventhal v. Home Ins. Co., 165 N. Y. Supp. 323; Willson v. Manhattan Ry. Co., 20 N. Y. Supp. 852; Interstate Dry Goods Stores v. Williamson, 91 W. Va. 156; Sims v. Sims, 75 N. Y. 466; People v. Rodawald, 177 N. Y. 408.)
   Pound, J.

Plaintiff sues on an insurance policy for a fire loss. Defendant sets up as a defense that by its terms the policy shall be void in case of any fraud of the insured touching the subject of the insurance; that plaintiff made to it a false and fraudulent statement of loss and damage; that thereafter plaintiff was convicted in the County Court of Nassau of the crime of presenting to defendant such false and fraudulent proof of loss and that such judgment of conviction is a bar to the maintenance of this action by the plaintiff and the issue of plaintiff’s fraud is res adjudicata. The defense has been stricken out as bad and a question certified as to its sufficiency.

Appellant does not question the existence of a general rule that conviction in a criminal action is not conclusive proof in a civil action of the facts on which the judgment of conviction rests, but challenges the application of the rule in its extreme form to this case as absurd, unjust and unsound in principle.

The source of this rule dates back towards the beginning of the common law. (The King v. The Warden of the Fleet, 12 Mod. Rep. 337.) In the Dutchess of Kingston’s Case (2 Smith’s Leading Cases [13th ed.], 644) the Lord Chief Justice of the Court of Common Pleas, after conference with the judges, answered certain questions of the House of Lords to the effect that a transaction between two parties in a judicial proceeding ought not to be binding on a third; for it would be unjust to bind any person who could not be admitted to make a defence, or to examine witnesses, or to appeal from a judgment he might think erroneous.” It may be thus stated: Any judgment, of conviction or acquittal is a decision in rem which estops the whole world from attacking the fact of conviction but estops only the parties, unless the Legislature has otherwise provided, from afterwards raising the question whether the accused was in fact guilty or innocent of the offense of which he was convicted or acquitted. In any civil proceeding to which the People are not parties, one may, after having been convicted of a crime, assert his innocence and put his opponent to his proof of guilt, or after having been acquitted on a criminal charge, may himself be subjected to a trial anew of the issue of fact.

The reasons given for the rule are that dissimilarity of object, procedure and degree and elements of proof in the two trials forbid that the criminal judgment should be held to be-decisive of the facts on which it is based. (6 North Car. Law Review, 333; Spencer Bower on Res Adjudicata, p. 130, et seq.; Sims v. Sims, 75 N. Y. 466, 471-473; People v. Rodawald, 177 N. Y. 408, 425; Leventhal v. Home Ins. Co., 165 N. Y. Supp. 323, 325, 326.)

As the lapse of time has tended to dissolve many substantial distinctions between civil and criminal trials, these reasons have become weak and outdated unless we fall back on the doctrine of mutuality of estoppel which requires that no party to a legal proceeding should be bound by a prior judgment unless the party seeking the benefit of the former adjudication would have been prejudiced by it if it had been determined the other way. (Burt v. Union Central Life Ins. Co., 187 U. S. 362-367.) While a judgment of acquittal is only a determination that guilt has not been established beyond a reasonable doubt, although a preponderance of evidence might point thereto,'j a valid judgment of conviction in a court of competent jurisdiction with all the safeguards thrown about a person accused of crime which enable him to make his defense, to examine witnesses and to testify in his own behalf, might be held free from collateral attack without exposing the law to the jibes and jests of the critics of our present system of administering j justice. As said Prentis, P., in Eagle, Star & British Dominions Ins. Co. v. Heller (149 Va. 82, 111), in which the rule of conclusiveness is applied in its entirety: To permit a recovery under a policy of fire insurance by one who has been convicted of burning the property insured, would be to disregard the contract, be illogical, would discredit the administration of justice, defy public policy and shock the most unenlightened conscience.”

The Legislature can get over the authorities by enacting that all convictions shall be conclusive evidence of the guilt of the convicted person in any proceeding, civil or criminal, whoever may be parties, for the purpose of establishing whenever material the facts on which the conviction rests. The court might so decide were the occasion imperative and the necessity clear, but established precedents are not to be lightly set aside even though they seem archaic. (Matter of Grifenhagen v. Ordway, 218 N. Y. 451, 458.)

The rule in New York from an early day (Maybie v. Avery, 18 Johns. 532) has relaxed the strict rule of complete exclusion. It permits proof of the conviction as prima facie evidence of the facts involved. The same rule has been stated in England (Matter of Crippen, L. R. [1911] Prob. 108, 115), where Evans, P., said: “In my opinion, where a convicted felon, or the personal representative of a convicted murderer who has been executed, brings any civil proceeding to establish claims, or to enforce rights, which result to the felon, or to the convicted testator from his own crime, the conviction is admissible in evidence, not merely as proof of the conviction, but also as presumptive proof of the commission of the crime.”

It would be an unedifying spectacle if the courts should now apply the strict rule which excluded all reference to the judgment of conviction in the civil action as evidence tending to establish the material facts. We shall, however, continue to hold that it is not effective as a plea in bar.

The order should be affirmed, with costs, and the question certified answered in the negative.

Cardozo, Ch. J., Crane, Lehman, Kellogg and O’Brien, JJ., concur; Hubbs, J., dissents for the reasons stated in Eagle, Star & British Dominions Ins. Co. v. Heller (149 Va. 82).

Order affirmed, etc.


author: O’Brien, J.

text:
    Ernst Wedemann, Appellant, v. United States Trust Company of New York, as Administrator of the Estate of Leon Michelson, Deceased, Respondent.
    (Argued December 1, 1931;
    decided February 9, 1932.)

      Samuel J. Rosensohn for appellant.
    The Supreme Court has jurisdiction over the suit, on a contract made in this State, by a non-resident against an ancillary administrator appointed by the courts of this State. (Hutchinson v. Ward, 192 N. Y. 375; Reed v. Chilson, 142 N. Y. 152; Hopper v. Hopper, 125 N. Y. 400; Smith v. Second Nat. Bank, 169 N. Y. 467.) The defense cannot be sustained as a plea against the exercise of jurisdiction by the Supreme Court. (Hutchinson v. Ward, 192 N. Y. 375; Reed v. Chilson, 142 N. Y. 152; Gregonis v. P. & R. C. & I. Co., 235 N. Y. 152.)

      Selden Bacon for respondent.
    The discretion of the justice at Special Term to exercise discretionary jurisdiction was not abused by his refusal to entertain the action. (Helme v. Bucklalew, 229 N Y. 363; Matter of Meyer, 125 Misc. Rep. 361; 216 App Div. 735; 224 N. Y. 508; Matter of Worch, 124 Misc. Rep. 380; Moyer v. Weil, 1 Dem. 71; Fox v. Carr, 16 Hun, 434; Johnson v. Powers, 139 U. S. 156; Aspden v. Nixon, 4 How. [U. S.] 467; Dahlstrom v. Gemunder, 198 N. Y. 449; Kirschbaum v. Eschman, 205 N. Y. 127.)
   O’Brien, J.

Leon A. Michelson, a Russian subject and resident, in 1916 purchased machinery in this country for his munition factories at Moscow. At that time Dietrich Heydemann, also a Russian subject and resident, was an express agent or forwarder of freight with offices at Moscow and New York, and in that capacity he is said to have undertaken to transport Michelson’s machinery from the United States to Russia. After the revolution both fled that country. In 1922 Heydemann died a citizen of Russia but a resident of Germany, and in 1923 Michelson died also a citizen of Russia but a resident of Switzerland. Heydemann’s widow is a resident of Germany and, as owner of this claim against Michelson for transportation of machinery, she assigned to plaintiff Wedemann, who is and at the date of assignment was a resident of New Jersey. Defendant is the ancillary administrator of Michelson’s estate.

