author: Meyer, J. Wachtler, J.

text:
    State Bank of Albany, Respondent, v William V. Fioravanti III et al., Defendants, and Mary Fioravanti, Appellant.
    Argued November 14, 1980;
    decided December 22, 1980

      POINTS OF COUNSEL

      Ernest Abdella and George Abdella for appellant.
    I. It was error to grant the bank’s motion for summary judgment because an adequate defense of estoppel was raised by the allegations contained in the affidavit of Mary Fioravanti. (Woodmere Academy v Steinberg, 53 AD2d 156, 41 NY2d 746; People v O’Donnell, 30 AD2d 625.) II. The fact that the bank misrepresented the amount secured by the mortgage to the mortgagor and then passively allowed that mortgagor to perpetuate the misrepresentation when the property was sold to Mary Fioravanti also created an estoppel. (Matter of City Tit. Ins. Co. v Orgel, 205 Misc 2d 1076; Bunge Corp. v Manufacturers Hanover Trust Co., 31 NY2d 223; United States Fid. & Guar. Co. v Royal Nat. Bank of N. Y., 413 F Supp 43; Hudson Trust Co. v American Linseed Co., 190 App Div 289; Greenbaum v Werner, 251 App Div 891.) III. It was error to make the order for summary judgment because a factual issue was joined between the parties. (Di Menna & Sons v City of New York, 301 NY 118; Veihelmann v Manufacturers Safe Deposit Co., 303 NY 526; Potter Bank & Trust Co. v Massey, 11 Misc 2d 523.) IV. It was error to grant respondent’s motion for summary judgment and to fail to grant appellant’s motion for summary judgment because the additional amount claimed due on the mortgage was purportedly owing on a note that on its face excluded the property in question as collateral. (Matter of Laminated Veneers Co. v Bassin, 471 F2d 1124.) V. It was error to grant the judgment for foreclosure because the judgment was based upon an improper order for summary judgment, and no notice was received by appellant’s attorney, after a notice of appearance was filed, as to the referee’s proceeding in foreclosure. VI. It was error to grant summary judgment to a movant who had exclusive knowledge of an undisclosed fact upon which the motion for summary judgment was predicated. (Marine Midland Bank-Western v Center of Williamsville, 48 AD2d 764; Crocker-Citizens Nat. Bank v L. N. Mag. Distrs., 26 AD2d 667; Utica Sheet Metal Corp. v Schecter Corp., 25 AD2d 928; Franklin Nat. Bank of Long Is. v De Giacomo, 20 AD2d 797.)

      Stephen Reynolds for respondent.
    I. The court was correct in enforcing the spreader clause of the mortgage and granting judgment in favor of plaintiff. (Matter of Mayerhofer, 43 Misc 2d 32; Miller v Lockwood, 32 NY 293; Robinson v Williams, 22 NY 380; Ackerman v Hunsicker, 85 NY 43; Matter of Woodruff, 272 F2d 696.) II. The court below was correct in dismissing defendant’s answer despite the claim by defendant of “estoppel”. (Raleigh Assoc. v Henry, 302 NY 467; Glenesk v Guidance Realty Corp., 36 AD2d 852;
      Village of Chester v Kantod Park Assn., 13 AD2d 709; Werking v Amity Estates, 2 NY2d 43; Staley v Nellis, 188 App Div 325; Smith v Vara, 136 Misc 500.) III. The court was correct in granting summary judgment to plaintiff as no issue of fact was raised. (Allen v Aetna Ins. Co., 54 AD2d 1072; Woodmere Academy v Steinberg, 53 AD2d 156, 41 NY2d 746; Baron v Acme Excavating Corp., 71 Misc 2d 919; Philipps v Philipps, 61 AD2d 979.) IV. The argument that plaintiff should have given notice to defendant of the reference to determine the amount due is of no merit. V. The Appellate Division was correct in affirming the judgment of the court below even if there was an undisclosed fact known to plaintiff.
   OPINION OF THE COURT

Meyer, J.

A mortgage which contains a dragnet clause, securing not only the bond referred to in the mortgage but in addition any and all further loans from the mortgagee to the mortgagor, subject only to the limitation that the maximum amount secured at any time shall be the original principal amount, secures not only the original $2,500 obligation but also a later $6,800 note of the mortgagors to the mortgagee. Each obligation is secured to the extent of $2,500, though should foreclosure be required it cannot be had for more than $2,500. Moreover, such a provision is binding upon the mortgagors’ grantee who takes title after the later loan, except to the extent that the grantee can establish an estoppel against the mortgagee. Because defendant Mary Fioravanti, grantee from the mortgagors, has failed to meet her burden of presenting evidentiary proof of the estoppel upon which she seeks to defend, the order of the Appellate Division affirming the award of summary judgment to the plaintiff bank in this mortgage foreclosure action should be affirmed.

The complaint alleges that on May 9, 1966 defendants William V. Fioravanti III and Thomas J. Fioravanti executed to the bank their bond in the principal sum of $2,500 secured by a mortgage on real property in the Town of Caroga, which was duly recorded and on which a mortgage tax of $12.50 was paid. Included in the mortgage was the printed provision that “In addition to the bond or obligation above mentioned, this mortgage is intended to secure any and all further loans or indebtedness owed or to be owed by the mortgagor to the mortgagee, and it is stipulated that the maximum amount secured by this mortgage at execution or which under any contingency may be secured thereby at any time in the future shall be the original principal amount hereof. The obligation of the mortgagee to make further or future advances or readvances shall be optional with the mortgagee. Readvances may be made under the provisions hereof to the present or to any future owner of the mortgaged premises.” On June 11, 1973 the same two defendants as comakers with Jobist Realty Inc. executed a promissory note to the bank in the amount of $6,874.56, the note reciting that it was secured by a “Parcel or Tract of Land designated as No. 77 Mechanic Street, Amsterdam, Montgomery, New York.”

By deed dated January 4, 1974 defendants William and Thomas Fioravanti conveyed to defendant Mary Fioravanti the Caroga real property. The deed is not part of the record before us but Mary Fioravanti’s affidavit states that she “assumed the payment” of the mortgage and her brief contains a similar statement. At the time the foreclosure action was begun the 1966 bond had been paid in full but there remained due on the 1973 note the sum of $3,026.54, that amount apparently being the deficiency after foreclosure of the Amsterdam property. The complaint in the present action alleges that of the balance due on the 1973 note $2,500 is secured by the 1966 mortgage and that mortgage tax of $12.50 has been paid in addition to that paid in 1966. Foreclosure of the mortgage by reason of default in paying $2,500 due on the 1973 note is requested.

Of the several defenses and arguments offered by Mary Fioravanti the only ones that require discussion are payment, estoppel and the absence from the 1973 note of any description of the Caroga property. The last can be quickly disposed of. It is predicated upon the provision of subdivision (1) of section 9-203 of the Uniform Commercial Code that a security interest is not enforceable unless the debtor has signed a security agreement which contains a description of the collateral. The instant action seeks foreclosure of the 1966 mortgage on real estate. Article 9 of the Uniform Commercial Code applies so far as concerns “personal property or fixtures” (§ 9-102, subd [1]) and by explicit provision “does not apply [with exceptions not here applicable] * * * (j) * * * to the creation or transfer of an interest in or lien on real estate” (§ 9-104, subd [j]). Enactment of the code has no effect, therefore, on mortgages which cover land and land alone (Coogan & Clovis, The Uniform Commercial Code and Real Estate Law: Problems for Both the Real Estate Lawyer and the Chattel Security Lawyer, 38 Ind LJ 533, 548). Even if the Uniform Commercial Code provision were applicable to real estate it would constitute no bar. The 1966 mortgage now sought to be foreclosed, not, as defendant suggests, the 1973 note, is a “security agreement” within the definition of the code (Uniform Commercial Code, §9-105, subd [1], par [£]) and it contains a description of the Caroga property sufficient to comply with section 9-203 (subd [1], par [a]) of the Uniform Commercial Code.

Analysis of the payment and estoppel arguments urged by defendants will be aided if we first draw a distinction which has not been clearly drawn in our prior decisions. Mortgages for future advances or obligations, recognized by English law since at least 1716 (Gordon v Graham, 7 Vin Abr 52, pl 3), have likewise been long recognized in New York (e.g., Hendricks v Robinson, 2 John Ch 283, 309, affd sub nom. Hendricks v Walden, 17 Johns 438; Bank of Utica v Finch, 3 Barb Ch 293; Note: 8 St John’s L Rev 340). Generally such mortgages fix the amount up to which future loans are secured (e.g., Mowry v Sanborn, 68 NY 153) though they may be equally valid when no amount is fixed or limit set (e.g., Merchants’ Nat. Bank of Whitehall v Hall, 83 NY 338; Robinson v Williams, 22 NY 380). Of importance also, concerning priority of the mortgage as against subsequent encumbrancers is whether the making of future advances is obligatory or optional, the mortgagee being given priority as to all advances up to the stated sum under an obligatory provision but only as to those advances made prior to receipt by him of notice of the subsequent lien when the making of advances is at his option. Most of the decided cases in this State have been concerned with the priority issue.

Though distinguishable from the future advance provisions above referred to in that the parties usually have neither a plan of future advances nor a fixed sum in mind when the mortgage is executed (see Note-: 47 Iowa L Rev 432, 435), a provision of the type in question in the present case is conceptually also a mortgage for future advances because it will cause the mortgage to secure not only the note or bond to which it refers but also other notes executed or indebtednesses incurred by the mortgagor or mortgagors. Such provisions, inserted by the lender to give itself first call upon the security for future loans are couched in different language than the future advance provisions above referred to and are often referred to as “dragnet” clauses (Osborne, Nelson, Whitman, Real Estate Finance Law, § 12.8; Blackburn, Mortgages to Secure Future Advances, 21 Mo L Rev 209; Debts included in provision of mortgage purporting to cover unspecified future or existing debts [“dragnet” clause], Ann., 172 ALR 1079; Notes: 56 Tex L Rev 733; 5 Memphis State U L Rev 586; 47 Iowa L Rev 432; 38 NY Jur, Mortgages, § 58, p 107; 59 CJS, Mortgages, § 178, p 222). Though looked upon with disfavor in some States and never referred to in our decisions by the term “dragnet” or previously distinguished by us from future advance provisions of the type first discussed above, we have in Farr v Nichols (132 NY 327) enforced such a provision against a later mortgagee of the same premises (see, also, Brown v Kiefer, 71 NY 610). In Farr we held it inferable from the $15,000 principal sum of an earlier mortgage given to secure payment of “any and all notes, checks and drafts indorsed” by the mortgagee and the fact that but one $3,000 indorsement had been made at the time the earlier mortgage was executed that a “series of indorsements to the amount of $15,000, or nearly, was within the contemplation of the parties (132 NY, at p 330) and that “plaintiff may construe the promise as beneficially to himself as its terms will fairly admit” (id., at p 331).

