author: Wachtler, J. Chief Judge Breitel (dissenting).

text:
    J. N. A. Realty Corp., Respondent, v Cross Bay Chelsea, Inc., Appellant, et al., Respondents.
    Argued March 30, 1977;
    decided June 16, 1977

      Vincent F. Nicolosi and Frank M. Nicolosi for appellant.

      Samuel Shapiro for respondent.
   Wachtler, J.

J. N. A. Realty Corp., the owner of a building in Howard Beach, commenced this proceeding to recover possession of the premises claiming that the lease has expired. The lease grants the tenant, Cross Bay Chelsea, Inc., an option to renew and although the notice was sent, through negligence or inadvertence, it was not sent within the time prescribed in the lease. The landlord seeks to enforce the letter of the agreement. The tenant asks for equity to relieve it from a forfeiture.

The Civil Court, after a trial, held that the tenant was entitled to equitable relief. The Appellate Term affirmed, without opinion, but the Appellate Division, after granting leave, reversed and granted the petition. The tenant has appealed to this court.

Two primary questions are raised on the appeal. First, will the tenant suffer a forfeiture if the landlord is permitted to enforce the letter of the agreement. Secondly, if there will be a forfeiture, may a court of equity grant the tenant relief when the forfeiture would result from the tenant’s own neglect or inadvertence.

At the trial it was shown that J. N!. A. Realty Corp. (hereafter JNA) originally leased the premises to Victor Palermo and Sylvester Vascellaro for a 10-year term commencing on January 1, 1964. Paragraph 58 of the lease, which was attached as part of a 12-page rider, granted the tenants an option to renew for a 10-year term provided "that Tenant shall notify the landlord in writing by registered or certified mail six (6) months prior to the last day of the term of the lease that tenant desires such renewal.” The tenants opened a restaurant on the premises. In February, 1964 they formed the Foro Romano Corp. (Foro) and assigned the lease to the corporation.

By December of 1967 the restaurant was operating at a loss and Foro decided to close it down and offer it for sale or lease. In March, 1968 Foro entered into a contract with Cross Bay Chelsea, Inc. (hereafter Chelsea), to sell the restaurant and assign the lease. As a condition of the sale Foro was required to obtain a modification of the option to renew so that Chelsea would have the right to renew the lease for an additional term of 24 years.

The closing took place in June of 1968. First JNA modified the option and consented to the assignment. The modification, which consists of a separate document to be attached to the lease, states: "the Tenant shall have a right to renew this lease for a further period of Twenty-Four (24) years, instead of Ten (10) years, from the expiration of the original term of said lease * * * All other provisions of Paragraph #58 in said lease, * * * shall remain in full force and effect, except as hereinabove modified.” Foro then assigned the lease and sold its interest in the restaurant to Chelsea for $155,000. The bill of sale states that "the value of the fixtures and chattels included in this sale is the sum of $40,000 and that the remainder of the purchase price is the value of the leasehold and possession of the restaurant premises.” At that point five and one-half years remained on the original term of the lease.

In the summer of 1968 Chelsea reopened the restaurant. JNA’s president, Nicholas Arena, admitted on the stand that throughout the tenancy it regularly informed Chelsea in writing of its obligations under the lease, such as the need to pay taxes and insurance by certain dates. For instance on June 13, 1973 JNA sent a letter to Chelsea informing them that certain taxes were due to be paid. When that letter was sent the option to renew was due to expire in approximately two weeks but JNA made no mention of this. A similar letter was sent to Chelsea in September, 1973.

Arena also admitted that throughout the term of the tenancy he was "most assuredly” aware of the time limitation on the option. In fact there is some indication in the record that JNA had previously used this device in an attempt to evict another tenant. Nevertheless it was not until November 12, 1973 that JNA took any action to inform the tenant that the option had lapsed. Then it sent a letter noting that the date had passed and, the letter states, "not having heard from you as prescribed by paragraph #58 in our lease we must assume you will vacate the premises” at the expiration of the original term, January 1, 1974. By letter dated November 16, 1973 Chelsea, through its attorney, sent written notice of intention to renew the option which, of course, JNA refused to honor.

At the trial Chelsea’s principals claimed that they were not aware of the time limitation because they had never received a copy of paragraph 58 of the rider. They had received a copy of the modification but they had assumed that it gave them an absolute right to retain the tenancy for 24 years after the expiration of the original term. However, at the trial and later at the Appellate Division, it was found that Chelsea had knowledge of, or at least was "chargeable with notice” of, the time limitation in the rider and thus was negligent in failing to renew within the time prescribed.

Chelsea’s principals also testified that they had spent an additional $15,000 on improvements, at least part of which had been expended after the option had expired. Toward the end of the trial JNA’s attorney asked the court whether it would "take evidence from” Arena that he had negotiated with another tenant after the option to renew had lapsed. However, the court held that this testimony would be immaterial.

It is a settled principle of law that a notice exercising an option is ineffective if it is not given within the time specified (see, e.g., Restatement, Contracts 2d [Tent Draft No. 1, 1964], § 64, subd [b]; 1A Corbin, Contracts [1963], § 264; 1 Williston, Contracts [3d ed, 1957], § 87; Sy Jack Realty Co. v Pergament Syosset Corp., 27 NY2d 449). "At law, of course, time is always of the essence of the contract” (De Funiak, Modern Equity, § 80, p 223). Thus the tenant had no legal right to exercise the option when it did, but to say that is simply to pose the issue; it does not resolve it. Of course the tenant would not be asking for equitable relief if it could establish its rights at law.

The major obstacle to obtaining equitable relief in these cases is that default on an option usually does not result in a forfeiture. The reason is that the option itself does not create any interest in the property, and no rights accrue until the condition precedent has been met by giving notice within the time specified. Thus equity will not intervene because the loss of the option does not ordinarily result in the forfeiture of any vested rights (see, e.g., Fidelity & Columbia Trust Co. v Levin, 128 Misc 838, affd 221 App Div 786, affd 248 NY 551; Doepfner v Bowers, 55 Misc 561; cf. People’s Bank of City of N. Y. v Mitchell, 73 NY 406; but see Noyes v Anderson, 124 NY 175, 179-180, where it is indicated that the "rule may not be without exception”). The general rule is customarily stated as follows: "There is a wide distinction between a condition precedent, where no title has vested and none is to vest until the condition is performed, and a condition subsequent, operating by way of a defeasance. In the former case equity can give no relief. The failure to perform is an inevitable bar. No right can ever vest. The result is very different where the condition is subsequent. There equity will interpose and relieve against the forfeiture”. (Davis v Gray, 16 Wall [83 US] 203, 229-230.) It has been suggested that even when the option has been paid for, nothing is forfeited when it expires, because the amount paid "is the exact agreed equivalent” of the power to exercise the right for the time allotted (see 1 Corbin, Contracts, § 35, p 147).

But when a tenant in possession under an existing lease has neglected to exercise an option to renew, he might suffer a forfeiture if he has made valuable improvements on the property. This of course generally distinguishes the lease option, to renew or purchase, from the stock option or the option to buy goods. This was a distinction which some of the older cases failed to recognize (see, e.g, Fidelity & Columbia Trust Co. v Levin, supra; Doepfner v Bower, supra; cf. People’s Bank of City of N. Y. v Mitchell, supra). More recently it has been noted that "although the tenant has no legal interest in the renewal period until the required notice is given, yet an equitable interest is recognized and protected against forfeiture in some cases where the tenant has in good faith made improvements of a substantial character, intending to renew the lease, if the landlord is not harmed by the delay in the giving of the notice and the lessee would sustain substantial loss in case the lease were not renewed” (2 Pomeroy, Equity Jurisprudence [5th ed], § 453b, p 296).

The leading case on this point is Fountain Co. v Stein (97 Conn 619; 27 ALR 976) and the rule has been accepted by noted commentators (see, e.g., 1 Corbin, op. cit., § 35, p 146; 1 Williston, Contracts [3d ed], § 76, p 249, n 4; 2 Pomeroy, op. cit., § 453b, p 296). It has also been accepted and applied by this court. In Jones v Gianferante (305 NY 135, 138), citing the Fountain case we held that the tenant was entitled to "the benefit of the rule or practice in equity which relieves against such forfeitures of valuable lease terms when default in notice has not prejudiced the landlord, and has resulted from an honest mistake, or similar excusable fault.” The rule was extended in Sy Jack Realty Co. v Pergament Syosset Corp. (27 NY2d 449, 453, supra) to preserve the tenant’s interest in a "long-standing location for a retail business” because this is "an important part of the good will of that enterprise, [and thus] the tenant stands to lose a substantial and valuable asset.”

In neither of those cases were we asked to consider whether the tenant would be entitled to equitable relief from the consequences of his own neglect or "mere forgetfulness” as the court had held in the Fountain case (supra). In Gianferante the default was due to an ambiguous lease, and in Sy Jack the notice was mailed but never delivered (but see Roy’s of North Syracuse v P & C Food Markets, 51 AD2d 641, mot for lv to app den 38 NY2d 711; and the dissenting opn in Sy Jack [supra, p 456, n 1], where it is noted that the three cases cited in Williston—the principle one being the Fountain case—"obviously warranted equitable relief. For not only in those cases was there 'excusable fault’, but also in each one the tenant had made substantial improvements”). But the principle involved is well established in this State. A tenant or mortgagor should not be denied equitable relief from the consequences of his own neglect or inadvertence if a forfeiture would result (Giles v Austin, 62 NY 486; Noyes v Anderson, 124 NY 175; Roy’s of North Syracuse v P & C Food Markets, supra; see, also, 2 Pomeroy, Equity Jurisprudence [5th ed], § 452, p 287). The rule applies even though the tenant or mortgagor, by his inadvertence, has neglected to perform an affirmative duty and thus breached a covenant in the agreement (Giles v Austin, supra; Noyes v Anderson, supra).