Two causes of action are alleged. The first is for the recovery of commissions and disbursements under a contract and the second is for an account stated in a foreign country. The complaint sets forth that’in May 1916 a contract for forwarding machinery was executed at New York, that it was there to be performed, that it was performed by plaintiff’s assignor, that payment was there to be made but that only partial payment has been received. The bill of particulars states that this contract was oral and was made by plaintiff acting in behalf of Heydemann and by the general manager of Michelson. The answer, after denying performance by Heydemann and even the existence of a contract, alleges that Michelson was never here in 1916 and that during that year and subsequently he had no agent in this State who was authorized to enter into such a contract as is alleged. The first affirmative defense pleads the non-residence of plaintiff who is alleged to seek in our courts the enforcement of a foreign general claim of a non-resident alien without the assertion of a right or lien upon funds in this State. Plaintiff’s reply to this affirmative defense was stricken out. Under the pleadings, as they remain, issues of fact are raised whether any contract was executed here, whether performance was here to be effected and was effected and whether payment here was to be made. Defendant concedes the authority of our courts to hear the case but argues that they possess the right to exercise a discretion in refusing to retain jurisdiction. The Special Term and the Appellate Division have used such a discretion and have dismissed the complaint. The only question now before us is whether, on these pleadings, such a power exists.

In actions between non-residents founded on tort where the cause of action arises outside this State, the right to refuse jurisdiction is fully recognized. (Gregonie v. Philadelphia & Reading C. & I. Co., 235 N. Y. 152, 160, Murnan v. Wabash Ry. Co., 246 N. Y. 244.) In actions on contract, where the enforcement of a common-law liability as between living parties is sought, the mere fact that an agreement has been executed in a foreign State between non-residents of this State does not vest our courts with discretion to refuse jurisdiction. (Hutchinson v. Ward, 192 N. Y. 375.) When we come to actions by or against representatives of deceased non-residents, we find that rules differ in respect to the status of a foreign executor and a foreign administrator as contrasted with the status of an ancillary executor and an ancillary administrator. An action at law apparently will not lie against a foreign executor for a debt contracted by his testator, but an action may be maintained, at least in equity, against such an officer for a liability assumed by himself. (Johnson v. Wallis, 112 N. Y. 230; DeCoppet v. Cone, 199 N. Y. 56, 61.) The condition of an ancillary executor, as distinguished from a foreign executor, - is such as to allow freedom of action against him. His representative character proceeds not from a foreign tribunal but from one of our own. He owes his authority first to his testator and secondarily to a mandate of approval by a local court and, consequently, his liability to be sued has been held to be no different from that of a domestic executor. (Hopper v. Hopper, 125 N. Y. 400.) As between ancillary executors and ancillary administrators, a distinction in respect to their enforceable obligations seems to be drawn. Considering administrators, both foreign and ancillary, we find that the processes of their creation, although unlike those of executors, do not essentially differ from each other. An executor, foreign or domiciliary, is created by act of a testator. He is merely recognized and his authority confirmed by a court. An administrator depends for his existence not upon the act of a subject or a citizen but upon the command of a sovereign. No individual participates in the formation of his official being. Accordingly, an ancillary administrator, although designated by our own courts, is sometimes regarded merely as the agent of a foreign sovereignty acknowledged by our courts and possessing certain rights and duties within our territory. (Helme v. Buckelew, 229 N. Y. 363, 366.) Then the affairs of a decedent are administered not by an instrumentality established by himself with merely the approval of a court, but by an official designated by the court who often is viewed as an agent of government and primarily its creature.

The powers and duties of ancillary representatives are prescribed in the Surrogate’s Court Act (§§ 159-166). Unless the Surrogate or other court of competent jurisdiction otherwise decrees, the general duty of such representatives consists in assembling local assets of a nonresident decedent, paying debts due to creditors residing within this State and transmitting any balance to the place of domiciliary administration. (Smith v. Second Nat. Bank, 169 N. Y. 467.) An important function of ancillary administration is the application of decedent’s local property to the payment of his debts but no ess important, under some circumstances, is the duty to transmit assets to the domicile. There is a strong implication in section 165 of the statute that priority in the discharge of debts which are due to residents of this State is intended. We have held that the Surrogate possesses a discretionary right under that section to refuse to pass upon all claims whether of residents or nonresidents. (Matter of Meyer, 244 N. Y. 598.) That is the law when an ancillary executor has been named in this State. In the case of an ancillary administrator, certainly the Surrogate’s power to refuse would not be diminished. We have left open in the Meyer case the rights of a non-resident creditor in the event that the Surrogate should elect to adjudicate only as to the claims of residents. However, those sections of the statute which deal with ancillary administration conspicuously emphasize the rights of resident creditors, Where there are two administrators of the same estate, one in the place of a foreign domicile and another in this State, whether our courts will decree distribution of the assets collected under the ancillary administration or remit them to the jurisdiction of the domicile is not a question of jurisdiction but of judicial discretion depending upon the circumstances of the particular case. (Matter of Hughes, 95 N. Y. 55, 60.) Even if we assume that in the case at bar Michelson owed a debt to Heydemann, the fixation of the location of the cause of action to enforce it is likewise a matter of discretion. We have said that the selection of the situs of a chose in action held by one nonresident against another depends generally upon a “ common sense appraisal of the requirements of justice and convenience in particular conditions.” (Severnoe Securities Corp. v. London & Lancashire Ins. Co., 255 N. Y. 120, 123, 124.) Even assuming further that the Supreme Court would retain jurisdiction, a judgment in this action might not be efficacious. The Surrogate in his discretion could refuse to direct payment. The courts of the foreign domicile would not be bound by a judgment here. (Stacy v. Thrasher, 6 How. [U. S.] 44.) We think, therefore, that the Supreme Court is empowered to exercise a discretion to the same extent in this action as inheres in the Surrogate in his disposition of the assets and liabilities of the fund within his possession. (Matter of Hughes, supra; Matter of Meyer, supra.)

The judgment should be affirmed, with costs.

Cardozo, Ch. J., Pound, Crane, Lehman, Kellogg and Hubbs, JJ., concur.

Judgment affirmed.


author: Crane, J.

text:
    James J. McHugh, as President of Good Shepherd Athletic Club, Appellant, v. Edward P. Mulrooney, Individually, and as Police Commissioner of the City of New York, et al., Respondents.
    (Submitted January 5, 1932:
    decided February 9, 1932.)

      Jeremiah T. Mahoney for appellant, and Metropolitan Association of Amateur Athletic Union of the United States of America, amicus curiœ.
    Under chapter 912 of the Laws of 1920 and chapter 714 of the Laws of 1921 it is not a misdemeanor or an offense to conduct boxing bouts where all the contestants are amateurs. (Sullivan v. State, 67 Miss. 346; Whitaker v. Masterton, 106 N. Y. 277; People v. Weinstock, 193 N. Y. 481; Burks v. Bosso, 180 N. Y. 341; People v. Phyfe, 136 N. Y. 554; Central Nat. Bank v. Stevens, 169 U. S. 432; State v. North American Land Co., 106 La. 621.) The State Athletic Commission has no jurisdiction over boxers and wrestlers or boxing and wrestling exhibitions where all contestants are amateurs, even though an admission fee is charged. (City Island Athletic Club, Inc., v. Mulrooney, 141 Misc. Rep. 733.)

