author:
Desmond, Ch. J.
      Ftjld, J.

text:
    In the Matter of Albert Martin Cohen, an Attorney, Appellant. Denis M. Hurley, Respondent.
    Argued February 29, 1960;
    decided April 1, 1960.

      Theodore Kiendl and David F. Price for appellant.
    I. An attorney cannot be disbarred solely for refusing to answer questions in good-faith reliance on his constitutional privilege against self incrimination. (Matter of Grae, 282 N. Y. 428; Matter of Ellis, 282 N. Y. 435; Matter of Solovei, 250 App. Div. 117, 276 N. Y. 647; Matter of Kaffenburgh, 188 N. Y. 49; Matter of Schneidkraut, 231 App. Div. 109; Matter of Cohen, 115 App. Div. 900; Matter of Hollan, 377 Ill. 346; People ex rel. Taylor v. Forbes, 143 N. Y. 219; Quinn v. United States, 349 U. S. 155; Twining v. Netv Jersey, 211 U. S. 78; Spector v. United States, 193 F. 2d 1002; Burdick v. United States, 236 U. S. 79; Boyd v. United States, 116 U. S. 616; Slochower v. Board of Educ., 350 U. S. 551; Matter of Levy, 255 N. Y. 223; People ex rel. Karlin v. Culkin, 248 N. Y. 465; People ex rel. Coyle v. Truesdell, 259 App. Div. 282; Securities Comm. v. Chenery Corp., 332 U. S. 194; Konigsberg v. State Bar, 353 U. S. 252; Matter of Lerner v. Casey, 2 N Y 2d 355, 357 U. S. 468; United Public Workers v. Mitchell, 330 U. S. 75.) II. Appellant was disbarred without due process of law. (Matter of Hecht v. Monaghan, 307 N. Y. 461; Matter of Eldridge, 82 N. Y. 161; Matter of Alpert v. Board of Governors of City Hosp., 286 App. Div. 542; Greene v. McElroy, 360 U. S. 474; Ex parte Robinson, 86 U. S. 505; Ex parte Garland, 71 U. S. 333; Parker v. Lester, 227 F. 2d 708; Matter of Los Angeles County Pioneer Soc., 217 F. 2d 190; Matter of Carter, 177 F. 2d 75, 338 U. S. 900.; Laughlin v. Wheat, 95 F. 2d 101; United States v. Hicks, 37 F. 2d 289; State ex rel. Shackleford v. McElhinney, 241 Mo. 592; Schware v. Board of Bar Examiners, 353 U. S. 232.) III. Appellant was not given notice of specific charges of professional misconduct. IV. No evidence of professional misconduct was produced at the inquiry and appellant was not afforded an opportunity to confront and cross-examine those who had furnished derogatory information concerning his professional conduct. (Greene v. McElroy, 360 U. S. 474; Peters v. Hobby, 349 U. S. 331; United Public Workers v. Mitchell, 330 U. S. 75; Bailey v. Richardson, 182 F. 2d 46, 341 U. S. 918; Matter of Eldridge, 82 N. Y. 161; Matter of Kaufman, 245 N. Y. 423; Matter of Lynch, 227 App. Div. 477; Matter of Joseph, 125 App. Div. 544; Matter of Doyle, 257 N. Y. 244.)

      Denis M. Hurley, in person, Michael A. Castaldi and Michael Caputo for Denis M. Hurley, respondent.
    I. In a judicial inquiry ordered by the Appellate Division into unethical practices of lawyers, appellant, as an attorney and officer of the court, was under a duty to answer all questions relating to his professional conduct. For a breach of that duty the lawyer is subject to disciplinary action — not by way of punishment, but for the protection of the public, the Bench and the Bar. (Matter of Rouss, 221 N. Y. 81; People ex rel. Karlin v. Culkin, 248 N. Y. 465; Matter of Isserman, 345 U. S. 286; Schware v. Board of Bar Examiners, 353 U. S. 232; Matter of Bar Assn. of City of N. Y., 222 App. Div. 580; Matter of Brooklyn Bar Assn., 223 App. Div. 149; Theard v. United States, 354 U. S. 278; Ex parte Wall, 107 U. S. 265.) II. As a citizen, appellant had the right to invoke the constitutional privilege against self incrimination. As a lawyer, appellant was under a duty to answer to the court. Appellant may not evade the disciplinary consequences for a breach of his duty to speak up as a lawyer by choosing to remain silent under the exercise of his constitutional privilege. (Matter of Ellis, 258 App. Div. 558; Matter of Grae, 258 App. Div. 576; Matter of Lerner v. Casey, 2 A D 2d 1, 2 N Y 2d 355, 357 U. S. 468; Beilan v. Board of Educ., 357 U. S. 399; Christal v. Police Comm., 33 Cal. App. 2d 564; Matter of Solovei, 250 App. Div. 117, 276 N. Y. 647; Matter of Kaffenburgh, 188 N. Y. 49; Matter of Cohen, 115 App. Div. 900; Matter of Holland, 377 Ill. 346; Matter of Schneidkraut, 231 App. Div. 109.) III. Appellant has. been accorded the fullest measure of due process.

      Leonard B. Boudin for New York State Association of Plaintiffs’ Trial Lawyers, amicus curiæ.

    I. Appellant was denied due process and subjected to an unlawful search and seizure in being summoned to appear and produce his records in an inquiry directed at him but without formal charges and witnesses subject to cross-examination. (People v. Steuding, 6 N Y 2d 214; Bradley v. Fisher, 13 Wall. [80 U. S.] 335; Ex parte Secombe, 19 How. [60 U. S.] 9; Ex parte Garland, 4 Wall. [71 U. S.] 333; People ex rel. Karlin v. Culkin, 248 N. Y. 465; Matter of Brewster, 12 Hun 109; Matter of Eldridge, 82 N. Y. 161; Matter of Kaufman, 245 N. Y. 423; Matter of Brooklyn Bar Assn., 92 App. Div. 612; Ex parte Wall, 107 U. S. 265; Matter of Spencer, 206 App. Div. 806; Matter of Rouss, 221 N. Y. 81.) II. Appellant’s disbarment for asserting his constitutional privilege violates section 6 of article I of the State Constitution, denies due process and equal protection under the Federal and State Constitutions, and conflicts with settled precedent in this State and throughout the United States. (Matter of Ellis, 282 N. Y. 435; Matter of Grae, 282 N. Y. 428; Matter of Levy, 229 App. Div. 62; People ex rel. Karlin v. Culkin, 248 N. Y. 465; Matter of Schneidkraut, 231 App. Div. 109; Matter of Solovei
      250 App. Div. 117, 276 N. Y. 647; Matter of Kaffenburgh, 188 N. Y. 49; Matter of Cohen, 115 App. Div. 900; McGuigan v. Delaware, O. & W. R. R. Co., 129 N. Y. 50; Matter of Lerner v. Casey, 2 N Y 2d 355, 357 U. S. 468; Matter of Percy, 36 N. Y. 651; Matter of Anonymous, 22 Wend. 656; Matter of Attorney, 83 N. Y. 164.)

      Emanuel Redfield for New York Civil Liberties Union, amicus curiæ.

    I. Appellant was denied due process of law in violation of the Federal and State Constitutions. (Schware v. Board of Bar Examiners, 353 U. S. 232; Slochower v. Board of Educ., 350 U. S. 551; Quinn v. United States, 349 U. S. 155; Matter of Grae, 282 N. Y. 428; Frost Trucking Co. v. Railroad Comm., 271 U. S. 583.) II. The Lerner and Beilan cases are distinguishable. (Beilan v. Board of Educ., 357 U. S. 399; Matter of Lerner v. Casey, 2 N Y 2d 355, 357 U. S. 468.)

      David Scribner, Jonathan R. Goldberg and Herman B. Gerringer for National Lawyers Guild, amicus curiæ.

    I. The practice of law is not a matter of the State’s grace and may not be conditioned upon the surrender of a constitutional right. (Schware v. Board of Bar Examiners, 353 U. S. 232; Ex parte Garland, 4 Wall. [71 U. S.] 333; Konigsberg v. State Bar, 353 U. S. 252; Matter of Ellis, 258 App. Div. 558; Matter of Doyle, 257 N. Y. 244; Matter of Rouss, 221 N. Y. 81; People ex rel. Karlin v. Culkin, 248 N. Y. 465.) II. The lawful use of the privilege against self incrimination does not constitute a breach of appellant’s responsibilities to the court as a lawyer. (Matter of Kaffenburgh, 188 N. Y. 49; Matter of Grae, 282 N. Y. 428; Matter of Ellis, 282 N. Y. 435; Matter of Rouss, 221 N. Y. 81; People ex rel. Karlin v. Culkin, 248 N. Y. 465.)

      Henry Weiner, Allen Harris and Daniel J. McMahon for Co-ordinating Committee on Discipline of the Association of the Bar of the City of New York and others, amici curiæ.

    I. The privilege to practice law carries with it at all times the duty to answer pertinent questions in a judicial inquiry addressed to professional conduct. (Beilan v. Board of Educ., 357 U. S. 399; Matter of Lerner v. Casey, 2 N Y 2d 355, 357 U. S. 468; Matter of Delehanty, 280 App. Div. 542, 304 N. Y. 725; Christal v. Police Comm., 33 Cal. App. 2d 564; Gair v. Peck, 6 N Y 2d 97; People ex rel. Karlin v. Culkin, 248 N. Y. 465;
      Matter of Brooklyn Bar Assn., 223 App. Div. 149; Stephens v. Hill, 10 M. & W. 28.) II. The cases cited by appellant to support his argument have no application herein. (Matter of Kaffenburgh, 188 N. Y. 49; Matter of Solovei, 250 App. Div. 117, 276 N. Y. 647; Matter of Grae, 282 N. Y. 428; Matter of Ellis, 282 N. Y. 435; Matter of Schneidkraut, 231 App. Div. 109; Matter of Cohen, 115 App. Div. 900.) III. Appellant was not denied due process by nonappointment of a Eeferee. (Matter of Richardson, 247 N. Y. 401; Matter of Rouss, 221 N. Y. 81.)
   Desmond, Ch. J.