On occasion the court has cautioned that equitable relief would be denied where there has been a willful or gross neglect (Noyes v Anderson, supra, p 179), but it has been reluctant to employ the sanction when a forfeiture would result. In Giles v Austin (supra, p 491), for instance, the landlord sought to recover possession of the premises after the tenant had neglected to pay the taxes as required by a covenant in the lease. We held that although the tenant had not paid the taxes since the inception of the lease in 1859, and had only paid them after suit-was commenced in 1868, the tenant’s default was not "so willful, or his neglect so inexcusable, that a court of equity should have denied him any relief.”

There are several cases in which this court has denied a tenant or mortgagor equitable relief because of his own neglect to perform within the time fixed in the lease or mortgage, but only when it has found that there was "no penalty, no forfeiture” (Graf v Hope Bldg. Corp., 254 NY 1, 4; Fidelity & Columbia Trust Co. v Levin, 128 Misc 838, affd 221 App Div 786, affd 248 NY 551, supra; People’s Bank of City ofN.Y.v Mitchell, 73 NY 406, supra). Cardozo took a different view. He felt that even though there may be no penalty or forfeiture "in a strict or proper sense” equity should "relieve against it if default has been due to mere venial inattention and if relief can be granted without damage to the lender”. Even in those cases he would apply the general equitable principle that "the gravity of the fault must be compared with the gravity of the hardship” (Graf v Hope Bldg. Corp., supra, pp 9-10, 13 [Cardozo, Ch. J., dissenting]; see, also, 2 Pomeroy, Equity Jurisprudence [5th ed], § 439, p 220).

Here, as noted, the tenant has made a considerable investment in improvements on the premises—$40,000 at the time of purchase, and an additional $15,000 during the tenancy. In addition, if the location is lost, the restaurant would undoubtedly lose a considerable amount of its customer good will. The tenant was at fault, but not in a culpable sense. It was, as Cardozo says, "mere venial inattention.” There would be a forfeiture and the gravity of the loss is certainly out of all proportion to the gravity of the fault. Thus, under the circumstances of this case, the tenant would be entitled to equitable relief if there is no prejudice to the landlord.

However it is not clear from the record whether JNA would be prejudiced if the tenant is relieved of its default. Because of the trial court’s ruling, JNA was unable to submit proof that it might be prejudiced if the terms of the agreement were not enforced literally. Its proof of other negotiations was considered immaterial. It may be that after the tenant’s default the landlord, relying on the agreement, in good faith, made other commitments for the premises. But if JNA did not rely on the letter of the agreement then, it should not be permitted to rely on it now to exact a substantial forfeiture for the tenant’s unwitting default. This, however, must be resolved at a new trial.

Finally we would note, as the dissenters do, that it is possible to imagine a situation in which a tenant holding an option to renew might intentionally delay beyond the time prescribed in order to exploit a fluctuating market. However, as the dissenters also note, there is no evidence to suggest that that is what occurred here. On the contrary there has been an affirmed finding of fact that the tenant’s late notice was due to negligence. Of course a tenant who has intentionally delayed should not be relieved of a forfeiture simply because this tenant, who was merely inadvertent, may be granted equitable relief. But, on the other hand, we do not believe that this tenant, or any tenant, guilty only of negligence should be denied equitable relief because some other tenant, in some other case, may be found to have acted in bad faith. By its nature equitable relief must always depend on the facts of the particular case and not on hypotheticals.

Accordingly, the order of the Appellate Division should be reversed and a new trial granted.

Chief Judge Breitel (dissenting).

Relieving the tenant of its negligent failure to exercise its option to renew a lease within the prescribed time upsets established precedent, introduces instability in business transactions, and disregards commercial realities. I therefore dissent.

This case involves an option to renew a lease, not a mortgage foreclosure or an acceleration clause in a lease or mortgage. The categories and applicable precedents are not to be confused.

In a summary holdover proceeding brought by J. N. A. Realty, a landlord, to recover possession of leased commercial premises, tenant, Cross Bay Chelsea, appeals. The Civil Court’s dismissal of the petition, after trial, was affirmed at Appellate Term, but the Appellate Division reversed, one Justice dissenting, and awarded the landlord possession.

At issue is the availability of equitable relief to remedy a commercial tenant’s failure, by the appointed date, to exercise its option to renew a lease when the only explanation is sheer negligence.

The order of the Appellate Division should be affirmed, and the landlord awarded possession. Mere negligence does not justify departing from the rule that notice of intention to exercise an option to renew must be given within the prescribed period. Equitable relief is never justified by the fact alone, always present, that the tenant will suffer some sort of economic detriment.

The record is unusually deficient in many respects. From it, however, may be culled what follows.

In December, 1963, J. N. A. Realty, as owner, leased a newly erected commercial building in Queens County to Victor Palermo and Sylvester Vascellero. The lease agreement consisted of a printed form and a single 12-page rider. According to the rider, the lease extended for 10 years, to begin January 1, 1964, with an option for an additional 10-year term. All that was required, as set forth in paragraph 58 of the 12-page rider, was that the "tenant * * * notify the landlord in writing by registered or certified mail six (6) months prior to the last day of the term of the lease that tenant desires such renewal.”

Shortly thereafter, Palermo and Vascellero assigned the lease to Foro Romano, Inc., a restaurant corporation in which they were the principals. But the restaurant operated at a loss. By late 1967, following undescribed attempts by others, not identified, at the behest of the tenant, and with six years remaining on the initial term, the business was closed down. It was not until February, 1968 that Peter and John Morfogen, principals of the present tenant Cross Bay Chelsea, responded to an advertisement in the New York Times and indicated their interest in purchasing the leasehold and the closed-down business.

The precise details of the initial conversations between the parties cannot be extracted from the record because they are included only in bits and pieces. Apparently, however, the prospective buyer, who at the time of trial was operating four other restaurants in Manhattan, Queens, and Nassau County, was ready to agree only if a 30-year lease could be arranged. To that effect, a meeting of the principals of landlord J. N. A, Foro, and Chelsea was held on March 16, 1968, and a "modification and extension of lease” agreement executed. While the modification agreement provided that the tenant have the "right to renew this lease for a further period of Twenty-Four (24) years, instead of Ten (10) years”, it also continued in full force and effect "[a]ll other provisions of Paragraph #58”, which contained the requirement of six months’ notice of election of the option to renew. The modified lease provided that a portion of the taxes and insurance premiums, and all of the interior repairs, be borne by the tenant. The starting rent reserved in the option was $1,000 per month.

J. N. A.’s principals attended this critical meeting without counsel, although the Chelsea principals, who now claim ignorance of the conditions to exercising the 24-year renewal option, were accompanied by their lawyer and an accountant. The transaction eventually involved a gross price of $155,000, much of it deferred, for the restaurant, fixtures, and the assignment of the leasehold. Of the $155,000, $40,000 was allocated to the chattels and fixtures, and the balance to the leasehold. Chelsea’s lawyer also attended the June 8 closing of the transfer of the modified lease and the sale of the restaurant, following the March 16 lease modification meeting. Between the closing of the lease modification agreement in March, 1968 and the final closing in June, 1968, Chelsea arranged for a liquor license. Also before the June, 1968 closing, Chelsea had invested $15,000 in undescribed improvements in the premises. In short order the restaurant was reopened and was quite successful, or else this litigation woúld never have ensued.

On July 1, 1973, the date the renewal option was to be exercised, no notice or advice of any kind was sent or given to the landlord. It was not until November 16, 1973, some four and a-half months later, that Chelsea, in response to a letter from J. N. A., sent to the landlord a purported notice to exercise the option. J. N. A. refused to recognize the notice, and on March 4, 1974 instituted this holdover proceeding. The record is silent about the intervening period except to indicate that there were negotiations.

To excuse its failure to send a renewal notice by the July 1 deadline and to support a claim to equitable relief, Chelsea asserts that it never received a copy of the 12-page rider attached to the original lease. In addition to the 1968 modification agreement’s reference to the 1963 rider, the entire lease, including that rider, was filed in April, 1968 with the Division of Alcoholic Beverage Control on Chelsea’s preclosing application for a liquor license. While Chelsea contends that the 1963 rider found in the agency’s file must have been taken from an earlier application submission, the trial court resolved this issue of fact in favor of the landlord. The Appellate Division expressly found that Chelsea had knowledge, or at least should be chargeable with notice, of the provisions of paragraph 58 of the 1963 rider requiring six months’ notice to renew.

Chelsea contends that J. N. A.’s representative was on the premises in the summer of 1973, after law day had passed, and failed to comment when he saw that additional improvements were still being made. There is no evidence of what these improvements were, how extensive they were, their value, or whether they were fixed or movable fixtures or equipment. J. N. A. never conceded that the visits had occurred or that such post law day improvements had been made.