      Arthur J. W. Hilly, Corporation Counsel (J. Joseph Lilly and Henry J. Shields of counsel), for respondents.
    By section 28 of chapter 912 of the Laws of 1920, the penal consequences of section 1710 of the Penal Law are tolled by the amateurism of the contestants, but the acts forbidden by that section are not thereby approved or removed from regulation. (People ex rel. Wiener v. Barr, 223 App. Div. 310; 248 N. Y. 601.) Sections 3, 6 and 7 of chapter 912 of the Laws of 1920 very plainly require the procurement of a license to hold any boxing match or exhibition where an admission fee is received. (City Island Athletic Club, Inc., v. Mulrooney, 141 Misc. Rep. 733; Fitzsimmons v. New York State Athletic Comm., 146 N. Y. Supp. 117; 162 App. Div. 904.)

      John J. Bennett, Jr., Attorney-General (Robert P. Beyer and Peter J. Brancato of counsel), for New York State Athletic Commission, amicus curiœ.

    The holding of boxing or sparring exhibitions, to which the public is charged admission, is illegal unless licensed by the New York State Athletic Commission, even though the contestants be amateurs. (Penal Law, § 1710; Fitzsimmons v. New York State Athletic Comm., 146 N. Y. Supp. 117; 162 App. Div. 904; People v. Finucane, 80 App. Div. 407.)
   Crane, J.

By chapter 714 of the Laws of 1921 the State Athletic Commission was continued and given certain jurisdiction, which has been questioned in this case. For the past ten years the Commission, as we are informed, attempted to exercise no control over amateur bouts or boxing matches, to which an admission fee was to be charged. Last year its policy changed, and it now insists that all such exhibitions must be licensed, pursuant to the provisions of the law. An application to enjoin the police from interference with such matches has been denied by the lower courts. Whatever powers are possessed by the Commission must be found in this New York State Boxing Law, and we must confess that its terms are none too clear.

The only boxing matches permitted before 1920 were amateur bouts, to which no admission fee was charged. Section 1710 of the Penal Law made this plain. It reads: “A person who, within this state, engages in, instigates, aids, encourages or does any act to further a contention, or fight, without weapons, between two or more persons, or a fight commonly called a ring or prizefight, either within or without the state, or who engages in a public or private sparring exhibition, with or without gloves, within the state, at which an admission fee is charged or received, either directly or indirectly, * * * is guilty of a misdemeanor.”

Chapter 714 of the Laws of 1921, known as the New York State Boxing Law, materially modified this section. That law provides for the appointment of a Commission, four deputies, who are to be present at each place where matches are to be held, and also provides a license committee, to consist of three persons. Section 3 in part reads as follows: Boxing, sparring and wrestling matches or exhibitions for prizes or purses, or where an admission fee is received, are hereby allowed except on Sundays.” They were unlawful under the Penal Law; now by this act they are permitted. Continuing, the provisions are: The commission shall have and hereby is vested with the sole direction, management, control and jurisdiction over all such boxing, sparring and wrestling matches or exhibitions to be conducted, held or given within the state of New York, and no such boxing, sparring or wrestling match or exhibition shall be conducted, held or given within the state except in accordance with the provisions of this act. The commission shall issue under its hand and seal, annual permits in writing for holding such boxing, sparring or wrestling matches, but only to corporations thereunto duly licensed, as hereinafter provided.”

The jurisdiction of the license committee is stated in section 6, as follows: “ The license committee is hereby-given the sole control, authority and jurisdiction over all licenses to hold boxing, sparring or wrestling matches or exhibitions for prizes or purses or where an admission fee is received, and over all licenses to any and all persons who participate in such boxing, sparring or wrestling matches or exhibitions, as hereinafter provided.”

The law then enacts that corporations, physicians, referees, judges, professional boxers, professional wrestlers, managers, trainers and seconds shall be licensed by the license committee. A professional boxer is one who competes for a money prize or teaches or who practices boxing as a means of obtaining a livelihood or pecuniary gain. Regulations are enacted for the conduct of all matches and exhibitions and the qualification of all contestants.

Up to this point this law apparently gives jurisdiction to the Commission and the license committee of all boxing matches to which an admission fee is charged, whether it be a professional match or one between amateurs. Then follows section 27, stating when boxing will be a misdemeanor: “Any person who directly or indirectly holds any such boxing, sparring or wrestling match or contest except where all contestants are amateurs without first having procured a license as hereinbefore prescribed shall be guilty of a misdemeanor.

“ § 28. Certain provisions of penal law inapplicable. The provisions of section seventeen hundred and ten of the penal law shall not apply to any boxing, sparring or wrestling match or exhibition, conducted, held or given, pursuant to the provisions of this act, nor to any boxing, sparring or wrestling match or exhibition in which all the contestants are amateurs.”

Section 27 by indirection states that where all contestants are^amateurs, no license is required. Nothing is said about an admission fee. If the contestants are amateurs they do not require a license under section 27, even though an admission fee be charged. This is made quite clear when the word amateurs ” is again used in section 28. There it is stated that section 1710 of the Penal Law does not apply to any boxing match in which all the contestants are amateurs. This section of the Penal Law only applied to boxing matches when an admission fee was charged. Boxing matches between amateurs where no admission fee was charged were not illegal under the Penal Law. Therefore, when the Penal Law, which only referred to boxing matches to which an admission fee was charged, is rendered inapplicable to amateur bouts, it must of necessity refer to such exhibitions having an entrance fee. The word amateurs ” in both these sections 27 and 28 must be given the same meaning. Therefore, contests between amateurs having an admission fee need not be licensed, and they are not unlawful.

This being so, the police have no right to interfere with such matches unless they become disorderly or a nuisance under some other provision of the law. These latter provisions in section 27 and section 28 are so clear and positive that we are not justified in taking away their meaning by any forced interpretation to accomplish what has been argued to be the beneficial purposes and intent of the boxing law. If the Legislature intends to make amateur exhibitions, to which an admission fee is charged, subject to the control and regulation of the State Athletic Commission and to all the provisions of the act, it must do so in clearer language than has been used in the present law.

The order of the Appellate Division and that of the Special Term should be reversed and the motion for an injunction granted, without costs, and the questions certified answered as follows: first and third in the negative; second and fourth not answered.

Cabdozo,. Ch. J., Pound, Lehman, Kellogg, O’Brien • and Hubbs, JJ., concur.

Ordered accordingly.


text:
    In the Matter of the Accounting of Frederick A. Locke, as Executor, and The New York Trust Company, as Administrator with the Will Annexed, of Herman Rausch, Deceased, Appellants. William Eastman, as Special Guardian, et al., Appellants; Dora Rausch et al., Respondents.
    (Argued January 5, 1932;
    decided February 9, 1932.)

      Charles F. Leining for Frederick A. Locke, appellant.
    In the absence of fraud or mistake the incorporation by reference of an extraneous document, which was in existence at the time of the execution of the will and its authenticity unquestioned as the one at issue is not in violation of the law, and, therefore, the intention of the testator should prevail. (Matter of Silsby, 229 N. Y. 396; Reynolds v. Reynolds, 224 N. Y. 429; Matter of Fowles, 222 N. Y. 222; Noble State Bank v. Haskell, 219 U. S. 104.)

      Leonard Belford and Roswell S. Nichols for the New York Trust Company, appellant.
    A rule of law which is the product of judicial construction only and was framed to safeguard the integrity of last wills and testaments should not be permitted to frustrate the well-defined intention of a testator where it is shown that there is no possibility of fraud or error. (Matter of Fowles, 222 N. Y. 222; Atwood v. Rhode Island Hospital Trust, 275 Fed. Rep. 513; Johnson v. Ball, 5 DeG. & Sm. 85; Whittemore v. Equitable Trust Co., 250 N. Y. 298.)

      William Eastman for Florence Skillings, appellant.
    The rule against incorporation of extraneous documents is not statutory and as now existing was not violated by the decision of the Surrogate. (Matter of Fowles, 222 N. Y. 222.)

