author: Chief Judge Cooke. Fuchsberg, J.

text:
    The People of the State of New York, Appellant, v Buster McRay, Also Known as Buster McCray, Respondent. The People of the State of New York, Respondent, v Charles J., Appellant. The People of the State of New York, Appellant, v Ronald Hester, Respondent.
    Argued November 12, 1980;
    decided December 18, 1980

      POINTS OF COUNSEL

      Robert M. Morgentkau, District Attorney (Robert M. Pitler and Susan Corkery of counsel), for appellant in the first above-entitled case.
    The hearing court correctly ruled that there was probable cause to arrest defendant, whose suspect course of conduct culminated in his bulk receipt of glassine envelopes. The reviewing court below erroneously reversed that determination, on the law, by improperly evaluating each factor in isolation thereby losing sight of the composite picture. (People v Palumbo, 49 NY2d 928; People v Oden, 36 NY2d 382; People v Alexander, 37 NY2d 202; People v Corrado, 22 NY2d 308; United States v Saratana, 485 F2d 365 415 US 931; People v Valentine, 17 NY2d 128; People v Maxwell, 51 AD2d 922.)

      Howard W. MuchnicK for respondent in the first above-entitled case.
    Probable cause for the arrest did not exist. (People v Alexander, 37 NY2d 202; People v Corrado, 22 NY2d 308; People v Butterly, 25 NY2d 159; People v Valentine, 17 NY2d 128; Henry v United States, 361 US 98; People v Brown, 24 NY2d 421; People v Smith, 21 NY2d 698; People v Cohen, 23 NY2d 674; People v White, 16 NY2d 270; People v Brady, 16 NY2d 186.)

      Joseph Calluori and William E. Hellerstein for appellant in second above-entitled case.
    Appellant’s arrest was unlawful because it was predicated on nothing more than a series of brief conversations with passersby unaccompanied, by furtive movements or transfers of cash, and a single transfer of a glassine envelope. (People v Bryant, 37 NY2d 208; People v Oden, 36 NY2d 382; People v Corvado, 22 NY2d 308; People v Santiago, 28 NY2d 753; People v Alexander, 37 NY2d 202; People v Quinones, 33 NY2d 811; People v Rowell, 27 NY2d 691; People v Brown, 24 NY2d 421; People v Smith, 21 NY2d 698; People v Valentine, 17 NY2d 128.)

      Robert M. Morgenthau, District Attorney (Robert M. Pitler and Susan Corkery of counsel), for respondent in the second above-entitled case.
    For a period of 45 minutes, defendant appeared to magnetically attract individual members of a fluctuating crowd on a corner notorious for illicit drug trafficking. After defendant briefly conversed with each individual who approached him and, at the final encounter, transferred a glassine envelope, a trained and experienced police officer had probable cause to arrest him. (People v Valentine, 17 NY2d 128; People v Maxwell, 51 AD2d 922; People v Oden, 36 NY2d 382; People v Corrado, 22 NY2d 308; People v Brown, 24 NY2d 421; People v Quinones, 33 NY2d 811; People v Davis, 36 NY2d 280, 423 US 876.)

      Robert M. Morgenthau, District Attorney (Robert M. Pitler and Susan Corkery of counsel), for appellant in the third above-entitled case.
    An experienced narcotics officer had probable cause to arrest defendant when he observed defendant, in a notorious narcotics trafficking area, engage in three successive, rapid and surreptitious exchanges which the officer reasonably believed to be illegal transfers of narcotics. (People v Oden, 36 NY2d 382; People v Alexander, 37 NY2d 202; People v Corrado, 22 NY2d 308; People v Valentine, 17 NY2d 128; People v Maxwell, 51 AD2d 922.)

      Elaine T. Stogel and William E. Hellerstein for respondent in the third above-entitled case.
    The court below properly held that respondent’s arrest was without probable cause and the ensuing search in violation of his constitutional rights because the police action was based only on the observation that respondent, walking in a high-crime area, looked up and down the street as he received glassine envelopes from a companion. (People v Oden, 36 NY2d 382; People v Bryant, 37 NY2d 208; People v Alexander, 37 NY2d 202; People v Santiago, 28 NY2d 753; People v Quinones, 33 NY2d 811; People v Rowell, 27 NY2d 691; People v Russell, 34 NY2d 261; People v Maldonado, 59 AD2d 692; People v Valentine, 17 NY2d 128.)
   OPINION OF THE COURT

Chief Judge Cooke.

These three appeals involve variations of the common glassine envelope scenario.

They are the latest in the persistent line of those cases assaying the weight to be accorded the passing of glassine envelopes in determining whether probable cause was established for a narcotics arrest. In the present day culture, such evidence presents such a strong clue of criminality that little more by way of relevant facts or circumstances is required in supplementation to justify the arrest. In each of these three matters, proof by a qualified observer that the exchange of the envelopes occurred in an area known for its high incidence of narcotic activity provided the requisite additive so that a finding of probable cause was permissible.

I

In People v McRay, defendant was arrested by a Street Enforcement Unit of the New York City Police Department. The police team was headed by Sergeant Alvin Ingram, a 20-year veteran of the department who, prior to his street enforcement duties, had served as a narcotics officer for four and one-half years. In addition to actual involvement in 300 to 400 drug arrests, Ingram completed Federal and local courses in illicit drug dealings and has testified before a congressional committee investigating drug abuse.

On August 10, 1977, the sergeant and his unit set up an undercover buy operation on West 127th Street in Manhattan. The area, according to Ingram’s testimony, is a “high narcotic prone location” when measured by the number of narcotic arrests made, the number of citizen complaints received and his own observations of narcotics activity. While standing in front of a grocery store observing the undercover “buy” officer, Ingram saw the defendant approach and stop a few feet away. Soon defendant was joined by another male, and the two engaged in a short conversation. Defendant then entered the grocery, his companion remaining outside and looking up and down the street. Ingram followed McKay into the store and overheard him asking for a “number 3 bag”, which the store did not have. Settling for a “number 5 bag”, defendant left the store and rejoined his companion. Sergeant Ingram purchased a beer and returned to the street drinking it. Again positioning himself near the two men, Ingram heard the other male tell defendant “come on, come on around the corner.” The men started walking, with the officer following at a safe distance. Suddenly, the men stopped, McKay opened the grocery bag and his companion withdrew bundles of glassine envelopes from his pockets and placed them in the bag. The bundles, which appeared to contain “ten dollar bags” of heroin, were too large for the man’s hand to encircle. Defendant was arrested a short time later. Six separate bundles, containing 133 glassine envelopes of heroin, were found in the bag. After denial of his motion to suppress, defendant entered a guilty plea. The Appellate Division, finding a lack of probable cause for arrest, entered an order of reversal on the law. That order is now reversed.

II

In People v Charles J., defendant was arrested by veteran Police Officer Lyman Gerrish and his partner, Officer Evans. On February 26, 1977, Gerrish was positioned on the second floor of an abandoned building in the vicinity of West 128th Street and Eighth Avenue in Manhattan. This intersection was so well known for drug trafficking that it became a target of a special police campaign called “Operation Drug.” Of the approximately 100 drug arrests made by Officer Gerrish, 30 or 40 had occurred at this same location. Gerrish too had completed a law enforcement course in drug transactions.

From their vantage point in the abandoned building and utilizing binoculars, the policemen noticed defendant standing on the celebrated corner. A constantly changing crowd of people milled about, but defendant remained at the same location for approximately 45 minutes. During that time, seven or eight persons approached defendant, spoke with him and departed. Finally, upon the advance of an unidentified male, Officer Gerrish saw defendant reach beneath his coat into his sweater pocket, withdraw a white glassine envelope and pass the envelope to the other individual. Defendant was arrested, and found to be in possession of 19 packets of heroin. Following denial of his motion to suppress, defendant was adjudicated a youthful offender. A divided Appellate Division affirmed. That order is now affirmed.