Had an honest mistake or similar "excusable fault”, as opposed to what is undoubtedly mere carelessness, occasioned the tenant’s tardiness, absent prejudice to the landlord, equitable relief would be available (e.g., Sy Jack Realty Co. v Pergament Syosset Corp., 27 NY2d 449, 453; Jones v Gianferante, 305 NY 135, 138). At issue, instead, is the availability of equitable relief where the only excuse for the commercial tenant’s dilatory failure to exercise its option to renew is sheer carelessness.

Enough has been said to uncover a common situation. Experienced and even hardened businessmen at cross-purposes over the renewal of a valuable lease term seek on the one hand to stand by the written agreement, and on the other, to loosen the applicable rules to receive ad hoc adjustment of equities and relief from economic detriment. The landlord wants a higher return. The tenant wants to keep the old bargain. Which of the profit-seeking parties in this particular case should prevail as a matter of morals is not within the province of the courts. The well-settled doctrine is that with respect to options, whether they be lease renewal options, options to purchase real or personal property, or stock options, time is of the essence. The exceptions, namely, estoppel, fraud, mistake, accident, or overreaching, are few. Commercial stability and certainty are paramount, and always the dangers of unsolvable issues of fact and speculative manipulation (as with stock options) are to be avoided.

The landlord should be awarded possession of the premises in accordance with the undisputed language and manifested intention of the written lease, its 12-page rider, and modification. It does not suffice that the tenant may suffer an economic detriment in losing the renewal period. Nor does it suffice that the delay in giving notice may have caused the landlord no "prejudice”, other than loss of the opportunity to relet the property or renegotiate the terms of a lease on a fresh basis. Once an option to renew a lease has been conditioned upon the tenant’s giving timely notice, the commercial lessee should not be heard to complain that through carelessness a valued asset has been lost, anymore than one would allow the landlord to complain of the economic detriment to him in agreeing to an improvident option to renew.

The court unanimously accepts the general rule at law: an option to renew a commercial lease must be exercised within the appointed time period (e.g., Sy Jack Realty Co. v Pergament Syosset Corp., 27 NY2d 449, 452, supra,' and authorities cited; see Restatement, Contracts 2d [Tent Draft Nos. 1-7, 1973], § 64, Comment f; 34 NY Jur, Landlord and Tenant, §§ 418-419; 51C CJS, Landlord and Tenant, § 59). Underlying the bar to equitable relief is the theory that until the condition precedent is fulfilled, that is, until the required timely notice is given, there is no "forfeiture” for which equity will extend protection (Fidelity & Columbia Trust Co. v Levin, 128 Misc 838, 844-845, affd 221 App Div 786, affd 248 NY 551; 2 Pomeroy, Equity Jurisprudence [5th ed], § 453b, p 296). While the rule has been bolstered by traditional concepts of estates in land, its basis has current commercial and economic validity.

In this State, as in others, relief has been afforded tenants threatened with loss of an expected renewal period (see, generally, Effect of Lessee’s Failure or Delay in Giving Notice Within Specified Time, of Intention to Renew Lease, Ann., 44 ALR2d 1359, esp 1362-1369). But in New York, as elsewhere, the circumstances conditioning such relief have been carefully limited. It is only where the tenant can show, not mere negligence, but an excuse such as fraud, mistake, or accident, that is, one or more of the categories common and integral to invocation of equity, that courts have, despite the literal agreement and intention of the parties, stepped in to prevent a loss (see, e.g., Jones v Gianferante, 305 NY 135, 138-139, supra; 1 McAdam, Landlord and Tenant [5th ed], § 156, pp 721-722).

Even in the case of excusable default by the tenant the court looks to the investment the tenant has made to bolster his right to equitable relief. But the fact of tenant investment alone is not enough to justify intervention. Thus, in the leading cases excusing the tenant’s late notice, mention is perforce made of investments and improvements (e.g., Sy Jack Realty Co. v Pergament Syosset Corp., 27 NY2d 449, 453, supra; Jones v Gianferante, 305 NY 135, 138, supra). But the loss or "forfeiture” of these investments was not alone the trigger to granting relief. Indispensable is the existence of some mistake or excusable default. Thus, in Jones v Gianferante (supra, p 138), an ambiguous term in the lease excused the tenant’s failure. And in Sy Jack v Pergament (supra, p 453), it was reliance on the post office to deliver the notice, mailed three days before law day, that was forgiven. In no case of accepted or acceptable authority, however, were improvements alone enough to help the negligent tenant.

The majority facilely disposes of the tenant’s delinquency in exercising its option by relying on cases in which a party, notwithstanding its negligence, was relieved from a forfeiture (e.g., Giles v Austin, 62 NY 486, 493-494, a conditional limitation in a lease; Noyes v Anderson, 124 NY 175, 182-183, mortgagor’s failure to pay an assessment). But indiscriminate application of principles evolved to deal with mortgage foreclosures or a lessor’s right to re-enter upon a tenant’s failure to pay taxes and assessments when due does not withstand analysis. Since ever so long, enforcement of a mortgage has rested in equity (see Jamaica Sav. Bank v M. S. Investing Co., 274 NY 215, 219; 38 NY Jur, Mortgages and Deeds of Trust, § 317). It is also significant that as to foreclosure, time is not of the essence (see 10 NY Jur, Contracts, § 270). Even where acceleration clauses are involved and a strong argument can be made for allowing relief, time has been of the essence and negligence has not been excused (see Graf v Hope Bldg. Corp., 254 NY 1, 4, 7 [dissenting opn per Cardozo, Ch. J.]). It is equally inappropriate to analogize to a lessee’s failure to comply with a lease requirement that taxes and assessments be paid as they become due (see Giles v Austin, supra, pp 493-494). For the loss of an existing lease term subject to a condition subsequent distinguishes that situation from the loss of a possible option period subject to a condition precedent. An option is a right to purchase or acquire an interest in personal or real property in the future, and, if precise, it carries an invulnerable requirement to comply with all conditions, including that of time which is therefore of the essence in law and equity.

There are cases, not binding on this court, which express the principles discussed. For reasons that are not persuasive they would distinguish, however, between mere neglect or forgetfulness and gross or willful negligence, whatever that might be (see Fountain Co. v Stein, 97 Conn 619, 626-627; Xanthakey v Hayes, 107 Conn 459, 469; see, generally, 1 Williston, Contracts [3d ed], § 76, p 249, n 4). This is not a distinction generally accepted and is hardly a pragmatic one to apply in an area where the opportunities for distortion and manipulation are so great. The instability and uncertainty would be dangerous and would allow for ad hoc dispensations in particular cases without reliable rule so essential to commercial enterprise.

To begin with, under the guise of sheer inadvertence, a tenant could gamble with a fluctuating market, at the expense of his landlord, by delaying his decision beyond the time fixed in the agreement. The market having resolved in favor of exercising the option, the landlord, even though the day appointed in the agreement has passed, could be held to the return set out in the option, although if the market had resolved otherwise, the tenant could not be held to the renewal period.

None of this is to say that the tenant in this case was guilty of any manipulation. Hardly so. But what the court is concerned with is a rule for this case which perforce must cover other cases of like kind, where there will be no assurance that the "forgetfulness” is no more than that. The worst of the matter is that the kind of paltry record made in this case is hardly one on which a new rule with potential for mischief should be based. When the option, especially one requiring notice well in advance of the expiration of the lease, permits of economic manipulation, in commercial fairness the parties, especially if represented by counsel, should be held to their bargain, if plainly expressed.

Considering investments in the premises or the renewal term a "forfeiture” as alone warranting equitable relief would undermine if not dissolve the general rule upon which there is agreement. For, it is difficult to imagine a dilatory commercial tenant, particularly one in litigation over a renewal, who would not or could not point, scrupulously or unscrupulously, to some threatened investment in the premises, be it a physical improvement or the fact of good will. As a practical matter, it is not unreasonable to expect the commercial tenant, as compared with his residential counterpart, to protect his business interests with meticulousness, a meticulousness to which he would hold his landlord. All he, or his lawyer, need do is red-flag the date on which he has to act.

Having established no excuse, other than its own carelessness, Chelsea’s claim is unfounded. Even if Chelsea honestly thought it enjoyed a 30-year lease, it does not change the result. Nor is it helpful to argue that Chelsea, always represented by a lawyer, was unable to procure a copy of the entire lease agreement. Indeed, it borders on the utterly incredible that experienced, sophisticated businessmen and their lawyers would not have assembled and scrutinized every relevant document affecting a long-term lease covering, with a renewal, a 30-year period.

That adherence to well-settled principles, like a Statute of Limitations or a Statute of Frauds, works a hardship on some does not, alone, permit a court to depart from sound doctrine and principles. Even if precedent did not control the same doctrines and principles discussed should be applied.

Accordingly, I dissent and vote that the order of the Appellate Division should be affirmed, and the landlord awarded possession of the premises.

Judges Gabrielli, Fuchsberg and Cooke concur with Judge Wachtler; Chief Judge Breitel dissents and votes to affirm in a separate opinion in which Judges Jasen and Jones concur.

Order reversed, with costs, and a new trial granted.


source: Caselaw Access Project

author: Jones, J. Cooke, J. (concurring in result).

license: Public Domain

text:
    In the Matter of Arthur Friedman, as Special Assistant Attorney-General, et al., Respondents, v Hi-Li Manor Home for Adults, Appellant. In the Matter of Arthur Friedman, as Special Assistant Attorney-General, et al., Respondents, v Israel Lefkowitz, Doing Business as Palm Beach Home for Adults, Appellant. In the Matter of Oceanaire Building Corporation, Appellant, v Charles J. Hynes, as Deputy Attorney-General, Respondent.
    Argued May 2, 1977;
    decided July 7, 1977

      Jack S. Hoffinger and Robert A. Goldschlag for appellant in the first and second above-entitled proceedings.