By an order of the Appellate Division, Second Department (one Justice dissenting) petitioner, admitted to the Bar in 1922, has been disbarred from the practice of law. The disbarment order was made after a hearing and on findings that he had refused to answer pertinent questions put to him during a “ Judicial Inquiry and Investigation ” (Judiciary Law, § 90) ordered by the Appellate Division and held before a Supreme Court Justice assigned by that court. The “ Inquiry and Investigation” was concerned with charges of alleged illegal, corrupt and unethical practices and of alleged conduct prejudicial to the administration of justice, by attorneys and others acting with them, in the County of Kings, where appellant had his law office. Appellant’s refusal to answer was on the stated ground that the answers might tend to iucriminate him. On this appeal he argues that the disbarment order was, contrary to law and in violation of his right to due process of law, made solely because of his refusing to answer questions, in good-faith reliance on his constitutional privilege (N. Y. Const., art. I, § 6) against self incrimination. The Appellate Division held that he was not disciplined for invoking his constitutional privilege but because, in his capacity and status as a lawyer, he had deliberately breached his inviolable and absolute duty to co-operate with the court in a valid and proper investigation of unethical practices. A lawyer, wrote the Appellate Division, “ cannot remain mute, thereby sterilizing the power of the court and frustrating its inquiry into unethical practices, and yet be permitted to retain his privilege of membership in an honorable profession.”

There is no dispute as to the facts and no real dispute as to the legality of this kind of general investigation or “ Judicial Inquiry ” (Judiciary Law, § 90; People ex rel. Karlin v. Culkin, 248 N. Y. 465). On two occasions appellant appeared before the Supreme Court Justice presiding at the inquiry. He was represented by his own counsel. The counsel for the inquiry explained the nature of and authority for the inquiry. Appellant and his attorney were informed by the inquiry’s counsel and by the court that this was an investigation and not an adversary proceeding (see Anonymous v. Baker, 360 U. S. 287, 291; People ex rel. Karlin v. Culkin, 248 N. Y. 465, 479, supra), that there were no respondents or defendants, that appellant was “not being charged with anything” but Avas to be questioned as to pertinent facts ‘ ‘ Avithin the scope of the Inquiry ’ ’ and which were thought to “ bear on or relate to your professional conduct ’ ’, also that counsel for the inquiry had ‘ information that indicates your participation in professional misconduct”.

Counsel for the inquiry then put into evidence 228 “ Statements of Betainer ” Avhich during the years 1954 through 1958 appellant had filed with the Appellate Division in obedience to its Special Buie 3 which requires that an attorney who makes contingent-fee agreements for his services in personal injury, Avrongful death, property damage, and certain other kinds of cases, must file such agreements Avith the court and, if he enters into five or more such agreements in any year, mnst give to the court in writing certain particulars as to hoAV he came to be retained. Put into evidence, also, Avhen appellant appeared before the judicial inquiry Avere 76 other such statements of retainer filed during the same period by the laAV firm of Cohen & Bothenberg, with which appellant apparently had some association. Counsel for the inquiry informed appellant and the court that all these retainer statements were offered in evidence “as a basis for some of the questions to follow ’ ’.

Appellant answered a few preliminary questions as to how long and where he had practiced law. About 60 other questions were asked of him during the two days (six months apart) on which he was on the witness stand but, on advice of his counsel who was present in court, he refused to answer any of them (except questions as to whether he had failed in any case to comply with Special Buie 3 and except as to questions about maintaining a separate office bank account) on the ground that answers might tend to incriminate or degrade him or expose him to a penalty or forfeiture. Those unanswered questions related to the identity of his law office partners, associates and employees, to his possession of the records of the cases described in his statements of retainer, to any destruction of such records, to his bank accounts, to his paying police officers or others for referring claimants to him, to his paying insurance company employees for referring cases to him, and to his promising to pay to any “ lay person ” 10% of recoveries or settlements. He was asked — and refused to answer — as to whether he had made or agreed to make such payments to any of several named persons, as to whether he had hired or paid nonlawyers to arrange settlements of his cases with insurance companies and as to whether his partner or associate Bothenberg had been indicted for and had pleaded guilty to violations of sections 270-a and 270-d of the Penal Law which forbid the solicitation of legal business or the employment by láwyers of such solicitors. At one stage of this questioning counsel for the inquiry pointedly called to appellant’s attention section 90 of the Judiciary Law which gives the Appellate Divisions power and control over lawyers and authority to punish professional misconduct or conduct prejudicial to the administration of justice. At that time the inquiry’s counsel cited Canon 22 of Professional Ethics requiring lawyers to be candid and frank when before the court, Canons 28 and 29 forbidding the payment of awards to persons bringing in legal business and requiring lawyers knowing of such practices to inform the court thereof, Canon 34 outlawing division of fees except with other lawyers; also sections 270-a, 270-c, 270-d and 276 of the Hew York Penal Law, all relat-. ing to soliciting and fee splitting. Counsel for the inquiry warned appellant and his counsel that “ serious consequences ” might flow from his refusal to answer by way of a “ recommendation to the Appellate Division.” Appellant’s counsel replied that he was relying on Matter of Grae (282 N. Y. 428) and Matter of Ellis (282 N. Y. 435) as holding that there could not be any consequence ” to lawyers for doing what they had an absolute legal right to do ’ ’. Appellant was given a further opportunity to answer but persisted in his refusal, all this being admitted in his pleading in this proceeding.

The Supreme Court Justice presiding at the judicial inquiry then filed with the Appellate Division a transcript of the proceedings before him with a recommendation that disciplinary proceedings be instituted against appellant. The Appellate Division directed respondent Hurley, counsel to the inquiry, to commence this disbarment proceeding. Appellant’s answer says that there is only an issue as to whether he was within his rights under section 6 of article I of the New York State Constitution, in pleading the privilege. The case, however, is not so simple. Of course, he had the right to assert the privilege and to withhold the criminating answers. That right was his as it would be the right of any citizen and it was not denied to him. He could not be forced to waive his immunity (Matter of Ellis, 282 N. Y. 435, supra). But the question still remained as to whether he had broken the “ condition ” on which depended the “ privilege ” of membership in the Bar (see Judge Cakdozo in Matter of Rouss, 221 N. Y. 81, 84). “ Whenever the condition is broken, the privilege is lost.” (Matter of Rouss, supra, pp. 84-85). Appellant as a citizen could not be denied any of the common rights of citizens. But he stood before the inquiry and before the Appellate Division in another quite different capacity, also. As a lawyer he was ‘ ‘ an officer of the court, and, like the court itself, an instrument * * * of justice ” (Chief Judge Cakdozo in People ex rel. Karlin v. Culkin, 248 N. Y. 465, 470-471, supra), with the inevitable consequences that the court which was charged with control and discipline of its officers had its own right to demand his full, honest and loyal co-operation in its investigations and to strike his name from the rolls if he refused to co-operate. 'Such “ co-operation ” is a “ phrase without reality ’ ’ as Chief Judge Cakdozo wrote in People ex rel. Karlin v. Culkin (supra, p. 471) if a lawyer after refusing to answer pertinent questions about his professional conduct can retain his status and privileges as an officer of the court.

The solution to our problem is clear when we consider the lawyer’s special position. “ The court’s control over a lawyer’s professional life derives from his relationship to * * * the court ” (Theard v. United States, 354 U. S. 278, 281). “ Membership in the bar is a privilege burdened with conditions ’ ’ (Matter of Rouss, 221 N. Y. 81, 84, supra). Those conditions must not be arbitrary but the proper and appropriate ones are numerous. An attorney’s contractual right to collect as fees a percentage of settlements or recoveries may validly be limited by court rule (Gair v. Peck, 6 N Y 2d 97, cert, denied 361 U. S. 374). He may be required to represent, without fee, indigent defendants. He cannot solicit retainers or employ, others to solicit them for him, or divide his fees with laymen (Penal Law, §§ 270-a, 270-b, 270-c, 270-d, 276)'. If he knows of such practices by others, he must inform the court (Canon 29). He must be candid and frank with the court at all times (Canon 22). Not only must he meet educational requirements and prove his character and fitness before being admitted to-the Bar but he is subject throughout his professional life to investigation as to whether he continues in the possession of those qualities (Judiciary Law, § 90).

The key word is “ duty ” and the imposition on a lawyer by tradition and positive law of strict and special duties produces this situation where, at the very time that he is exercising -a common privilege of every citizen in refusing to answer incriminating inquiries, he is failing in his duty as a lawyer and endangering his professional life. Breach of the special duty brings a special penalty. Lawyers are not the only citizens whose duty to answer is inconsistent with the exercise of the constitutional privilege. So it is with police officers (Christal v. Police Comm., 33 Cal. App. 2d 564; Canteline v. McClellan, 282 N. Y. 166) and with certain other public employees (Matter of Lerner v. Casey, 2 N Y 2d 355, affd. 357 U. S. 468; Beilan v. Board of Educ., 357 U. S. 399). The latest in this line of decisions is. Nelson v. Los Angeles County (362 U. S. 1). Nelson and Globe had been ordered by their employer, the county, to answer any questions asked of them by a Congressional subcommittee before which they had been subpoenaed. There was a California statute making it the duty of any public employee so subpoenaed to answer any questions as to his membership in any organization advocating the forceful overthrow of the United States Government, etc. Nelson and Globe refused to answer the subcommittee’s questions on Fifth Amendment grounds and they were thereupon discharged from their county employment. The United States Supreme Court, following Beilan and Lerner. (supra), held that they had been validly separated from their employment not for invoking their constitutional privilege but • for insubordination under California law. The majority opinion in the Supreme Court stated that, if these men had simply refused without more to answer the subcommittee’s questions, the county could certainly have discharged them and the fact that they chose to place their refusal on a Fifth Amendment claim put the matter in no different posture since their assertion of that claim was not used as a basis for drawing an inference of guilt. In those cited cases the duty to co-operate in investigations by answering relevant questions was found in statutes or constitutions. The lawyer’s duty is found elsewhere — in the common law and in the Canons of Ethics — but it is just as plainly written. In this State a lawyer on admission to the Bar takes the same oath as does a public official (see Judiciary Law, § 466).

The idea that invocation of basic constitutional rights may result, for other reasons, in forfeiture of office or privilege is not a new one. Justice Holmes’ aphorism has become famous: ‘ ‘ The petitioner may have a constitutional right to talk politics, but he has no constitutional right to be a policeman ” (McAuliff e v. New Bedford, 155 Mass. 216, 220). The Federal Hatch Act, denying to governmental employees their right of political activity, on pain of dismissal, has been held valid (United Public Workers v. Mitchell, 330 U. S. 75).

Appellant’s reliance is on Matter of Grae (282 N. Y. 428, supra); Matter of Ellis (282 N. Y. 435, supra); Matter of Solovei (276 N. Y. 647) and Matter of Kaffenburgh (188 N. Y. 49). None of those decisions controls us here. The precise question in Grae and Ellis (supra) was as to whether a lawyer who offered to answer all pertinent questions could be compelled in such an investigation to waive immunity in advance of questioning. The holding in each case was that a lawyer like every other citizen is constitutionally privileged not to answer dam-, aging questions. The difference between those cases and the present one may seem slight but it is enough to permit a fresh examination (or re-examination) of the question now directly presented. Likewise as to Kaffenburgh and Solovei (supra): Kaffenburgh’s refusal to testify was at a criminal trial (so in Matter of Cohen, 115 App. Div. 900) and Solovei’s was before a grand jury. Our present appellant by declining to answer may have escaped criminal prosecution and punishment, but he could never, while a member of the Bar, escape the other consequences of his flagrant breach of his absolute duty to the court whose officer he was. That breach was in itself “ professional delinquency ” (Ex parte Garland, 71 U. S. 333, 379) and a valid reason for depriving appellant of his office as attorney.