Considered against that background, the provision of the 1966 mortgage quoted above is a dragnet clause which secures each advance by the bank to the extent of $2,500 (the original principal sum) but not more than a total of $2,500 at any one time. This is so because the words “In addition to the bond or obligation above mentioned,” “any and all further loans or indebtedness,” “further or future advances or readvances,” and “to the present or to any future owner of the mortgaged premises” make abundantly evident the intent of the parties that while the real property was not to constitute security for more than $2,500 at any one time, more than the one loan or indebtedness of $2,500 was intended to be secured by the mortgage. Moreover, the stipulation that “the maximum amount secured * * * thereby at any time in the future” (emphasis added) is the “original principal amount” of $2,500, when read together with the reference to “future advances or readvances,” establishes that, subject only to the maximum amount for which foreclosure may be had, each further loan or indebtedness is secured by the mortgage, the mortgage being “a continuing security” for the “floating debt intended to be secured thereby” (Bank of Utica v Finch, 3 Barb Ch 293, 298, 303, supra; see Jones, Mortgages [2d ed], p 279; 38 NY Jur, Mortgages, § 54, pp 101-102). Here, as in the Bank of Utica case, the 1973 “further * * * indebtedness” was incurred before Mary Fioravanti took title so we deal with “no right or pretended right of any grantee or incumbrancer attaching at all until after the advances were made” (id., at p 298). That the 1973 note was for a sum in excess of $2,500 is of no moment, for the mortgage made clear that the real estate constituted security for each further indebtedness but not in excess of $2,500 thereof.

Viewed in this context, payment of the 1966 note could not terminate the bank’s right to foreclose the mortgage. If payment of the original $2,500 bond terminated all right to the security without regard to further loans by or indebtedness to the bank incurred by the mortgagors, the provision that the mortgage secured further loans would be wholly meaningless. The reference not only to “readvances” but also to such readvances “to any future owner” and the flat statement that the mortgage secured “any and all further loans or indebtedness owed or to be owed” (emphasis supplied) is wholly inconsistent with the concept that the life of the mortgage was limited by the status of the principal of the 1966 note. The inconsistency between that conclusion and the holding in Truscott v King (6 NY 147, 162) that “[w]hen the creditor has received of the debtor moneys, upon the security taken, equal in amount to the sum specified therein, to be secured, whether given for a present debt or for future advances, it becomes satisfied and extinguished” is more apparent than real. Truscott’s holding does not apply to a mortgage containing a dragnet clause worded as the one here in issue. Truscott involved a judgment confessed for advances which the creditor had made or should thereafter make to the exent of $20,000 and, therefore, clearly evidenced that no more than $20,000 in total was secured by it. The present dragnet provision, to the contrary, shows by its wording that more than one $2,500 obligation is intended to be covered by its security, though not more than $2,500 can be recovered by foreclosure because the principal amount secured ($2,500) is the maximum “secured thereby at any time.” It follows that each payment on the 1966 obligation made the mortgage available as security for the 1973 obligation in like amount up to a total of $2,500. Mary Fioravanti, as a grantee taking after the advances were made, takes title subject to the mortgage and its dragnet provision without regard to notice (Judson v Dada, 79 NY 373, 380). A fortiori is that so when, the mortgage being recorded, she is on notice of its provisions (Ackerman v Hunsicker, 85 NY 43; Real Property Law, § 291) and when she has, in fact, assumed it (cf. 21 NY Jur, Estoppel, § 53, p 80).

With respect to estoppel, the mortgage provides only that the mortgagor will on request give a written statement of the amount due and whether any offsets or defenses exist. A mortgagee may, of course, be estopped by a certificate furnished pursuant to section 274-a of the Real Property Law, but no such certificate is claimed to have been given by the bank. A mortgagee may also be estopped by his conduct from foreclosing, but to defend against a summary judgment motion in a foreclosure action it is incumbent upon the real property owner who relies upon an estoppel defense to produce “evidentiary proof in admissible form * * * sufficient to require a trial [of that defense] * * * mere conclusions, expressions of hope, unsubstantiated allegations or assertions are insufficient” (Zuckerman v City of New York, 49 NY2d 557, 562). Here we are informed by Mary Fioravanti’s attorney’s affidavit that the claimed estoppel arises from the bank’s “statment submitted to the purchaser, setting forth a balance due upon the mortgage upon which" the purchaser relied” but the only support for that claim is the statement, made in the same affidavit by the attorney “speaking for Mary Fioravanti”, that “the sellers delivered to the buyer a statement showing the balance then due upon the mortgage.” Whether the statement referred to was made by the sellers or was one received by them from the bank and, if from the bank, whether simply a periodic billing statement or the more formal statement provided for by section 274-a of the Real Property Law, we are not told. We cannot assume that it was the latter and if it was the former the bank would not be estopped by it, as Mary Fioravanti argues. Unlike the public weigher’s certificate involved in Glanzer v Shepard (233 NY 236, 238-239), a bank’s periodic billing statement is not submitted with “the end and aim” that it be presented by the mortgagor receiving it to a potential purchaser; it is, rather, simply a statement of the status of the original bond or note secured by the mortgage.

The bank’s original motion for summary judgment was denied for insufficiency of its papers, and on renewal an affidavit of Mary Fioravanti was submitted. That affidavit, however, for the most part refers to events after she took title to the property which could not create an estoppel (Assets Realization Co. v Clark, 205 NY 105, 109). Moreover, despite an affidavit of a bank official denying that Mary Fioravanti ever requested a statement of balance due, her only rejoinder was “that at the time that I purchased this property on the 4th day of January, 1974, I was advised by the bank that the balance due on the mortgage was $752.29.” While the function of the court on a motion for summary judgment is to ascertain whether the papers demonstrate the existence of a triable issue of fact and not to determine the issue presented, something more than that conclusory allegation is required to demonstrate that in taking title to the property Mary Fioravanti received and relied upon an assurance of the bank under circumstances that would constitute an estoppel, especially since, having assumed the mortgage, she was chargeable with knowledge of its dragnet clause.

For the foregoing reasons, the order of the Appellate Division should be affirmed, with costs.

Wachtler, J.

(dissenting). On May 9, 1966, in connection with the purchase of a home in the Town of Caroga, two brothers, William and Thomaé Fioravanti, executed a mortgage agreement with the plaintiff. That agreement provided, among other things, that the premises would secure a $2,500 debt plus interest and further that: “In addition to the bond or obligation above mentioned, this mortgage is intended to secure any and all further loans or indebtedness owed or to be owed by the mortgagor to the mortgagee, and it is stipulated that the maximum amount secured by this mortgage at execution or which under any contingency may be secured thereby at any time in the future shall be the original principal amount hereof.”

Another indebtedness as contemplated by this dragnet clause was incurred by the brothers on June 11, 1973. Subsequently, on January 4, 1974, the brothers conveyed the premises to their mother, the defendant, who assumed the mortgage. On that date she inquired of the plaintiff as to how much still was owing on the mortgage, and she was told $752. However, when she had finally paid this amount plus interest, she was informed by plaintiff that her sons had defaulted on the second debt, and that by operation of the above-quoted clause she owed an additional $2,500. Defendant failed to pay this amount and plaintiff instituted the instant foreclosure proceeding.

While we agree with the majority that defendant failed to show the necessary elements of estoppel, the clause on which plaintiff relies being plain on the face of the mortgage, we would conclude nonetheless that there should be a reversal. The plaintiff’s failure to give defendant due notice of a referee’s proceeding to compute the amount still owed on the mortgage deprived defendant of a substantive right, since there is a basis in the record for concluding that the computations of the referee were erroneous.

The premise of plaintiff’s argument that $2,500 is still due on the mortgage is that the dragnet clause became operative on the day the brothers incurred the second debt to the plaintiff. On that date, however, by the clear wording of the clause, the property could secure no more than $2,500. There is nothing in the clause, or for that matter, anything anywhere else in the agreement which indicates that payments after that date should be totally ineffective to reduce the secured amount. Without doubt, had the brothers tendered $2,500 to plaintiff as soon as they incurred the second debt, this mortgage should have been extinguished. Plaintiff points to no contract language indicating that in this respect payments by installment are to be treated differently from payment in full. On the contrary, the majority’s holding that the monthly payments did not reduce the debt secured, and that the $2,500 lien continued to float so long as the full debt of the brothers remained unpaid, causes this mortgage to secure over the course of the payments far more than the stated $2,500 limit. Of course, this is not to say that a floating limited security arrangement cannot be accomplished, but only that we do not read the quoted language to have accomplished it here. At the very least, defendant was entitled to have the mortgage released to the extent of payments made after the date when the dragnet clause became operative.

Finally, it is indeed disconcerting in this era of plain English, when — we thought — the value of obtuse legal jargon had diminished, that the majority has construed the clear statement in this mortgage that not more than $2,500 be secured at any one time to mean that the property can actually be used to secure payment of over $5,000 including interest. Even more disconcerting is that this result is achieved with a mortgage designed for use by the general public. However, even leaving aside the question of whether this sophisticated interpretation could be justified on a theoretical plane, the fact remains that at the very least the clause in question is ambiguous. Certainly among the more cogent indicators of this ambiguity is that the Judges of the highest court in this State have split 4 to 3 on its meaning.