      Charles J. Hynes, Deputy Attorney-General (T. James Bryan, Arthur Friedman and Matthew S. Greenberg of counsel), for respondents in the first and second above-entitled proceedings.

      Robert A. Goldschlag and Jack S. Hoffinger for appellant in the third above-entitled proceeding.

      Charles J. Hynes, Deputy Attorney-General (T. James Bryan, Arthur Friedman and Matthew S. Greenberg of counsel), for respondent in the third above-entitled proceeding.
   Jones, J.

In these three cases we hold that the Deputy Attorney-General had authority by the issuance of an office subpoena duces tecum under subdivision 8 of section 63 of the Executive Law to compel the production of books and records of private proprietary homes for adults.

On August 2, 1976 the Governor issued Executive Order No. 36 (9 NYCRR 3.36) directing the Attorney-General, or his deputy "to inquire into all matters concerning the administration, management, control, operation, supervision, funding and quality of private proprietary homes for adults, or any principal, operator, agent, supplier or other person connected therewith”. As predicates for this directive the. order recited that "the treatment and care of elderly citizens in private proprietary homes for adults, and the management and operation of such facilities are matters concerning the public peace, public safety and public justice of the State of New York; and * * * the compensation for that treatment and care is derived in part from public funds, and the State of New York is responsible for licensing and supervision of such facilities; and * * * there have been numerous allegations of violations of law and mistreatment of residents in such facilities; and * * * the New York State Board of Social Welfare has requested you to investigate and prosecute the alleged commission of indictable offenses relating to private proprietary homes for adults”. Thereafter the Attorney-General appointed Charles J. Hynes as his deputy to perform any and all functions and to exercise any and all powers conferred by Executive Order No. 36 in relation to private proprietary homes for adults, and Arthur Friedman was assigned to the office of the deputy as a Special Assistant Attorney-General.

Although two separate private proprietary homes for adults (PPHA) are involved in these cases, the fact patterns and the contentions with respect to each are virtually the same. The Deputy Attorney-General served office subpoenas duces tecum calling for the production of voluminous books and records of two PPHAs and of the corporate landlord of one of such homes. In each case there has been a motion to quash and a motion to compel compliance. Supreme Court sustained each of the three subpoenas and ordered compliance, denying the applications to quash. This disposition was affirmed at the Appellate Division.

Preliminarily it is appropriate to dispose of the Deputy Attorney-General’s claim that the challenges to office , subpoenas raised by the PPHAs were not timely made. The thrust of the argument is that the recipient of an office subpoena who desires to challenge its validity should be required to initiate a motion to quash rather than to await the institution of proceedings to compel compliance and then for the first time to raise objection. We reject this argument. In our view the recipient may properly raise his objections when the official issuing the office subpoena first seeks judicial sanction for noncompliance. (Myerson v Lentini Bros. Moving & Stor. Co., 33 NY2d 250, 256; see Matter of Sussman v New York State Organized Crime Task Force, 39 NY2d 227, 234.) Accordingly, we treat the objections to the office subpoenas in all three cases as timely made.

We turn then to the principal question presented by and argued on these appeals—whether the Deputy Attorney-General had authority under subdivision 8 of section 63 of the Executive Law to subpoena records of PPHAs and, in the Oceanaire case, of the landlord of a PPHA.

Subdivision 8 of section 63 of the Executive Law, which confers a power to subpoena witnesses, books and papers, provides: "Whenever in his judgment the public interest requires it, the attorney-general may, with the approval of the governor, and when directed by the governor, shall, inquire into matters concerning the public peace, public safety and public justice”. The predecessor statute (Executive Law, § 62, subd 8) was enacted during World War I, when the Legislature recognized that a war emergency might create a need for such authority to obtain information concerning sabotage—in effect a standby authority for circumstances in which there might not be time or opportunity for the normal functioning of the legislative process (L 1917, ch 595). After World War I, the authority was continued notwithstanding that the Attorney-General recommended repeal of the statute. Until today, however, there have been but three occasions in which our court has been asked to sustain investigations conducted under the authority of subdivision 8 of section 63 and its predecessor. In Matter of Di Brizzi (Proskauer) (303 NY 206), our court held that recourse to the section could be had to combat organized crime in government. In Matter of Greenspon v Stichman (12 NY2d 1079), we rejected a challenge to an investigation under the section of "the relationship between misconduct or corruption in office by public officials and the faithful execution of the laws by units of government in the State’’. Most recently we held that the section could be read as including authority for the investigation of the nursing home industry (Matter of Sigety v Hynes, 38 NY2d 260). This latter holding was based on a combination of compelling factors: the State’s recognized responsibility for the care of the elderly, the quantum of financial support for such care that came from the public treasury, and the existence of widespread corruption in the industry. It was vigorously argued then, however, that authority for such investigation was not properly to be found in subdivision 8 of section 63.

It would seem evident that the course much to be preferred with respect to State-wide investigations of this sort would be the enactment of specific, ad hoc legislative authority for particular inquiries. Thereby need and scope of the inquiry could be determined by the elected representatives of the people, reflecting an informed, current evaluation of the circumstances (cf., e.g., Executive Law, § 70-a, State-wide Organized Crime Task Force).

We are now urged to conclude that, inasmuch as authority has been found in the section for investigation of the nursing home industry, authority should also be found for inquiry into private proprietary homes for adults. Similarities between these two areas of activity are evident. To a large extent the consumers of care and service come from the same sector of our State’s population. Historically the great bulk of financial support has and does come from the public treasury, formerly in direct grants to the homes, now in indirect but equally significant subsidy routed through the residents of the homes. The operation of the homes is subject to the supervision of the State Board of Social Welfare (Executive Law, §§ 750, 751, 758; see Social Services Law, former §§ 21, 22, 35-a).

In view of the particular complex of circumstances, and especially the close similarity to nursing homes, we conclude that authority may be found in subdivision 8 of section 63 for the inquiry the Attorney-General, as directed by the Governor, is conducting into the operations of private proprietary homes for adults. In reaching the conclusion we do in this case we should not be understood as viewing subdivision 8 of section 63 as any reservoir of latent authority for investigations, however desirable they may be thought to be, into other areas of legitimate governmental concern or responsibility. Quite the contrary. In perspective we perceive recourse to this section as having been intended only when for compelling reasons reliance cannot or should not necessarily be placed on specific, individualized grants of authority from the Legislature; initially it was even argued that it took a peril such as sabotage which threatened the very existence of the State to activate the authority of this section (Matter of Di Brizzi [Proskauer] 303 NY 206, 214, supra).

On a narrower focus, appellants assert that Executive Order No. 36 is ineffectual because the recited request had emanated from a Special Deputy Attorney-General rather than from the Attorney-General and because there had been no explicit recital of a factual determination on the part of the latter that "the public interest requires” the investigation of PPHAs. We conclude that there is no substance to either of these hypertechnical claims. Subdivision 8 of section 63 contemplates either of two initiatory procedures:—when the Attorney-General judges that the public interest requires it and the Governor approves, or (as here and in Matter of Sigety v Hynes, 38 NY2d 260, supra) when the Governor directs it. Surely the position of the Attorney-General, whether of request or concurrence, may effectively be manifested by his deputy.

By like token there is no substance to the claim that respondent failed to establish that the executive order was issued for the purpose of furnishing the Governor with information. The proof in the records in these cases gives rise to the unmistakable inference, implicitly found as a fact by both lower courts, that this was precisely the objective of the issuance of Executive Order No. 36. (Contrast Ward Baking Co. v Western Union Tel. Co., 205 App Div 723.)

We hold, therefore, that the Deputy Attorney-General had authority, pursuant to Executive Order No. 36 and the provisions of subdivision 8 of section 63, to issue subpoenas duces tecum in aid of his inquiry into the affairs of PPHAs.

Appellants in the two PPHA cases contend further that, even if it be conceded that the Deputy Attorney-General had authority to issue subpoenas duces tecum, enforcement of these subpoenas would violate constitutional protections against compulsory self incrimination. The privilege against self incrimination reflects a policy of "protection of an individual’s right to a 'private enclave where he may lead a private life’ ” (Bellis v United States, 417 US 85, 91); the constitutional guarantee against compulsory self-disclosure, concerned primarily with protection of individual civil liberties, is not to be interpreted to insulate economic or other interests of organizations, incorporated and unincorporated, when to do so would be to frustrate appropriate governmental regulation (United States v White, 322 US 694, 700). The proposition that a PPHA is such a "private enclave” is negated beyond peradventure by the statutory command to the Board of Social Welfare to "visit and inspect, from time to time, and maintain a general supervision” of such homes (Executive Law, § 750, subd 1, par a); the grant of power to representatives of the board of "full access to the * * * books and papers relating to such institution” (Executive Law, § 750, subd 3); the authorization given to the board to "direct an investigation * * * of the affairs and management” of such a home (Executive Law, § 752); and the required compliance in operation of such a home with the rules of the board (Executive Law, § 758, subd 3, par [e]; cf. Davis v United States, 328 US 582). We rejected a similar claim in Matter of Sigety v Hynes (38 NY2d 260, 268, supra).