The order appealed from should be affirmed, without costs.

Ftjld, J.

(dissenting). In order to appreciate the force of today’s decision, it must be borne in mind that we are concerned not with the necessarily vague contours of the Due Process Clause of the Federal Constitution, but with the specific provision of the Constitution of this State that no person shall be compelled to be a witness against himself (art. I, § 6). Eecent Supreme Court decisions (Lerner v. Casey, 357 U. S. 468; Beilan v. Board of Educ., 357 U. S. 399; and Nelson v. Los Angeles County, 362 U. S. 1), whatever their bearing on the present problem, are, therefore, not dispositive of this case. In other words, whether or not this disbarment violates federal constitutional guarantees — and for reasons previously expressed (e.g., Matter of Lerner v. Casey, 2 N Y 2d 355, 373, dissenting), I believe that it does — we need not resolve the federal question. The ease before us may and should be decided, as were Matter of Grae (282 N. Y. 428) and Matter of Ellis (282 N. Y. 435), on an interpretation of our own Constitution, article I, section 6.

I agree that “ strict and special duties ” have been imposed on a lawyer (opinion, p. 496). I cannot, however, persuade myself that a lawyer’s refusal to answer questions, even before a judicial inquiry, on the constitutionally permissible ground that to do so would incriminate him, may be said to constitute a violation of any such duty. (See Matter of Grae, 282 N. Y. 428, supra; Matter of Ellis, 282 N. Y. 435, supra; see, also, People ex rel. Karlin v. Culkin, 248 N. Y. 465, 471.) In the Grae and Ellis cases, the court held that under our State Constitution an attorney’s refusal to sign a waiver of immunity — his refusal to forego reliance on the privilege — could not constitute a ground for disbarment, even though the refusal occurred during the course of a judicial inquiry similar to the one which here concerns us. ****There, too, it was argued that failure to answer was a violation of the lawyer’s duty of co-operation with the court. We rejected that argument and, in the words of Presiding Justice Lazansky who had dissented in the Appellate Division, forthrightly declared that (282 N. Y., at p. 435)

“ ‘ The constitutional privilege is a fundamental right and a measure of duty; its exercise cannot be a breach of duty to the court.’ ”

And, therefore, concluded the court (p. 435),

“It follows that * * * the present disciplinary proceeding instituted against the appellant, wherein the single offense charged is his refusal to yield a constitutional privilege, is unwarrantable.”

The attorneys Grae and Ellis ultimately offered to answer all questions put to them, but, the record makes clear, the offer was based not on a surrender of immunity, but on the specific condition that immunity be granted — by their being compelled to answer questions that might incriminate them. It was for the very reason that the court was unwilling to have immunity conferred on them that it declined to put questions to them without first obtaining a waiver of immunity. Analysis of our opinion, as well as the dissent of Presiding Justice Lazansky (258 App. Div., at pp. 567-575) — which this court explicitly approved (282 1ST. Y., at p. 434) — demonstrates that this court was not merely passing on the consequences of a momentary lapse of courtesy, but was deciding the very point in issue today. Pointedly noting that “the single offense charged [against Grae] is his refusal to yield a constitutional privilege ”, the court unequivocally announced that “ its exercise cannot be a breach of duty to the court ” (282 N. Y., at p. 435).

The attorneys who refused to sign waivers of immunity in those proceedings were not, I am confident, any more co-operative or any more mindful of their “ strict and special duties ” or of their privileged posts in the affairs of men than the present appellant. And, I venture, the motives which prompted Grae and Ellis to assert their privilege were no different from those of the appellant.

Nor do Matter of Grae and Matter of Ellis stand alone in holding .that an attorney’s claim of privilege may not be treated as professional misconduct warranting disciplinary action.

The question now before us first came to this court in 1907 in Matter of Kaffenburgh (188 N. Y. 49). Kaffenburgh was called as a witness on the trial of his employer for conspiracy to obstruct justice. He was asked questions relating to his possible participation in the conspiracy and declined to answer on constitutional grounds. This was one of the charges on which his disbarment was later sought, and as to it this court wrote (p. 53): “The defendant * * * had the right to refrain from answering any question which might form the basis of or lead to the prosecution of himself or a forfeiture of his office of attorney and counselor at law. # * * We are, therefore, of the opinion that no offense was stated in the first charge ’ \ The court’s opinion herein attempts to distinguish Kaffenburgh upon the ground that it involved a trial and not an inquiry into the conduct of lawyers. In point of fact, it was the most serious kind of inquiry into the conduct of lawyers, taking, as it did, the form of a criminal prosecution. The questions put to Kaffenburgh dealt solely with his conduct in the practice of the law and, certainly, he was as much an officer of the court conducting the trial as the appellant here was of the court conducting the judicial inquiry.

Ten years later came Matter of Rouss (221 N. Y. 81), also cited by the majority. That decision, far from overruling Kaffenburgh on this point, actually confirmed it, for the court explicitly declared that “ the charge was made that the refusal to answer was professional misconduct. That charge was not sustained either in the Appellate Division or in this court” (p. 90).

Twenty years after Rouss came Matter of Solovei (276 N. Y. 647, affg. 250 App. Div. 117). As a result of asserted irregularities in connection with a murder investigation in which the respondent therein represented one of the suspects, the Governor appointed an Extraordinary Special and Trial Term of the Supreme Court and a grand jury was drawn for that term. It indicted three persons for murder and, some time later, it also indicted certain others, including an office associate of the respondent, for the crime of conspiracy to obstruct justice. The respondent, named as a coconspirator, declined to waive immunity when questioned by the grand jury. That body thereupon presented charges to the Appellate Division. That court dismissed the charges, stating that “ Matter of Kaffenburgh * * * decided that an attorney who in good faith refused to answer questions on the ground that they might tend to incriminate him was not amenable to disciplinary proceedings ’ ’ (250 App. Div., at p. 121). The Appellate Division also commented on the nature of the proceedings, noting that, if it was not a breach of duty to the court to refuse to co-operate with it in a public trial, as in Kaffenburgh, it was surely no breach to claim the privilege in a private hearing (p. 120). As indicated, we affirmed without opinion.

Although the court in this case places considerable reliance upon People ex rel. Karlin v. Culkin (opinion, p. 495), it is noteworthy that that case did not involve a claim of privilege; the attorney simply refused to be sworn or testify. In affirming an order adjudging him in contempt, the court spoke of the duty of “ co-operation ” owed by an attorney in an inquiry such as the present, but it was careful to indicate that such “ co-operation ” on the part of the lawyer was “subject to his claim of privilege ” (248 N. Y., at p. 471).

It is hardly necessary to say that a scrupulous regard for the constitutional limitation will not leave the disciplinary authority powerless or a guilty attorney immune. If, as counsel for the judicial inquiry stated toward the conclusion of the investigation, there was information indicating the appellant’s “ participation in professional misconduct ”, his unwillingness to testify might have justified institution of a disciplinary proceeding founded on the information at hand. And, if such proceeding were to be brought and the appellant were to stand mute therein, he would have to bear all of the legitimate inferences stemming from the damaging evidence adduced against him. It is also relevant that, where immunity is conferred — by overriding the claim of privilege and compelling the witness to answer the questions — and the testimony shows that he is not fit to continue as a lawyer, he may then be disbarred or otherwise disciplined. (See Matter of Rouss, 221 N. Y. 81, 86 et seq., supra.)

In the present case, however, the appellant’s claim of privilege was the sole ground relied upon to disbar him, and this fact cannot be altered or disguised by styling his conduct a ‘ ‘ refusal to co-operate with the court”. It is to substance that we must look, not to form or labels. The courts should not sanction so easy an avoidance of a constitutional guarantee of a fundamental personal right.

To the charge that it is unthinkable that a lawyer ‘ ‘ can retain his status and privileges as an officer of the court ” after claiming his privilege (opinion, p. 495), I would answer, as did Mr. Justice Lazansky in his dissent in Matter of Ellis (258 App. Div. 558, 573, supra), that the charge “is based upon false assumption. Defiance and affront there cannot be when the act has the sanction of the fundamental law of the land ’ ’. It is, in short, my view that not only section 6 of article I of our Constitution but the decisions of this court considering and construing it require us to set aside the order of disbarment. Failure to do so can only mean that time has eroded the importance and vitality of the constitutional privilege against self incrimination.

I would reverse the order of the Appellate Division.

Judges Dye, Froessel, Van Voorhis, Burke and Foster concur with Chief Judge Desmond ; Judge Fuld dissents in a separate opinion.

Order affirmed.

      . Indeed, in the Ellis case (282 N. Y. 435, supra), the court pointed out that Ellis, “ appearing as a witness at the inquiry, not only declined to sign a waiver of immunity * * * but in addition * 6 declined to answer any questions upon the ground that such answers would tend to incriminate or degrade him” (p. 437; see, also, 258 App. Div., at p. 559). Although Ellis later wrote a letter stating that, while he stood upon his refusal to sign a waiver, he was “ willing ” to answer questions put to him, the significant fact is not only that he never did appear as a witness, but that his refusals to answer questions went unpunished.


source: Caselaw Access Project

author: Desmond, Oh. J.

license: Public Domain

text:
    Doris W. Vidor, as Executrix of Charles Vidor, Deceased, Respondent, v. Oscar Serlin et al., Appellants, and Romola Nijinsky, Respondent.
    Argued February 25, 1960;
    decided April 1, 1960.