Ill

In People v Hester, defendant was arrested by an officer also assigned to “Operation Drug”, Ronald Bellistri. An experienced narcotics officer, Bellistri had made more than 100 drug-related arrests and had received formal law enforcement training in the narcotics field. On April 6, 1977, Bellistri and his partner stationed themselves in a vacant apartment overlooking West 115th Street near Seventh Avenue. Officer Bellistri had made numerous drug arrests on that block. Within a few minutes, the officers observed defendant and one Artis Jones walking together on the south side of 115th Street. The two men stopped in front of a school yard, looking up and down the street. Jones then passed a stack of whitish glassine envelopes to defendant, who placed them in his pocket while continuing his watch back and forth along the block. Two more similar exchanges were made. Defendant was then arrested with 31 glassine envelopes in his possession. Artis Jones was also arrested in possession of a quantity of cocaine and $415. Defendant’s motion to suppress was denied and he entered a guilty plea to criminal possession of a controlled substance in the third degree. The Appellate Division, concluding that there was no probable cause for an arrest, reversed on the law. That order is now in turn reversed.

IV

At the outset, it is important to emphasize that probable cause determinations, which involve questions of fact or mixed questions of law and fact, generally are beyond the review powers of this court (People v Wharton, 46 NY2d 924, 925; People v Clements, 37 NY2d 675, 677-678; People v Oden, 36 NY2d 382, 384-385). Thus, where the facts are disputed, where credibility is at issue or where reasonable minds may differ as to the inference to be drawn from the established facts, this court, absent an error of law, will not disturb the findings of the Appellate Division and the suppression court (e.g., People v Wharton, supra; People v Oden, supra). On the other hand, when an issue arises as to the standard by which probable cause is measured — the minimum showing necessary to establish probable cause— a question of law is presented for review (see, e.g., People v Clements, supra, at pp 677-678). In these three cases, it is the minimum requirement for probable cause that is at issue. Two were reversed by the Appellate Division, on the law, essentially on the ground that the undisputed facts do not meet the threshold requirement for probable cause. In the third, the defendant seeks reversal of his conviction on the same basis. Thus, there is presented the issue of what constitutes the lowest level of proof required for probable cause in the glassine envelope situation.

We are not without guideposts, however, since prior decisions have established principles relevant to these appeals. This court has consistently recognized that a glassine envelope is a “telltale sign of heroin” (People v Alexander, 37 NY2d 202, 203; People v Corrado, 22 NY2d 308, 313). The cases also indicate that a high incidence of narcotic trafficking in a particular community is a relevant circumstance in assessing probable cause (e.g., People v Oden, 36 NY2d 382, 385, supra; People v Brown, 32 NY2d 172, 174). And, the police officer’s experience and training in narcotics investigations are entitled to weight in evaluating his or her observations (e.g., People v Alexander, supra, at pp 203-204; see People v Valentine, 17 NY2d 128, 132). But, despite the fact that the glassine envelope is a “telltale sign of heroin”, we have never held that the mere passing of such an envelope establishes probable cause (see, e.g., People v Oden, supra, at p 385; People v Corrado, 22 NY2d 308, 313, supra). Rather, “additional relevant behavior or circumstances” are necessary “to raise the level of inference from suspicion to probable cause” (People v Oden, supra, at p 385).

It is not logic alone which has dissuaded the courts from concluding that an exchange of a glassine envelope, the “telltale sign” of heroin, does not suffice to establish probable cause. Probable cause requires, not proof beyond a reasonable doubt or evidence sufficient to warrant a conviction (e.g., People v Miner, 42 NY2d 937, 938; People v White, 16 NY2d 270, 273), but merely information which would lead a reasonable person who possesses the same expertise as the officer to conclude, under the circumstances, that a crime is being or was committed (see, e.g., People v Oden, 36 NY2d, at pp 384-385, supra; People v Russell, 34 NY2d 261, 262-264; see, also, Henry v United States, 361 US 98, 102). Arguably, the street exchange of a glassine envelope alone would provide the requisite level of certainty (see, e.g., United States v Rosario, 638 F2d 460; 1 LaFave, Search and Seizure, A Treatise on the Fourth Amendment, § 3.6, at pp 654-655)

Undoubtedly, the courts have been influenced by the maxim that a pattern of conduct which occurs “just as frequently * * * in innocent transactions” as in criminal transactions “is too equivocal to form the basis for * * * a warrantless arrest” (People v Russell, 34 NY2d 261, 264, supra). And obviously it was thought, at the time, that the exchange of a glassine envelope is as likely to signal innocent behavior as criminal conduct. Whatever the validity of this conclusion in the past, time and experience have proven it no longer viable.

We have witnessed, in recent years, a virtual explosion in drug trafficking in our society (see, e.g., Annual Message of the Governor, McKinney’s Session Laws of NY, 1973, pp 2317-2318; “Crime in America — Heroin Importation, Distribution, Packaging and Paraphernalia”, Hearings Before the House Select Comm on Crime, 91 Cong, 2d Sess, p 1 [1970]). One authority estimated, for instance, that the number of heroin users or addicts in New York City alone rose from 65,000 in 1967 to 150,000 in 1971 (Second Report of the National Comm on Marihuana and Drug Abuse, Drug Use in America; Problem in Perspective, p 173). More recently, in just the last few months, both the President and the Governor of this State have sought to declare war on the heroin epidemic. Although the stringent drug laws in this State have had an impact, the problem persists (see Governor’s Message on approving L 1979, ch 410, McKinney’s Session Laws of NY, 1979, p 1799). The costs to this society of illicit drugs, in human and economic terms, is staggering (see, e.g., Second Report of the National Comm on Marihuana and Drug Abuse, pp 173-176). And, it is generally agreed that drug dependency and trafficking breed collateral, sometimes violent, crime (see People v Broadie, 37 NY2d 100, 113; Amer Bar Assn Special Comm on Crime Prevention and Control, New Perspective on Urban Crime 31 [1972]).

The alarming pervasiveness of drugs in our society does not, of course, provide the occasion for obliterating the protections afforded by the Fourth Amendment and our State Constitution. But it does increase the awareness, and the probability, that the passing of a glassine envelope signals an illicit drug transaction and not some other, innocuous act. Indeed, given the infrequency of legitimate street encounters which involve glassine envelopes, the exchange itself would all but constitute per se probable cause. If in the past the glassine envelope was a “telltale sign of heroin”, it can now be deemed the hallmark of an illicit drug exchange.

It is against this background that this court should outline certain circumstances which, when combined with the exchange of a glassine envelope, may give rise to a finding of probable cause. To begin with the most obvious, if money is passed in exchange for the envelope, probable cause almost surely would exist (see, e.g., United States v Davis, 561 F2d 1014, 1017; United States v Thomas, 551 F2d 347, 348). Exchange of currency negates all but the most implausible explanations for the transaction, and thus conveys more than sufficient indicia of a drug sale to warrant an arrest. Similarly, additional evidence of furtive or evasive behavior on the part of the participants suffices to establish probable cause (e.g., People v Alexander, 37 NY2d 202, 204, supra; People v Butterly, 25 NY2d 159, 162-163; see Sibron v New York, 392 US 40, 66-67). Such evidence, suggesting consciousness of guilt, has traditionally been considered some proof of a crime (see, e.g., People v Yazum, 13 NY2d 302, 304-305; People v Leyra, 1 NY2d 199, 208-210).

Beyond these situations, if the exchange occurs in an area rampant with narcotics activity, and is proven by competent evidence such as testimony of a qualified observer, an inference of probable cause may properly be drawn. The character of the community known to the arresting officer provides the supplemental element — the additional requisite assurance that the observer has witnessed an illicit dealing rather than an innocent encounter. In an area which has developed a reputation as a drug marketplace or the like, the possibility that a street exchange of a glassine envelope involves noncriminal behavior declines appreciably. Indeed, it is precisely in such a neighborhood that the exchange would be expected to most reliably establish a drug transaction.

Quite simply, then, there is no sound basis for resisting as a matter of law the inference of probable cause that arises when as in these cases a trained and experienced officer observes the delivery of one or more glassine envelopes —the “hallmark” of a drug transaction — in an area notorious for narcotics activity. This is not to say that the inference of probable cause must be drawn in every case. Rather, we are merely establishing a minimum requirement. Once the minimum is satisfied, it is a question for those courts with fact-finding power — principally the suppression court and the Appellate Divisions — to find as a fact whether probable cause exists. As discussed, those factual determinations are normally beyond the review of this court.