Finally appellants attack the subpoenas duces tecum in these cases as too sweeping in the extent of the books and records directed to be produced. Both courts below have found that the evidence sought is relevant and not overbroad in view of the purpose of the inquiry. We cannot say that such conclusions, involving as they do primarily factual determinations, were erroneous as a matter of law. There surely are limits to the reach of office subpoenas, and inquisitorial officers are not to be understood as licensed to embark on roving fishing expeditions (cf. Dunham v Ottinger, 243 NY 423, 433). It appears that such limits have been approached if not reached in these cases. We cannot, however, say they have been exceeded here when it is recalled that the focus of the present inquiry is the "administration, management, control, operation, supervision, funding and quality of private proprietary homes for adults”, and it is recognized that an "[investigation will be paralyzed if arguments as to materiality or relevance, however appropriate at the hearing, are to be transferred upon a doubtful showing to the stage of a preliminary contest as to the obligation of the writ” and "[o]nly where the futility of the process to uncover anything legitimate is inevitable or obvious must there be a halt upon the threshold” (cf. Matter of Edge Ho Holding Corp., 256 NY 374, 381-382).

For the reasons stated the order of the Appellate Division in each case should be affirmed, with costs.

Cooke, J. (concurring in result).

I concur in the result arrived at by the majority. The Appellate Division orders, upholding the issuance of subpoenas duces tecum by the Deputy Attorney-General in respect to books and records of the private proprietary homes for adults, should be affirmed.

I am disturbed, however, by certain implications evident in the majority writing which portend the death knell for certain investigatory powers long vested in the Governor and Attorney-General by subdivision 8 of section 63 of the Executive Law.

The instant matters are sequents of Matter of Sigety v Hynes (38 NY2d 260) where this court, less than two years ago and without hesitation or equivocation, upheld the subpoena power of the Deputy Attorney-General under subdivision 8 of section 63 of the Executive Law, in an ongoing investigation of the nursing home industry. The similarities of the two situations are so readily apparent, with nursing homes on the one hand and private proprietary homes for adults on the other, that Sigety compels an affirmance and legally there is no need for further discussion. Indeed, this is recognized by the majority statement here: "In view of the particular complex of circumstances, and especially the close similarity to nursing homes, we conclude that authority may be found in subdivision 8 of section 63 for the inquiry the Attorney-General, as directed by the Governor, is conducting into the operations of private proprietary homes for adults” (p 415).

The alarming part of the majority’s writing in extension is its cast of a pall over the future vitality of subdivision 8 of section 63. In effect, future challenges to the compass of the statute, with consequent delays and at times dilatory tactics, are encouraged, if not invited. Such an approach is not only unnecessary, for the present determination but it disregards the jurisprudence in respect to the subdivision. This statute and its predecessor (Executive Law, § 62, subd 8) have been in existence 60 years—in peace and war (L 1917, ch 595); and, as the majority indicates, in each instance when challenged this court has seen fit to sustain the authority vested in the statute (p 413).

Apparently as part of the foreboding, it is pointed out to us the predecessor was enacted during World War I, in effect as a standby when there might not be time or opportunity for normal functioning of the legislative process, and that after World War I the Attorney-General recommended repeal (p 413). These arguments or observations were effectively disposed of and rejected long ago by this court. In Matter of Di Brizzi (Proskauer) (303 NY 206), we held at pages 214-215:

"We are thus led to the question of whether the investigation to be conducted by the Attorney-General, and his officers constituting the Crime Commission, is within the purview of subdivision 8 of section 62 of the Executive Law. That subdivision grants authority to 'inquire into matters concerning the public peace, public safety and public justice.’ The words there used by the Legislature are sufficiently broad to encompass an investigation such as the one here involved, the principal purpose of which is to determine whether there exists a relationship between organized crime and any units of government in the State. We think the Legislature intended to use the words in their usual and ordinary sense, rather than to ascribe a narrow and technical meaning to them. Petitioner, however, points to the fact that the statute—Executive Law, section 62, subdivision 8—was enacted in May, 1917, one month following the entry of the United States into World War I (L. 1917, ch. 595) and urges that it was merely 'a war measure with the limited scope of enabling the executive to cope with riots, insurrections, rebellions, sabotage, and similar acts interfering with the very foundations of the State.’ There is little doubt, of course, that the Legislature first recognized the need for such a statute as this because of a war emergency. The Legislature, in enacting the statute, however, utilized general terms, and did not, either expressly or by implication, limit its operation to a time of war. We may not do so now. * * *

"‘Likewise unavailing to petitioner is the fact that, in 1918, the then Attorney-General in his report stated that the powers conferred by subdivision 8 of section 62 of the Executive Law should not be continued in peacetime and recommended that the statute be repealed at the end of the war (1918 Atty. Gen. 16). The simple answer to this argument is that the Legislature failed to heed the recommendation of the Attorney-General and refused to repeal the statute. That, we think, is fairly conclusive evidence that the Legislature determined that the powers conferred by the statute upon the Governor and the Attorney-General might be necessary for the public good in time of peace as well as in time of war”. (Emphasis added.)

Our attention is also drawn to the fact that, when Sigety came before us, "[i]t was vigorously argued then * * * that authority for such investigation was not properly to be found in subdivision 8 of section 63” (p 414). This should lend no comfort to the majority position since the argument was unanimously rejected. In Sigety, (38 NY2d 260, 266, supra) we held:

"Widespread corruption in the nursing home industry, care of the elderly and infirm and compensation for that care from the public treasury are 'matters concerning the public peace, public safety and public justice’ just as organized crime and its relationship to units of government were held to be in Di Brizzi. * * *

"Here, as in Di Brizzi, the court recognizes that there exists a reasonable relation between the action taken by the Governor, through the Attorney-General, and the proper discharge of the executive function. Investigations pursuant to Executive Orders Nos. 2 and 4 serve to inform the Governor, who, so informed, can more adequately fulfill the obligations of his office.”

In considering the executive function, we should keep in mind that the State Constitution mandates that the Governor shall take care that the laws are faithfully executed and that he shall recommend such matters to the Legislature as he deems expedient (art IV, § 3). The Attorney-General is the head of the Department of Law of the State (NY Const, art V, § 4; Executive Law, §60). With the authority granted by subdivision 8 of section 63 of the Executive Law, so long and so well established, it is difficult to conceive of a legal reason for the cutback or limitation of the existing executive power.

It is hardly our function as a court, particularly in these matters following so closely on the heels of Sigety, to declare: "It would seem evident that the course much to be preferred with respect to State-wide investigations of this sort would be the enactment of specific, ad hoc legislative authority for particular inquiries” and "[t]hereby need and scope of the inquiry could be determined by the elected representatives of the people, reflecting an informed, current evaluation of the circumstances” (p 414). Suffice it to say that it is a constitutional requirement and duty of the Governor to make recommendations to the Legislature in areas considered by him to need legislative action and to see to it that bills are signed into law and enforced. Thus, it is the Governor as well who must make "informed, current evaluation of the circumstances”, in order to fulfill the obligations of his elected office and recommend areas ripe for legislation or regulation. As the two branches of government must work together, each must be equally well informed. Parenthetically, the suggested ad hoc approach would be impractical and self-defeating (e.g., when the Legislature is in recess, when powerful interests are involved, or when a politically sensitive investigation should be launched and there is a politically divided Legislature). An investigation, to be successful, must proceed promptly under an ever-present authority to conduct one.

As a corollary to or segment of the ad hoc concept advanced, the majority states in no uncertain fashion that the conclusion reached by it in these instant matters should not be construed (p 415) "as [the court’s] viewing subdivision 8 of section 63 as any reservoir of latent authority for investigations, however desirable they may be thought to be, into other areas of legitimate governmental concern or responsibility” (emphasis added). This was not the same view of the statute pursuant to which investigations into organized crime (Matter of Di Brizzi [Proskauer], 303 NY 206, 215-216, supra), or the letting of municipal contracts (Matter of Greenspon v Stichman, 12 NY2d 1079) or the nursing home industry (Matter of Sigety v Hynes, 38 NY2d 260, supra) were held to be valid by this court. Neither have the Governors through the years so regarded the subdivision. The "reservoir” should not be emptied but its contents controlled, as controlled they are. Just because there is authority to investigate does not imply, of course, that there are no protections, or that there are no limits to the power or that that authority may be abused. The authority to make investigations and issue compulsory process is subject to the requirements that it be exercised concerning relevant matters, not for the sake of harassment, and in reasonable relation to some power or duty, such as to take care that the laws are faithfully executed or to enact laws, and is subject also to the restriction that the power of investigation does not permit unlimited investigation into the private affairs of citizens (see Myerson v Lentini Bros. Moving & Stor. Co., 33 NY2d 250, 256; 2A Weinstein-Korn-Miller, NY Civ Prac, par 2304.07, p 23-75).

Chief Judge Breitel and Judges Wachtler and Fuchsberg concur with Judge Jones; Judge Cooke concurs in result in a separate opinion in which Judges Jasen and Gabrielli concur.

In each case: Order affirmed.