      John Logan O’Donnell and William F. Sondericker for appellants.
    I. The 1940 agreement transferred the rights to Bass and the rights were effectively assigned to Serlin. (Rogalsky v. Ryan, 192 Misc. 392, 275 App. Div. 794; Kelly Asphalt Block Co. v. Barber Asphalt Paving Co., 211 N. Y. 68; Manchel v. Kasdan, 286 App. Div. 483, 1 N Y 2d 734; Sachs v. Cluett, Peabody & Co., 265 App. Div. 497; Mandel v. Liebman, 303 N. Y. 88; Janvey v. Loketz, 122 App. Div. 411; Schloss Bros. & Co. v. Bennett, 260 N. Y. 243; Lane & Co. v. United Oil Cloth Co., 103 App. Div. 378; Lane & Bodley Co. v. Locke, 150 U. S. 193; Voss v. Luzzo, 149 Misc. 65; Sillman v. Twentieth Century-Fox Film Corp., 3 N Y 2d 395.) II. The recording statute on which plaintiff relies applies only to every assignment of copyright and does not apply to a license of motion-picture rights or of the right to impersonate. Although Serlin’s instruments conveying such rights are capable of being recorded, the lack of recording thereof does not cut off Serlin’s prior license. (Hirshon v. United Artists Corp., 243 F. 2d 640; American Dirigold Corp. v. Dirigold Metals Corp., 125 F. 2d 446; Matter of Bernard & Katz, 38 F. 2d 40; Photo-Drama Motion Picture Co. v. Social Uplift Film Corp., 220 F. 448; Stephens v. Howells Sales Co., 16 F. 2d 805; Fortunato v. Patten, 147 N. Y. 277.) III. The Federal statute pertaining to the recordation of every assignment of copyright has no bearing upon, or pertinence to, the right to impersonate or portray another person or rights of privacy and plaintiff’s recording could not-, therefore, cut off Serlin’s prior ownership or license of portrayal rights. (Binns v. Vitagraph Co. of America, 210 N. Y. 51.) IV. The knowledge held by plaintiff and his agents was sufficient to constitute notice under the authorities of Serlin’s prior equities and the failure of plaintiff or his agent to use due diligence in pursuing such inquiry is fatal to plaintiff’s claim as a subsequent purchaser. (People v. Steele, 179 Misc. 587; The Tompkins, 13 F. 2d 552; Williamson v. Brown, 15 N. Y. 354; Bennett v. Buchan, 76 N. Y. 386; Simmons Cr. Coal Co. v. Doran, 142 U. S. 417; Long v. Chronical Pub. Co., 68 Cal. App. 171;
      Cunningham v. Brown, 265 U. S. 1; Reed v. Gannon, 50 N. Y. 345; Rogers v. Adams, 119 Misc. 77, 206 App. Div. 739; Cassia Corp.v. North Hills Holding Corp., 278 App. Div. 960.) V. Since judgment was entered for plaintiff, the court erred in not awarding judgment over in favor of Serlin in some amount which the court should have determined to be the damage Serlin sustained by virtue of Mrs. Nijinsky’s double sale, without notice to Serlin of the rights in question and the necessity of Serlin’s defending this action by virtue of two sales. (Fox v. Sizeland, 170 Misc. 390; Krause v. Hullar, 135 Misc. 837; Webb v. Powers, Fed. Cas. No. 17,323; McGaw v. Acker, Merrall & Condit Co., 111 Md. 153; Seech & Kade v. Pertussin Chem. Co., 235 App. Div. 251; Charman v. Tatum, 54 App. Div. 61,166 N. Y. 605; Olmstead v. Rawson, 188 N. Y. 517.)

      Robert Morris and Burton L. Litwin for Doris Vidor, respondent.
    I. The trial court was justified in finding that Vidor was a bona fide purchaser for a valuable consideration without notice. (Gillet v. Bank of America, 160 N. Y. 549; Photo-Drama Motion Picture Co. v. Social Uplift Film Corp., 220 F. 448; Macloon v. Vitagraph, 30 F. 2d 634; Mabee v. White Plains Pub. Co., 179 Misc. 832; Ruddy v. Morse Dry Dock & Repair Co., 107 Misc. 199; Boyd v. Boyd, 252 N. Y. 422; Matter of Aurelio [Cohen], 291 N. Y. 176; Harrington v. Harrington, 290 N. Y. 126; Persky v. Bank of America Nat. Assn., 261 N. Y. 212; Union Bank & Trust Co. v. Girard Trust Co., 307 Pa. 488.) II. The Appellate Division was correct in its holding that no transfer took place to Serlin and that no valid ratification occurred. The agreement dated March 26, 1940 between Bass and Romola Nijinsky was for personal services and was nonassignable. (Avenue Z Wet Wash Laundry Co. v. Yarmush, 129 Misc. 427, 220 App. Div. 740; Seligman & Latz v. Noonan, 201 Misc. 96; Paige v. Faure, 229 N. Y. 114; Wood v. Duff-Gordon, 222 N. Y. 88; Arkansas Smelting Co. v. Belden Co., 127 U. S. 379; Nassau Hotel Co. v. Barnett & Barse Corp., 162 App. Div. 381, 212 N. Y. 568.) III. The purported assignment from Basil N. Bass to Oscar Serlin was ineffective inasmuch as it was never ratified by Romola Nijinsky and the obligations never were assumed by Serlin. (Blass v. Terry, 156 N. Y. 122; Merritt v. Bissell, 155 N. Y. 396; Pope v. Hoyt, 200 App. Div. 475; Matter of Smathers, 153 Misc. 132; Trustees of Freeholders

      & Commonalty of Town of Easthampton v. Bowman, 136 N. Y. 521; Sillman v. Twentieth Century-Fox Film Corp., 3 N Y 2d 395; York Mtge. Corp. v. Clotar Constr. Corp., 254 N. Y. 128; People ex rel. MacCracken v. Miller, 291 N. Y. 55; Aerated Prods. Co. v. Godfrey, 290 N. Y. 92.) IV. Plaintiff is a stranger to the cross complaints of defendants and should not be affected by such cross complaints.

      Maurice R. Cheyette for Romola Nijinsky, respondent.
    I. The unanimous modification of the judgment of the lower court by dismissing Serlin’s cross complaint on the law and the facts was proper. The new findings on which' such dismissal was predicated are supported by substantial evidence in the record. (Paige v. Faure, 229 N. Y. 114; Nassau Hotel Co. v. Barnett & Barse Corp., 162 App. Div. 381, 212 N. Y. 568; New York Bank Note Co. v. Hamilton Bank Note Co., 180 N. Y. 280; Arkansas Val. Smelting Co. v. Belden, 127 U. S. 379; Adair v. Brimmer, 74 N. Y. 539; Trustees of Freeholders & Commonalty of Town of Easthampton v. Bowman, 136 N. Y. 521; De Mille Co. v. Casey, 115 Misc. 646; New York Phonograph Co. v. Davega, 127 App. Div. 222; Anderson v. New York & Harlem R. R. Co., 132 App. Div. 183; Morgan Munitions Supply Co. v. Studebaker Corp., 226 N. Y. 94; Sirkin v. Fourteenth St. Store, 124 App. Div. 384.) II. The findings of the trial court embodied in the trial court’s opinion and decision upon which judgment was entered in the Supreme Court, being supported by substantial evidence in the record, are not subject to review by this court and are conclusive, as they have been unanimously affirmed by the Appellate Division. The findings of the trial court that the management contract was an instrument capable of recordation and should have been recorded under the provisions of the Copyright Act in order to give notice, and that Vidor was a bona fide purchaser for value without notice and acquired sole and exclusive motion-picture rights in Mrs. Nijinsky’s two literary works were correctly determined in accordance with the Federal copyright statute and Federal judicial decisions which governed and controlled the interpretation of the Federal law. (Adams Express Co. v. Croninger, 226 U. S. 491; United States v. American Bell Tel. Co., 159 U. S. 548; Kalem Co. v. Harper Bros., 169 F. 61, 222 U. S. 55; Photo-Drama Motion Picture Co. v. Social Uplift Film Corp., 213 F. 374, 220 F. 448; Macloon v.
      Vitagraph, 30 F. 2d 634; Manners v. Morosco, 252 U. S. 317.) III. Appellants come into court with unclean hands. They are not entitled to favorable consideration of the court by reason of their fraud and duplicity. (American Sur. Co. v. Conner, 251 N. Y. 1.)
   Desmond, Oh. J.

In 1954 Charles Vidor, a producer of motion pictures, made a written agreement with defendant Eomola Nijinsky whereby Mrs. Nijinsky purported to sell to Vidor the exclusive motion-picture, television, radio and allied rights in two books written by Mrs. Nijinsky, of both of which she held the recorded copyright, and which described the life and works of her late husband, the famous ballet dancer Vaslav Nijinsky. Concurrently with that agreemlEt, Mrs. Nijinsky gave Vidor a separate instrument of assignAnt of the same rights. The assignment was recorded in thAlnited States Copyright Office (see U. S. Code, tit. 17, § 30) a fljv days later.

This suit was brought by Vi Ac (his executrix is now plaintiff) for a declaratory judgmei^Arst, that plaintiff is the sole owner of the motion-picture a^Vallied rights in the literary works above referred to; and,second, that neither defendant Basil N. Bass (his executoáfI'M-/mbw substituted as defendant) nor defendant Oscar Serlinmak'yhv/such rights in the two books. Bass and Serlin by answer)AAB' alleged rights of theirs as based on an agreement made^^Kirch, 1940 between Bass and Mrs. Nijinsky (assigned by-B^^Ao Serlin in November, 1940). Also, they served on Mrs. Nijlffilfy a cross complaint in which they asked for damages agajiÉPner because she had twice sold the rights in question and hApkus cast a cloud on their rights and caused them damage andput them to expense.

It is conceded that the Nijinsky-Bass agreement was not recorded in the Copyright Office until long after Vidor’s assignment was so recorded pursuant to the applicable Federal statute (II. S. Code, tit. 17, § 30, supra). Defendants Harlow (executor of the Bass will) and Serlin argue, however, that the former instrument was not an assignment of copyright ” but a mere license as to the motion-picture and allied rights (coupled with an agreement making Bass the booking agent of Mrs. Nijinsky for a proposed American lecture tour) and that, as such, it could be, but was not required to be, recorded under the statute (U. S. Code, tit. 17, § 30, supra). They assert that the lack of recording did not invalidate the license and that it effectively transferred all the rights of Mrs. Nijinsky. Furthermore, say Berlin and Bass’ executor, Vidor took his assignment with knowledge or notice of the prior equities of Berlin as assignee of Bass, and Vidor’s failure to use due diligence in inquiring as to Berlin’s position is fatal to Vidor’s (or his estate’s) claim. Mrs. Nijinsky’s answer argued that her contract with Bass was an instrument capable of statutory recordation and should have been recorded so as to give notice, that Vidor as a bona fide purchaser without notice became sole owner of the motion-picture rights and that Berlin and the Bass estate, because of their alleged breaches of their agreement with her and because of their concealments of the relationship bjgj$ween Bass and Berlin, etc., can have no relief against her. £

There was a trial (Justice (Beenberg without a jury) which ended in findings as follows: shat the Bass-Nijinsky contract was an instrument capable ofjaling recorded as was the BassSerlin assignment thereof, thjj^Beither was recorded until more than six months after VidoJ^Brecording and that Vidor had neither actual notice thereoflBr notice implied by law, that the Vidor-Nijinsky agreement v and assignment were duly recorded in the Copyright (Qffiee, ^hat plaintiff owns all the disputed rights and that nei'1j|*eW Bass estate nor Berlin has any motion-picture or simildl^^^Bs in the two literary works. The Trial Judge did not pail^^Bhc Bass-Nijinsky agreement issues but found that Mrs. N$pPPy never knew of the relationship between Bass and Berlin tstimisented to the assignment by the former to the latter. Thejjepnent subsequently entered was to the effect that the assignment from Bass to Berlin was ineffective, that plaintiff owns the motion-picture and allied rights and that defendants Berlin and Bass’ executor have no such rights.