We think the whole approach of the majority misses the point: that with this type of instrument the meaning should not depend on hypertechnical dissections and legal precedent. Rather, a truly ambiguous mortgage clause such as this should be construed in favor of the borrower — not the bank which drew it.

Accordingly, I dissent and vote that the order of the Appellate Division should be reversed.

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

Order affirmed, with costs.

      . Whether the total tax paid is correct is not an issue in this proceeding. Section 256 of the Tax law provides that if the indebtedness which by any contingency may be secured by the mortgage is not determinable from its terms, the tax shall be computed on the value of the property covered by the mortgage.

      . Nothing in our decision in First Nat. City Bank v Tara Fealty Corp. (48 NY2d 793), reversing for the reasons stated in the Appellate Division dissent (64 AD2d 460, 462-465), is contrary to the conclusion now reached. The future advance provision in Tara was in an unrecorded instrument of which the subsequent encumbrancer had no knowledge, and the Appellate Division dissent concluded that “The recording statutes protect only those interests that are recorded and only to the extent indicated in the recorded instrument,” and held, therefore, that the $100,000 referred to in the recorded instrument having been repaid the mortgage was as to a subsequent encumbrancer extinguished.


source: Caselaw Access Project

author: Gabrielli, J.

license: Public Domain

text:
    Lumbermens Mutual Casualty Company, Appellant, v Allstate Insurance Company et al., Respondents, et al., Defendants.
    Submitted November 10, 1980;
    decided December 22, 1980

      POINTS OF COUNSEL

      John J. Moore and John J. McDonough, III, for appellant.
    I. The policy" of insurance issued to Judith Tantleff should be the first layer of coverage after the exhaustion of the primary policy. (Allstate Ins. Co. v Employers Liab. Assur. Corp., 445 F2d 1278; Aetna Ins. Co. v State Auto. Mut. Ins. Co., 368 F Supp 1278; General Acc. Fire & Life Assur. Corp. v Piazza, 4 NY2d 659.) II. The contracts of insurance clearly indicate that the second layer of additional coverage should be the Allstate executive policy. (State Farm Mut. Auto. Ins. Co. v Westlake, 35 NY2d 587; Lewis v Ocean Acc. & Guar. Corp., 224 NY 18; Burr v Commercial Travelers Mut. Acc. Assn. of Amer., 295 NY 294; Miller v Continental Ins. Co., 40 NY2d 675.) III. As between the executive and catastrophe policies, the catastrophe policy should be the last applied to the loss. (Government Employees Ins. Co. v Kligler, 42 NY2d 863.) IV. The contracts of insurance should be given their plain and ordinary meaning. (Government Employees Ins. Co. v Kligler, 42 NY2d 863; State Farm Mut. Auto. Ins. Co. v West-lake, 35 NY2d 587; Austrian v Equitable Life Assur. Soc. of U. S., 48 AD2d 144; Allstate Ins. Co. v Employers Liab. Assur. Corp., 445 F2d 1278.)

      Julius L. Hauptman for respondents.
    I. The “excess” provisions of the Lumbermen’s and two Allstate excess policies are in parity and should be applied concurrently. (Government Employees Ins. Co. v Kligler, 42 NY2d 863; State Farm Mut. Auto. Ins. Co. v Westlake, 35 NY2d 587; Austrian v Equitable Life Assur. Soc. of U. S., 48 AD2d 144; Dyer v Great Eastern Ins. Co., 71 Misc 2d 89; Rubin v Empire Mut. Ins. Co., 57 Misc 2d 104; Muzak Corp. v Hotel Taft Corp., 1 NY2d 42; Madison 52nd Corp. v Empire Trust Co., 12 AD2d 600, 10 NY2d 873; Ward v Coward, 281 App Div 798; Laurino v Hewman, 10 AD2d 725.) II. The three excess policies should be applied on a basis proportionate to each of the coverages. (American Lumbermens Mut. Cas. Co. v Lumber Mut. Cas. Ins. Co., 251 App Div 231.) III. The cases cited by appellant are distinguishable and inapt as to the fact pattern herein.
   OPINION OF THE COURT

Gabrielli, J.

This case involves the interpretation of four insurance contracts which, coincidentally, provide liability coverage for the same event. In the context in which this case comes to us, we are presented for the first time with the question of whether a contract expressly providing for “excess insurance” in all cases contributes ratably with all other “excess insurance”, or whether an insurer may structure the policy specifically to provide secondary excess coverage that will not be reached until both the primary and other excess policies are exhausted.

On December 27, 1974, Jack Tantleff was involved in an automobile accident in which two of his passengers were injured. The car he was driving was registered in the name of One Eleven South Street Number 2, Inc.

Actions subsequently commenced resulted in a settlement in favor of the first passenger for the sum of $750,000, and in favor of the second passenger for $30,000. Primary insurance had been provided by the Allstate Insurance Company (Allstate) to One Eleven South Street Number 2, Inc., the owner of the car, to the limit of $300,000. This amount was contributed by the primary insurer toward the settlement. Allstate also provided two forms of non-primary insurance in this case, and, along with Lumbermens Mutual Casualty Company (Lumbermens) which also provided a form of nonprimary insurance, agreed to contribute toward the balance of the settlements equally with Lumbermens, while both companies reserved the right to seek a declaration of their rights. This action for a declaratory judgment followed.

The second policy involved on this appeal was issued by Allstate to Judith Tantleff, Jack’s mother. This policy insured Judith’s personal automobile, but also provided that there would be coverage for a relative of the named insured (Judith) if that relative were charged with responsibility for and was involved in an accident while driving a nonowned automobile. However, Judith’s policy also provided that: “If there is other insurance * * * the insurance with respect to a * * * nonowned automobile shall be excess insurance over any other collectible insurance”.

The third policy was issued by Allstate to Jack’s father, Irwin Tantleff, and was denominated an executive policy. It provided that Allstate would be responsible for and pay the “net loss in excess of insured’s retained limit”. The term “retained limit” was then defined as “the sum of applicable limits of underlying policies listed in Schedule A hereof and the applicable limits of any other underlying insurance collectible by the insured”. The policy of insuranee issued to the operator’s mother, Judith, was listed in Schedule “A”. Additionally, this executive policy also provided: “The insurance afforded under this policy shall apply as excess insurance, not contributory to other collectible insurance (other than insurance applying as excess to Allstate’s limit of liability hereunder) available to the Insured and covering loss against which insurance is afforded hereunder”.

The fourth and final policy was a “Catastrophe Policy” issued by Lumbermens to Twin County Grocers, of which One Eleven South Street Number 2, Inc., was a member. It provided for coverage in excess of “any other valid and collectible insurance available to the insured, whether such other insurance is stated to be primary, contributing, excess or contingent”.

In essence, each of the last three-mentioned policies involved in the present appeal provides a form of nonprimary coverage. Allstate urges that these policies simply provide excess insurance, or secondary coverage, and thus all exist at the same level. The general rule is, of course, that where there are multiple policies covering the same risk, and each generally purports to be excess to the other, the excess coverage clauses are held to cancel out each other and each insurer contributes in proportion to its limit amount of insurance (see Federal Ins. Co. v Atlantic Nat. Ins. Co., 25 NY2d 71; Atlantic Mut. Ins. Co. v Atlantic Nat. Ins. Co., 38 AD2d 517, affd 33 NY2d 817). However, this rule is inapplicable to the case before us because its use would effectively deny and clearly distort the plain meaning of the terms of the policies of insurance here involved.

The policy issued by Allstate to Judith was designed to provide excess insurance in the present situation. In contrast, the executive policy issued by Allstate to Irwin, the driver’s father, was not just a simple excess policy, but was designed specifically to provide coverage in excess of that provided by Judith’s policy. The parties to this contract did not bargain for ratable contributions in the event of an accident, but instead contemplated that the executive policy would be summoned and become applicable only after Judith’s policy had been exhausted.

Similarly, the parties to the Lumbermens contract did not bargain for a ratable contribution with any of the Allstate policies. This “Catastrophe Policy” specifically provided coverage in excess of all other coverage available, including excess coverage. Presumably the premiums for this policy reflected the rarity of Lumbermens’ ultimate requirement to contribute to a settlement.

Additionally, we observe that defendant Allstate did not bargain for a single second tier of excess coverage at the time of entering into its contracts. Allstate’s executive policy clearly provided that its policy issued to Judith should be exhausted first. By writing such a provision into its own contract, it now cannot contend seriously that the law always contemplates only a single tier of nonprimary coverage. In fact, in the excess clause of its own executive policy Allstate conceded the possibility that another policy could provide coverage in excess of its coverage.

The plain meaning of the language embodied within the terms of these contracts compels the conclusion that the rule of ratable contribution is inapplicable in this case. The only interpretation which can be adopted and ultimately concluded from the language of these agreements requires us to hold that the primary insurance having been exhausted, the policy issued by Allstate to Judith Tantleff should next contribute to the settlement. Then, if and when the limits of that policy have been exhausted the executive policy issued by Allstate should be called upon to contribute, and only after the executive policy has been exhausted should the catastrophe policy issued by Lumbermens be summoned into effect.

We note that our holding and departure from the general rule of ratable contribution for multiple excess insurers finds support in the case law of other jurisdictions (see Allstate Ins. Co. v Employers Liab. Assur. Corp., 445 F2d 1278, interpreting Illinois law; Prudential Prop. & Cas. Ins. Co. v New Hampshire Ins. Co., 164 NJ Super 184). Finally, we also observe that to force a ratable contribution among the nonprimary insurers in this case, in contravention to the plain meaning of the insurance contracts, would serve to prevent the insurance buyer from purchasing additional coverage at a premium reduced to reflect the lesser risk to the insurer.

Accordingly, the order of the Appellate Division should be reversed, with costs, and judgment should be granted in favor of plaintiff declaring that its catastrophe policy provides coverage in excess of the coverage provided by the Allstate policies.

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

Order reversed, with costs, and judgment granted in favor of plaintiff in accordance with the opinion herein.