       By virtue of the State-wide program of additional State payments for aged, blind and disabled persons, established in order to maintain assistance for such persons at a level consistent with their needs (Social Services Law, § 207), persons living in private proprietary homes for adults, being part of the "receiving residential care” category, receive substantially more money per month than do those living alone in a private household, classified as "living alone” (Social Services Law, § 209, subd 3, pars [a], [d]; subd 2, pars [a], [d]). Because of the over 80 million dollars expended yearly in supplemental security income payments to 70% of the approximately 20,000 residents in 549 adult homes, of which the State pays a major portion, it is difficult to perceive the reality of appellants’ claims that PPHAs do not receive any compensation from public funds. It is true by way of some difference that public funds are paid directly to nursing homes by the State for the care of those patients entitled to Medicaid benefits, but residents at adult homes entitled to supplemental security income benefits receive public funds from the State specifically to pay for their care at such homes.


author: Wachtler, J.

text:
    The People of the State of New York, Respondent, v. Richard Moore, Appellant.
    Argued June 9, 1977;
    decided July 7, 1977

      William E. Hellerstein for appellant.

      Robert M. Morgenthau, District Attorney (Peter L. Zimroth and Richard M. Seltzer of counsel), for respondent.
   Wachtler, J.

The defendant has been convicted of attempted murder and felonious possession of a weapon in connection with the shooting of two New York City police officers. The Appellate Division has affirmed the convictions. The primary issues on this appeal are whether the defendant was deprived of a fair trial (1) by media coverage of similar crimes, committed and reported during the selection of the jury and (2) by evidence introduced at trial showing that the apartment, used by the defendant and others at the time of the shooting, contained militant antipolice documents and a "field hospital.” The order of the Appellate Division should be affirmed.

The shooting occurred May 19, 1971 on Riverside Drive in Manhattan. That evening a marked police car with two uniformed police officers, Thomas Curry and Nicholas Binetti, was stationed outside the home of Frank Hogan who was then District Attorney of New York County. At approximately 9 o’clock the officers noticed a car going the wrong way on a one-way street. They pursued the vehicle and, after stopping it, were met with a hail of machine gun bullets.

Both of the officers were seriously injured but survived the assault. Neither however was able to identify the persons who attacked them. Bystanders supplied some information—a description of the car as a blue or green late model Maverick or Mustang, several variations of the license plate number and a general description of the occupants as being Black. In addition police ballistics experts were able to determine that the two officers had been shot by a .45 caliber automatic or semiautomatic weapon.

Two days after the shooting (May 21) a young Black woman left a package at WLIB, a Harlem radio station. Approximately a half an hour later a Black man left a similar package, folded inside a newspaper, at the security desk of The New York Times. Each of the packages contained a New York license plate No. 8373YR, a .45 caliber cartridge, an áirmail envelope and a typewritten letter. The envelope indicated that it contained a letter explaining "[t]he shooting of two N.Y.P.D. Pigs on Malcolm’s Birthday”, apparently referring to May 19, the birthday of Malcolm X. The letters stated: "Here are the license plates sort [sic] after by the Fascist state pig police. We send them in order to exhibit the potential power of oppressed peoples to acquire Revolutionary Justice. The armed goons of this racist government will again meet the guns of oppressed third world peoples as long as they occupy our community and murder our brothers and sisters in the name of law and order * * * The domestic armed forces of racism and oppression will be confronted with the guns of the Black Liberation Army, who will meet [sic] out in the tradition of Malcolm and all true revoluntionaries real justice. We are Revolutionary Justice” (the underscored portions were typed in red).

Analysis by police experts revealed that each letter had been written on the same typewriter and halves of the same piece of paper. The police also discovered four readable fingerprints on the newspaper which had been folded around the package delivered to The New York Times. The license plates, it turned out, had been stolen prior to the shooting.

In the early morning hours of June 5, 1971 the defendant and three others were arrested in an unrelated incident at a Bronx "after hours” bar. Several weapons, were found in the bar including a loaded .45 caliber submachine gun. One of the patrons said the defendant had entered the bar armed with the submachine gun. Police ballistics experts immediately checked the weapon and found that it was the one which had been used in the Riverside shooting. The police also learned that the defendant’s fingerprints matched two of the four prints found on the newspaper which had been left with the package at the office of The New York Times.

A week later (June 12, 1971) the police received an anonymous call from a woman who stated that the defendant had spent the evening of May 19 at a Bronx apartment belonging to the common-law wife of one Eddie Joseph. That lead them to Pauline Joseph who became the chief witness for the prosecution.

Pauline Joseph stated that in January, 1971 a girl friend of hers moved into her apartment with a man named Andrew Jackson, who was active in the Black Panther Party. After that a number of Jackson’s friends, including the defendant and Eddie Joseph, visited the apartment and, one by one, set up residence there. On May 15 the defendant moved in with a black vinyl bag containing a machine gun. Later that day she saw a diagram of a building and was informed that the defendant and Michael Hill were then planning to blow up a police station. They apparently abandoned this plan when she protested that "innocent people”, meaning prisoners, might get hurt. The following day she again asked the defendant and Hill what they planned to do. The defendant replied "we’re going to deal with some pigs.” This time however he had decided to "hit them from the outside.” When she pressed for further details the defendant simply said "I’m going to kill them.”

On May 19 Pauline Joseph saw the defendant load the machine gun and place it in a duffel bag. At approximately 6 p.m. he picked up the duffel bag and left the apartment. Within 10 or 15 minutes, Irving Mason and Eddie Joseph, who was armed with a hand gun, also left the apartment. The three men returned approximately four and one-half hours later. Pauline Joseph noticed that one of the machine gun magazines was empty. The defendant would not tell her what had happened to the bullets. At 11 o’clock they all watched the news reports of the Riverside shooting on television. After it was over Pauline Joseph told the defendant "I think you did it” and he replied "so what, you better learn to keep your mouth shut.”

That evening Pauline Joseph and Irving Mason’s wife found an expended shell casing on the floor of a blue Maverick parked two blocks from the building. They turned it over to Irving Mason. The following day she saw two license plates in the apartment and she heard the defendant and several others discussing the possibility of getting into the hospital "to finish off the cops.”

The next day (May 21) defendant’s girl friend, Patricia Greene, came to the apartment with a portable typewriter. Later Pauline Joseph saw the defendant writing something on a pad with the girl beside him making corrections. In the late afternoon she saw a sheet of paper in the typewriter with the words "Revolutionary Justice” written in red. In one of the bedrooms she saw two license plates, envelopes, wrapping paper and other items including about four or five cartridges. That evening when Mrs. Mason and Andrew Jackson left the apartment at about 6 o’clock, Pauline Joseph noticed that Mrs. Mason was carrying a package addressed to "WLIB News”. When Mason and Jackson returned approximately two hours later, the defendant, his girl friend and several others were listening to music on radio station WLIB. Shortly thereafter the announcer mentioned a package which had just been received and read the "Revolutionary Justice” letter. The defendant and Eddie Joseph then looked at each other, smiled and slapped each other’s hand in a congratulatory manner.

With Pauline Joseph’s consent the police searched her apartment. They found fingerprints from a number of individuals she had mentioned, including the defendant. In one room, which they characterized as a "field hospital”, they found a large store of medical supplies. They also discovered a number of letters and other documents including: (1) a leaflet listing medical supplies and equipment and describing how to treat an arm wound; (2) a single paragraph "History of the Black Panther Party”, concededly written by the defendant, in which he states that this is the "first National Organization to utilize Armed Propaganda”; (3) a crude map or diagram of what appears to be a prison; (4) two letters from one Landon Robert to his wife discussing Black militant activities; (5) a "press release” stating that the people should be informed of the "N.Y.P.D’s plan for premeditated murder” and "how the pigs occupy our communities like a foreign army”; (6) a letter addressed to the police commissioner referring to the Riverside shooting and stating that "what we have in mind is to let you know that EVERYTIME you use your guns against our people we’ll use our guns against your repressive forces” (emphasis in original). The last two documents had been written on the same typewriter which had been used for the letters sent to WLIB and The New York Times.

At the trial the defendant objected to the introduction of these documents and the description of the room containing the medical supplies. The court overruled the objections noting at one point that this evidence showed "the character of the premises and the persons that occupied it.” The defendant claims that this was improper because he had chosen not to place his character in issue (see, e.g., People v Fiore, 34 NY2d 81). He also claims that this evidence bore no connection to him or the Riverside shooting and could only have served to prejudice the jury against him.

Of course none of the evidence at trial directly established the defendant’s guilt. The People’s case was largely circumstantial. In such a case "motive often becomes not only material but controlling” (People v Fitzgerald, 156 NY 253, 258). According to Pauline Joseph, the defendant and his associates planned and carried out the Riverside shooting because they had a vicious ideological hatred for the police. Her testimony on this point was properly admitted to show the motive for the shooting even though it reflected on the defendant’s character (People v Fitzgerald, supra, p 259) and the character of his associates (People v Hagan, 24 NY2d 395, 400), which was not otherwise in issue. The other evidence which the defendant claims was improperly admitted, tended to corroborate her testimony and thus was also properly admitted at the trial. It was for the jury to determine whether it was entitled to any weight.

The defendant also claims that he was deprived of a fair trial because of adverse publicity in the various news media and the court’s failure to employ certain measures to check its impact. The argument it should be noted is not addressed to the publicity which preceded this trial—the reports of the shooting, the "Revolutionary Justice” letters, the recovery of the shotgun or the defendant’s arrest for robbery and indictment for attempted murder of the two police officers. Nor is he concerned about the fact that he had previously been tried for the Riverside shooting, which resulted in a hung jury and additional publicity just a few weeks before this trial. He never moved for a change of venue, a continuance, sequestration or any other relief based on the reports of these events and does not claim that any of this publicity affected his right to a fair trial. He argues instead that certain items reported during the selection of the jury at this, his second trial, enveloped the trial in "adverse and prejudicial publicity.”