On appeal, the Appellate Division affirmed except that it added to the judgment, by modification, a dismissal of the cross complaint against Mrs. Nijinsky, explaining in a memorandum that the Bass-Serlin assignment was ineffective because the dramatic rights given by Mrs. Nijinsky to Bass were not separately assignable without her consent which was never given and that, in any event, 1 ‘ whatever rights Berlin or his assignor might have acquired were lost as the result of the breach of Bass’ managerial obligations under the purported agreement

No one doubts that Vidor’s assignment was recordable and properly recorded. Appellants, nevertheless, say that the recording act did not give Vidor priority over Bass, since, so they argue, the Nijinsky-Bass document was at most a license, not an “ assignment ” of the sort described in section 30 of title 17 of the United States Code. Their submission is that such a nonrecordable license loses nothing by the statute and that its priority in time gives it priority in rank. The first answer is in the Nijinsky-Bass contract itself since in terms it “ assigns ” to Bass “ any and all rights ” of Mrs. Nijinsky. A more complete answer is in the controlling case of Photo-Drama Motion Picture Co. v. Social Uplift Film Corp. (220 F. 448, 449, 450 [C. C. A. 2d]) which says that a separate conveyance of motion-picture rights “must be recorded to avail of the constructive notice which the section contemplates. ’ ’

It is, therefore, clear enough that, since Vidor did record his assignment, his rights thereunder are prior to any rights of the Bass estate or Serlin, unless Vidor had knowledge or notice of the Nijinsky-Bass and Bass-Serlin documents — that is, of Serlin’s claims. We will assume that if Vidor had knowledge of facts putting him on inquiry, he would not be a bona fide purchaser, regardless of recording. But. the trial court here made findings, affirmed by the Appellate Division, that Vidor had no knowledge or actual or implied notice of Serlin’s claims. Those findings have support in the record. Vidor denied ever having-had notice. Before signing with Mrs. Nijinsky he had retained attorneys to clear the title and was told by the attorneys that it was “clear”. One of the reports from an attorney included newspaper and theatrical trade paper items to the effect that Serlin owned performing rights to the book “Nijinsky” but, as Vidor testified, these “ publicity releases ” did not necessarily have any significance as to actual truth. When Vidor learned that the original copyright was held by a book publisher, he arranged to get from the publisher an assignment containing no exceptions. Mrs. Nijinsky in her assignment to Vidor warranted that she had not granted the rights to anyone else. There is testimony of an ‘ invariable custom ’ ’ whereby one who acquires motion-picture rights files an assignment in the Copyright Office. On the whole record it. cannot be said that Vidor had knowledge of Serlin’s rights or claims or such notice as required him to make other inquiries. The findings, therefore, that Vidor was a bona fide purchaser for value are well based and sufficient to give Vidor clear priority over Serlin as to ownership of the motion-picture rights.

As between Serlin and Mrs. Nijinsky also, there is support for the judgment in favor of the latter. The trial court held that no consent to or ratification of the Bass-Serlin assignment ever came from Mrs. Nijinsky. Clearly, there was evidentiary basis for the latter holding. As to the necessity for consent, the document which says nothing about assignment seems to be an entire contract, providing not only for the transfer to Bass of some rights to the books but calling also for the performance by Bass of services as booking agent for an American lecture tour.

The Appellate Division, as we have seen, went farther than the trial court and made a new fact finding (see Bernardine v. City of New York, 294 N. Y. 361, 366) that Bass had breached his “managerial obligations”. There is ample proof that he did little or nothing in that direction and that he got no lecture engagements at all. This brings us to another ground for holding that Bass-Serlin could not have priority rights as against Vidor. Since it has been established in this very lawsuilt that neither Bass nor his attempted assignee Serlin ever performed their agreement with Mrs. Nijinsky at all, that adjudication is available not only to Mrs. Nijinsky but to Vidor, too (see Israel v. Wood Dotson Co., 1 N Y 2d 116). It is, therefore, still another reason for defeating the Bass-Serlin claim to priority over Vidor.

The judgment should be affirmed, with costs to respondents against appellants.

Judges Dye, Fuld, Froessel, Vast Voorhis, Burke and Foster concur.

Judgment affirmed.


author: Van Voorhis, J.

text:
    The People of the State of New York, Respondent, v. Alvin Griffin, Appellant.
    Argued February 24, 1960;
    decided April 1, 1960.

      Frederic G. Corneel and Anthony F. Marra for appellant.
    I. A defendant’s plea of guilty to a lesser offense made to ‘1 cover the indictment ’ ’ admits all of the facts alleged in the indictment which are essential to constitute such lesser offense and denies all other facts alleged in the indictment. After a court accepts such plea, it cannot impose a sentence based on facts that were denied by the plea it accepted. II. Agreements as to sentence are binding on the court. (People v. Farina, 2 A D 2d 776, 2 N Y 2d 454; People v. Sullivan, 276 App. Div. 1087; People ex rel. Farina v. Klein, 208 Misc. 792, 2 A D 2d 777; People v. Chichester, 262 App. Div. 567; People v. Strecker, 279 App. Div. 936; People v. Siciliano, 185 Misc. 149; People v. Simmons, 130 Misc. 821; People v. Wasnik, 5 Misc 2d 1016.) III. A plea to cover the indictment denies all facts which it does not specifically admit. (People v. White, 309 N. Y. 636; People v. Siciliano, 185 Misc. 149; People v. Simmons, 130 Misc. 821; People v. Glass, 201 Misc. 460; People v. Fuchs, 71 Misc. 69; People ex rel. Temple v. Brophy, 248 App. Div. 442, 273 N. Y. 487; People v. Krennen, 264 N. Y. 108.) IV. The plea denied the allegation that defendant was armed with a dangerous weapon although this allegation may not have charged a separate crime. (People ex rel. Romano v. Brophy, 280 N. Y. 181; People ex rel. Codoluto v. Martin, 262 App. Div. 934; People ex rel. McCue v. Martin, 261 App. Div. 868; People ex rel. Glass v. Murphy, 246 App. Div. 885; People v. Simmons, 130 Misc. 821 ; People v. Chichester, 262 App. Div. 567.) V. The court did not reserve the right to sentence under section 1944. VI. Defendant did not waive his rights. (People v. Perrin, 170 App. Div. 375; People v. Persce, 204 N. Y. 397; People v. Adamkiewicz, 298 N. Y. 176.) VII. Coram nobis is an appropriate remedy where as here the case turns on the question whether defendant in pleading guilty relied upon a statement as to his sentence made by the Judge in open court at the time the plea was taken. (People v. Sadness, 300 N. Y. 69; People v. Sullivan, 276 App. Div. 1087; People v. Farina, 2 N Y 2d 454; People v. White, 309 N. Y. 636; People v. Eastman, 306 N. Y. 658; People ex rel. Miller v. Marlin, 1 N Y 2d 406; People v. Picciotti, 4 N Y 2d 340.)

      Edward S. Silver, District Attorney (William I. Siegel, David Diamond and Raymond J. Scanlon of counsel), for respondent.
    I. The order appealed from was proper in law and in fact. (People v. Richetti, 302 N. Y. 290; People v. Guariglia, 303 N. Y. 338; People v. Farina, 2 N Y 2d 454; People v. Oddo, 300 N. Y. 649; People v. Sullivan, 277 App. Div. 1087; People v. Rinaldo, 9 A D 2d 664; People v. White, 309 N. Y. 636; People ex rel. Small v. Shaw, 279 App. Div. 59; Matter of Lyons v. Robinson, 293 N. Y. 191.) II. The order of the Appellate Division had a basis in sufficient evidence. The Court of Appeals may not review the determination of the facts by the Appellate Division. (People v. Sugarman, 248 N. Y. 255; People v. Pesky, 254 N. Y. 373; People v. Bearden, 290 N. Y. 478; People v. Boas, 92 N. Y. 560; People v. Sherlock, 166 N. Y. 180; People v. McCarthy, 250 N. Y. 358; People v. Wrieden, 299 N. Y. 425; People v. Spinello, 303 N. Y. 193.)
   Van Voorhis, J.

The relator has appealed from the affirmance of an order dismissing a coram nobis application. Appellant contends that he was misled respecting sentence in pleading guilty to a lesser offense than was charged in the indictment.

The indictment charged assault in the second degree in two counts committed upon the same victim on the same date. The first count alleged the infliction of grievous bodily harm (Penal Law, § 242, subd. 3). The second count, omitting the infliction of grievous bodily harm, charged an assault with an instrument, weapon or thing likely to produce grievous bodily harm (Penal Law, § 242, subd. 4).

Appellant pleaded not guilty to both counts, but the Assistant District Attorney recommended acceptance of a plea of ‘1 guilty to the crime of an attempt to commit the crime of assault in the second degree to cover all counts of the indictment.” In interposing this plea, appellant was led to believe that his punishment would be less severe than though he had pleaded to either of the charges of assault. Except in capital cases or life imprisonment, a person convicted of an attempt ‘£ is punishable by imprisonment for not more than half of the longest term, or by a fine of not more than one-half of the largest sum prescribed upon a conviction for the commission of the offense attempted, or by both such fine and imprisonment” (Penal Law, § 261, suM. 2). Assault in the second degree is punishable by imprisonment for a term not exceeding 5 years or by a fine of not more than $1,000 or both (Penal Law, § 243). The maximum punishment for an attempt to commit this crime is a prison term of 2% years or a fine of not more than $500, or both. This appellant received an indeterminate sentence of from 6 years and 3 months to 12 years and 6 months. The explanation is as follows: To the surprise of appellant, after his plea to an attempt had been accepted, the County Judge conducted a hearing at which he called the complaining witness who testified that appellant hit him on the head with a child’s baseball bat and stabbed him with a knife. The witness was unable to say what kind of a knife it was except that it was about three inches long. Then the County Judge called a detective who saw appellant in the station house, but did not recollect having seen the baseball bat or the knife. Appellant’s attorney inquired “ the reason for this proceeding in view of the' fact that he had already pleaded guilty to attempted assault in the 2nd degree? ” to which the Judge replied: “The reason is to determine the nature of the weapon or weapons that were used; to determine whether or not the defendant comes within the purview of the statute in such case made and provided concerning increased punishment.” The appellant then took the stand and testified that the baseball bat was a souvenir, a little over a foot long, 1 ‘ Like the one you get at Ebbets Field ’ ’, weighing less than a pound, and that the knife was a kitchen paring knife. The Judge then stated that “ The Court finds that the defendant was armed with a' dangerous weapon that comes within the purview of the statute; to wit, the knife and that he is, therefore, amenable to added punishment under the Penal Law” (§ 1944).