V

Applying these principles to the three appeals here, it is concluded in each case that enough was shown to create a fact question as to probable cause. In People v McRay, a veteran narcotics officer witnessed the defendant actually receiving a number of bundles of glassine envelopes in a high narcotics area. In addition to the officer’s expertise, and the high incidence of narcotics in the area, it is significant that defendant made careful preparations to receive the packets, his companion looked furtively up and down the street, and a large number of glassine envelopes were exchanged. In these circumstances, the finder of fact could properly draw an inference of probable cause, and the Appellate Division erred in reversing on the law.

In People v Charles J., an experienced officer saw seven or eight people approach defendant, and ultimately saw defendant pass a whitish glassine envelope. The locale was so rampant with drugs as to be one of the targets of a special police operation. Thus, not only did an experienced officer witness the passing of a glassine envelope in a high narcotics area, but he observed the defendant engage in other behavior consistent with that of a narcotics seller. The officer was also able to identify the envelope as containing a whitish substance. In such a situation, the factual conclusion of the suppression court, that probable cause existed, affirmed by the Appellate Division, satisfies the minimum requirement for probable cause and may not be overturned by this court.

Finally, in People v Hester, an experienced officer saw defendant receive three stacks of whitish glassine envelopes. In addition, defendant was looking up and down the street during the transaction. As in People v McRay, the sum of these circumstances makes out a fact question as to the existence of probable cause and the Appellate Division erred in reversing on the law.

Accordingly, in People v McRay and People v Hester the orders of the Appellate Division should be reversed, and the cases remitted to that court for a review of the facts. In People v Charles J. the order of the Appellate Division should be affirmed.

Fuchsberg, J.

(concurring). While I am in accord with the practical considerations that motivate Chief Judge Cooke’s opinion and agree that the three convictions with which it deals should be upheld, I respectfully suggest that the reputation of the particular neighborhood in which illegal conduct happens to occur should not be a significant factor in finding probable cause.

Arrests are made of individuals, not of neighborhoods. When we single out the latter, more likely than not congested areas peopled in the main by those who are socially and economically deprived, we subject all its residents, the vast majority of whom are sure to be free of criminal taint, to an immeasurably greater risk of invasion than those who live elsewhere. The inevitable result is a measurable abridgement of the Fourth Amendment’s protection against police intrusions conducted without sufficient justification. As California’s Supreme Court, which has given much attention to this question, has had occasion to note, “giving substantial weight to the perceived crime rate of an area may constitute a self-fulfilling prophesy” (Cunha v Superior Ct. of Alameda County, 2 Cal 3d 352, 357, n 1, citing President’s Commission on Law Enforcement and Administration of Justice: Task Force Report, Crime and its Impact — An Assessment, p 22).

This is not to say that the police should not be alert to their environment, but that is a different thing from allowing neighborhood to make the difference between seizing and searching a person or respecting his or her right to be let alone. A distinguished scholar has explained that such a standard is almost sure to make the chances high that the honest citizen will be mistaken for — and treated as— a suspected criminal (see Skolnick, Justice Without Trial, pp 217-218).

In my opinion, vigorous narcotics law enforcement can accomplish its goals without paying this price.

Judges Jasen, Gabrielli, Jones, Wachtler and Meyer concur with Chief Judge Cooke; Judge Fuchsberg concurs in a separate opinion.

In People v McRay: Order reversed and case remitted to the Appellate Division, First Department, for further proceedings in accordance with the opinion herein.

In People v Charles J.: Order affirmed.

In People v Hester: Order reversed and case remitted to the Appellate Division, First Department, for further proceedings in accordance with the opinion herein.

      . In these cases, the officers making the arrest made first-hand observations and did not rely upon information supplied by other persons. Thus, there is no occasion to apply the standards by which informer-produced information is.measured (see, generally, Moylan, Hearsay and Probable Cause: An Aguilar and Spinelli Primer, 25 Mercer L Rev 741). The only question here is whether the officers’ observations establish probable cause.

      . For a number of reasons, it is difficult, if not impossible, to estimate accurately the number of current addicts or users or the increase in the prevalence of narcotics in this country over the years (see Handel, Problems with Official Drug Statistics, 21 Stanford L Rev 991).

      . Experts estimate that between one half and three fifths of the Nation’s opiate dependent persons reside in New York City (see, e.g., President’s Comm on Law Enforcement and the Administration of Justice, Task Force on Narcotics and Drug Abuse [1967], p 11; Second Report of the National Comm on Marihuana and Drug Abuse, p 173).

      . For a discussion of the history of drug abuse control in this State, and various alternative approaches, see Hardt and Brooks, Social Policy on Dangerous Drugs: A Study of Changing Attitudes in New York and Overseas (48 St John’s L Rev 48).

      . It would not be an exaggeration to say that drug trafficking reaches all parts of this State, from the crowded cities to the rural woodlands; no neighborhood, community or group enjoys an immunity from the affliction. But, it is also true that certain neighborhoods exhibit a more concentrated level of drug activity. Contrary to the suggestion of the concurring opinion, our cases have always recognized this reality.
      Indeed, the character of a neighborhood as a known locale for illicit narcotic activity provides an additional objective empirical basis for an officer to evaluate whether probable cause exists to believe that a transaction involves illegality. Each defendant has a constitutional right to be free from unreasonable searches and seizures. The reasonableness of the police officer’s conduct in any situation will depend on the totality of the circumstances with which he is confronted, including the known character of the area involved.

      . Any suggestion that a bright line probable cause rule would enhance the possibility of police perjury may be quickly rejected. As this court observed in People v Berrios (28 NY2d 361, 368): “Some police officers, as well as some in other callings may be tempted to tamper with the truth. But there is no valid proof that all members of law enforcement agencies * * * who testify are perjurers. Therefore, all policemen should not be singled out as suspect as a matter of law.” Thus, we must reject any such “attack on the integrity of our entire law enforcement system” (id.).


source: Caselaw Access Project

author: Fuchsberg, J.

license: Public Domain

text:
    Servomation Corp., Respondent, v State Tax Commission, Appellant.
    Argued October 9, 1980;
    decided December 22, 1980

      POINTS OF COUNSEL

      Robert Abrams, Attorney-General (Maurice K. Peaslee and Shirley Adelson Siegel of counsel), for appellant.
    I. The food and drink served by restaurants and similar establishments is not sold as tangible personal property within the meaning of article 28 of the Tax Law. (Toxaway Hotel Co. v Smathers, 216 US 439.) II. Paper and plastic products purchased by restaurants and similar establishments are purchased at retail for their own use and consumption and are not exempt from the sales tax as purchases for resale. (Matter of Albany Calcium Light Co. v State Tax Comm., 44 NY2d 986; Matter of Colgate-Palmolive-Peet Co. v Joseph, 308 NY 333; Matter of American Molasses Co. of N. Y. v

      McGoldrick, 281 NY 269; Matter of Dairylea Co-op. v State Tax Comm., 41 AD2d 312, 33 NY2d 513; Matter of Abraham & Strauss v Tully, 47 NY2d 207; Matter of Lockport Union-Sun & Journal v Preisch, 7 AD2d 502, 8 NY2d 54; Matter of National Elevator Ind. v New York State Tax Comm., 49 NY2d 538.) III. Paper and plastic products purchased by restaurants and similar establishments for use in serving food and drink are not exempted from the sales tax by section 1115 (subd [a], par [19]) of the Tax Law. (Matter of Grace v State Tax Comm., 37 NY2d 193; Matter of Central Off. Alarm Co. v State Tax Comm., 58 AD2d 162, 44 NY2d 642; Matter of Colgate-Palmolive-Peet Co. v Joseph, 308 NY 333; Matter of American Molasses Co. of N. Y. v McGoldrick, 281 NY 269.)