Jury selection at this trial began on January 15, 1973 and ended on February 8, 1973. The indictment was read to the prospective jurors and throughout the voir dire they were questioned by both sides, as to whether they had read or heard anything about the case. A number of them said that they had heard of the incident or the defendant. A few said that because of this they did not feel that they could decide the case impartially and they were excused on consent. Most however had only vague recollections of the incident and stated that this would not affect their judgment. From the outset, and throughout the voir dire, defense counsel impressed upon the prospective jurors that the defendant was, or had been, a member of militant Black groups which were said to advocate violence, and he obtained their assurance that this would not affect their ability to decide the case impartially. And, of course, the court repeatedly admonished them not to read or listen to any accounts of the shooting or the trial.

The proceedings were adjourned from January 18 to January 29 because of the illness of defense counsel. During this period two attacks were made on police officers by Blacks armed with automatic weapons. The first incident occurred on January 25 in the Brownsville section of Brooklyn and the second took place on January 28 in Queens County. In each case two officers had been wounded.

These incidents were reported by New York City’s three major daily newspapers. The accounts generally noted that the police suspected the attacks had been made by certain members of the so-called "Black Liberation Army”. Several suspects were named including Andrew Jackson, Eddie Joseph and Joanne Chesimard who, according to some accounts, was also being sought in connection with the Riverside shooting. Only one of the articles mentioned the defendant and then only incidentally. That article suggested that the Brownsville attack "was similar to” the Riverside shooting for which "Richard Moore, a member of the Black Panther Party” had been indicted. The article then noted that his first trial on this charge had ended in a hung jury last month and that he was presently being retried.

When the trial resumed on January 29 defense counsel argued that the defendant could not obtain a fair trial while the media were reporting the fact that Black militants, some of whom were associated with the defendant, were making attacks on police officers. He asked that the entire jury panel be discharged, that a mistrial be declared and that the case be postponed, for several weeks, until the publicity surrounding these incidents had abated. The court denied the motion after noting at various points during the argument that the articles dealt essentially with other crimes by other individuals, that attacks on police officers were not uncommon in the City of New York, and that the defendant could question "potential jurors as to what they read and if it will have any bearing on their verdict in this case.”

On January 30, January 31 and February 5, defendant renewed the motion, on one occasion requesting a six-month continuance, because follow-up articles had appeared reporting the efforts of police and other officials, to apprehend the suspects in the Brownsville and Queens shootings and to guard against further attacks on police officers. These motions were also denied.

On February 6, when 11 jurors had been chosen and sworn, the defendant produced a recently published magazine article entitled "Target Blue”, which had been written by a former Deputy Police Commissioner of the City of New York. The article, which appeared as the cover story in the current issue of New York Magazine, discussed attacks by Black militants, particularly the Black Liberation Army, on police officers during the past two years. A portion of the article described the Riverside shooting and the events leading to the defendant’s arrest and indictment much as they were described at trial. In some respects it went beyond the proof admitted at trial by, for instance, noting that the defendant had been charged with committing other crimes on other occasions.

Referring to this article, the defendant again moved for a mistrial and a continuance and again the motion was denied. Two days later the defendant asked the court to sequester the jury, which was also denied. Later in the day defense counsel remarked "I think it would be appropriate for his Honor to ask those eleven jurors [who had been sworn prior to the appearance of 'Target Blue’] if they had occasion to see the article and/or read it.” The court denied the motion stating "I’ve already admonished them not to read anything in connection with this case, and I must resolve that they are keeping their word in that respect.” That day the jury selection process was completed. There were 12 regular jurors and 4 alternates.

The defendant argues that the court should have granted the motions for a continuance. In addition he claims that after the appearance of "Target Blue” the court should have sequestered the jury and questioned the 11 jurors who had already been sworn to see whether they had read the article and been affected by it.

The accused, of course, is entitled to a "fair trial in a fair tribunal” (Matter of Murchison, 349 US 133, 136; People v McLaughlin, 150 NY 365, 375). The question, stated in its broadest terms, is whether in view of the publicity which occurred during the selection of the jury, the relief requested was necessary to insure the defendant’s right to a fair trial (Sheppard v Maxwell, 384 US 333; cf. Nebraska Press Assn. v Stuart, 427 US 539).

The publicity itself falls into three general categories: (1) reports of the defendant’s involvement in the crime charged; (2) reports of other crimes committed by the defendant, and (3) reports of similar crimes committed by individuals or groups associated with the defendant.

Obviously the most damaging type of publicity is that which shows or states that the defendant has committed the crime charged (Sheppard v Maxwell, supra; Irvin v Dowd, 366 US 717; Rideau v Louisiana, 373 US 723). Collateral references to the fact that the defendant has committed other crimes, generally have a lesser impact (see, e.g., Murphy v Florida, 421 US 794, 797, 798; compare Marshall v United States, 360 US 310) but may nevertheless prejudice his case, especially when the other crimes are similar, or otherwise related, to the crime charged (see, e.g., Irvin v Dowd, supra). But the Constitution does not impose an "impossible standard” (Irvin v Dowd, supra, p 723). There is no requirement "that the jurors be totally ignorant of the facts and issues involved” (Irvin v Dowd, supra, p 722) or the defendant’s other involvements with the law (Murphy v Florida, supra, p 799). What is generally condemned is the "trial by newspaper” or other media in which a substantial portion of the community has been exposed to inflammatory reports purportedly establishing defendant’s guilt (Sheppard v Maxwell, supra; Irvin v Dowd, supra; Rideau v Louisiana, supra; Murphy v Florida, supra).

Here, as noted, only two articles mentioned the defendant in connection with the Riverside shooting. One simply recalled the fact that the shooting had taken place and that the defendant was standing trial for attempted murder. The other article, "Target Blue”, described the crime and how the police had "solved” it. That was also the only article which referred to the defendant’s other criminal activities. The prejudicial impact of this article was no doubt diminished by the fact that the substance of the police investigation, "one of the most prominent features” of the article, was later introduced in evidence at the trial (Stroble v California, 343 US 181, 195). But what is most significant is that the defendant, who was tried in one of the largest cities in the Nation, can only point to one article, in a magazine of unknown circulation, in which his involvement in the crime and other criminal activities were discussed in any detail (compare Sheppard v Maxwell, supra; Irvin v Dowd, supra; Rideau v Louisiana, supra; see, also, Beck v Washington, 369 US 541).

Most of the publicity the defendant complains of involves reports of similar crimes committed by other persons during the jury selection process. The major question on this appeal is whether publicity of this nature could affect the defendant’s right to a fair trial. Taken as a general proposition, and carried to its logical extreme, it would mean, for instance, that no one accused of robbery could receive a fair trial as long as the media continued to report the numerous robberies committed daily—unless the courts, as a matter of course, employed extraordinary measures to shield the jury from the unending publicity. Of course attacks on police officers are less common than robberies and "assassinations” by militants are rarer still. But, if there is a right to be shielded from publicity of similar crimes, it cannot depend on the novelty of the offense. The right to a fair trial applies to all and not just those accused of unusual crimes.

Here however the defendant notes that the crimes were not only similar but have also been attributed to persons and groups associated with the defendant, which in a few instances was specifically noted by the media. This he argues is akin to saying that the defendant is a member of "organized crime”, a kind of guilt by association (see, e.g., People v Genovese, 10 NY2d 478). But the analogy is not complete because this is not a case where the jury had no right to know of the defendant’s association with the Black Liberation Army or any of its members. As noted, evidence of the defendant’s relationship with the group and their stated hostility to the police was properly admitted at trial to show the motive for the crime. Thus although the details of the group’s most recent exploits were not, of course, introduced in evidence, media references to the defendant’s association with the Black Liberation Army and its creed, could not be said to be prejudicial in the sense that it "was never heard from the witness stand” (Sheppard v Maxwell, 384 US 333, 356 supra).

In sum, the potential for prejudice from media publicity is most tenuous when it involves reports of similar crimes committed by other individuals, even when, as here, it involves groups associated with the defendant. Consequently it is an area in which the trial court must be allowed the greatest latitude in determining whether special measures should be employed to insure the defendant’s right to a fair trial. We could not say, for instance, that the court abused its discretion in refusing to order the "extreme” remedy of sequestration in this case considering the lengthy trial, the nature of the proof at trial and the inconsequential content of the four articles which appeared after the defendant made the motion in connection with "Target Blue” (see Matter of Oliver v Postel, 30 NY2d 171, 182-183; Stephens v People, 19 NY 549, 554).

The court could have questioned the 11 sworn jurors after "Target Blue” appeared to see whether any of them had read it and been influenced by it, as indeed he might have done when each of the articles appeared. But he had repeatedly ordered all the jurors not to read or listen to anything about the case. In fact after the first article appeared he ordered them not to read anything regarding assaults on police officers generally. And, as noted, throughout the proceedings the prospective jurors had been constantly questioned about their exposure to publicity concerning the case, the defendant and Black militant groups. Significantly not one of the 11 jurors who had been sworn had heard anything about the defendant’s involvement in the shooting. Even more significant is the fact that of the 18 prospective jurors called after "Target Blue” appeared only one of them had seen the article and he had not read it, in obedience to the court’s order.