      Thomas R. Fay and George A. Gibson for Florence Skillings, an infant, appellant.
    The rule against incorporation by reference does not prevent the incorporation of the terms of the trust agreement into paragraph sixth of the will. (Allen v. Maddock, 11 Moore P. C. C. 427; Newton v. Seaman’s Friend Society, 130 Mass. 91; Matter of Dickin, 3 Curt. Eccl. Rep. 60; Matter of Willey, 128 Cal. 1; Booth v. Baptist Church, 126 N. Y. 215; Matter of Fowles, 222 N. Y. 222.)

      Albert Van Winkle for Grosse Friedrichs-Waisenhaus et al., appellants.
    The terms of the trust agreement made by the testator should be incorporated in his will. (Matter of Fowles, 222 N. Y. 222.)

      Cornelius C. Webster for Dora Rausch et al., respondents.
    Because our courts have never been able to make any practicable distinction between papers of different kinds or between papers and oral instructions, the rule against incorporation of extraneous papers should not be destroyed. (Matter of Blair, 152 N. Y. 645; Matter of Fowles, 222 N. Y. 222; Reynolds v. Reynolds, 224 N. Y. 429; Brown v. Clarke, 77 N. Y. 369; Cook v. White, 43 App. Div. 388; 156 N. Y. 588; Matter of Campbell, 170 N. Y. 84; Matter of Dunham, 1 N. Y. Supp. 120; 121 N. Y. 575; Matter of Brand, 68 App. Div. 225; Booth v. Baptist Church, 126 N. Y. 215; Matter of Acres, 128 Misc. Rep. 254; Langdon v. Astor’s Executors, 16 N. Y. 9; Robert v. Corning, 89 N. Y. 225; Seymour v. Sanford, 86 Conn. 516; Matter of Andrews, 162 N. Y. 1; Matter of Blair, 84 Hun, 581; 152 N. Y. 648; Matter of Whitney, 153 N. Y. 259; Matter of Conway, 124 N. Y. 455; Matter of O’Neil, 91 N. Y. 516; Williams v. Freeman, 85 N. Y. 569; Matter of Lawler, 195 App. Div. 27; Matter of Emmons, 110 App. Div. 701; Matter of Martindale, 69 Misc. Rep. 522; Atwoodv. Rhode Island Hospital Trust Co., 275 Fed. Rep. 513.) The attempted incorporation of the trust agreement in the will renders that portion of the will invalid and void. (Thompson v. Quimby, 2 Bradf. 449; 21 Barb. 107; Langdon v. Astor’s Executors, 16 N. Y. 9; Robert v. Corning, 89 N. Y. 225; Tonnele v. Hall, 4 N. Y. 140; Matter of O’Neil, 91 N. Y. 516; Booth v. Baptist Church, 126 N. Y. 215; Matter of Martindale, 69 Misc. Rep. 522; Reynolds v. Reynolds, 224 N. Y. 429; Matter of Conway, 124 N. Y. 455; Matter of Whitney, 153 N. Y. 259; Matter of Acres, 128 Misc. Rep. 254; Matter of Emmons, 110 App. Div. 701.)

      Richard F. Weeks for Helen Rausch, respondent.
   Cardozo, Ch. J.

Herman Rausch left a will dated November 25, 1927, whereby he gave one-fifth of his residuary estate “ to the New York Trust Company of New York City, to be held by said Trust Company in trust for the benefit of my daughter Florence Skillings, under the same terms and conditions embodied in the Trust Agreement made between myself and the Said New York Trust Company, dated April 15, 1922, the principal to be disposed of as contained in the said agreement, and which agreement is hereby made part of this my will, as if fully set forth herein.”

The testator’s daughter had been judicially declared to be a person of unsound mind and had been committed to an asylum. The trust agreement assigns to the trustee specified shares of stock to be applied to her support. It also states that by a will previously made the grantor has set apart for her use a sixth of his residuary estate, “to be held by the Trustee as an addition to and part of the trust estate hereby created, and the Trustee upon receiving such share of the grantor’s residuary estate, shall administer it as a part hereof and as directed in this indenture.” Provision is also made for the disposition of the interests in remainder when the trust is at an end. The only change effected by the will of 1927 is to make the share of the residue a fifth instead of a sixth.

The Surrogate held upon objections by the next of kin that the will was valid in all its parts. The Appellate Division reversed, and held that as to a fifth of the residuary estate there had been a violation of the rule forbidding the incorporation of unattested documents, and that the testator to that extent had died intestate. The case is now here upon appeal by the legatees affected.

At the execution of this will there was in existence a valid deed of trust whereby a trustee was under a duty to apply the subject-matter of the grant to uses there declared. All that the later will does is to give additional property to the same trustee to be held in the same way. We are told by the decision below that this may not be done unless the terms of the deed of trust are repeated in the will.

The rule against incorporation, well established though it is, is one that will not be carried to a drily logical extreme ” (Matter of Fowles, 222 N. Y. 222, 233). It is one thing to hold that a testator may not import into his will an unattested memorandum of his mere desires and expectations, his unexecuted plans (Booth v. Baptist Church of Christ, 126 N. Y. 215, 247). It is another thing to hold that he may not effectively enlarge the subject-matter of an existing trust by identifying the trust deed and the extent and nature of the increment. In the view of the law, a corporation as an individual and a corporation as trustee are separate personalities (Collins v. Hydorn, 135 N. Y. 320, 324, 325). What is taken as trustee is taken subject to the trust, for it can be held no other way. A gift to a trust company as trustee of a trust created by a particular deed identifies the trust in describing the trustee, like a gift to a corporation for the uses stated in its charter. Only a quibble will find a difference between a gift to a trust company as trustee under a deed and a gift to the same company with instructions to hold what is given in accordance with the deed. The quibble becomes the more transparent when we recall that by the terms of the deed the trustee had bound itself in advance to accept a sixth of the estate if so directed by the will. The legacy when given was not the declaration of a trust, but the enlargement of the subject-matter of a trust declared already. A philanthropist during his fife establishes a foundation as trustee for a specific trust. The mind rebels against the formalism that would invalidate a bequest for no better reason than the omission to state the purpose of the trust again. We do not mean that a gift, though merely one of enlargement, would be held to be effective if the declaration of the trust had been by word of mouth alone. The possibility of fraud or error would be too strong in such circumstances to permit the gift to stand (Reynolds v. Reynolds, 224 N. Y. 429, 431). Even in courts where incorporation is permitted more liberally than it is with us, the reference must be to a document or something equivalent thereto (Wilcox v. Attorney-General, 207 Mass. 198), the document must be in existence at the time of the making of the will, and the tests of identification must be precise and definite (Matter of Shillaber, 74 Cal. 144; Watson v. Hinson, 162 N. C. 72). Here the extrinsic fact, identifying and explaining the gift already made, is as impersonal and enduring as the inscription on a monument.