       The clause provided, in effect, that Allstate would not contribute with other collectible insurance “other than insurance applying as excess to Allstate’s limit of liability”. This provision admits to the possibility that there may be insurance provided as excess to the coverage under the executive policy, but is ineffective as a means to place all other nonprimary insurance on an equal tier and compel ratable contribution. However, we note in passing that there may be situations where an insurer could provide that it would, in effect, supply only the final tier of coverage, and that all other general final tier policies would have to contribute ratably with it toward any settlement.


author: Meyer, J. Gabrielli, J.

text:
    The People of the State of New York, Respondent, v Walter Neumann, Appellant.
    Argued November 17, 1980;
    decided December 22, 1980

      POINTS OF COUNSEL

      Roger Bennet Adler for appellant.
    I. The judgment must be reversed because defendant’s responses were literally true. (Brown v United States, 245 F2d 549; People v Hattemer, 4 AD2d 775, 4 NY2d 835; People v Schmidt, 221 App Div 77; United States v Tonelli, 577 F2d 194; United States v Abrams, 568 F2d 411; United States v Slawik, 548 F2d 75; United States v Wall, 371 F2d 398; People v Blumenthal, 55 AD2d 13; People v Rao, 53 AD2d 904; United States v Bonacorsa, 528 F2d 1218.) II. The evidence is legally insufficient to sustain the jury’s verdict. (People v Tyler, 62 AD2d 136, 46 NY2d 251; People v Lombardozzi, 35 AD2d 528, 30 NY2d 677; People v Samuels, 284 NY 410; Bronston v United States, 409 US 352; People v Rinaldi, 34 NY2d 843; People v Gleason, 285 App Div 278; People v Fellman, 35 NY2d 158.) III. The Department of Investigation proceeding was improperly utilized as a perjury trap. Accordingly, the indictment constitutes abuse of process and a deprivation of due process. (People v Tyler, 46 NY2d 251; United States v Mandujano, 425 US 564; United States v Doss, 545 F2d 548; United States v Cross, 170 F Supp 303; Brown v United States, 245 F2d 549; United States v Icardi, 140 F Supp 383; People v Monaghan, 55 AD2d 1056; Brown v United States, 245 F2d 549.) IV. Defendant’s responses to the questions posed by examiner Roche were not material to the Department of Investigation’s inquiry. Accordingly, the judgment should be modified to perjury in the third degree. (People v Samuels, 284 NY 410; United States v Birrell, 470 F2d 113; People v Perillo, 48 AD2d 862; People v Hattemer, 4 AD2d 775, 4 NY2d 835; People v Teal, 196 NY 372.) V. The failure of the trial court to allow expert testimony concerning the meaning of the term “firearm” was error. (Dougherty v Milliken, 163 NY 527; Clark v Iceland S. S. Co., 6 AD2d 544, 7 AD2d 837; People v Allweiss, 48 NY2d 40; Washington v Texas, 388 US 14; Webb v Texas, 409 US 95; People v Berry, 62 AD2d 1021; People v Cuevas, 67 AD2d 219.) VI. The posecutor’s"summation and his erroneous objection to defendant’s summation deprived defendant of a fair trial. (People v Carborano, 301 NY 39; People v Tassiello, 300 NY 425; People v Ashwal, 39 NY2d 105; People v Petrucelli, 44 AD2d 58; People v Reyes, 64 AD2d 657; People v Butler, 67 AD2d 950.)

      Robert M. Morgenthau, District Attorney (Joyce P. Adolfsen, Robert M. Pitler and Jerrold Tannenbaum of counsel), for respondent.
    I. Defendant’s guilt was proved beyond a reasonable doubt. (People v Stanard, 42 NY2d 74, 434 US 986; Wood v People, 59 NY 117; People v Schmidt, 221 App Div 77; United States v Bonacorsa, 528 F2d 1218, 426 US 935; United States v Jones, 374 F2d 414, 392 US 299; Meyers v United States, 171 F2d 800, 336 US 912.) II. The investigation had the legitimate, substantive, and good faith goals of ascertaining whether the Prospect Park Zoo was being run correctly and whether animals populating the zoo were being mistreated. The investigation was in no respect a “perjury trap” designed to trick defendant into making false statements. (People v Tyler, 46 NY2d 251; People v Pomerantz, 46 NY2d 240; People v Schenkman, 46 NY2d 232.) III. The People provided sufficient corroboration of the falsity of defendant’s statements that he never discharged a firearm at pigeons in the zoo and that he never discharged a firearm within the geographical confines of the zoo. (People v Stanard, 42 NY2d 74; People v Sabella, 35 NY2d 158; People v Brown, 40 NY2d 381; People v Dixon, 231 NY 111.) IV. The court correctly denied defendant’s request to call an expert witness for the purpose of establishing that a pellet gun is really not a firearm. (Dougherty v Milliken, 163 NY 527; Swarts v Wilson Mfg. Co., 115 App Div 739.) V. Defendant was not prejudiced by one of the remarks in the prosecutor’s summation or by the prosecutor’s objecting to a remark made by defense counsel in summation. (People v Alicea, 37 NY2d 601; People v Ashwal, 39 NY2d 105; Williams v Booklyn El. R. R. Co., 126 NY 96; People v Ostin, 62 AD2d 1004; People v Gambino, 52 AD2d 957.)
   OPINION OF THE COURT

Meyer, J.

The issue to be determined in the trial of a witness for perjury is whether, measured by the meaning of the words used in the context of the questions asked and answers given, defendant’s testimony was intentionally false. When that context contains nothing to suggest that the word “firearm” was used in the limited sense defined in subdivision 3 of section 265.00 of the Penal Law, and shows that “firearm” was used interchangeably with “weapon” and to include a tranquilizer gun, it is a question for the jury whether proof that defendant fired a .22 caliber rifle and a pellet gun establishes the falsity of his testimony that he “never discharged a firearm.” The order of the Appellate Division affirming defendant’s perjury conviction should, therefore, be affirmed.

Defendant Neumann was the Acting Supervisor of the Prospect Park Zoo in Brooklyn, and the perjury charges against him stem from his testimony at a 1976 hearing of the New York City Department of Investigation concerning practices at the zoo. The Department of Investigation had received reports from the Parks Department that animals .had been abused and killed by zoo employees. One report alleged that a monkey had been scalded to death.

Before calling defendant to testify, Investigator Roche obtained sworn statements from defendant’s subordinates at the zoo. A menagerie keeper at the zoo, Devillo Holmes, swore that he and another zoo employee had accompanied defendant to the “elephant house” where all three men shot at pigeons with an air-powered pellet gun. Ejnar Johnson, a porter at the zoo, also reported that he had observed the defendant shooting at pigeons in the elephant house. Samuel Borrelli swore that he had seen defendant shoot a .22 caliber rifle at rats in the lion house and Devillo Holmes corroborated that fact.

Having secured these sworn statements, Investigator Roche summoned defendant for examination. Roche asked first whether there were wild birds within the zoo and defendant stated that there were, mainly starlings and pigeons. Asked if steps had been taken to drive the birds out, defendant answered that employees would either make loud noises or spray water at the birds. The following colloquy then ensued:

“Q. Has there been any other means used to your knowledge?
“A. Not to my knowledge.
* * *
“Q. Have you ever used a firearm to disperse the pigeons?
“A. I have not.
“Q. Do you own any firearmsl
“A. I do.
“Q. Could you tell me what kinds they are?
“A. 306, very powerful gun much too big for pigeons.
“Q. Do you own any other firearmsl
“A. Well, I have some in my summer home in Maine, but they are not registered. Also I have a New York City pistol permit.
“Q. For what kinds of weapons!
* * *
“A. .357 Magnum.
“Q. Do you own any other weapons at home in New York?
“A. I have a 12 gauge shotgun.
“Q. Have you ever registered any weapons with the City of New York?
“A. All my weapons are registered.
* * *
“Q. Are there any others [ , ] those that you haven’t mentioned?
“A. No.
“Q. You own a .221
“A. I do not.
“Q. Do you own a pellet gunl
“A. I do not.
“Q. Does the zoo own a pellet gunl
“A. Not to my knowledge.
* * *
“Q. And you say you’ve never discharged a weapon or firearm at any of the pigeons or birds at the zoo?
“A. Correct.
“Q. Have you ever seen anybody do that?
“A. No.” (Emphasis supplied.)

Investigator Roche then led the discussion to other topics, such as defendant’s relationship with his subordinates and the treatment of animals at the zoo. However, he returned to the subject of whether defendant had discharged a firearm at pigeons or within the confines of the zoo. The inquiry proceeded as follows:

“Q. I’d like to go back to one other area we discussed and that is the pigeons. Have you ever, at any time, discharged" a firearm at any of the pigeons?
“A. No.
“Q. Has any employees of the zoo?
“A. Not to my knowledge.
“Q. Did you ever discharge a firearm anywhere within the geographical confines of the zoo?
“A. No.
“Q. Are you certain of that?
“A. I don’t ever recall doing it. Unless — well, the tranquilizer gunl
“Q. Other than the tranquilizer gun?
“A. No.
“Q. And you’re absolutely certain you never discharged a firearm in the Elephant House at the-pigeons?
“A. Certain.
“Q. Have you owned a .22 in the last year?
“A. No.
“Q. Have you used a .22 in the last year?
“A. I spend a great deal of time in Pennsylvania where I use a great many firearms and I probably have.
* * *
“Q. Have you used a pellet gun in the last year?
“A. I don’t recall using one in the last — many many years before that.
, * * *
“Q. Have you never seen any dead pigeons in the zoo killed by bullets?
“A. Not that I know.” (Emphasis supplied.)

When the inquiry ended, Roche expressed his belief that defendant had not testified truthfully and reminded him of the penalty for giving false testimony. Roche also in- - formed defendant that he could then recant his testimony without penalty, but defendant did not accept the offer.