In a case like this the court could also find that a continuance is an inappropriate remedy. In every case the court must consider the risk that the media will pick up the defendant’s trial when it resumes. Here the risks are multiplied. As long as the other members of the group remain at large, it is most likely that at some point there will be a resumption of the type of publicity he seeks to avoid, either because of the others’ individual or collective future activities or police efforts to apprehend them. And of course publicity does not necessarily or even generally cease upon arrest. The possibilities are endless, but the point is that a continuance may easily become an indefinite postponement when the defendant seeks to avoid the publicity generated by a group with which he has become associated.

The obvious remedy under these circumstances is not to change the time of trial but to change the place of trial. It is notable that the defendant in this case never applied for a change of venue, even when the prosecutor suggested this and offered to consent. This may not be dispositive, but it cannot be ignored. The Supreme Court has noted that "in an effort to determine whether there was public hysteria or widespread community prejudice against petitioner at the time of his trial, we think it significant that two deputy public defenders who were vigorous in petitioner’s defense throughout the trial, saw no occasion to seek a transfer of the action to another county on the ground that prejudicial newspaper accounts had made it imposssible for petitioner to obtain a fair trial” in the county where the trial was held (Stroble v California, 343 US 181, 194, supra).

The Supreme Court has also noted that the "length to which the trial court must go in order to select jurors who appear to be impartial is another factor relevant in evaluating those jurors’ assurances of impartiality” (Murphy v Florida, 421 US 794, 802-803, supra). In the Murphy case it was held that although 20 of the 78 persons questioned were excused because they had formed an opinion of the defendant’s guilt that by "no means suggests a community with sentiment so poisoned against petitioner as to impeach the indifference of jurors who displayed no animus of their own” (Murphy v Florida, supra, p 803). In this case only 8 of the 85 prospective jurors questioned on the voir dire were excused because they doubted their ability to be impartial or had formed an opinion of the defendant’s guilt based on adverse publicity—and that for the most part was pretrial publicity, not the subsequent publicity of which the defendant complains on this appeal. In short, we find no basis for concluding that the defendant was denied his right to a fair trial because of the media reports which occurred during the jury selection process.

We have considered the other issues raised by the defendant but have found them to be without merit. With respect to the prosecutor’s alleged improper use of the notice of alibi, we would note that at the trial defense counsel objected on the ground that the prosecutor was falsely stating the contents of the notice, and not on the ground now urged, that the notice could not be used for impeachment purposes. Since the issue was not raised at trial, it is beyond the scope of our review (CPL 470.05, subd 2; People v Tutt, 38 NY2d 1011).

Accordingly, the order of the Appellate Division should be affirmed.

Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Fuchsberg and Cooke concur.

Order affirmed.

      . There were three possible license plate numbers: 8373YR; 8373YD, and 8733YA.

      . At the trial it was stipulated that Pauline Joseph made the anonymous call herself in which she originally stated that the four men being held in custody were not involved in the Riverside shooting or a later fatal shooting of two police officers in the 32nd Precinct.

      . Although the defendant alludes to the fact that these events were reported in the media, no articles from this period have been reproduced in the record. They were not placed in issue in the trial court and, of course, may not be considered here.

      . The article states that the police had been looking for the defendant prior to the Riverside shooting because he "had disappeared the previous winter in the course of his trial” on some unidentified charge. It indicates that "he was believed to be in Algeria together with others of the Black Panther leadership who had fled the country while being sought by the police”. The article also notes that when the defendant was arrested in June of 1971 he was then engaged in the armed robbery of "an after-hours social club in the Bronx.”

      . Defendant had also requested sequestration on January 30 and January 31 but on this appeal he does not challenge the court’s denial of these motions.

      . The record does not disclose the number of subscribers or the circulation of New York Magazine.


author: Per Curiam.

text:
    Walter A. Stanley & Son, Inc., Appellant, v. Trustees of Hackley School, Respondent.
    Argued June 1, 1977;
    decided July 14, 1977

      Robert G. Benisch for appellant.

      Harold L. Warner, Jr., Steven L. Cohen and Hilton H. Stothers, Jr., for respondent.
   Per Curiam.

The parties, Walter A. Stanley & Son, Inc., and Trustees of Hackley School, entered into a contract under which Stanley agreed to construct a gymnasium for the school at Tarrytown, to be completed no later than December 1, 1973. Paragraph 14 of their agreement provided: "If any dispute or disagreement in connection with the performance of the work to be performed by the Builder [Stanley] shall arise, such dispute or disagreement shall be referred to arbitration by the American Arbitration Association.”

Initially, Stanley served a demand for arbitration of its claim for damages incurred in performance under the contract by reason of "certain delays, interferences and other breaches of the contract” on the part of the school. Special Term denied an application by the school for a stay of arbitration and the Appellate Division affirmed (50 AD2d 608). The school then demanded arbitration of the counterclaims asserted by it against Stanley for damages allegedly arising out of Stanley’s failure to complete the work within the time prescribed in the contract and its failure properly to perform and manage the work under the contract, the damages "consisting, inter alia, of loss of use of the gymnasium for the 1973-1974 season, attendant loss of enrollment at the school, increased architect’s fees, increased operating costs, physical damage to property, loss of interest, and other damages”. Involved on this appeal is Stanley’s application to stay the arbitration of the school’s counterclaims, based on the ground that the counterclaims were not arbitrable under the contract. Special Term granted the stay sought by Stanley but the Appellate Division reversed and directed the parties to proceed to arbitration. Stanley’s appeal is now before us as of right (CPLR 5601, subd [a], par [ii]).

Although the arbitration provision in this contract is not a "broad arbitration clause”, in our view the Appellate Division properly concluded that the parties’ agreement to refer to arbitration "any dispute or disagreement in connection with the performance of the work” must be read as embracing the school’s counterclaims with respect both to the determination of the liability of Stanley and to the computation of damages. A reading of paragraph 12 of the agreement (relating to delays and extension of time) and of paragraph 13 (relating to changes in the work) supports the conclusion that the parties intended that the arbitration provision embrace the questions of damages now asserted by the school under its counterclaims.

Because of a facial similarity in contract language and because of the extensive attention devoted to Matter of Marchant v Mead-Morrison Mfg. Co. (252 NY 284) in both briefs and oral argument, it is appropriate briefly to discuss that case and its relation to our decision in this case.

We have elsewhere explicitly recognized "the fundamental principle that the resolution of disputes by arbitration is grounded in agreement of the parties” (County of Sullivan v Edward L. Nezelek, Inc., 42 NY2d 123, 128). The agreement of the parties may range from what is in effect a choice of forum, as under what has come to be called a "broad arbitration clause”, to an agreement to submit to arbitration only one or more discrete issues of fact in a complex commercial controversy (without reference to ultimate liability or to damages). Within that spectrum the agreement to arbitrate may be with reference to liability only, or to damages, or to both. Along still another axis the agreement may refer to arbitration a single controversy arising out of one transaction or all controversies which may arise during a period of the continuing relationship between the parties. In form the agreement to arbitrate may be drafted to specify what is to be included or it may be drawn to specify what is to be excluded. The critical issue is the scope of the parties’ own agreement; subject to constraints of statute and public policy, the range of their possible definitions is virtually unlimited.

Our holding in the present case is no departure from the principle recognized and applied in Matter of Marchant v Mead-Morrison Mfg. Co. (252 NY 284, supra). In Marchant our court concluded that the parties had not agreed to submit the issue of consequential damages to arbitration. The crucial question was identified by the court there as that of determining the extent of the parties’ agreement. Judge Cardozo’s opinion is permeated with consideration of that issue:

"Parties to a contract may agree, if they will, that any and all controversies growing out of it in any way shall be submitted to arbitration. If they do, the courts of New York will give effect to their intention. A submission so phrased, or in form substantially equivalent, does not limit the authority of the arbitrators to an adjudication of the breach. It is authority to assess the damages against the party in default [citation omitted].

"There is nothing in the law, however, that exacts a submission so sweepingly inclusive. The question is one of intention, to be ascertained by the same tests that are applied to contracts generally.” (252 NY, pp 298-299.)

"We think there was no intention to clothe the arbitrators with power to settle every difference having its genesis in the contract. Their function was more modest.” (Id., p 300.) Reference is next made to clauses then in current usage, and to the contemporary expectations of the trade as to the interpretation to be placed on particular arbitration clauses (id., pp 301, 302). "It is not a question whether the damages awarded proceed from the default so directly and certainly that the plaintiff might have recovered them if he had been suing in the courts. The judgment of the arbitrators within the lines of the submission is not to be impeached for misconception of the law. It is rather a question whether the damages are of such a nature that arbitrators so commissioned may consider them at all.” (Id., p 302.) The court then concluded that the award of damages made by the arbitrators was outside the scope of the issues which the parties had agreed to submit to them.

It is the fundamental teaching of Marchant, continuing with undiminished vitality today, that the responsibility of judicial review is to determine what the contracting parties agreed should be submitted to the arbitrator for resolution. It is never conclusive that because certain words used in one context have a particular meaning, the same or similar words will necessarily have the same meaning in another context (3 Corbin, Contracts, § 535).

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke concur in Per Curiam opinion.

Order affirmed.