The books abound in nice distinctions. They are tests to guide the judgment rather than invariable rules or standards. The one most frequently drawn is between documents expressing the terms of the bequest and documents identifying the thing intended to be bequeathed (Hatheway v. Smith, 79 Conn., 506, 519, 521; Booth v. Baptist Church of Christ, supra). We pointed out, however, in the Fowles Case (supra, p. 233) that “ the two classes of cases run into each other by almost imperceptible gradations ” (citing Langdon v. Astor’s Executors, 16 N. Y. 9, 26, 31). To insist upon a will so self-contained and self-sufficient as to make resort to things extrinsic needless in every possible contingency is to lose sight of the significance of language, its function and capacities. “ Words,” we have said, are symbols, and we must compare them with things and persons and events ” (Matter of Fowles, supra, p. 232). A father bequeaths a legacy to his son by canceling whatever indebtedness appears upon his books. No one doubts the validity of such a gift (Langdon v. Astor’s Executors, 16 N. Y. 9, 24, 26, 28; Robert v. Corning, 89 N. Y. 225, 242), yet to* understand the extent of the legacy we must go beyond the will itself. “ Signs and symbols must be turned into then-equivalent realities ” (Marks v. Cowdin, 226 N. Y. 138, 143). How far the process will be extended is a question of degree (Marks v. Cowdin, supra; Matter of Fowles, supra; Doherty v. Hill, 144 Mass. 465, 468, 469). We exclude the will that remits us to other words of promise, the expression of a plan or purpose inchoate and imperfect. Another result may follow where by comparison of the description with some “manifest, external, and continuing fact ” (Doherty v. Hill, supra; Marks v. Cowdin, supra) we learn the terms of a relation that is consummate and subsisting. Much will depend upon the extent to which the door is likely to be opened to chicanery or mistake if there is relaxation of the requirement of a self-sufficient integration. The rule against incorporation is not a doctrinaire demand for an unattainable perfection. It has its limits in the considerations of practical expediency that brought it into being. Here the identification of the donee is itself an expression of the gift, the discovery of the one being equivalent to the ascertainment of the other.

What has been written assumes that the question is still open in this State. We think the fact is that two cases, considered with great care, permit an answer to be given on the footing of authority.

No substantial distinction can be drawn between the situation in Matter of Piffard (111 N. Y. 410) and the one before us now. The testator in the Piffard case conferred a power on his daughter to dispose of his estate and then added a provision in substance that in case of her death before him and her consequent inability to execute the power, the legatees under her will should be deemed, none the less, to be the legatees under his own. The daughter died before her father. We held that her will might be referred to for the purpose of determining the legatees entitled to take under his and the extent of their respective shares.

Matter of Fowles (supra) followed the decision in the Piffard case, though in a situation slightly different.

There are rulings to the same effect in New Jersey (Condit v. DeHart, 62 N. J. L. 78) and Massachusetts (Bemis v. Fletcher, 251 Mass. 178, 186).

A decision in Connecticut is cited for a different doctrine (Hatheway v. Smith, 79 Conn. 506, 519). The facts are distinguishable, for there the will and the deed were executed at the same time. If the decision was meant to cover a situation like the one before us, we are unwilling to approve it.

The order of the Appellate Division should be reversed and that of the Surrogate’s Court affirmed with costs in the Appellate Division and in this court payable out of the estate.

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

Ordered accordingly.


author: Hubbs, J.

text:
    In the Matter of James F. Egan, as Administrator of the Estate of Nanny Frank, Deceased, Respondent. Joseph A. Broderick, as Superintendent of Banks, Appellant.

      (Argued January 5, 1932;
    decided February 9, 1932.)

      Joseph F. Hunter, Warren C. Fielding, Arthur Ofner and Carl J. Austrian for appellant.
    The order should be reversed as premature and for lack of jurisdiction. (Banking Law, §§ 72-78; Matter of Carnegie Trust Co., 162 App. Div. 76.) Priority of payment should be denied on the merits, since petitioner’s claim does not fall within any preferential statutory provision. (Banking Law, § 188, subd. 8; Matter of Bond, 232 App. Div. 468; Henkel v. Carnegie Trust Co., 213 N. Y. 185; Civ. Prac. Act, §§ 133-137; State Finance Law, §§ 4, subd. 8, 44-c; Madison Trust Co. v. Carnegie Trust Co., 215 N. Y. 475; Jacobus v. Colgate, 217 N. Y. 235; Rhodes v. Sperry & Hutchinson Co., 193 N. Y. 223; People v. American Loan & Trust Co., 172 N. Y. 371.) Priority of payment should be denied on the merits since the alleged statutory preference applies only to the liquidation of a trust company and not to that of a bank. (Madison Trust Co. v. Carnegie Trust Co., 215 N. Y. 475.)

      Albert Van Winkle and James J. Flood for respondent.
    The Supreme Court may make a determination of preference or priority prior to the date fixed by the Superinintendent of Banks for the presentation of claims. (Banking Law, § 78.)
   Hubbs, J.

The respondent is the Public Administrator of the county of New York, appointed by the Surrogates, pursuant to the provisions of chapter 230 of the Laws of 1898.

On February 19, 1930, letters of administration were duly issued to him on the estate of Nanny Frank, deceased. Thereafter, he deposited in the commercial department of the Bank of United States, as “ Public Administrator of the County of New York,” the sum of $5,145.10. Thereafter the respondent, by eight checks bearing his sole signature and without the production of a court order therefor, withdrew from the bank a portion of the money deposited, leaving a balance at the commencement of this proceeding of $5,118.58.

The respondent, as Public Administrator, maintained only one account in the bank which was divided into two hundred and fifty or more subdivisions, indicated by different numbers, so that a record was kept of the funds belonging to each separate estate. No segregation was made of the funds deposited and entered on the bank books in the various subdivisions of the respondent’s account, and no segregation of the funds was made in the general account from the other assets of the bank.

The Bank of United States is a domestic banking corporation, designated according to the law as a depositary for the deposit of funds held by trustees and other fiduciaries under the laws of the State. On December 11, 1930, the appellant, Superintendent of Banks, pursuant to section 57 of the Banking Law (Cons. Laws, ch. 2), took possession of the bank and its assets for the purpose of liquidation.

The respondent, without filing a claim with the appellant as Superintendent of Banks, and before the Superintendent filed a list of the claims against the bank, made a motion- for an order granting a preference or priority of payment, from the assets of the bank, of the funds on deposit belonging to the estate of Nanny Frank. The order was granted, and has been affirmed by the Appellate Division. Such funds were not deposited pursuant to an order of the court. The situation is the same as though an individual administrator had deposited funds in the bank in his name as administrator without an order of the court requiring such deposit.

The respondent contends that such a deposit of funds of an estate by an administrator creates a preferential claim against the assets of a bank in the possession of the Superintendent of Banks for the purpose of liquidation under section 57 of the Banking Law. It is urged that such preference is granted by subdivision 8 of section 188 of the Banking Law which reads:

8. Preference. If dissolved by the legislature or the court, or otherwise, or liquidated by the superintendent of banks or otherwise, the debts from such corporation as guardian, trustee, executor, administrator, committee or depositary, shall be entitled to priority of payment from the assets of such corporation on an equality with any other priority given by this chapter.”

Article V of the Banking Law deals with the organization, incorporation, powers, regulation, restrictions and management of trust companies. Section 188 thereof contains provisions relating to appointment of and exercise of powers as executor and in other fiduciary capacities.” Subdivisions 2, 3 and 4 provide that a trust company may be guardian, trustee, administrator, committee, receiver, etc. Subdivision 5 thereof reads:

5. Depositary for moneys paid into court. All moneys brought into court by order or judgment of any court of record of this state, or of any other state or of the United States, maybe deposited with any such corporation that has been designated a depositary by the comptroller of the state of New York, as provided by the code of civil procedure. Whenever any such corporation shall be designated by the comptroller as a depositary for funds and moneys paid into court, it shall give to the people of the state a bond in the form and manner prescribed in this chapter.”

It is clear from the reading of subdivision 8 that it has no application to the situation involved in this case. It provides for a preference upon dissolution when a trust company is itself acting as a guardian, executor, administrator, etc., and is indebted in such capacity. In the case at bar it was not acting as administrator. It merely received on deposit funds which the Public Administrator had in his possession as administrator of Nanny Frank, deceased, and was indebted to him as such administrator for the balance on deposit.