An additional sentence of 5 to 10 years in Sing Sing was imposed, making the total sentence from 6 years and 3 months to 12 years and 6 months. The additional sentence under section 1944 of the Penal Law is the same for attempting to commit a felony as in the case of the commission of the felony, with the consequence that the total punishment was but slightly less than the maximum to which appellant could have been subjected if he had pleaded guilty to the indictment charging assault in the second degree. It is well established that section 1944 of the Penal Law is applicable to an attempted felony as well as to a felony, and that it does not create a separate crime but increases the penalty for a felony committed or attempted (People v. Paradiso, 248 N. Y. 123, 126; People ex rel. Temple v. Brophy, 248 App. Div. 442, 444; People v. Krennen, 264 N. Y. 108).

If appellant had pleaded guilty to the crime charged in the indictment, or had been convicted after trial, it would have been proper for the court to have taken testimony to determine whether appellant was armed in order to determine the question of increased punishment (People v. Caruso, 249 N. Y. 302; People v. Krennen, supra). Here, however, appellant did not plead guilty to any count in this indictment. His plea was to a lesser crime which the court is authorized to accept on recommendation of the prosecuting officer (Code Crim. Pro., § 342-a). Section 334 defines the form of pleas to indictments. Unless it sets forth a former conviction or acquittal, the plea (with an exception pertinent here) must state that the defendant pleads that he is guilty or not guilty of the crime charged in the indictment. The exception relates to pleas to lesser crimes. Where that occurs, the defendant does not admit the facts charged against him in the indictment. He pleads guilty to something else. Subdivision 2 of section 334 directs that “If he plead guilty to any lesser crime than that charged in the indictment ” the substance of his plea shall be that 1 ‘1 the defendant pleads guilty to the crime of’ — (naming it).” Such a plea does not presuppose the truth of the facts pleaded in the indictment. Consequently it accomplishes nothing for the Judge to institute an inquiry concerning the facts alleged in the indictment, since the defendant has pleaded guilty to another crime. His plea only admits the facts stated in the plea as constituting the lesser crime. This accused, pleading guilty to an attempt to cover both counts in the indictment, may be deemed to have referred to the time, place and intended victim described in the indictment, but otherwise the plea to an attempt assumes different circumstances. This was quite different from pleading guilty to the indictment and gave no warrant to the court to conduct an inquiry to ascertain whether the facts alleged in the indictment were true or whether, if the acts described in the indictment were committed, the person who did so was armed.

Although the language of appellant’s plea of guilty to attempted assault in the second degree may be deemed to refer to the time, place and intended victim described in the indictment, the plea of attempt presupposes different circumstances. Moreover, the practice of accepting pleas to lesser crimes is generally intended as a compromise in situations where conviction is uncertain of the crime charged. The judgment entered on the plea in such situations may be based upon no objective state of facts. It is often a hypothetical crime, and the procedure— authorized by statute — is justified for the reason that it is in substitution for a charge of crime of a more serious nature which has been charged but perhaps cannot be proved. After a plea to a lesser crime has been accepted, the factual basis of the crime confessed can ordinarily be found only in the language of the plea. Here, appellant could have been guilty of attempted assault in the second degree if he intended to inflict grievous bodily harm without a weapon. It could not be assumed that he was armed from the plea which he entered and, since his plea may relate to a hypothetical situation without objective basis, it was not permissible for the Trial Judge to conduct a so-called section 1944 inquiry. The charges in the indictment cannot be tried after a plea to a lesser crime has been interposed, which stands as a barrier even where the inquiry discloses that an actual assault has been committed and not merely an attempt. Notwithstanding that being armed under section 1944 of the Penal Law is not a separate crime, but only an aggravation, and may be applicable to an attempt as well as to a completed crime, this section cannot be applied where the defendant has been allowed to plead guilty to a different crime unless the fact of being armed is admitted by the plea.

Here appellant manifestly intended to plead guilty to attempted second degree assault while unarmed. He had reason to believe that he would be punished less severely than if he had committed a second degree assault. In substituting an attempt for the counts in the indictment, the facts of the crime were necessarily altered, and, after the plea was taken, it was too late to go behind the facts contained in the plea in order to ascertain how the other crime occurred. In specifying that the plea to the substituted crime covered the whole indictment, armed assault was excluded. The lesser crime authorized by sections 334 and 342-a of the Code of Criminal Procedure need not be a lower degree of the same crime, nor an included crime. A plea of larceny might be taken in satisfaction of a burglary indictment, but that would not admit or establish that the defendant broke into and entered a building with intent to commit a crime therein, nor could the sentence for larceny be aggravated by proving that he committed the burglary while armed. The very circumstance that, in the case of this as an included crime, the plea is to something less than is charged in the indictment, signifies that in accepting it the court acted on the basis of only such facts alleged in the indictment as are necessary to sustain the plea to the reduced crime. That, as has been indicated, does not require an assumption that appellant was armed, nor can the court conduct an inquiry into the facts of the suppositious crime confessed by the plea. If he was guilty of the charges in the indictment, he should have been tried in which event this problem could not have arisen. But if, as the County Judge and the Assistant District Attorney thought to be the case, there was enough doubt about his conviction to justify accepting a plea to another crime, the punishment as well as the conviction depend for legal authorization upon the facts admitted by the plea.

The County Court was without jurisdiction to impose the additional sentence under section 1944 of the Penal Law. While this point might well have been raised by writ of habeas corpus, we think that it is a proper subject of coram nobis especially inasmuch as the circumstances indicate that appellant was induced to plead guilty on the false assumption that the additional punishment would not be applied.

The order appealed from should be reversed, the motion granted, the sentence vacated, and appellant remanded for resentencing but without the imposition of the additional sentence under section 1944 of the Penal Law.

Chief Judge Desmond and Judges Fuld, Froessel and Foster concur with Judge Van Voorhis; Judges Dye and Burke dissent and vote to affirm.

Order reversed and matter remitted to the County Court, Kings County, for further proceedings in accordance with the opinion herein.


author: Fuld, J. Burke, J.

text:
    In the Matter of George A. Swalbach, Appellant, against State Liquor Authority of the State of New York, Respondent.
    Argued January 21, 1960;
    decided April 1, 1960.
    Appeal from an order of the Appellate Division of the Supreme Court in the Fourth Judicial Department, entered January 14, 1959, which (1) reversed an order of the Supreme Court at Special Term (Arthur E. Blauvelt, J.), entered in Monroe County, annulling a determination of the State Liquor Authority which disapproved petitioner’s application under article 78 of the Civil Practice Act to remove his licensed premises from 345 Central Avenue, in the City of Rochester, to 580 Jefferson Road, in the Town of Henrietta, and directing the State Liquor Authority to approve the removal and transfer, and (2) dismissed the proceeding to review the determination of the State Liquor Authority.

      Bruce E. Hansen for appellant.
    I. Respondent’s policy of disapproving petitions to remove package liquor stores to modern shipping centers is arbitrary, capricious, unreasonable and erroneous and is further inapplicable to the facts in this case. (Matter of 54 Cafe Restaurant v. O’Connell, 274 App. Div. 428, 298 N. Y. 883; Matter of Nicholas & Co. v. Bruckman, 269 App. Div. 681; Matter of Asche-Bandor Corp. v. Bruckman, 269 App. Div. 681; Matter of Wanetick v. State Liq. Auth., 16 Misc 2d 275, 8 A D 2d 706; Matter of Acker Merrall & Condit Co. v. New York State Liq. Auth., 282 App. Div. 638.) II. Respondent’s alleged policy of disapproving applications to transfer liquor licenses to shopping centers is arbitrary and capricious as said policy is not of uniform and general application. (Matter of Greene v. Rohan, 3 Misc 2d 680.) III. Respondent’s disapproval of appellant’s application is not only unsupported by the facts but is based upon conclusions clearly contrary to the facts. (Matter of Kendzie v. O’Connell, 283 App. Div. 256; Matter of Baird v. State Liq. Auth., 277 App. Div. 60; Matter of Stork Restaurant v. Boland, 282 N. Y. 256; Matter of Winkler v. State Liq. Auth., 3 A D 2d 1011, 4 N Y 2d 856.)

      Emanuel D. Black and Hyman Amsel for respondent.
    I. The State Liquor Authority, in refusing to permit a removal of petitioner’s off-premises liquor license from their present location in the Town of Henrietta, was exercising its discretion under the Alcoholic Beverage Control Law. The determination to disapprove the application, upon the record presented, was a reasonable exercise of that discretion. It was neither arbitrary nor unreasonable. It was lawful and not in violation of any rights of the petitioner. The petitioner having failed to disclose circumstances which leave no possible scope for the exercise of the Authority’s discretion in the manner complained of, the Appellate Division properly reversed the order of Special Term and dismissed the petition herein. (Matter of Gambino
      v. State Liq. Auth., 4 A D 2d 37, 4 N Y 2d 997: Crowley v. Christensen, 137 U. S. 86; Bertholf v. O’Reilly 74 N. Y. 509; Matter of Wager v. State Liq. Auth., 4 N Y 2d 465; Matter of Eiss v. Summers, 205 App. Div. 691, 236 N. Y. 638; Matter of Fiore v. O’Connell, 297 N. Y. 260; Matter of Stracquadanio v. Department of Health, 285 N. Y. 93; Matter of Joseph Burstyn, Inc., v. Wilson, 278 App. Div. 253, 303 N. Y. 242; Matter of Colgate-Palmolive-Peet Co. v. Joseph, 308 N. Y. 333: Matter of Kilgus v. Board of Estimate of City of N. Y., 308 N. Y. 620; Matter of Fink v. Cole, 1 N Y 2d 48; Matter of Kaplan v. O’Connell, 281 App. Div. 46, 305 N. Y. 850; Matter of Battaglia v. O’Connell, 269 App. Div. 1002; Matter of Restaurants & Patisseries Longchamps v. O’Connell, 271 App. Div. 684, 296 N. Y. 888; Matter of Rockower v. State Liq. Auth., 4 N Y 2d 128; Matter of Buck v. New York State Liq. Auth., 8 A D 2d 851; Matter of Austin v. Rohan, 8 A D 2d 647; Communications Comm. v. WOKO, 329 U. S. 223; Matter of Commercial Pictures Corp. v. Board of Regents, 280 App. Div. 260, 305 N. Y. 336, 346 U. S. 587; Matter of Glintenkamp v. O’Connell, 271 App. Div. 795, 296 N. Y. 806; Matter of Snetlage v. O’Connell, 271 App. Div. 1015, 297 N. Y. 707; Matter of Watinsky v. O’Connell, 271 App. Div. 973, 297 N. Y. 552.) II. Except as expressly proscribed by law, the location of licensed premises is a matter for the Authority to determine in the exercise of its discretion. The exercise of such discretion pursuant to a stated policy is not arbitrary or capricious. Application of said policy to a proposed premises near or proximate to shopping centers is a reasonable exercise of the Authority’s broad discretionary power. (Matter of Deitch v. Rohan, 3 Misc 2d 458; Matter of Greene v. Rohan, 3 Misc 2d 680; Matter of Willmont Liqs. v. Rohan, 2 Misc 2d 768; Matter of McGinnis’ Broadway Restaurant v. Rohan, 6 A D 2d 115, 5 N Y 2d 770; Matter of Dowsey v. State Liq. Auth., 8 A D 2d 724, 7 N Y 2d 795.)
   Fuld, J.