The indictment contains two counts. The first charges that defendant “swore falsely that he never discharged a firearm at any of the pigeons or birds at the zoo”, and the second accuses defendant of having sworn “falsely that he never discharged a firearm within the geographical confines of the zoo.” Holmes, Johnson and Borrelli having testified at trial concerning defendant’s shooting an air-powered pellet gun at pigeons in the elephant house and firing a rifle at rats in the lion house, the Trial Judge submitted both counts to the jury under instruction that they must determine what defendant meant when he denied discharging a firearm. Defendant was convicted of both counts of perjury and the Appellate Division, by a divided court, affirmed.

Defendant presents a number of arguments for reversal, only one of which, the standard by which falsity is to be determined, requires discussion. Defendant urges that his responses were literally true, becáuse the Penal Law definition of “firearm” as “any pistol, revolver, sawed-off shotgun or other firearm of a size which may be concealed upon the person” (§ 265.00, subd 3) does not include either a .22 rifle or a pellet gun. Alternatively, he insists that his conviction on the first count must be reversed because the dictionary definition of “firearm” (“a weapon from which a shot is discharged by gunpowder”, Webster’s Third New International Dictionary, at p 854) excludes an air-powered pellet gun. Though the discourse between a witness and his interrogator could make either or both definitions relevant, this is not such a case.

Nothing in the interchange between defendant and Roche suggested that either was speaking with reference to the Penal Law definition of “firearm”. More importantly, that definition itself contains its own refutation that it was intended to have any bearing on the determination of a perjury indictment such as the present one. This is because the definitions in section 265.00 of the Penal Law are preceded by the limiting words: “As used in this article and in article four hundred, the following terms shall mean and include”. Article 265 is concerned with possession, use and purchase of firearms and other dangerous weapons. Article 400 deals with the licensing of firearms and the destruction of weapons. Because neither is related in any way to a prosecution for perjury, section 265,00 by its express language precludes reliance upon its firearm definition in such a prosecution, except as a question or answer may have been specifically addressed to that definition.

More difficult is the question whether the first count must fall because the dictionary definition of “firearm” excludes an air-powered weapon. Defendant’s argument is largely based upon the decision of the United States Supreme Court in Bronston v United States (409 US 352). The Supreme Court did emphasize in that case that “The burden is on the questioner to pin the witness down to the specific object of the questioner’s inquiry” (at p 360), and that “Precise questioning is imperative as predicate for the offense of perjury” (at p 362). Those statements can no more be applied out of context, however, than can defendant’s words be assayed for falsity out of the context in which they were spoken.

In Bronston (at p 354) defendant had answered in the negative the question whether he had any bank accounts in Swiss banks. To the next question: “Have you ever?” his answer was: “The company had an account there for about six months, in Zurich.” The answer was literally true, but did not reveal that Bronston had himself maintained a Swiss bank account in the past although he did not have such an account at the time he was questioned. The Supreme Court held that the Federal perjury statute did not reach a nonresponsive answer which, so far as it went, was literally true. Reviewing the history of the offense of perjury, including the seminal Report on Perjury made in 1935 by our Law Revision Commission (NY Legis Doc, 1935, No. 60), the court concluded that the Congress did not intend its perjury statute to be construed so broadly. Of major concern as that history revealed was that witnesses not be discouraged from testifying by the fear that their responsibility for misunderstanding would be tested by jury hindsight and against the vague standard “of 'intent to mislead’ or ‘perjury by implication’ ” (id., at p 359). The safeguard, the court concluded, was to require that a perjury charge be based on actual rather than implied falsehood, leaving it to a “probing, prying, pressing” cross-examination rather than the threat of a perjury prosecution to ferret out the truth.

Bronston’s insistence upon thorough cross-examination was, thus, addressed to an answer literally true but unresponsive to the question because a half-truth. Here we deal with a witness who insists that he spoke truthfully because the word “firearm” had a different meaning for him than it did for his questioner. Whether words are spoken falsely, however, is not wholly a subjective matter. Unlike Humpty-Dumpty, the perjury defendant will not be heard to say “When I use a word it means just what I choose it to mean — neither more nor less.” Rather is the meaning to be gleaned from the context in which the word is used.

The English language contains many words with multiple meanings. As Mr. Justice Holmes so beautifully phrased it in Towne v Eisner (245 US 418, 425), “A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used.” It will, therefore, ordinarily be for the jury, when a perjury defendant claims that his answers to questions asked were truthful because he ascribed a particular meaning to a word, to determine from the context in which the word was used whether the claim is valid.

The conclusion reached is not new to perjury law. Thus, in Seymour v United States (77 F2d 577, 584), the Sixth Circuit held it a jury question whether a perjury defendant thought the question put to him “meant what he said he understood it to mean,” and in Meyers v United States (171 F2d 800, cert den 336 US 912) and United States v Bonacorsa (528 F2d 1218, cert den 426 US 935), the District of Columbia Circuit and the Second Circuit Courts of Appeals have both concluded that “[a] defense to a charge of perjury may not be established by isolating a statement from context, giving it in this manner a meaning entirely different from that which it has when the testimony is considered as a whole” (528 F2d, at p 1221).

Viewed in the context in which defendant responded to questioning by Roche, no other conclusion can be reached than that there was evidence to take to the jury the question whether defendant testified falsely when he swore that he never discharged a firearm at pigeons or birds at the zoo or within the geographical confines of the zoo. The concept that defendant used the word “firearm” in its Penal Law sense is, if not negated, placed in serious doubt by the interchangeable use of “weapon” and “firearm” in the course of the questioning and by the references to a tranquilizer gun, to a pellet gun, and to a .22 caliber rifle, the more so as to the last since defendant himself used the word “firearm” when asked if he had used a .22 in the last year. The suggestion that defendant used the word “firearm” in its dictionary sense to mean a gunpowder, as distinct from an air-powered, weapon, while not as clearly so, also presented a question for the jury. Asked if he was certain that he had never discharged a firearm within the confines of the zoo, defendant responded, “I don’t ever recall doing it. Unless — well, the tranquilizer gun.” Defendant never questioned the use of the term “firearm” during his examination, or even after Investigator Roche had told him that he believed defendant had lied. Nor did he ever ask that the Trial Judge charge the jury as to the definition of firearm for which he now presses. There was ample evidence from which a jury could conclude that defendant used the term “firearm” in a sense broad enough to include both a .22 caliber rifle and an air-powered pellet gun and was not confused by the Penal Law or dictionary definition of the term. That being so, defendant’s conviction should be affirmed.

Gabrielli, J.

(dissenting in part). I dissent from the opinion of the majority insofar as it would uphold defendant’s conviction under the first count of the indictment, which charged that defendant “swore falsely that he never discharged a firearm at any of the pigeons or birds at the zoo”. It appears clear that a firearm is commonly understood to be a “weapon from which a shot is discharged by gunpowder”. Indeed, as the majority notes, this is the definition contained in Webster’s dictionary (Webster’s Third New International Dictionary, at p 854). A pellet gun, in contrast to a firearm, discharges a projectile by force of air rather than by gunpowder. Thus, since the People had proved only that defendant had fired a pellet gun at the pigeons, his denial of having discharged a firearm at these birds was factually, literally and legally truthful. Significantly, it is not and cannot be disputed that defendant was a gun fancier and an expert on the use of guns, which lends further support to the fact that he believed he was answering truthfully when he denied having discharged a “firearm” at pigeons.

Although it is clear that common words may have several meanings, and that the truthfulness of a statement must often be judged in the context in which it is given, the defendant’s response covered in the first count of the indictment was factually and literally true, and may not form the basis for a conviction for perjury. Before calling the defendant to testify at the 1976 hearing, the investigator secured sworn statements from defendant’s subordinates at the zoo that defendant had discharged a pellet gun at pigeons. However, when questioning the defendant, the investigator did not ask the defendant if he had discharged a pellet gun at pigeons, but instead asked him if he had discharged a firearm. In light of this background, when the defendant gave a literally truthful answer to the question, certainly the investigator could have pursued and indeed was obliged to pursue the inquiry further. A conviction for perjury cannot be based upon answers which are literally truthful and upon speculation concerning the defendant’s state of mind in view of the over-all context of a conversation in which other imprecise inquiries were made. The grave nature of a conviction for perjury demands nothing less than that the inquiry has been honed to ensure that the person questioned understands what he has been asked and to remove any reasonable doubt that his response is truthful.

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

Order affirmed.


author: Fuchsberg, J.

text:
    Dutchess Sanitation Service, Inc., Appellant, v Town of Plattekill, Respondent.
    Argued October 15, 1980;
    decided December 22, 1980

      POINTS OF COUNSEL

      Steven A. Greenwold for appellant.
    I. The court has power to vacate a portion of a permanent injunction heretofore granted and entered. (Drivers Union v Meadowmoor Co.,
      312 US 287; State of Pennsylvania v Wheeling & Belmont Bridge Co., 18 How [59 US] 421; Western Union Tel. Co. v International Brotherhood of Elec. Workers, Local Union No. 134, 133 F2d 955.) II. This is a proper case in which to invoke the power of the court. (Philadelphia v New Jersey, 437 US 617; Pike v Bruce Church, 397 US 137.) III. The determination by the court below that the instant action is not precluded by the doctrine of res judicata is correct. (United States v Swift & Co., 286 US 106; Matter of Gowan v Tully, 45 NY2d 32.)

      Richard Greenblatt for respondent.
    I. Plattekill’s ordinance prohibiting the disposal within the town of wastes originating from other jurisdictions does not violate the commerce clause of the United States Constitution. (Hughes v Oklahoma, 441 US 322; Philadelphia v New Jersey, 437 US 617; Pike v Bruce Church, 397 US 137; Exxon Corp. v Governor of Md., 437 US 117; Gibbons v Ogden, 9 Wheat [22 US] 1; Huron Cement Co. v Detroit, 362 US 440.) II. Modification of an injunction is not warranted by the facts of this case. (Drivers Union v Meadowmoor Co., 312 US 287; United States v Swift & Co., 286 US 106; Enterprise Window Cleaning Co. v Slowuta, 299 NY 286; Philadelphia v New Jersey, 437 US 617; Wiggins v Town of Somers, 4 NY2d 215.)
   OPINION OF THE COURT

Fuchsberg, J.