      Eugene J. Steiner and Donald Zee for respondent.
    I. The sales tax law and the regulations and examples in question should be strictly construed in favor of the taxpayer. (Matter of Bes Corp. v Tully, 46 NY2d 1038; Matter of Nehi Bottling Co. v Gallman, 39 AD2d 256, 34 NY2d 808; Matter of American Locker Co. v Gallman, 38 AD2d 105, 32 NY2d 175; Bathrick Enterprises v Murphy, 27 AD2d 215, 23 NY2d 664; Matter of Grace v State Tax Comm., 37 NY2d 193; Matter of Burger King v State Tax Comm., 70 AD2d 447; Matter of Finch, Pruyn & Co. v Tully, 69 AD2d 192.) II. Although administrative agencies by legislative grave, have power to promulgate interpretative and constructive rules and regulations, these regulations may not run afoul of the empowering statute or its underlying legislative intent. (Brown v University of State of N. Y., 242 App Div 85, 266 NY 598; Matter of Kaplan v McGoldrick, 198 Misc 440; Matter of Humphrey v State Ins. Fund, 298 NY 327; Pollard v Trivia Bldg. Corp., 291 NY 19; Gerber v Seaich Realty Co., 259 App Div 667.) III. Paper products purchased by plaintiff-respondent fall within the resale exclusion provided for by section 1101 (subd [b], par [4], cl [i], subcl [A]) of the Tax Law. (Matter of Burger King v State Tax Comm., 70 AD2d 447; Matter of Nehi Bottling Co. v Gallman, 39 AD2d 256; Matter of Maplecrest Sausage Co. v Tully, 67 AD2d 329.) IV. Common sense dictates that food and beverages dispensed through a vending machine must be packaged in paper and related paper products.
   OPINION OF THE COURT

Fuchsberg, J.

In this companion case to Matter of Burger King v State Tax Comm. (51 NY2d 614), the sole question is the enforceability of a State Tax Commission regulation interpreting section 1115 (subd [a], par [19]) of the Tax Law.

Servomation operates vending machines, cafeterias, “fast food” restaurants and dining facilities located throughout the United States and Canada. In conjunction with the operation of its food service business, it purchases large quantities of disposable paper and plastic products which consist of cups, plates and containers for hot and cold drinks.

Enacted in 1974 (L 1974, ch 581, § 1), section 1115 (subd [a], par [19]) of the Tax Law exempts from taxation “[cjartons, containers, and wrapping and packing materials and supplies, and components thereof for use and consumption by a vendor in packaging or packing tangible personal property for sale, and actually transferred by the vendor to the purchaser”. In 1977, the State Tax Commission promulgated the following regulation: “Cartons, containers and other packaging materials used in or by restaurants, taverns or other establishments, or by caterers, are subject to tax whether or not there is a separate charge for such containers or packaging material” (20 NYCRR 528.20 [c] [5]). Paragraph (5) of the regulation also includes examples of when such items are taxable.

By this action Servomation seeks a judgment declaring this regulation invalid as conflicting with either or of section 1101 (subd [b], par [4], cl [i], subcl [A]) or section 1115 (subd [a], par [19]) of the Tax Law insofar as it would make containers, cups, lids, and other wrappings taxable when purchased by its establishments. On cross motions for summary judgment the Supreme Court denied Servomation’s motion and granted that of the Tax Commission. But the Appellate Division reversed and granted Servomation’s motion, citing for authority its decision in Matter of Burger King v State Tax Comm. (70 AD2d 447, mod 51 NY2d 614). For the reasons which follow, we believe that Servomation’s purchases are not subject to the tax.

The Tax Commission argues for the validity of its regulation on several grounds. It initially contends that section 1115 (subd [a], par [19]) only exempts containers and wrapping material used to package tangible personal property and that restaurant food is not tangible personal property within the meaning of the Tax Law, a contention we today accept in Matter of Burger King v State Tax Comm. (51 NY2d 614, supra).

This alone, however, does not necessitate a finding in favor of the commission. For, in Matter of Burger King v State Tax Comm., (51 NY2d 614, supra), we held that the paper products, purchased by a fast food chain operator for sale to customers, fall within the resale exclusion provided for by section 1101 (subd [b], par [4], cl [i], subcl [A]) of the Tax Law. An administrative agency cannot by regulatory fiat directly or indirectly countermand a statute enacted by the Legislature (Matter of Jones v Berman, 37 NY2d-42, 53). 20 NYCRR 528.20(c) (5), promulgated by the State Tax Commission, thus being disharmonious with the statute it was intended to implement, must be found void.

In so ruling the regulation unenforceable, we, of course, recognize that, where it is adopted in implementation of a broadly framed statute which the administrative agency that promulgated the regulation was authorized to administer, reviewing courts most often will defer to the interpretation that inheres in the regulation. “Where, however, the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent, there is little basis to rely on any special competence or expertise of the administrative agency and its interpretive regulations are therefore to be accorded much less weight” (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459). For the reasons we have stated, this is the case here.

It follows that the order of the Appellate Division should be affirmed.

Chief Judge Cooke and Judges Jasen, Gabrielli and Wachtler concur with Judge Fuchsberg; Judges Jones and Meyer concur in result on constraint of Matter of Burger King v State Tax Comm. (51 NY2d 614).

Order affirmed, with costs.

      . The examples set out are as follows:

        “Example 5: A restaurant purchases paper bags, beverage containers and wrapping paper to use in packaging orders, and napkins and stirrers, whether for on- or off-premises consumption. Such purchases are taxable.

        “Example 6: A pizza parlor has a 10-cent surcharge for pizza which is taken out. The surcharge is intended to defray the cost of the cartons. Since the carton is not used to package tangible personal property, it is subject to tax.

        “Example 7: A food vending machine operator purchases stirrers, napkins, hot and cold cups and lids. Since these items do not become part of the products sold nor are they used to package tangible personal property, they are subject to sales tax.”

      . Tax Law (§ 1101, subd [b], par [4] cl [i], subcl [A]) excludes from taxation a sale “for resale as such” or “as a physical component part of tangible personal property”.


author: Fuchsberg, J. Jones, J.

text:
    In the Matter of Burger King, Inc., Respondent, v State Tax Commission, Appellant. (Proceeding No. 1.) In the Matter of Davmor Industries, Inc., Respondent, v State Tax Commission, Appellant. (Proceeding No. 2.) In the Matter of Edgmor, Inc., Respondent, v State Tax Commission, Appellant. (Proceeding No. 3.)
    Argued October 9, 1980;
    decided December 22, 1980

      POINTS OF COUNSEL

      Robert Abrams, Attorney-General (Maurice K. Peaslee and Shirley Adelson Siegel of counsel), for appellant.
    I. The food and drink sold by a fast food restaurant is not sold as tangible personal property within the meaning of article 28 of the Tax Law. (Matter of Levene v Levitt, 63 AD2d 787; Matter of Howard v Wyman, 28 NY2d 434; Matter of Conde Nast Pub. v State Tax Comm., 51 AD2d 17, 39 NY2d 942; Matter of Great Lakes Dredge & Dock Co. v Department of Taxation & Fin. of State of N. Y., 39 NY2d 75; Matter of Mounting & Finishing Co. v McGoldrick, 294 NY 104; Toxaway Hotel Co. v Smathers, 216 US 439.) II. The paper products purchased by Burger King are purchased at retail for Burger King’s own use and consumption and are not exempt from the sales tax as a purchase for resale. (Matter of Albany Calcium Light Co. v State Tax Comm., 44 NY2d 986; Matter of Colgate-Palmolive-Peet Co. v Joseph, 308 NY 333; Matter of American Molasses Co. v McGoldrick, 281 NY 269; Matter of Dairylea Co-op. v State Tax Comm., 41 AD2d 312, 33 NY2d 513; Matter of Abraham & Straus v Tully, 47 NY2d 207; Matter of Lockport Union-Sun & Journal v Preisch, 7 AD2d 502, 8 NY2d 54.) III. The ovens, broilers, fryers, coffee urns, milk shake machinery and similar equipment sold by Davmor and purchased at bulk sale by Edgmor are not used in “the production of tangible personal property * * * for sale” and are not exempt from the sales tax by section 1115 (subd [a], par [12]). (Matter of Grace v New York State Tax Comm., 37 NY2d 193; Matter

      of Central Off. Alarm Co. v State Tax Comm., 58 AD2d 162, 44 NY2d 642; Matter of Long Is. Light. Co. v State Tax Comm., 45 NY2d 529; Matter of Sandy Hill Corp. v State Tax Comm. of State of N. Y., 61 AD2d 550; Matter of Fredonia Prods. Co. v Procaccino, 53 AD2d 275.)