The petitioner was licensed in 1942 to sell liquor for off-premises consumption and for 15 years thereafter conducted his business in Rochester. In 1957, he was compelled to vacate his store when the building in which it was located was taken by the State in connection with the construction of a highway. Several months before, in May of 1957, in anticipation of his forced removal, he had applied to the State Liquor Authority for permission to transfer his license to a new location in the Town of Henrietta, a few miles from Rochester. The contemplated site, in an area partly residential and partly business, is on a heavily traveled highway, at its intersection with another busy road. Some 420 feet distant from the petitioner’s proposed location, and on the other side of the highway, is a group of 25 stores, known as the South Town Shopping Plaza. Although Henrietta is a growing town, and had a population of more than 8,400 persons when the application was presented in 1957, it contains no liquor shop within its entire area. There are, we are informed, several package stores in Rochester, within a radius of 5 miles, but no one of them is closer than 2% miles from the petitioner’s desired site.

The local Monroe County Alcoholic Beverage Control Board, following an investigation, approved the petitioner’s application, but it was disapproved by the State Liquor Authority. The latter placed its determination upon the ground that to locate the store “ in such close proximity to a large modern shopping center” would be contrary ” to “ the policy (expressed in Bulletin #279, 12/9/55) of prohibiting the location of retail wine and liquor stores in modern shopping centers”. Therefore, the Authority concluded, “ the public convenience and advantage will not be served or promoted by the approval of this application which must be and is Disapproved. ’ ’

The petitioner thereupon brought this article 78 proceeding to review that action. The court at Special Term annulled the determination, upon the ground that it was 11 without hny reasonable basis and must be deemed arbitrary and capricious ”, and directed the Authority to approve the removal and the transfer of the license. Upon appeal, however, the Appellate Division, by a 3 to 2 vote, reversed Special Term and dismissed the proceeding.

The State Liquor Authority is vested with a broad discretion in deciding whether to allow the transfer of a license from one premises to another (Alcoholic Beverage Control Law, §§ 2, 111; see, e.g., Matter of Rochower v. State Liq. Auth., 4 N Y 2d 128; Matter of Wager v. State Liq. Auth., 4 N Y 2d 465; Matter of Gambino v. State Liq. Auth., 4 A D 2d 37, affd. 4 N Y 2d 997), but, obviously, that discretion is not unlimited. It must be a discretion truly exercised and “ within the law” (Matter of Barry v. O’Connell, 303 N. Y. 46, 52), for it is “ the duty of the courts to set at naught arbitrary and unfounded administrative holdings ”. (Matter of Rumsey Mfg. Corp. [Corsi], 296 N. Y. 113, 118; see, also, Matter of Dowsey v. State Liq. Auth., 7 N Y 2d 795, affg. 8 A D 2d 724; Matter of Cowen v. Reavy, 283 N. Y. 232, 237.) We “ owe deference to the Authority”, we wrote in Matter of Barry v. O’Connell (303 N. Y. 46, 52-53, supra),“ in the exercise of its discretion within the law. That discretion, however, oann’ot be invoked outside the law. * * * ‘ Laws are made by the law-making power and not by administrative officers acting solely on their own ideas of sound public policy, however excellent such ideas may be.’ (Matter of Picone v. Commissioner of Licenses, 241 N. Y. 157,162.) ”

In the case before us, the court is thus called upon to say whether the denial of the petitioner’s application was arbitrary and capricious. However, sincé the Authority grounded its decision upon what it chose to label a “ codification and restatement of policy” — compelling the disapproval of every application for removal of a package store to a “ modern shopping center ” — the true question we face is whether that “ policy ” is valid.

To meet the requirements of judicial review, a so-called policy or, for that matter, any other stated criterion for decision, must, at the very least, be understandable, possessed of a definite meaning. The Authority’s formulation of the “ modern shopping center ” policy is far too imprecise to serve either as the reason for a denial of a license or as a fixed standard or guide. One is left entirely in the dark as to what the concept embraces or envisages. Is a “modern shopping center” a collection of stores grouped together in a growing town and designed to attract only the residents of the immediate neighborhood? Is it a group of shops located on a main highway beyond the residential area, intended to attract people from towns and cities near and far? Or is it, as Judge Burke believes (p. 530), solely an accumulation of ‘ ‘ nationally known shops and department stores ’ ’ which are attractive to distant as well as neighboring communities? Is the essential characteristic of the shopping center concept the location of the group of stores in relation to (1) urban centers of population, (2) the place of residence of those whom it is intended to serve, (3) the proximity of other shops of a similar sort, (4) the architectural style or economic character of the stores involved or (5) some complex combination of all these factors? How nebulous and elastic the term is, how uncertain its denotation, is well demonstrated by the recent case of Matter of Dowsey v. State Liq. Auth. (7 N Y 2d 795, affg. 8 A D 2d 724, supra) in which we held that the Authority had mistakenly characterized a grouping of 12 retail stores, including one ££ nationally known chain store ”— a First National Supermarket — as a £< modern shopping center”.

The uncertainty of the Authority’s formulation is further accentuated by its application here. The location sought by the petitioner is not££ in ” the shopping center, however defined, since it is separated from the collection of stores by a heavily traveled highway and is some 420 feet distant. The Authority itself has recognized the literal inapplicability of its yardstick by characterizing the petitioner’s proposed location as <£ in * * * close proximity” to the center. Such interpretation, when read in the light of our decision in the Dowsey case (7 N Y 2d 795, supra), makes it exceedingly difficult, if not impossible, to ascertain what the intended yardstick measures.

There is, however, an even more basic and fundamental reason for holding the asserted shopping center policy unreasonable and arbitrary. Even if we were to assume that the term,££ modern shopping center ”, has a definite meaning, there is no warrant for a policy which excludes liquor stores from all such centers without regard to, indeed in entire disregard of, the facts of any particular dase. The Authority’s reliance upon the policy as basis for denying every license transfer application under 'section 111 of the Alcoholic Beverage Control Law constitutes a capricious exercise of discretion, one made “by administrative officers acting solely on their own ideas of sound public policy (Matter of Picone v. Commissioner of Licenses, 241 N. Y. 157, 162.)

The Legislature has made it clear that it is for the Liquor Authority “ to determine whether public convenience and advantage will be promoted by the issuance of licenses * * * and the location of premises licensed thereby, subject only to the right of judicial review” (Alcoholic Beverage Control Law, § 2) and that “ A license [once] issued * * * for any licensed premises shall not be transferable * * * to any other premises * * * except in the [Authority’s] discretion ” (§ 111). No one questions the Authority’s discretionary power to refuse to permit removal of a store to a particular shopping center, if there is basis therefor in the record, on the ground that public convenience and advantage would not thereby be promoted. But this does not permit formulation of a general “ policy ” to cover every petition for transfer to any shopping center in the State.

The Authority’s principal source of support for its shopping center policy is a phrase in section 101-c of the statute. That section, added in 1950, provides for the imposition of minimum consumer resale prices. In seeking to justify the provision, the Legislature declared that the objective was “ to eliminate price wars which unduly stimulate the sale and consumption of liquor and wine, disrupt the orderly sale and distribution thereof, and tend to destroy the statutory plan for location of off premises liquor and wine stores in neighborhood communities which most effectively serves public convenience and advantage ” (Alcoholic Beverage Control Law, § 101-c). Even if the italicized language is considered apart from its context, the contention that the statutory plan for the location of liquor stores requires that such stores be excluded from all shopping centers is to a very large extent refuted by the fact that the Legislature has elsewhere expressly sanctioned the location of liquor stores in railroad terminals (Alcoholic Beverage Control Law, § 105, subd. 2). It cannot possibly be disputed that the several liquor shops in New York City’s Grand Central and Pennsylvania Bailroad Stations, catering as they do to thousands of commuters daily, attract considerable trade which would otherwise be transacted locally. If there were such a required policy or design as the Authority suggests, the Legislature would never have provided for these railroad terminal liquor stores.

Nor may support for the Authority’s ban be found in the provision of the statute that no liquor store shall be located within 1,500 feet of another liquor store on the same street in New York City or within 700 feet elsewhere (Alcoholic Beverage Control Law, § 105, subd. 4). Manifestly, the legislative policy thus enacted is irrelevant to the exclusion of liquor stores from shopping centers no matter how many miles away the nearest liquor shop may be.

New York City and other large cities of this State have over the years served, in a very real sense, as shopping centers for the millions of rural and suburban inhabitants who daily visit them to make their purchases, and, within the cities themselves, certain areas, in contrast with the more residential sections, are pre-eminently shopping centers. Yet it is common knowledge that liquor stores are located in these shopping areas and that their business is by no means confined to persons residing in the immediate neighborhood. We are unable to understand how it may reasonably be said that the rapidly growing Town of Henrietta, with a population close to 9,000 at the time of the application, is any less a neighborhood community than these urban centers. As a matter of fact, many suburban and rural shopping facilities have been expressly designed to retain the business of suburbanites which would otherwise gravitate to the city. The amazing growth of these districts in recent years represents an attempt to serve the phenomenal development of the suburban population, at least as much as it does an attempt to induce urban dwellers to go to the suburbs for their shopping needs. It is not only anachronistic but, more important, without sanction in statute for the Liquor Authority to equate public convenience and advantage with the preservation of the same plan for location of liquor stores as existed prior to the revolutionary population shift to the suburbs.