A duly enacted Town of Plattekill ordinance broadly forbids anyone other than those who reside or conduct an established business in the town from depositing within its boundaries any “garbage, rubbish or other articles originating elsewhere than in the Town”. The principal question we reach on this appeal is whether the ordinance, as applied, violates the interstate commerce clause of the United States Constitution (art I, § 8).

This case is a sequel to one by which, in 1976, the town successfully sought to permanently enjoin the plaintiff, Dutchess Sanitation Service, Inc., from accepting refuse in violation of the ordinance. Dutchess, a State-licensed commercial carting and sanitary landfill company, until then had continued to operate a lawfully zoned 74 acre tract at which the now forbidden substances had long been received without regard to whether these emanated from in or out of the town. In the 1976 litigation Dutchess’ challenge to the ordinance’s constitutionality was overruled (Town of Plattekill v Dutchess Sanitation, 56 AD2d 150, affd 43 NY2d 662).

However, when, some three years later, the United States Supreme Court, in Philadelphia v New Jersey (437 US 617), invalidated a New Jersey statute prohibiting the importation into that State of most out-of-State wastes, the appellant instituted the present suit. Its request for relief is cast in terms of vacatur of the existing injunction insofar as it affects refuse originating outside the State of New York.

On cross motions for summary judgment, in the main Dutchess demonstrated the existence of admissible evidence sufficient to establish that out-of-State refuse carting firms, especially ones from neighboring Connecticut and New Jersey, were desirous of patronizing its landfill. This showing was not controverted. Special Term, though perceiving no principled distinction between the Plattekill ordinance and the invalidated New Jersey statute, and though voicing the opinion that the one imposed as constitutionally impermissible a burden on interstate commerce as did the other, nevertheless felt constrained to deny Dutchess’ motion on the ground of res judicata. Concordantly, it granted the town’s motion to dismiss. For its part, the Appellate Division, rejecting the res judicata rationale, and so reaching the merits, reasoned that the exclusion of “all wastes from out-of-town sources” was an “evenhanded ban”. On that basis, it affirmed (73 AD2d 300). While we agree that the-prior decision is no bar to the present action, in our view the application of the ordinance offends constitutional requirements.

Preliminarily, it should be made clear that the earlier determination does not dictate the result in this case. Notwithstanding its denomination as “permanent”, a relative term in law as in life, when there has been a change in the conditions that originally justified the issuance of a continuing injunction, settled principles do not leave a court of equity without power to determine that the injunction’s survival, in all or in part, is no longer warranted (see People v Scanlon, 11 NY2d 459, 463). It is also recognized that such an alteration in circumstances may be grounded on a change in the interpretation of applicable law (State of Pennsylvania v Wheeling & Belmont Bridge Co., 18 How [59 US] 421; Western Union Tel. Co. v International Brotherhood, 133 F2d 955, 957). If, then, the injunction here demanded obedience to legislation whose constitutional validity is found to have been undermined by subsequent authoritative adjudications, vacatur or modification may be in order.

Turning then to Dutchess’ contention that the town’s ordinance is repugnant to the commerce clause, we begin with by then Justice Cardozo’s oft-quoted observation, made in the context of a commerce clause case, that the Constitution “was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are in union and not division” (Baldwin v G.A.F. Seelig (294 US 511, 523). To that end, the clause has been read to assure that the basic economic unit is the country at large, that in matters of interstate commerce there are no State lines and that no State may thwart these concepts by placing itself in economic isolation. The credo is that the future of our Nation depends not on how certain parts of it fare but on how it does as a whole.

These interpretations hearken to the pragmatic political philosophy which guided the formation of our Nation. So fundamental is this unadorned and unqualified grant of Federal authority — “The Congress shall have Power * * * To Regulate Commerce * * * among the several States”— that the Supreme Court has taken the pains recently to reiterate that the clause not only invites Congressional regulation, but, even when the power to do so goes unexercised, it nonetheless restricts State regulation (Hughes v Oklahoma, 441 US 322, 326; Philadelphia v New Jersey, 437 US 617, 621-623, supra). Indeed, history takes any element of surprise out of these declarations. For, as is true of the privileges and immunities clause as well (US Const, art IV, § 2), the commerce clause was a primary tool in the framers’ conversion of the weak and failing central government the parochially oriented former colonies had maintained under the Articles of Confederation into a strong and united Nation under the Constitution (see Salla v County of Monroe, 48 NY2d 514, 520-521; Hood & Sons v Du Mond, 336 US 525, 533-534; Gibbons v Ogden, 9 Wheat [22 US] 1, 209; Madison, The Federalist Nos. 41, 42; Tribe, American Constitutional Law, p 319; Hall, Constitutional Law, p 288; Kibble, State and National Power Over Commerce, pp 30-31).

The product of this background is a broad definition of interstate commerce. Thus, in Philadelphia, the Supreme Court expressly rejected a “two-tiered definition of commerce” which, while advocating “ ‘a very sweeping concept’ ” of commerce when supported by Congressional legislation, would have applied a narrower one where the clause itself was invoked to overturn a State enactment. At issue there was whether, in the absence of a Federal statute, the movement and deposit of refuse was commerce. The court’s reply was that commerce had but one definition under the clause: “Just as Congress had power to regulate the interstate movement of these wastes, States are not free from constitutional scrutiny when they restrict that movement” (Philadelphia v New Jersey, 437 US 617, 621, 623, supra). This maxim as a guide, two salient principles emerge from the cases.

One is that the clause protects against offending activities though, because these are carried out entirely within one State, their imposition on interstate commerce is only “indirect”. Thus, in Fry v United States (421 US 542, 547), wage increases “even for employees of wholly intrastate operations” were held to affect interstate commerce. Similarly, in United States v Women’s Sportswear Assn. (336 US 460, 464), a combination effectuated in Massachusetts to fix prices on services performed entirely in that State was found to be within the scope of the clause because the victimized customers were engaged in interstate commerce. And, in Wickard v Filburn (317 US 111, 127-128), the clause was invoked to protect the Federally supported national wheat market from the crop of an individual farmer grown in excess of quota, although only for on-the-farm consumption.

The second and concomitant principle is that, for purposes of determining the presence of effect on interstate commerce, not only the impact of a particular instance of regulation, but a projection of the cumulative burden that would result if similar regulations were adopted elsewhere is to be considered. On that premise, in upholding, in the Fry case, presidential authority under anti-inflation legislation to rescind wage raises granted to less than one one thousandth of the Nation’s labor force, the Supreme Court observed, “Even activity that is purely intrastate in character may be regulated by Congress, where the activity, combined with like conduct by others similarly situated, affects commerce among the States” (Fry v United States, 421 US 542, 547, supra; accord Wickard v Filburn, supra, at p 129).

Without going any further for the purposes of this opinion, where a State regulation thus indirectly imposes a burden on commerce, it will be subject to constitutional scrutiny and will not be upheld unless its impact is reasonable when weighed against an important State interest which cannot be realized through less burdensome means. Against this frame of reference, that in this case the town’s ordinance affects interstate commerce is inescapable. It is undisputed that, but for the ordinance, plaintiff would serve out-of-State as well as other out-of-town enterprises.

The impermissible burden it thus casts becomes evident when it is compared with statutes which were held to be tolerable under the commerce clause despite the fact that their local regulatory purpose projected an incidental effect on interstate commerce. In Head v New Mexico (374 US 424), for example, the application to an out-of-State advertiser of a statute forbidding all advertising of optical goods on the basis of price was sustained because the ban fell equally upon citizens and noncitizens of the enacting State. Again, in Huron Cement Co. v Detroit (362 US 440), an incidental effect upon a visiting out-of-State ship was held not to require invalidation of a city’s smoke abatement ordinance that indiscriminately affected everyone, resident or transient alike.

Furthermore, “the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities” (Pike v Bruce Church, 397 US 137, 142; emphasis added). On that basis, when the effect of a statutory scheme is to make exclusion do the work of inspection in protecting a State’s or city’s residents from unwholesome milk, it has been declared unconstitutional on the ground that, given the possibility off inspection, the local interest could equally well be served by means far less disruptive of interstate commerce (e.g., A & P Tea Co. v Cottrell, 424 US 366, 377; Dean Milk Co. v Madison, 340 US 349, 355-356).

Consequently, bearing in mind that conservation of the landfill for use by the town’s own residents is not in itself a constitutionally acceptable goal (Philadelphia v New Jersey, 437 US 617, 629, supra; cf. Hughes v Oklahoma, 441 US 322, supra), the ordinance as applied here would not meet the less-burdensome-alternative analysis. Obviously, the only legitimate goal — protection of community health— might have been adequately effected, as in the milk cases, through such means, for example, as inspection carried out either by town officials or by the State Department of Environmental Conservation, or through nondiscriminatory, across-the-board limitation on the quantity, type or state of waste to be deposited or excluded. Instead, the path the town took was to regulate garbage on no criterion except its place of origin. In the absence of a reason, apart from its origin, to treat the out-of-town garbage differently from an equivalent quantity of the local product — and none is suggested— in actual operation respondent’s ordinance violates the principle of nondiscrimination imposed by the commerce clause. This it may not do.

For all these reasons, the order of the Appellate Division should be reversed, with costs, and the case remitted to the Supreme Court, Ulster County, for entry of a judgment in accordance with this opinion.

Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Waghtler and Meyer concur.

Order reversed, etc.

      . Dutchess also held additional acreage in the town in reserve for the future needs of its business.

      . The ordinance here, like other local legislation, was enacted in the exercise of a delegation of State power, in this instance pursuant to the authority granted by section 130 of the Town Law. For present purposes, it therefore stands on the same footing as though the State Legislature itself had adopted the ordinance under attack here.