      Sterling L. Weaver, Richard B. Sullivan and John R. McQueen for respondents.
    I. Burger King’s purchases of paper products are for the purpose of resale and, thus, are not subject to sales tax. (Matter of Grace v New York State Tax Comm., 37 NY2d 193; Matter of American Cyanamid & Chem. Corp. v Joseph, 308 NY 259; Matter of Nehi Bottling Co. v Gallman, 39 AD2d 256, 34 NY2d 808; Matter of American Molasses Co. v McGoldrick, 281 NY 269; Matter of Colgate-Palmolive-Peet Co. v Joseph, 308 NY 333.) II. Sales of food preparation equipment by or to Burger King’s subsidiaries are exempt from sales tax. (Matter of Grace v New York State Tax Comm., 37 NY2d 193; Matter of Niagara Mohawk Power Corp. v Wanamaker, 286 App Div 446, 2 NY2d 764.)

      Gerard A. Navagh for New York State Restaurant Association, Inc., amicus curiae.

    I. Burger King purchases the paper products for resale. (Matter of Mendoza Fur Dyeing Works v Taylor, 272 NY 275; Matter of American Molasses Co. v McGoldrick, 256 App Div 649; Matter of Colgate-Palmolive-Peet Co. v Joseph, 308 NY 333; Matter of Dairylea Co-op. v State Tax Comm., 41 AD2d 312.) II. The machinery here involved was used directly and exclusively in the production of tangible personal property and is exempt under section 1115 (subd [a], par [12]) of the Tax Law.

      Ronald H. Surkin and Leonard P. Nalencz for McDonald’s System, Inc., and others, amici curiae.

    I. The fast food industry has developed a highly sophisticated process for the production and packaging of convenience food and drink products. II. The New York sales and use tax is a consumption tax which is to be imposed only at the final point in the marketing chain. (Matter of Dairylea Co-op. v State Tax Comm., 41 AD2d 312.) III. The machinery and equipment at issue in this case were used directly and exclusively for production of food and drink products by manufacturing, processing, or assembling, and sales of such therefore are exempt from taxation under section 1115 (subd [a], par [12]) of the New York Tax Law. IV. The sale of paper products to Burger King for packaging its food and drink products is not a retail sale which is taxable under the New York sales tax law. (Matter of Nehi Bottling Co. v Gallman, 39 AD2d 256, 34 NY2d 808; Matter of American Molasses Co. v McGoldrick, 281 NY 269; Matter of Colgate-Palmolive-Peet Co. v Joseph, 308 NY 333.)
   OPINION OF THE COURT

Fuchsberg, J.

In this consolidated article 78 proceeding, brought on, in the nature of certiorari, by three business-related taxpayers, the State Tax Commission asks us to review an order of the Appellate Division which modified an order of the Supreme Court which, in part, had annulled the commission’s determinations denying petitioners’ applications for revision of sales tax assessments. In particular, in the context of the “fast food” restaurant business, this appeal poses issues that test the scope of subdivision (a) of section 1105 of the Tax Law, which imposes taxes on retail sales of “tangible personal property”. The focus is on whether the taxpayers come within the exceptions to this impost articulated in either section 1101 (subd [b], par [4], cl [i], subcl [A]) of the Tax Law, which excludes a sale “for resale as such or as a physical component part of tangible personal property” (emphasis added), or section 1115 (subd [a], par [12]) of the Tax Law, which exempts the sale of machinery and equipment used to produce “tangible personal property”.

The operative facts are undisputed.

Burger King, a nationwide “fast food” chain, refused to pay sales tax on its purchases of certain paper or plastic packaging materials during the tax period March 1, 1970 through November 30, 1972. The materials consisted of wrappers for hamburgers, cups for beverages and “sleeves” for french fries. The taxpayer insists that it bought these articles for the purpose of resale and that, accordingly, their purchase was tax free.

Davmor Industries, Inc., a wholly owned subsidiary of Burger King, manufactures restaurant equipment for sale to Burger King establishments. During the period between June 1, 1970 through November 30, 1972, it did not collect taxes on such sales of ovens, fryers, broilers, coffee urns, milk shake machinery and other similar equipment. It claims exemption because the equipment was used exclusively and directly to manufacture and otherwise process the food and beverages Burger King sells.

Edgmor, Inc., then a fully owned subsidiary of Burger King, made a bulk purchase of two self-service restaurants from a third party on January 30,1970. By the terms of the purchase agreement, Edgmor agreed to assume responsibility for the remittal of any sales taxes due the State on account of this transaction. It did not do so as to the food preparation equipment it thus acquired. The ground on which it unsuccessfully resisted the ensuing State Sales Tax Bureau’s assessment is the same one urged by Davmor.

In sustaining the Burger King assessment, the commission’s rationale was that the taxpayer’s patrons received the paper products “only as an incident to the purchase of food and drink” and thus, rather than being bought by Burger King for resale “as such”, were consumed by Burger King in the course of consummating the “hybrid” transactions involved in the delivery of its combined food and service. It also asserts that the food and drink is not “tangible personal property” within the meaning of that phrase as it is used in subdivision (a) of section 1105. On this basis, it then also reasoned, consistently, that the machinery and equipment in the Davmor and Edgmor cases, even if the processing of the restaurant food and drink could be said to be manufacturing, was not used for the “production of tangible personal property”.

In the ensuing court proceedings, Special Term confirmed the determination as to Burger King, but on a different theory. Though it held the food and drink was tangible personal property, it decided that the packaging did not qualify for the exclusion because it was neither a physical component part of the product nor sold by Burger King for resale as such and so served “only to facilitate the sale of the product”. As to the equipment sold by Davmor and that bought by Edgmor, having held the food was tangible personal property, the court rejected the commission’s conclusion that the machinery was not exempt under section 1115 (subd [a], par [12]) of the Tax Law. For its part, the ' Appellate Division, two Justices dissenting, annulled the assessments in toto. For the reasons which follow, we agree with the result it reached as to Burger King, but not as to Davmor and Edgmor.

For this purpose, we first look at whether Burger King’s packaging material is excepted from the tax on the theory that it is a “physical component part” of the “tangible personal property” Burger King sells to its patrons (Tax Law, § 1101, subd [b], par [4], cl [i], subcl [A]). To arrive at an answer, preliminarily we address the subissue of whether food sold by restaurants is “tangible personal property” within the reasonable intendment of the Tax Law.

On that score, both courts below simply applied the broad definition of “tangible personal property” contained in the definitional section of the sales tax statute, i.e., “ [c] orporeal property of any nature” (Tax Law, § 1101, subd [b], par [6]). This interpretation, however, creates an ambiguity in the statutory scheme. If restaurant food is merely “tangible personal property”, then subdivision (a) of section 1105 of the Tax Law, which imposes a tax on such retail sales, would seem to suffice. Nevertheless, there is a separate section (Tax Law, § 1105, subd [d]), which imposes a tax on the sale of restaurant food. Nowhere in this section is reference made to “tangible personal property”. It is a familiar and salutary canon of construction that courts, in construing apparently conflicting statutory provisions, must try to harmonize them (McKinney’s Cons Laws of NY, Book 1, Statutes, §§ 98, 141).

This principle in mind, the commission’s assertion that restaurant food, within the meaning of the Tax Law, is distinct from “tangible personal property”, provides a ready means to reconcile the differing statutory sections. For the purchase of restaurant food is more than the mere receipt of an edible or a potable. Surely, it requires no impermissible outreach of the imagination to see it as a delivery of food and service in combination. Whether the proportion of the combination is 90% of service and 10% of food, as it might be in a gourmet restaurant which features pheasant under glass, or whether it is 10% of service and 90 % of food, as it might be at a hot dog stand, it is difficult to see why the commission could not view the totality, as it did, as a “hybrid” transaction rather than as the sale of “tangible personal property”. In so saying, we recognize that where the interpretation of a statute or its application involves a special knowledge, courts regularly defer to administrative expertise (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459).