It is also urged by the respondent that the debt of the bank to the respondent is that of a “ depositary ” of court funds within the meaning of subdivision 8 of section 188, and, therefore, that the respondent is entitled to a preference. The priority of payment of debts of a trust company as “ depositary,” provided for by subdivision 8, has no application under the facts in this case. That provision applies to money brought into court as provided by the Code of Civil Procedure, now transferred to sections 133 to 137 of the Civil Practice Act, and to sections 44-c and subdivision 8 of section 4 of the State Finance Law (Cons. Laws, ch. 56) and deposited as permitted by subdivision 6 of section 185 and subdivision 5 of section 188 of the Banking Law.

In the case of Henkel v. Carnegie Trust Co. (213 N. Y. 185) this court definitely decided both propositions contrary to the respondent’s contentions. The opinion in that case dealt with similar provisions of the Banking Law as it existed prior to the revision of 1914 (Laws of 1914, ch. 369), and the enactment of the Civil Practice Act. There has, however, been no substantial change in the statutory provisions involved and the opinion in that case is controlling in construing the provisions of the statutes as they now read.

We have reached the conclusion that the bank is not indebted as administrator to the estate of Nanny Frank, deceased, within the meaning of subdivision 8 of section 188, and that the funds on deposit are not held by it “as depositary ” of moneys brought into court as provided by subdivision 5 as such funds were not deposited pursuant to the provisions of an “ order or judgment of any court of record of this state, or of any other state or of the United States.”

Chapter 552 of the Laws of 1931, referred to by respondent, has no application under the facts of this case, as the county of New York is expressly excepted from the provisions of that act.

Even if we should assume that the respondent is entitled to preference in payment as to the funds in question deposited by him, nevertheless, the order granting a preference was not properly granted.

The Legislature by the enactment of sections 72 to 78, inclusive, of the Banking Law, as amended, has provided a complete and comprehensive working plan for the proof and enforcement of all claims and accounts against a moneyed corporation during its liquidation by the Superintendent of Banks. The law governing the priority of payment is contained in sections 75 and 78. Section 75 provides that the Superintendent shall not determine the priority of payment of accepted claims and accounts, but that priority of payment shall be determined by the Supreme Court, pursuant to section 78, which reads in part: “At any time after the date fixed by the superintendent for the presentation of claims, the Supreme Court may by order authorize the superintendent upon his application to declare out of the funds remaining in his hands after the payment of expenses, one or more dividends. Such order shall specify what claims and what accounts payable as shown by the books and records as to which no claims were presented, listed and accepted by the superintendent, if any, are entitled to priority of payment, and shall direct the superintendent regarding the manner of payment of such prior claims and accounts.”

Those sections specify two classes of claims and accounts: First, those accepted or rejected by the Superintendent (§ 75), and second, claims and accounts payable as shown by the books and records as to which no claims were presented, listed and accepted by the superintendent ” (§ 78). As to both classes, it is the duty of the Supreme Court to determine as to priority of payment. The procedure for obtaining such determination specifically provides that the application to the court to determine priority of payment must be made by the Superintendent after the date fixed by him for presentation of claims. The order herein was granted before the date fixed by the Superintendent for the presentation of claims ” and it was not granted upon bis application.” The petition did not allege that a proof of claim or account had been listed and accepted.” Indeed, it does not appear that a claim or account had been filed with the Superintendent. In fact, none of the requirements specified in section 78 were complied with by the respondent.

Other provisions of the Banking Law were ignored by the respondent in filing his petition for a preference. Section 72, as amended by chapter 191, Laws of 1931, provides for notice to be published for the filing of claims. Objections as to a claim filed must be made within twenty days after a fist of the claims has been filed by the Superintendent (§ 74). Thereafter, the Superintendent must accept, reject or submit to the court all duly filed claims. The acceptance of an ordinary claim entitles the owner to share ratably in the distribution of assets (§ 76). The acceptance by the Superintendent of a claim alleged to be entitled to priority does not determine the right to priority of payment. That question must be submitted to the court by the Superintendent (§§ 75 and 78). It is apparent from a reading of the statute that the primary duty rests upon the Superintendent to determine in the first instance whether a claim filed has been duly established and in case of claims not presented which appear upon the books and records, it is his duty to list them and accept or reject each class in writing. The statute does not provide for any action by the court until such primary duty has been performed by the Superintendent.

The statute clearly indicates that the Legislature did not intend that the court should interfere with the orderly administration of the affairs of a moneyed corporation in the possession of the Superintendent and determine upon motion in specific instances whether claims should be preferred, thereby hampering the Superintendent in the performance of his duty. To permit such interference would inevitably lead to great confusion, expense and delay and place upon the Superintendent a heavy burden not contemplated by the statute.

The statute does not attempt to deprive the Supreme Court of its constitutional powers. It simply regulates the practice to be followed before the court is called upon to determine whether a claim or account is entitled to priority of payment. The Legislature in prescribing the primary acts to be performed before the court can be called upon, acted within its jurisdiction and the practice prescribed by it must be followed. We do not mean to decide that under no conditions may the court act to protect the interest of those holding claims or accounts against a moneyed corporation in the possession of the Superintendent even though the procedure prescribed by the Legislature has not been strictly complied with. It is possible that cases may arise where the Superintendent may refuse or fail to act, or may act arbitrarily, negligently or illegally and thereby prejudice the rights of creditors. Under such circumstances, it may be that the court should interfere to protect such rights. We do not pass upon that question. It is sufficient for the decision of this case that no such condition exists and that the respondent has utterly failed to comply with the provisions of the Banking Law.

The contentions of the respondent are based upon the provisions of the Banking Law which regulate trust companies and it is his claim that such provisions arq applicable to the Bank of United States, which is not a trust company, but a bank which exercises fiduciary powers by authorization of the Superintendent of Banks under sections 106 and 24-a of the Banking Law. Assuming that such contention is right, nevertheless, the order was improperly granted because of the failure to comply with the provisions applicable to the liquidation of trust companies.

It is earnestly urged by the appellant that the provisions of the Banking Law relied upon by the respondent are not applicable as the Bank of United States is not a trust company, and, therefore, that the provisions of the statute dealing with moneyed institutions not trust companies are the only provisions applicable. There is no claim that the order was properly granted under such provisions of the Banking Law. We do not, therefore, pass upon that question. Neither do we pass upon the right of a court in a reclamation proceeding or on a claim under section 350-1 of the Negotiable Instruments Law (Cons. Laws, ch. 38), added by Laws of 1929, chapter 589, section 1, to order the Superintendent to turn over to a claimant property in his possession. In such a proceeding it is always the contention of the claimant that the Superintendent is unlawfully withholding property which belongs to the claimant and the claim is in hostility to the liquidation proceeding. The proceeding here involved is a pure liquidation proceeding to establish a preference under the Banking Law.

The order of the Appellate Division and that of the Special Term should be reversed, with costs in this court and in the Appellate Division, and the motion denied, with ten dollars costs.

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

Orders reversed, etc.


text:
    Antoinette F. Russo, an Infant, by Carmine Frele, Her Guardian ad Litem, Respondent, v. The City of New York, Appellant.

      (Submitted January 5, 1932,
    decided February 9, 1932.)