      . Additionally, three Judges of the court would hold the ordinance invalid, not only in effect, but facially as well (see Monroe-Livingston Sanitary Landfill v Town of Caledonia, 51 NY2d 679, decided herewith).


author: Wachtler, J. Fuchsberg, J.

text:
    Monroe-Livingston Sanitary Landfill, Inc., Appellant, v Town of Caledonia, Respondent.
    Argued October 15, 1980;
    decided December 22, 1980

      POINTS OF COUNSEL

      Robert G. Harvey and G. Robert Witmer, Jr., for appellant.
    I. Caledonia’s landfill permit requirement is preempted by article 27 of the New York Environmental Conservation Law. (Town of Black Brook v State of New York, 41 NY2d 486; Zumbo v Town of Farmington, 60 AD2d 350; Matter of Kress & Co. v Department of Health of City of N. Y., 283 NY 55; Jewish Consumptives’ Relief Soc. v Town of Woodbury, 230 App Div 228, 256 NY 619; Wiggins v Town of Somers, 4 NY2d 215; Town of Plattekill v Dutchess Sanitation, 56 AD2d 150, 43 NY2d 662; Town of Stillwater v Doughty, 25 NY2d 986; Trio Distr. Corp. v City of Albany, 2 NY2d 690.) II. Adoption of the Sanitary Landfill Ordinance on July 17, 1976, exceeded the town’s police powers. (Lighthouse Shores v Town of Islip, 41 NY2d 7; Health Ins. Assn. of Amer. v Harnett, 44 NY2d 302; People v Bunis, 9 NY2d 1; Matter of Belle Harbor Realty Corp. v Kerr, 35 NY2d 507; Arverne Bay Constr. Co. v Thatcher, 278 NY 222; Matter of Charles v Diamond, 41 NY2d 318; Pacific Blvd. Assoc. v City of Long Beach, 48 AD2d 857; Town of Lima v Harper, 55 AD2d 405; Matter of Harper v Zoning Bd. of Appeals of Town of Lima, 43 NY2d 980; Good Humor Corp. v City of New

      York, 290 NY 312; Len's Amoco v Town of Gates, 97 Misc 2d 900.) III. Exclusion of wastes generated outside Caledonia from disposal at privately owned sites within Caledonia violates the commerce clause of the United States Constitution, the equal protection, privileges and immunities, and due process clauses of the United States and New York Constitutions, and section ,80 of the New York General Municipal Law. (Hughes v Oklahoma, 441 US 322; Philadelphia v New Jersey, 437 US 617; Gibbons v Ogden, 9 Wheat [22 US] 1; Monroe-Livingston Sanitary Landfill v Town of Caledonia, 72 AD2d 957; Pike v Bruce Church, 397 US 137; United States v Rock Royal Co-op., 307 US 533; United States v Sullivan, 332 US 689; Raymond Motor Transp. v Rice, 434 US 429; Perez v United States, 402 US 146.) IV. Application of Caledonia’s ordinance to plaintiff constitutes a taking of its property without just compensation. (Pennsylvania Coal Co. v Mahon, 260 US 393; Moore v East Cleveland, 431 US 494; Lutheran Church in Amer. v City of New York, 35 NY2d 121; French Investing Co. v City of New York, 39 NY2d 587.)

      Patrick M. Keefe for respondent.
    I. The landfill permit requirement of the Town of Caledonia’s Sanitary Landfill Ordinance is not pre-empted by article 27 of the New York Environmental Conservation Law. (Town of Porter v Chem-Trol Pollution Servs., 91 Misc 2d 42; Monroe-Livingston Sanitary Landfill v Town of Caledonia, 72 AD2d 957; Philadelphia v New Jersey, 437 US 617; Matter of Belle Harbor Realty Corp. v Kerr, 35 NY2d 507.) II. Adoption of the Sanitary Landfill Ordinance by the Town of Caledonia on July 17, 1976 did not exceed the town’s police powers. (Wiggins v Town of Somers, 4 NY2d 215; Town of Stillwater v Doughty, 25 NY2d 986; Town of Plattekill v Dutchess Sanitation, 43 NY2d 662; Rodgers v Village of Tarrytown, 302 NY 115; Shepard v Village of Skaneateles, 300 NY 115; Matter of Original R. Tyson, Inc. v Tyler, 24 NY2d 671; Lincoln Bldg. Assoc. v Barr, 1 NY2d 413; United States v Carotene Prods. Co., 304 US 144; Town of Hempstead v Goldblatt, 9 NY2d 101; Lighthouse Shores v Town of Islip, 41 NY2d 7.) III. Exclusion of wastes generated outside of the Town of Caledonia from disposal at privately owned sites within the Town of Caledonia does not violate the commerce clause of the United States Constitution, the equal protection, privileges and immunities, and due process clauses of the United States and New York Constitutions, and section 80 of the New York State General Municipal Law. (Hughes v Oklahoma, 441 US 322; Pike v Bruce Church, 397 US 137; Huron Cement Co. v Detroit, 362 US 440; Philadelphia v New Jersey, 437 US 617; Monroe-Livingston Sanitary Landfill v Town of Caledonia, 72 AD2d 957; Salamar Bldrs. Corp. v Tuttle, 29 NY2d 221; Dean Milk Co. v Madison, 340 US 349; Toomer v Witsell, 334 US 385; Hicklin v Orbeck, 437 US 518; Town of Plattekill v Dutchess Sanitation, 56 AD2d 150, 43 NY2d 662.) IV. The application of Caledonia’s ordinance to plaintiff does not constitute a taking of its property without just compensation. (Matter of Wulfsohn v Burden, 241 NY 288; Dauernheim, Inc. v Town Bd. of Town of Hempstead, 33 NY2d 468; Mugler v Kansas, 123 US 623; Goldblatt v Hempstead, 369 US 590; Matter of Albert Simon, Inc. v Myerson, 36 NY2d 300; Nebbia v New York, 291 US 502; Defiance Milk Prods. Co. v Du Mond, 309 NY 537; Pacific Blvd. Assoc. v City of Long Beach, 48 AD2d 857; Wiggins v Town of Somers, 4 NY2d 215; Averne Bay Constr. Co. v Thatcher, 278 NY 222.) V. If plaintiff-appellant has a preexisting nonconforming use, it is not immune from the Sanitary Landfill Ordinance adopted by the Town Board of the Town of Caledonia on July 17,1976. (Town of Platte-kill v Dutchess Sanitation, 56 AD2d 150, 43 NY2d 662.)
   OPINION OF THE COURT

Wachtler, J.

The plaintiff owns and operates a 190-acre State licensed sanitary landfill in the Town of Caledonia, Livingston County. While the plaintiff was negotiating a contract with Monroe County to handle all of that county’s refuse, the Town of Caledonia enacted its Sanitary Landfill Ordinance of July 17,1976. Subdivision C of section 7 of that ordinance provides: “Refuse generated outside of the Town of Caledonia, New York, will not be accepted at facilities licensed by the Town of Caledonia unless authorized by the Town Board and consistent with the regional comprehensive plan as it relates to solid waste management.”

The plaintiff brought this declaratory judgment action seeking a determination that the ordinance, and particularly subdivision C of section 7, is unconstitutional. During a lengthy trial both sides presented extensive testimony as to whether or not the town and private water supplies would be contaminated if an increased volume of refuse were permitted at the landfill.

The trial court found that the zoning board’s determination of the potential safety hazard was supported by the record and that the plaintiff had failed to rebut the presumption that the ordinance was a constitutional and legitimate exercise of the town’s police power to protect the public health. This determination was unanimously affirmed by the Appellate Division.

On this appeal plaintiff argues, first, that article 27 of the Environmental Conservation Law dealing with solid waste disposal supersedes and by pre-emption nullifies the town ordinance. To draw this conclusion, however, would require us to say that the mere fact that the State deals with a subject it automatically pre-empts it. We have never construed the principle of pre-emption that broadly. Indeed, where local government is otherwise authorized to act, it will be prohibited from legislating on a subject only if the State pre-empts the field through legislation evidencing a State purpose to exclude the possibility of varying local legislation (People v Cook, 34 NY2d 100, 109). When this occurs a local law may be said to be inconsistent with a State law because it prohibits something which the State law would consider acceptable (e.g., Wholesale Laundry Bd. of Trade v City of New York, 12 NY2d 998). But that is not present here.

In fact the statute in express terms disclaims any State purpose to either supersede or preclude the enactment of local ordinances so long as they are consistent “with at least the minimum applicable requirements” of those regulations promulgated by the statute (ECL 27-0711) and speaks specifically, not of the preclusion, but rather the inelusion of local government in the planning and control of problems endemic to waste management (ECL 27-0101, subds 1, 2; 27-0703, subd 3; 27-0707, subds 3, 4).

Plaintiff’s second contention, relying upon the Supreme Court’s decision in Philadelphia v New Jersey (437 US 617), is that the town’s ordinance violates the interstate commerce clause of the Federal Constitution. In the Philadelphia case there was, at the time of the enactment of the prohibited legislation, actual dumping in New Jersey of refuse generated outside of the State of New Jersey. In that case the discrimination against interstate commerce would seem apparent; however, on the facts of the case now before us, it is hard to see how it can be said that the practical effect of the ordinance is to discriminate against interstate commerce.

The ordinance is not aimed at interstate refuse, but excludes any refuse from outside the town. Although most of the plaintiff’s business involves refuse from surrounding communities, all of those communities are located within the State and there is no contention or indication" that any of the refuse originates beyond the State borders. Nor is there any suggestion that the ordinance affects other Caledonia business concerns which would deal in interstate refuse or that the plaintiff has contracted for, reasonably anticipates, or intends to accept interstate refuse. In fact, through the assertion in its briefs that most if not all of its refuse business is and will continue to be derived from communities within the State, plaintiff has itself succeeded in negating any possible inference that the ordinance has an actual impact on interstate commerce. In the present suit it simply seeks to maintain the status of its business prior to the enactment of the ordinance.

Nor can it be successfully argued that the ordinance in question affects interstate commerce by the threat of a “ripple effect” through the imposition of “cumulative burdens” (see United States v Rock Royal Co-op., 307 US 533, 569-570). To do so we would have to say that this ordinance interferes with interstate commerce because Monroe County would be forced to deposit its refuse elsewhere thereby indirectly displacing out-of-State refuse which would otherwise be shipped to the landfill sites that Monroe would be using. Few local ordinances relating to the planned development of a community could withstand constitutional scrutiny if subjected to that type of analysis. For example, a zoning restriction upon the size or number of dwelling units that may be built within a town would have an effect upon interstate commerce, in that it would reduce the flow of building materials across State lines. Surely it cannot be maintained that, for this reason, the commerce clause precludes the adoption of such zoning ordinances by local governments.