Indeed, it is appropriate here to comment on the modern-day economic and social phenomenon which, not without cause, has come to be known as the “fast food restaurant”. Its universal proliferation on our national scene has made it common knowledge that such restaurants, for better or worse, are designed to mass-produce uniform, popular-priced food and drink products for consumption on ready demand on a conveyor-like, assembly-line basis. The amount of service it incorporates in its operation may be different from that of other types of restaurants, but, if anything, may be more significant. For its method of doing business requires that the food and drink it serves be in a form available for delivery whenever the unheralded patron chooses to arrive. The goal is streamlined movement of bagged food in sanitary form from restaurant to customer, who takes it in its ready-to-eat state without pause to wherever, on or off the premises, she or he wishes to consume it. Key to imparting these vaunted service features— of speed, sanitation and portability — is the use of paper or plastic goods in its preparation, storage and delivery (see, generally, Levitt, Production Line Approach to Service, Harv Business Rev, Sept.-Oct., 1972).

Turning now to the applicability of the sale “for resale as such” exclusion, we observe, in somewhat greater detail, that each of the prior tribunals has approached the matter differently. The commission, of the view that the suppliers’ sales of the packaging to Burger King were the crucial events, ruled them retail sales on which the restaurant was to pay the tax. It reasoned that, when the packaging accompanied the edibles Burger King delivered to its customers, it did so only as “an incident to the purchases of the food”, and not as sales of the wrappings as such. On that note, Burger King, as the first buyer who had made its purchase for other than a resale as such, was to be regarded as a retail purchaser and therefore liable for the tax in its capacity as vendee. In contrast, Special Term focused on the transactions between Burger King and its customers. It, nonetheless, concluded that Burger King was liable for the tax, but as vendor (see Tax Law, §§ 1131, 1132), by taking the tack that, though the transfers of the restaurant’s wrappings to the patrons constituted sales, they were ones at retail, rather than “sales for resale”. Finally, the majority, at the Appellate Division, satisfied that the sales of the packaging material to Burger King by its supplier indeed were the controlling transactions, decided that the sales were “for resale as such” and, accordingly, entitled to the benefit of the exclusion at the supplier-Burger King level.

As to this problem, decisional guidance is to be found in the so-called “container cases” (Matter of American Molasses Co. v McGoldrick, 281 NY 269, 273; Matter of Colgate-Palmolive-Peet Co. v Joseph, 308 NY 333, 338; Matter of Dairylea Co-op. v State Tax Comm., 41 AD2d 312, 316, mot for Iv to app den 33 NY2d 513). The nub of these cases is that a sale is not one at retail when a supplier sells containers to a wholesaler or manufacturer, who then sells his product packed in these containers either to a retailer or to an ultimate consumer. The courts reasoned that the containers, although bought to be resold as “an incident to the sale of the contents” (Matter of American Molasses Co. v McGoldrick, supra, p 274), were nonetheless sales for resale as such. The cartons, although “not inseparable” from the contents, were, in this context, being resold “as containers” (see Matter of Colgate-Palmolive-Peet Co. v Joseph, supra, p 339 [emphasis in original]).

All the more is this so in the case of Burger King, whose packaging, as we have seen, is such a critical element of the final product sold to customers. So regarded, the packaging material is as much a part of the final price as is the food or drink item itself. It would be exalting form over substance, therefore, to hold that a resale of these paper products does not take place merely because Burger King does not list a separate price.

Now, though the relative delicacy of the paper goods employed in Burger King’s “fast food” operation is qualitatively much different from the grosser and coarser containers (pails, wooden barrels, metal drums, wooden crates, burlap sacks and three-gallon ice cream containers) with which the courts treated in the cited cases, and though the containers in these cases were largely confined to conventional delivery functions rather than the far more intimate product association afforded to Burger Kings’ wrappings, in the present case, as in the cited ones, the containers and their contents at no time become “inseparably connected” (Matter of American Molasses Co. v McGoldrick, 281 NY 269, 273-274, supra). It follows that Burger King purchases its packaging from its suppliers for “resale as such” to its customers and thus is entitled to the exclusion of section 1101 (subd [b], par [4], cl [i], subcl [A]), of the Tax Law.

This holding also brings that statute within the spirit underlying our sales tax law, which is to impose the tax only upon the sale to the ultimate consumer, at which time the price paid for the taxable item would presumably be at its highest. (See Matter of Dairylea Co-op. v State Tax Comm., 41 AD2d 312, mot for lv to app den 33 NY2d 513, supra). Yet if Burger King were required to pay sales tax on its purchases of packaging, the consumer would end up paying a tax on the sales tax. Clearly, this pyramiding of taxes would distort the original legislative intent and is to be avoided.

Lastly, we now treat with Edgmor’s and Davmor’s contention that section 1115 (subd [a], par [12]) of the Tax Law exempted the sale of machinery used to process food and drink. That section, as it existed during the assessment periods at issue provided:

“(a) Receipts from the following shall be exempt from the tax * * *
“(12) Machinery or equipment for use or consumption directly and exclusively in the production of tangible personal property * * * for sale, by manufacturing [or] processing” (emphasis added).

In effect, we have already rejected the taxpayers’ claim of an exemption under this legislation. As its plain language tells us, necessary to a conclusion that the provision applies is a finding that the machinery is used to produce “tangible personal property”. While in another context (e.g., the production of a frozen food product to be sold in a grocery store) these machines might be said to be so used, we have already demonstrated that here the production efforts are geared to the processing and delivery of restaurant food — a category distinct from tangible personal property. Certainly, the commission is not to be faulted because, in refusing to classify restaurant food as tangible personal property, it did not allow the particular stage at which its products were being “serviced” to result in an inconsistent conceptualization of their nature. Consequently, we are compelled to conclude that the sales of the machinery and equipment at issue are not exempt.

For all these reasons, the order of the Appellate Division should be modified, in accordance with this writing and, as so modified, affirmed.

Jones, J.

(dissenting). I would transpose the conclusions reached by the majority. The purchases by Burger King of the paper products (e.g., wrappers for sandwiches, cups to contain coffee, soda and other drinks, and sleeves for holding french fries) should be held to be subject to the sales tax (to that extent I would agree with the State Tax Commission), and the purchases by Burger King of equipment for processing food and drink (e.g., ovens, fryers, broilers, coffee urns and milk shake machinery) should be held to be exempt from the sales tax (to that extent I would disagree with the commission).

With reference to the paper products, the commission was surely justified in determining that their purchase was a retail sale within the definition of section 1101 (subd [Jb], par [4]) of the Tax Law and did not come within the exception set forth in subclause (A) of clause (i) of that paragraph as a purchase “for resale as such or as a physical component part of tangible personal property”. I agree with Mr. Justice Ellis J. Staley, Jr., at the Appellate Division, and for the reasons stated in his dissenting opinion, that Burger King did not sell the paper products as such to their customers and that the paper products did not become physical component parts of the food and drink which were sold to their customers.

As to the processing equipment, I am persuaded that the purchase of this equipment, as a matter of law, falls within the exemption provided in section 1115 (subd [a], par [12]) of the Tax Law. That paragraph provided that receipts from the sale of “ [m] achinery or equipment for use or consumption directly and exclusively [since 1974, ‘predominantly’] in the production of tangible personal property” were exempt from the tax imposed by subdivision (a) of section 1105. I can agree with the contention of the commission that, under the design of the sales tax law, receipts from sales of food and drink by this taxpayer were taxable under subdivision (d) of section 1105 as a hybrid sale of tangible personal property with associated service incident to their delivery to the customer, rather than under subdivision (a) as a sale of tangible personal property, and to that extent that restaurant food subject to the tax under subdivision (d) does not fall within the definition of “tangible personal property” set out in section 1101 (subd [b], par [6]).

The matter does not end there, however. The exemption provision of section 1115 (subd [a], par [12]) on which the taxpayer relies is entirely independent of subdivision (d) of section 1105 which imposes a tax on the “hybrid” sales. The exemption granted is from the tax imposed by subdivision (a) of section 1105, not from the tax imposed by subdivision (d) of that section. No reason appears why the explicit definition of “tangible personal property” as “[c]orporeal personal property of any nature” (Tax Law, § 1101, subd [b], par [6]) should not be applied in accordance with the plain meaning of the words used. Food and drink as such would clearly fall within the sweep of that definition. The hybrid concept of the taxation of sales of restaurant food and drink as a combination of tangible personal property and services within the contemplation of subdivision (d) of section 1105, on which the commission would rely, is irrevelant.