      Arthur J. W. Hilly, Corporation Counsel (J. Joseph Lilly, Charles E. Ramsgate and Edward A. Gobel of counsel), for appellant.
    The voluntary discontinuance on December 7, 1927, of the action commenced by the infant plaintiff on October 24, 1925, barred the commencement, on August 28, 1928, of the present action for the same cause. (Murphy v. Village of Fort Edward, 213 N. Y. 397; Matter of Grout, 105 App. Div. 98; Tolchinsky v. City of New York, 164 App. Div. 636; 220 N. Y. 633; Ward v. City of Troy, 55 App. Div. 192; Merry Realty Co. v. Shamokin & Hollis R. E. Co., 230 N. Y. 316; Sweeney v. City of New York, 225 N. Y. 271; Casey v. City of New York, 217 N. Y. 192; Fitzpatrick v. City of New York, 220 App. Div. 320; Thomann v. City of Rochester, 256 N. Y. 165; McKnight v. City of New York, 186 N. Y. 35; Lord & Burnham Co. v. City of New York, 251 N. Y. 198; Matter of City of New York [Elm Street], 239 N. Y. 220; Diehl, C. E., Inc., v. City of Lackawanna, 233 App. Div. 348; Bannister v. Michigan Mut. Life Ins. Co., 111 App. Div. 765.) The plaintiff’s action was not commenced within the time limited by law. (Civ. Prac. Act, § 49; Laws of 1886, ch. 572; Vance v. Vance, 108 U. S. 514; Morgan v. City of Des Moines, 60 Fed. Rep. 208; Baker v. Town of Manitou, 277 Fed. Rep. 232; Hurley v. Town of Bingham, 63 Utah, 589; Szroka v. Northwestern Bell Telephone Co., 171 Minn. 57; Gold v.
      City of Kingston, 210 App. Div. 523; Murphy v. Village of Fort Edward, 213 N. Y. 397; Schieffelin v. Hylan, 236 N. Y. 254; Stein v. Dunne, 119 App. Div. 1; 190 N. Y. 524; Manning, Bowman & Co. v. Keenan, 73 N. Y. 45; Winter v. City of Niagara Falls, 190 N. Y. 198; Casey v. City of New York, 217 N. Y. 192; Ponsrok v. City of Yonkers, 254 N. Y. 91; Rogers v. Village of Port Chester, 234 N. Y. 182; Lord & Burnham Co. v. City of New York, 251 N. Y. 198; Robinson v. Robins Dry Dock & Repair Co., 238 N. Y. 271; Eagle-Pilcher Lead Co. v. Mansfield Paint Co., 201 App. Div. 223; Zouch v. Parsons, 3 Burr. 1794.)

      David C. Broderick, David M. Fink and Jacquin Frank for respondent.
    Section 261 of the Greater New York Charter and chapter 572 of the Laws of 1886 are not binding on the infant plaintiff, except in so far as covered by the charge of the court. This issue of fact having been determined by the jury in the infant plaintiff’s favor, cannot be disturbed. (Casey v. City of New York, 217 N. Y. 192; Brown Paint Co. v. Reinhardt, 210 N. Y. 162; Sweeney v. City of New York, 225 N. Y. 271; Murphy v. Village of Ft. Edward, 213 N. Y. 397; McKnight v. City of New York, 186 N. Y. 35; Winter v. Niagara Falls, 190 N. Y. 198.)
   Pound, J.

The jury has found that the infant plaintiff was seriously injured on July 24, 1925, through the negligence of the defendant, The City of New York, when she was fourteen years of age. The question of law is whether she has lost her right to recover by reason of non-compliance with the provisions of sections 149 and 261 of the Greater New York Charter (Laws of 1901, ch. 466, amd. L. 1912, ch. 452; L. 1917, ch. 401) and of Laws of 1886, chapter 572, relative to filing notice of claim and notice of intention to sue, appearance before the Comptroller for examination and commencement of suit, and of the provisions of the Statute of Limitations. (Civ. Prac. Act, §§ 23, 49, 60, 201.)

These statutes have to do, first, with the right to maintain a cause of action against the city of New York. They require the service on the Corporation Counsel of notice of intention to sue within six months and the commencement of the action within one year after the cause of action accrued; the presentation of the claim to the Comptroller of the city for adjustment and the appearance of the claimant before the Comptroller on notice for examination touching the claim. In this case notice of claim and intention to sue were duly served on the defendant’s Comptroller and Corporation Counsel. She was thereafter duly notified to appear for examination by the defendant’s Comptroller. She made default in appearing and her default was noted on October 7, 1925.

On October 24, 1925, she began an action by her guardian ad litem against the city which was voluntarily discontinued by her because of such default on December 7, 1927, when it was about to be reached for trial.

On December 13, 1927, she served a second notice of claim and of intention to sue and appeared before the Comptroller for examination and on August 28, 1928, she began the present action. This was over three years and one month after the accident. While the second notices are set forth in the complaint as the basis of this action, the fact that the earlier notices were served was not questioned by the defendant on the trial.

The defendant moved to dismiss the complaint for failure to comply with the provisions above referred to, including the general provisions ■ of the Statute of Limitations.

The trial justice left to the jury the question whether plaintiff was physically and mentally able to comprehend and comply with the statutes. One fact is obvious, that she did literally comply with such statutes so far as notice of claim and intention to Sue is concerned. It is necessary for her only to excuse her failure to appear for examination before the Comptroller. Her counsel on the trial conceded that she was duly notified to appear and was in default. The question was properly presented to the jury. (Murphy v. Village of Fort Edward, 213 N. Y. 397.)

There are three periods of infancy to be considered in this connection. As matter of law the strict requirements of the statute are not enforced against an immature infant of approximately ten years or less. They are enforced against an infant of riper years, of ordinary physical and mental capacity. Between these two periods lies a middle period where the infant may or may not be held to the provisions of the statute under the facts of the case as the jury may determine. No exact limitation of these periods by age can safely be made and the classification may depend to some extent on the facts in a given case, but it is the age and capacity of the infant rather than the conduct of its parents and guardians which control.

It cannot, however, be justly held, we think, that rights accorded by the law to infants are forfeited because a parent did not perform for an infant where performance was excused because of the infancy.”' (Murphy v. Village of Fort Edward, supra, p. 403.)

Here the plaintiff was a witness in her own behalf and the jury had not only her age but her appearance to aid them in arriving at their conclusion. No claim can be made that a- little girl of fourteen when served with a notice to appear before the Comptroller for examination should as matter of law be held to the strict requirements of the statute, even though a notice of claim and intention to sue had been previously filed on her behalf.

Next we have to consider the general statutes of limitation in their application to the case. While the statutory requirements for the presentation of claims, service of intention to sue and appearance for examination are not suspended during infancy and the infant when he does sue must allege and prove compliance therewith or establish facts excusing his non-compliance (Winter v. City of Niagara Falls, 190 N. Y. 198), the provision that the action must be commenced within one year after the cause of action accrues is not in the nature of a Statute of Limitations which runs during infancy. An injured infant having a right of action need not wait until reaching full age before beginning such action (Civ. Prac. Act, § 201), but when the infant is entitled to maintain the action the time of disability by reason of infancy is not a part of the time limited for the commencement of the action. (Civ. Prac. Act, § 60.) Plaintiff had one year after the disability of infancy ceased in which to begin her action. (McKnight v. City of New York, 186 N. Y. 35.)

Civil Practice Act, section 23, which permits a new action to be brought within one year after a reversal, applies only to cases where without this saving clause the action would be barred by the Statute of Limitations. Here, because of the disability of infancy, the bar of the statute never became effective.

The judgment should be affirmed, with costs.

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

Judgment affirmed.


text:
    Irene C. DeHaen, as Administratrix of the Estate of Mathew T. Landy, Deceased, Respondent, v. Rockwood Sprinkler Company of Massachusetts et al., Appellants.
    (Argued January 11, 1932;
    decided February 9, 1932.)