In view of the fact that the plaintiff, the operator of the only privately owned landfill in the town which is open to the public, is not engaged in the importation of refuse from out of State, there has been no showing that, in practice, the ordinance has the effect of inhibiting or discriminating against interstate commerce. Neither the cases cited by the plaintiff nor the general principles stated in the case of Dutchess Sanitation Serv. v Town of Plattekill (51 NY2d 670 [decided herewith]) compel a contrary conclusion. In the absence of something more definitive, the presumption of constitutionality should be sufficient to sustain the ordinance.

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

Fuchsberg, J.

(dissenting). In my view and, that of my fellow dissenters, while the town’s ordinance is not preempted by State law, it is in conflict with the commerce clause of the United States Constitution (art I, § 8), both “on its face and in its plain effect” (Philadelphia v New Jersey, 437 US 617, 627). The order of the Appellate Division should, therefore, be reversed and the ordinance declared unconstitutional per se.

As we see it, for all legal purposes, the factual case here is on all fours with Dutchess Sanitation Serv. v Town of Plattekill (51 NY2d 670 [decided herewith]). Essentially, there are only two factual differences, neither material.

One is that the ordinance here contains an exception to its exclusion of refuse generated outside the town: the town board, “consistent with the regional comprehensive plan”, may authorize acceptance of out-of-town refuse despite the exclusion. In contrast, refuse generated inside the town is not at the mercy of a grant or denial of such special leave. Even more telling is the fact that the flawed statute in Philadelphia v New Jersey (supra), the case that largely controls the Dutchess decision, similarly provided that the refuse it otherwise excluded could be admitted if and when authorized by the promulgation of appropriate regulations by New Jersey’s Environmental Commissioner.

The second difference is that in Dutchess the landfill company expected to receive some refuse from out-of-State customers, while here the customers were entirely out-of-town rather than out-of-State. However, plaintiff here proved that its out-of-town customers include ones who themselves are engaged in interstate commerce in a substantial way. Among these customers are a large nationally known interstate corporation (Delco), a sizable exporter (Gleason Works), the franchises of a nationwide fast food chain (Kentucky Fried Chicken) and a utility which supplies vital services to numerous other businesses engaged in interstate commerce (Rochester Gas & Electric). Local activity may, to a cognizable degree, indirectly impose on interstate commerce (see Dutchess Sanitation Serv. v Town of Plattekill, supra, pp 675-676).

Nevertheless, the town argues that, since plaintiff’s business presently involves refuse from surrounding communities located within the State, there can be no impact on interstate commerce. In doing so, however, it ignores the fact that the effect of the ordinance is to make it impossible for out-of-State carting companies to offer their business to the plaintiff or for the out-of-town customers who are engaged in or whose activities affect interstate commerce to continue to use the plaintiff’s landfill. Where legislation thus conceptually affects interstate commerce, there need be no quantitative showing of the impact (Fry v United States, 421 US 542, 547; Wickard v Filburn, 317 US 111, 129). The test is whether, viewed cumulatively alongside like potential conduct by others similarly situated, there is enough to activate the clause.

As both this and the Philadelphia cases well illustrate, the proliferation of legislation affecting garbage disposal is more than merely potential (Philadelphia v New Jersey, 437 US 617, supra). It is symptomatic of a pattern in which Federal and State regulation has reduced the surface area available for landfill use at one and the same time that waste production burgeons (Note, Commerce Clause and Interstate Waste Disposal: New Jersey’s Options After the Philadelphia Decision, 11 Rut-Cam LJ 31). Experience teaches that parochial protectionist measures, fueled by an understandable but impermissible purpose to conserve the landfill site for the townspeople alone, are almost sure to spawn reciprocal exclusionary acts, which in totality would soon constitute a serious impediment to the free flow of interstate commerce. This threat is not outside the range of commerce clause interdiction.

Therefore, since, on the whole, the ordinance here is at least as offensive to the commerce clause as was the one in Dutchess, it may be useful to set out the factual and procedural environment in which it was enacted and now comes to us:

The plaintiff’s landfill is licensed by the New York State Department of Environmental Conservation. Its operation began in the early 1960’s. Subsequently all the waste material deposited throughout the ensuing period was generated outside the town. At the time the challenged ordinance was enacted, 95% or more of the refuse plaintiff accepted originated from without the town. Those it served include 40,000 to 50,000 households, several municipalities and hundreds of business establishments, including the ones heretofore mentioned.

When the plaintiff first informed the town that it had been negotiating with Monroe County for a contract under which the appellant would receive refuse collected from the City of Rochester, while the news was received critically by the town fathers, there was then no suggestion that any pollution issue existed. When, however, shortly thereafter, the Monroe County legislature formally authorized execution of the Rochester contract, the defendant’s town board’s response was to call a special session for the very next day, when it passed a resolution objecting to any contract involving Rochester waste and declaring that the board intended, “as a result of any such aforesaid contract”, to pass an ordinance that would prohibit the deposit of refuse originating outside the town. In fulfillment of this promise, the ordinance, as may be gathered from the trial testimony of the. town’s supervisor and two of its board members, was designed to put the plaintiffs out of business. It took the following form: “Refuse generated outside of the Town of Caledonia, New York, will not be accepted at facilities licensed by the Town of Caledonia unless authorized by the Town Board and consistent with the regional comprehensive plan as it relates to solid waste management”.

It is to be noted that the different treatment this legislation accords “refuse generated outside of the town” does not except refuse which originates from outside the State, a discrimination which would be no more or less repugnant to the commerce clause because the ordinance also discriminates against out-of-town refuse that originates within the State (see Dutchess Sanitation Serv. v Town of Plattekill, 51 NY2d 670, 676, supra). In any event, the appellant then commenced this action for a judgment declaring the ordinance unconstitutional.

At the ensuing trial, despite the extraordinary burden that is placed on one who would justify State or local legislation which facially discriminates against interstate commerce “ ‘both in terms of the local benefits flowing from the statute and the unavailability of nondiscriminatory alternatives’ ” (Hughes v Oklahoma, 441 US 322, 336; emphasis added), there was no showing that any alternatives were even considered.

As to the “local benefits”, the town attempted to prove the existence of a potential for contamination of its water resources. For that purpose, it relied heavily on three or four reports, which opined that the continued operation of the landfill might result in an adverse environmental impact. But Gary Olin, author of these reports, admitted on the stand that he had visited the landfill site only once, that this was his first professional job, that he was not a professional engineer, that he had no on-site experience in landfill construction practices and that his reports were based principally upon his review of reports prepared by others. Two other documents on which the town relied consisted of a letter and a map prepared by a geologist, Dr. Richard Young. The record shows that this letter was based not on field tests or surveys, but only a review of literature and Dr. Young’s general knowledge of the valley area in which the town is located. No explanation was offered as to why, in the three years between the time of the Young report and the time of trial (especially since the landfill operations had been going on for some 15 years), no pollution had been found in any of the 50 to 100 wells in the area.

For its part, the landfill company presented proof that it had fully met the more stringent standards required for licensing by the State Department of Environmental Conservation (DEC) and that it had received no complaints from the DEC or the county health department. It also called Frank Clark (senior sanitary engineer for the DEC’S solid waste department), Herman Davis (engineering geologist for the DEC), Earl Bar comb (chief of design and evaluation of the DEC’S division of solid waste management) and Robert Navias, a geologist in the plaintiff’s employ. Clark testified that he had visited the site often in his official capacity, that soil conditions were suitable, that there was no evidence of leachite migration (the feared contaminant) and that over the number of years that the site had been used as a landfill any major weaknesses would have revealed themselves. Davis told the court that, as part of his official review of the plaintiff’s most recent license application, he had not only visited the site, but consulted with representatives of the landfill company and the town, to wit, Davis, Navias and Dr. Clark; his review had resulted in a finding that the site is suitable for a landfill, that it is so located that refuse it receives does not encroach on the groundwater and that his investigation gave no indication of leachite contamination. Barcomb also concluded that the site was suitable, that the soils were sufficiently impermeable to prevent groundwater pollution and that the site fit in with the State’s waste management plan for the area. Navias, the only interested person among these witnesses, added, from his special familiarity with the characteristics of the landfill, that two topographic barriers make it impossible for water to migrate from the landfill to the Caledonia wells.

After hearing both sides, the trial court found “no evidence that the landfill had effected [sic] the Village of Caledonia water wells or any other domestic well in the area of the landfill * * * [and] no evidence that either the Livingston County or the Monroe County Health Departments had ruled any of the domestic wells adjacent to the landfill to be unfit for use.” Despite its conclusion that the ordinance was rational, it dismissed the complaint. The Appellate Division affirmed in a memorandum.

On the present appeal, the plaintiff, in addition to his pre-emption and commerce clause points, claims, inter alia, that the ordinance runs afoul of the equal protection and privileges and immunities provisions of the Constitution, that its adoption was arbitrary in that the reasons given for it were pretextual and that it discriminates against instate out-of-town residents in violation of section 80 of the General Municipal Law. For the purposes of this dissent, in addition to our comments on pre-emption, we confine ourselves to the interstate commerce clause. That alone is sufficient to compel us to invalidate the ordinance.

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

Order affirmed, with costs.

      . We suggest that the hypothetical example the majority poses of a restriction on the size or number of dwelling units that may be built within a town is not apt. The assumed reduction in the rate of flow of building materials would not be based on their origin. And the effect on all sources of supply, intrastate and interstate, presumably would be alike (see Dutchess Sanitation Serv. v Town of Plattekill, 51 NY2d 670, 676-677, supra).

      . When this appeal was taken, after some three and a half years of litigation, the plaintiff, with the aid of a series of temporary injunctions, was still operating its business.

      . It was not clear whether the town had received all four or only three of the reports.