Even if that concept were thought to be relevant, however, it would not be applicable. The equipment in question processed only food and drink — the tangible personal property component of the hybrid — and had nothing whatsoever to do with the services component of the hybrid. It could not be concluded, therefore, that the sales of the processing equipment did not enjoy the benefits of the paragraph (12) exemption on the theory that the equipment was acquired for use in the production of the hybrid; it was not.

For the reasons stated, I would modify the order of the Appellate Division to the extent of reinstating that portion of the determintaion of the State Tax Commission which imposed the tax on the receipts from the sale of Burger King of the paper products, and, as so modified, affirm.

Chief Judge Cooke and Judges Jasen, Gabrielli and Wachtler concur with Judge Fuchsberg; Judge Jones dissents in part and votes to modify in a separate opinion in which Judge Meyer concurs.

Order modified, without costs, in accordance with the opinion herein and, as so modified, affirmed.

      . Only so much of these items as were used by Burger King for on-premises consumption of meals are at stake on this appeal. The commission is not pursuing a like assessment as to off-premises consumption only because it failed to give the taxpayer notice that taxes due on such sales were also to be the subject matter of his hearing. At the hearing, the taxpayer conceded liability as to outer bags, straws and coffee stirrers.

      . Section 1105, in fact, imposes a sales tax on six separate types of transactions ranging from the sale of tangible personal property through admission charges for the use of places of amusement. Each type of transaction is taxed by a different subdivision of section 1105.

      . Effective September 1, 1974 “predominantly” was substituted for “exclusively” (L 1974, ch 851, § 1).

      . The State Tax Commission sought to impose a sales tax on the sale to the taxpayer of this equipment under this subdivision.

      . Were this not the case there would have been no occasion for the express exemption from the tax on “tangible personal property” under subdivision (a) of section 1105 of “[f]ood, food products and beverages” found in section 1115 (subd [a], par [1]).


author: Meyer, J.

text:
    In the Matter of Elfriede Green, Respondent. Marie Potter et al., Appellants.
    Submitted November 21, 1980;
    decided December 22, 1980

      POINTS OF COUNSEL

      Samuel Shapiro for appellants.
    I. As there is no statutory-authority in a proceeding for appointment of a conservator, for allowance to a petitioner’s attorney, Trial Term erred in making the allowance. (City of Buffalo v Clement Co., 28 NY2d 241; Matter of Cantor, 80 Misc 2d 555; Matter of Schild, 72 Misc 2d 225.) II. Assuming, arguendo, that in a proceeding for appointment of a conservator, there is authority for allowance to a petitioner’s attorney, Trial Term erred in making the allowance, as the services were statutorily proscribed. (Anker v Brodnitz, 98 Misc 2d 148, 73 AD2d 589.) III. The services claimed to have been rendered by petitioner’s attorney, were only for the direct benefit of the Greens, and Trial Term erred in making the allowance. (Matter of Muller, 28 AD2d 889, 24 NY2d 336.)

      Bertram Zweibon for respondent.
    The allowance for the benefit of petitioner’s attorney, inclusive of disbursement is permitted by law and by the public policy of the State of New York. (Matter of Schnelle, 74 Misc 2d 226.)
   OPINION OF THE COURT

Meyer, J.

To consider whether there is authority to award counsel fees to the petitioner in a conservatorship proceeding brought under article 77 of the Mental Hygiene Law, we granted leave in this case. We conclude that there is not, absent amendment of the statute.

The proceeding was begun by a niece of the proposed conservatee, an 82-year-old woman, who it was claimed was senile and unable to care for herself and whose 86-year-old husband, the petition alleged, was mulcting her of her assets. The proceeding was vigorously defended but after a jury had been empaneled to consider whether the proposed conservatee’s ability to care for her property had been substantially impaired, agreement was reached upon the appointment as conservator of the court-designated guardian ad litem. Jury trial was then waived and after testimony by a psychiatrist who at the request of the guardian had examined the proposed conservatee, the trial court found substantial impairment. After submission of an affidavit of services by petitioner’s attorney and affidavits in opposition by the conservatee and her husband stressing that counsel fees should be denied because not authorized, because petitioner had acted in her own self-interest and because she had violated both doctor-patient and attorney-client privileges in relation to the proceeding, the Trial Judge awarded petitioner’s counsel a fee of $5,000 and disbursements of $1,378.47. On this appeal, the latter two grounds of opposition are again presénted but are beyond our power of review in light of the affirmed findings of fact on which their objection rests.

The attorney’s affidavit of services points to no specific statutory authority for payment of the fee for his services out of the conservatorship estate, and none exists in article 77 of the Mental Hygiene Law. It is argued, however, that such authority does exist in a commitment proceeding (Mental Hygiene Law, § 78.03, subd [h], par 2), that section 77.04 authorizes the court to treat an incompetency petition as one for appointment of a conservator, and that section 78.02 requires the court in an incompetency proceeding “to consider whether the interests sought to be protected could best be served by the appointment of a conservator.” In light of that preference, it is suggested, it would be contrary to public policy to deny in a conservatorship proceeding what can be obtained if there is a commitment.

Were there no other indicia of legislative intent, the implication petitioner seeks to draw might be permissible, though even then the rules that “ ‘Courts cannot correct supposed errors, omissions or defects in legislation’ ” (Meltzer v Koenigsberg, 302 NY 523, 525; McKinney’s Cons Laws of NY, Book 1, Statutes, § 73) and that a grant of power is not to be read into a statute by doubtful implication (People ex rel. City of Olean v Western N. Y. & Pa. Traction Co., 214 NY 526; McKinney’s, op. cit., § 363) would present difficulties. Here, however, there are a number of reasons, based upon decisional rules governing counsel fees as well as upon the statute and its legislative history, for concluding that the omission from article 77 of the power to award petitioner counsel fees was deliberate.

It is well established that in the absence of specific statutory authority counsel fees “are merely incidents of litigation and thus are not compensable” (City of Buffalo v Clement Co., 28 NY2d 241, 262; see Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21-22; Siegel, New York Practice, § 147, at p 190). As already noted, article 77 contains no such authority. That statute was the product of extensive study first by the Special Committee to Study Commitment Procedures established by The Association of the Bar of the City of New York in 1960 and then by the Law Revision Commission. First proposed by the commission in 1966 (NY Legis Doc, 1966, No. 65, p 263) and resubmitted in 1967 (NY Legis Doc, 1967, No. 65, p 209), 1968 (NY Legis Doc, 1968, No. 65, p 179) and 1971 (McKinney’s Session Laws, 1971, p 2338), the conservatorship article was finally enacted in 1972. Not only were changes made in the proposed statute during the period between the first proposal and final enactment, after consultation with the association’s special committee and with the Department of Mental Hygiene, but also the 1971 report (McKinney’s Cons Laws of NY, Book 1, Statutes, § 73, p 2338) reveals that “The substance of the proposed bill is embodied in the Uniform Probate Code (Article 5, Part 4) which was promulgated by the Conference of Commissioners on Uniform State Laws and approved by the American Bar Association.” Section 5-414 of the Uniform Probate Code explicitly provides: “If not otherwise compensated for services rendered, any visitor, lawyer, physician, conservator or special conservator appointed in a protective proceeding is entitled to reasonable compensation from the estate.” There can be no question, therefore, that the counsel fee question was before the drafters of the legislation.

A further indication that omission of a provision for the award of fees to the petitioner’s attorney in a conservator-ship proceeding was deliberate is the express provision, already referred to, in article 78 (§ 78.03, subd [h], par 2) that “[w]hen the petition is granted, the court may award reasonable counsel fees to the attorney for petitioner”. In light of the statement in each of the reports of the Law Revision Commission, other than the 1966 report, that the procedural provisions of the conservatorship article were patterned upon the provisions of the Mental Hygiene Law governing the appointment of a committee, it can hardly be argued that omission of a provision similar to section 78.03 (subd [h], par 2) was an oversight.