      Walter G. Evans and John P. Smith for Rockwood Sprinkler Company of Massachusetts, appellant.
    The verdict holding that the negligence of the other defendants was a contributing cause of the accident is amply supported by the evidence. (Quigley v. Thatcher, 207 N. Y. 66; Bohnhoff v. Fisher, 210 N. Y. 172; Smith v. Variety Iron Co., 147 App. Div. 242; Hart v. Bridge Co., 80 N. Y. 622; New York Harbor Co. v. N. Y. L. R. Co., 76 Hun, 258; Gallagher v. Crooks, 132 N. Y. 338; Fitzwater v. Warren, 206 N. Y. 355; Lester v. Graham, 157 App. Div. 651; Berthelson v. Garber, 111 App. Div. 142; Pinsdorf v. Kellogg, 108 App. Div. 209.)

      Bertrand L. Pettigrew and Walter L. Glenney for John F. LeBeau, appellant.
    No negligence on the part of the individual defendant was the proximate cause of the accident. (Laidlaw v. Sage, 158 N. Y. 73; Koch v. Fox, 71 App. Div. 288; Storey v. Mayor, 29 App. Div. 316; Independent I. C. Co. v. United I. C. Co., 69 Misc. Rep. 623; Davy v. Lyons, 71 Misc. Rep. 139; Miller v. Bahmmuller, 124 App. Div. 558; Wolf v. American Tract Society, 164 N. Y. 30; Jack v. McCabe, 56 App. Div. 378; Tobias v. Lewis, 182 App. Div. 598; 230 N. Y. 571; Loktich v. Bethlehem Engineering Corp., 242 N. Y. 436.)

      Frederick Hulse for Turner Construction Company, Inc., appellant.
    The absence of a barrier along the north side of the shaft was not the proximate or remote cause of the accident. (Bond v. Smith, 113 N. Y. 378; Pauley v. S. G. & L. Co., 131 N. Y. 90; Perry v. Rochester Lime Co., 219 N. Y. 60; Swenson v. Willis, 152 App. Div. 711; Genovesia v. Pelham Operating Co., 130 App. Div. 200; Eagan v. Thompson-Starrett, 209 N. Y. 110; Sabatino v. Roebling Constr. Co., 136 App. Div. 217.)

      Archie E. Latto, Leonard F. Fish and Thomas J. O’Neill for respondent.
    The general contractor was guilty of manifest negligence in failing to maintain proper barriers to the shaft as required by statute, which was one of the proximate causes of the accident, (Quigley v. Thatcher, 207 N. Y. 66; Bohnhoff v. Fischer, 210 N. Y. 172; Smith v. Variety Iron Co., 147 App. Div. 242; Sweet v. Perkins, 196 N. Y. 482; Hart v. Bridge Co., 80 N. Y. 622; New York Harbor Co. v. N. Y. L. R. Co., 76 Hun, 258; Gallagher v. Crooks, 132 N. Y. 338; Fitzwater v. Warren, 206 N. Y. 355; Lotocka v. Elevator Supplies Co., 246 N. Y. 295; Lester v. Graham, 157 App. Div. 651; Berthelson v. Garber, 111 App. Div. 142; Pinsdorf v. Kellogg, 108 App. Div. 209; Volkmar v. R. R. Co., 134 N. Y. 418.) The individual defendant was guilty of culpable negligence in setting down the radiators in a dangerous place, which was one of the proximate causes of the accident. (Becker v. Koch, 104 N. Y. 394; Sweet v. Perkins, 196 N. Y. 482.)
   Cardozo, Ch. J.

A radiator placed about ten or twelve inches from the edge of an unprotected hoistway and parallel thereto fell down the shaft and killed a man below.

In this action to recover damages for his death, the defendant Rockwood Sprinkler Company has been held liable on the ground that its servants negligently struck the radiator and thus brought about the fall; the defendant LeBeau has been held liable on the ground that his servants negligently placed the radiator in dangerous proximity to the. shaft; and the defendant Turner Construction Company has been held hable on the ground of an omission to fence the shaft in the manner called for by statute.

The liability of the Rockwood Sprinkler Company is hardly doubtful. The negligence of its servants in dislodging the radiator was plainly a contributing cause.

The liability of LeBeau, though not so certain, may fairly be upheld. The inference is a permissible one that it was by the act of his servants, and not by the act of others, that the radiator was left in the place from which it fell. Reasonable men might not unreasonably say that there was warning of peril when a thing so easily dislodged was placed in close proximity to an open and unguarded hoistway. Liability is not defeated by the fact that the thing could not be. moved without the co-operative negligence of others (Sweet v. Perkins, 196 N. Y. 482). One may not place an engine of destruction in a position where a heedless touch by some one else will awaken its destructive power (cf. Teasdale v. Beacon Oil Co., 266 Mass. 25, 28; Pastene v. Adams, 49 Cal. 87; Lane v. Atlantic Works, 111 Mass. 136). At least a jury may so find (O’Neill v. City of Port Jervis, 253 N. Y. 423, 433).

A question even closer arises with reference to the liability of the Turner Construction Company, the general contractor.

Section 241, subdivision 5, of the Labor Law (Cons. Laws, ch. 31) (as it stood at the time of the accident) contained the following provisions: " If elevators, elevating machines or hod-hoisting apparatus are used within a building in the course of construction, for the purpose of lifting materials to be used, the shafts or openings in each floor shall be inclosed or fenced in on all sides by a barrier of suitable height, except on two sides which may be used for taking off and putting on materials, and those sides shall be guarded by an adjustable barrier not less than three nor more than four feet from the floor and not less than two feet from the edges of such shafts or openings.”

The violation of a statute calling for a prescribed Safeguard-in the construction of a building does not establish liability if the statute is intended to protect against a particular hazard, and a hazard of a different kind is the occasion of the injury (Am. Law Inst., Restatement of Torts [No. 4], § 176; Lang v. N. Y. C. R. R. Co., 227 N. Y. 507; 255 U. S. 455; Boronkay v. Robinson & Carpenter, 247 N. Y. 365; DiCaprio v. N. Y. C. R. R. Co., 231 N. Y. 94).

The chief object of this statute is to protect workmen from the hazard of falling into a shaft. ' We cannot say, however, that no other hazard was within the zone of apprehension. On two sides of the shaft there must be a solid or comparatively solid fence. Only on the other sides where material is taken on or off may there be a single bar. If there was no thought to give protection against falling missiles or debris, the lawmakers might well have stopped with a requirement that there be a single bar on every side. The fact that they did not stop there is evidence of a broader purpose. True, indeed, it is that on two of the four sides the security is only partial and imperfect. A barrier set in place at a height of four feet will often be of little avail in holding back material or rubbish collected on the floor. Even so, security against the hazard of falling objects will not be lacking altogether. One of the requirements of the statute is that the guard shall be placed at least two feet from the edge. In a barrier so fixed there is warning,- if no more. Workmen, who may otherwise be tempted to store material in dangerous proximity to the edge of an open shaft will be reminded of the danger and will tend to stand afar. The thoughtless will be checked, though the recklessly indifferent will be free to go their way.

The potencies of protection that reside in such a barrier have illustration in the case before us. If the hoistway had been guarded, it is unlikely that the radiators thirty-eight inches high would have been placed as they were within falling distance of the edge. It is still less likely that a worker would heedlessly have brushed against them and so brought about the fall. We do not mean to say that these considerations are decisive. Liability is not established by a showing that as chance would have it a statutory safeguard might have avoided the particular hazard out of which an accident ensued. The hazard out of which the accident ensued must have been the particular hazard or class of hazards that the statutory-safeguard in the thought and purpose of the Legislature was intended to correct (Lang v. N. Y. C. R. R. Co., supra; DiCaprio v. N. Y. C. R. R. Co., supra). None the less, the sequence of events may help to fix the Units of a purpose that would be obscure if viewed alone. A safeguard has been commanded, but without distinct enumeration of the hazards to be avoided. In the revealing Ught of experience the hazards to be avoided are disclosed to us as the hazards that ensued.

The judgment should be affirmed with costs.

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

Judgment affirmed.