Finally, review of the provisions of the conservatorship article reveals specific cross references to article 78 in sections 77.04,77.13,77.19 and 77.29, dealing respectively with conservatorship as an alternative to commitment, the security to be given by a conservator, the powers and duties of the conservator, and the form of and procedure in relation to the conservator’s annual accounting. With so many references to specific provisions of article 78, it cannot successfully be argued that the omission of article 78’s counsel fee provision was unintentional. The only conceivable basis for petitioner’s argument is the provision in section 77.19 that a conservator “shall have all of the powers and duties granted to or imposed upon a committee of the property of an incompetent appointed pursuant to article seventy-eight of this chapter”. The powers and duties of a committee are, however, not the issue, which is whether the court has power to award counsel fees to the attorney for petitioner. Moreover, section 78.15, which details the powers and duties of a committee, says nothing about award or payment of counsel fees.

It follows that the order granting counsel fees cannot be sustained. However, judgment was entered upon the petition and petitioner was, therefore, entitled to costs and taxable disbursements. The order of the Appellate Division should, therefore, be modified by reducing the amount directed to be paid to the attorney for petitioner to $1,378.47, and, as so modified, should be affirmed, with costs to appellant.

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

Order modified, with costs to appellant, in accordance with the opinion herein and, as so modified, affirmed.

       Defined in subdivision (2) of section 5-101 of the code to include a conservatorship proceeding.


text:
    The People of the State of New York, Respondent, v Mary Hoag, Appellant.
    Argued December 17, 1980;
    decided January 15, 1981

      POINTS OF COUNSEL

      Charles E. Shafer for appellant.
    It is reversible error for a Trial Judge to refuse a defendant’s request to charge the jury as to a lesser included offense if any possible view of the fact would support such a charge. (People v Schnebley, 27 AD2d 639; People v Long, 40 AD2d 984; People v Malave, 21 NY2d 26; People v Bump, 68 Misc 2d 533; People v Weaver, 188 App Div 395; People v Cionek, 43 AD2d 256; People v Bronzino, 25 AD2d 685; People v Donaldson, 36 AD2d 37; People v Ridley, 65 Misc 2d 547.)

      Robert T. Jewett, Assistant Corporation Counsel, for respondent.
    Subdivision 2 of CPL 300.50 provides that the trial court must upon the request of either party submit to the jury a lesser included offense which it is authorized to submit under the provisions of CPL 300.50 (subd 1). (People v Graser, 90 Misc 2d 219; People v Ali, 44 AD2d 232, 36 NY2d 880; People v Hubbard, 48 AD2d 941; People v Graham, 57 AD2d 478, 44 NY2d 768; People v Johnson, 45 NY2d 546.)
   OPINION OF THE COURT

Meyer, J.

Driving while ability is impaired (DWAI) (Vehicle and Traffic Law, § 1192, subd 1) is a lesser included offense of the charge of driving while intoxicated (DWI) (Vehicle and Traffic Law, § 1192, subd 3). Though under CPL 360.50 (subd 2) the Judge trying the information is given discretion whether he will submit to the jury as an alternative a lesser included offense, a Trial Judge, who declines to submit DWAI as a lesser included offense to DWI on the ground that there is no reasonable view of the evidence that would support a finding that defendant committed the lesser charge makes a ruling on the law rather than in the exercise of discretion. In such a case, there being a reasonable view of the evidence to support submission of DWAI, defendant’s DWI conviction must be reversed and a new trial ordered.

Defendant was arrested by two police officers who testified that her car had been moving erratically and that defendant was “very intoxicated” and refused to obey their order to get out of the car. Because there was an 11-month-old child in the car with defendant and her adult passenger, the officers called a Social Services Department employee to take custody of the infant. Taken to the police station, defendant refused to take a breathalyzer test notwithstanding a warning that she could lose her driver’s license if she did not take the test. The Social Services employee who observed defendant at the police station testified also that she was very drunk.

The City Court Judge, relying apparently on cases decided prior to the 1970 amendment to section 1192 of the Vehicle and Traffic Law, denied defendant’s request that DWAI be submitted to the jury as a lesser included offense. On appeal, the County Judge recognized that DWAI was a lesser included charge to DWI and that the record should be viewed in the light most favorable to defendant, but nevertheless affirmed because he found that the Trial Judge acted within his discretion, there being no reasonable view of the evidence that would warrant a finding of DWAI and not DWI.

The basis for the City Court Judge’s ruling (that conviction of DWAI requires evidence of a breathalyzer or blood test) is no longer the law (cf. People v Cruz, 48 NY2d 419; People v Farmer, 36 NY2d 386). Moreover, both the express provision of subdivision 1 of section 1196 of the Vehicle and Traffic Law and the definition of “lesser included offense” contained in CPL 1.20 (subd 37) make clear that DWAI is a lesser included offense to DWI. The former provides that a driver charged with violation of subdivisions 2 or 3 of section 1192 of the Vehicle and Traffic Law may nevertheless be convicted of a violation of subdivision 1. The latter definition is “ [w]hen it is impossible to commit a particular crime without concomitantly committing, by the same conduct, another offense of lesser grade or degree”. It is not possible to drive while intoxicated without by the same conduct driving while impaired (People v Brown, 73 AD2d 112, 114; see, also, People v Cruz, supra; People v Farmer, supra).

DWAI being a lesser included offense and defendant’s attorney having requested its submission, submission would be mandatory were the prosecution under an indictment, provided only there were a reasonable view of the evidence to support a DWAI finding (CPL 300.50, subd 2). Prosecution in the instant case was, however, under an information and CPL 360.50, which governs what counts are to be submitted to the jury in a prosecution on information, though it contains cross references to CPL 300.30 and 300.40, does not refer to CPL 300.50. Presumably this is because the last sentence of CPL 360.50 (subd 2) is intended to provide the rule governing submission of lesser offenses on prosecution of an information.

The sentence referred to provides: “In submitting a count charging a misdemeanor established by legally sufficient trial evidence, the court in its discretion may, in addition to submitting such misdemeanor, submit in the alternative any lesser included offense if there is a reasonable view of the evidence which would support a finding that the defendant committed such lesser offense but did not commit the misdemeanor charged.” It is not necessary to inquire concerning the basis for differentiation between indictment and information in making submission of a lesser included offense mandatory, for here the trial court denied the request on a mistaken view of the law rather than in the exercise of discretion. Nor does the County Judge’s conclusion remedy the situation, even if he had the power to do so, for his opinion shows that it too was based upon the law rather than discretion, that is, upon his conclusion that there was no reasonable view of the evidence which would support a finding of impairment but not of intoxication.

In reaching that conclusion the County Judge emphasized the testimony of the two officers who arrested defendant and of the Social Services Department employee. Except to comment that “Nowhere in the testimony is there any indication that the Appellant was acting as a normal, sober person”, however, he wholly ignored the testimony of defendant and her passenger that though she had had two drinks that evening she was not driving erratically and did not act unusually except as the officers’ threat to have her grandson placed in foster care caused her to speak forcefully and resist them.

To entitle defendant to a DWAI charge the evidence need not establish that she acted as a “normal, sober person,” but only that she had not been rendered incapable by alcoholic beverage of employing the physical or mental abilities needed to operate a car, even though her abilities to do so were to some degree impaired (cf. People v Cruz, supra, at pp 426-427). The standard by which that determination is to be made was succinctly stated in People v Henderson (41 NY2d 233, 236): “The court’s appraisal of the persuasiveness of the evidence indicating guilt of the higher count is irrelevant; the question simply is whether on any reasonable view of the evidence it is possible for the trier of the facts to acquit the defendant on the higher count * * * and still find him guilty on the lesser one” (see, also, People of Mussenden, 308 NY 558, 561-562).

In weighing the evidence as he did the County Judge assumed the responsibilities of the jury, for it cannot be said on the record before the City Court Judge that the evidence excluded “every possible hypothesis” ezcept driving while intoxicated (cf. People v Malave, 21 NY2d 26, 29) or that there was no reasonable view of the evidence that would support a jury finding of driving while defendant’s ability to operate a motor vehicle was impaired, bearing in mind the prerogative of the jury to accept or reject part or all of the defense’s or the prosecution’s proof (ibid.; People v Henderson, supra, at p 236; see Pitler, New York Criminal Practice Under the CPU [1979 Supp], 447).

For the foregoing reasons, the order of the County Court of the County of Cortland affirming the judgment of the City Court, City of Cortland, convicting defendant of driving while intoxicated should be reversed and a new trial ordered.

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

Order reversed and a new trial ordered.