We suppose that the presence of a liquor store in this or that shopping center could affect the business of “neighborhood” liquor shops located some miles away, and we assume that the interest of such “neighborhood” liquor dealer is entitled to consideration. • But Ms interest is not the only matter to be considered. As the Legislature itself has proclaimed, it is the public convenience and advantage that must be served and promoted (Alcoholic Beverage Control Law, § 2). The Authority, of course, recognizes this as a general proposition, but it contends, curiously enough, that its shopping center policy finds justification in the fact that the public has more and more been attracted to shopping centers. Thus, it is in effect argued, the licensing of a liquor store in a shopping center would be contrary to public convenience and advantage ’ ’ because, mirabile dictu, the public itself has found the centers to be convenient and advantageous places in which to do its buying. This is an indefensible position, reflecting as it does a perversion of the legislative declaration of policy contained in section 2 of the statute.

In sum, then, the statement of a general “policy” which , excludes liquor stores from every shopping center is unreasonable and unsupportable. This does not mean, though, that the Authority will be powerless ever to disapprove applications for transfer to a location in a shopping center. Of course it has such power, but it must deal with the situation case by case, appraising the facts as each application is submitted. The agency may not avoid the duty imposed upon it, of exercising a sound discretion in each case, by adopting an all-encompassing shopping center “policy”, for, by so doing, it forecloses consideration of the various factors which the Legislature intended that it take into account in reaching a decision. It is hardly necessary to say that, in reaching this conclusion, we are not presuming to substitute our judgment for that of the Authority. If an administrative agency acts within permissible limits of the law and its conclusions find reasonable support in the record, its determination is conclusive. Here, however, the Authority, in promulgating and relying upon its announced general policy, exceeded its powers and acted outside the law.

In view of our conclusion, it follows that the order of the Appellate Division must be reversed and the determination of the Authority annulled. There remains the question of the appropriate form of relief to be granted. In the very similar Dowsey case (7 N Y 2d 795), where, as here, the record did not support the denial of the application, we affirmed the Special Term order which directed the Authority to approve the transfer. However, despite the fact that the present record does not justify refusal of the petitioner’s application, we have decided that it is more in accord with the legislative design to remit the matter to the Authority so that it may reconsider the application on its particular facts without reliance on the invalid general shopping center prohibition.

The order of the Appellate Division should be reversed, the determination of the State Liquor Authority annulled, with costs to the appellant in this court and in the Appellate Division, and the matter remitted to the Authority for further proceedings not inconsistent with this opinion.

Burke, J.

(dissenting). The issue before this court is: whether or not there is any reasonable basis for the Liquor Authority’s denial of the application to remove to a new location. We believe there is.

In 1957 the petitioner was compelled to vacate his store in the City of Rochester when the building in which it was located was taken by the State in connection with the construction of a highway. He, therefore, applied to the State Liquor Authority for permission to transfer his license to a new location in the Town of Henrietta, near Rochester.

In accordance with procedure an investigation was made and licensed stores nearest the proposed location were notified of petitioner’s application. In addition the area of the proposed location was inspected and a map prepared by direction of the Authority. An objection was filed by a similarly licensed store near the location which stated that the public convenience did not appear to require an additional store in this area which was thinly populated.

The proposed premises are located directly across from the South Town Plaza Shopping Center, and immediately in front of the Kiddyland facility of the Plaza which has been dedicated to the entertainment of children. This shopping center, which is within a few minutes’ driving distance of four other liquor shops (three to the north in neighborhoods of the City of Rochester, <and one .to the south), has among its 25 occupants the following nationally known chain stores: J. C. Penney Co.; The Great Atlantic & Pacific Tea Co.; F. W. Woolworth; Fanny Farmer; W. T. Grant; Western Automobile and Singer Sewing Machine. In denying the removal, the Authority found that this location was so close to the large modern shopping center that it would substantially enjoy the patronage of the customers and would thereby in effect become a part thereof. The Authority found that, since this licensee would serve shoppers from a number of sections of neighboring communities now serviced by existing licensees, the approval of the application would substantially affect the business being done by local package stores, and would, therefore, be disruptive of the statutory plan for their location in neighborhoods so as to best serve the public convenience and advantage. The Authority also stated that the proposed removal would be contrary to their policy (Bulletin No. 279) “ of prohibiting the location of retail wine and liquor stores in modern shopping centers as contrary to the aforesaid statutory plan recognized by the legislature ’

The Legislature has declared that its policy will ‘ ‘ best be carried out by empowering the liquor authority of the state to determine whether public convenience and advantage will be promoted by the issuance of licenses to traffic in alcoholic beverages, the increase or decrease in the number thereof and the location of premises licensed thereby ”. (Alcoholic Beverage Control Law, § 2; italics supplied.) In addition sections 101-c and 111 affirm this policy and method by express recognition of a statutory plan for the location of off-premises package stores in neighborhood communities and by limiting the removal of any licenses so issued to the discretion of the Liquor Authority (see, also, § 17).

The cases are legion wherein we have upheld administrative determinations so long as reasonably supported by the evidence. This has been especially true of determinations of the Liquor Authority in view of the express intention of the Legislature to confer a very broad discretion (Matter of Wager v. State Liq. Auth., 4 N Y 2d 465; Matter of Rockower v. State Liq. Auth., 4 NY 2d 128; Matter of Gambino v. State Liq. Auth., 4 A D 2d 37, affd. 4 N Y 2d 997). We have consistently held that judicial ‘ ‘ ‘ inquiry is limited to a determination whether the record discloses circumstances which leave no possible' scope for the reasonable exercise of that discretion in the manner of which appellant complains ’ ” (Matter of Rockower v. State Liq. Auth., supra, p. 131; Matter of Wager v. State Liq. Auth., supra, p. 468), and that, therefore, we would not interfere unless the petitioner (appellant) clearly establishes that the Liquor Authority acted arbitrarily (Matter of Gambino v. State Liq. Auth., supra, p. 38).

It is clear, therefore, that a determination cannot be upset merely because we might, on the same facts, arrive at a different conclusion as to the social desirability of the location of a regulated business in a shopping center. The court cannot substitute its judgment for that of an administrative agency unless, of course, there is absolutely no basis within reason for the decision (Communications Comm. v. WOKO, 329 U. S. 223, 229; Matter of Glintenkamp v. O’Connell, 271 App. Div. 795, affd. 296 N. Y. 806).

Since the determination here as well as the regulation relied on are well within the sphere of delegated discretion and warranted by sufficient re'a'son, we should not interfere. Any such interference would flaunt the express desire of the Legislature to provide, via delegated discretion, for the most convenient and advantageous location of off-premises package stores. This policy was adopted and promulgated only after careful and conscientious consideration of the effect of the location of liquor shops in those shopping centers which are necessarily attractive to near and distant communities because of their location on principal automobile traffic arteries, their extensive parking facilities and automotive services, and varied as well as concentrated retail business operations. It is of grave concern and common knowledge that the competitive advantage afforded these centers has caused throughout the nation the untimely demise of tens of thousands of small local retail businesses. The Authority, therefore, in recognition of its duty to protect the existing neighborhood licensees and thereby provide for the public convenience and advantage, prohibits any such centrally and preferred locations at the expense of the local merchant who has invested his funds and good will in the neighborhood store in reliance upon the policies heretofore adopted. Any such preference would, of course, lead to either clandestine price-cutting and/or the eventual extinction of the local merchant, and would be detrimental to public convenience as well as inconsistent with the statutory plan and purpose expressed in section 2 and reaffirmed in sections 101-e and 111 of the Alcoholic Beverage Control Law.

Of course, it may be argued that the phrase ‘ ‘ modern shopping center ’ ’ excised and analyzed out of context is difficult to define and, therefore, too nebulous a standard to guide administrative discretion. However, in context and taken in conjunction with the very reason for its promulgation, it affords a very definite standard and has obvious reference to an accumulation of nationally known shops and department stores which are attractive to distant as well as neighboring communities. It is this feature that has secured the attention and multimillion dollar investments of the leading national chain store organizations. There is no doubt that this concentrated congregation of stores, so constructed at the intersection of road networks as to accommodate thousands of mobile shoppers, has dangerously imperiled the existence of the small local merchants. Assuming, without conceding for the moment, that the phrase used to describe this operation is somewhat vague, there is certainly nothing indefinite about the impact that this and similar shopping centers have upon the smaller enterprises in nearby communities.

We should refrain from limiting any administrative agency to rules and wording calculated to precision since this in effect would deter, rather than enhance, the exercise of discretion so necessary .to reasonable and consistent determinations. The so-called ‘ ‘ all-encompassing policy ” here under review is in our opinion an exercise of sound discretion. (See Matter of Greene v. Rohan, 3 Misc 2d 680; Matter of Austin v. Rohan, 8 A D 2d 647; Matter of Buck v. New York State Liq. Auth., 8 AD 2d 851; Matter of Deitch v. Rohan, 3 Misc 2d 458.)

Although the Liquor Authority’s reliance on its general policy, per se, in no way establishes arbitrary action, its application is always subject to review. For example, if as in Matter of Dowsey v. State Liq. Auth. (8 A D 2d 724, affd. 7 N Y 2d 795) there is an arbitrary application of this policy, we may properly annul the determination. A comparison of the facts of that case with those now before us illustrates very clearly that the meaning of the term “ modern shopping center ” is ascertainable. In the Dowsey case the center (an accumulation of 12 stores, only one of which had a national reputation) was found to be merely a secondary shopping area patronized substantially by local shoppers. It was quite similar to any number of ordinary business centers found in similar small communities, and was so situated so as to be unworthy of the attention of the important national stores which place their future and fortunes in what has become known as the primary shopping areas which serve numerous communities. In the case at bar a mere recital of the nationally known business stores indicates that its purpose is to provide not only for the convenience of the Town of Henrietta but also the neighboring and very prosperous suburban area of the City of Rochester, which at the present time is more than adequately served by existing neighborhood liquor licensees. An approval here would create a preference and compel an abuse of discretion since it would threaten and possibly destroy the investment of the licensees, the livelihood of their employees and the convenience offered by the existence of local shops.

Neither statute nor decisional law authorizes a usurpation of the discretion expressly delegated to the Authority (Alcoholic Beverage Control Law, § 101-c, subd. 1), or an interference with the exercise of a responsibility which the Authority owes to existing licensees and the public.

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

Judges Froessel, Van Voorhis and Foster concur with Judge Field ; Judge Burke dissents in an opinion in which Chief Judge Desmond and Judge Dye concur.

Order reversed, etc.

      . The Bulletin which expressed the “policy”, on which the Authority relied for its conclusion, was entitled “ Removal of Package Stores ” and was addressed to “ Package Store Licensees ”. It opened with a sentence calling the attention of such licensees to “ the following codification and restatement of policy governing removals of package stores ” and, in a later paragraph, entitled “ Shopping Centers ”, concluded with the statement that, in view of certain recited “ circumstances ”, “ the Authority has determined that the licensing of package stores in modern ‘ shopping centers’ would be contrary to public convenience and advantage; and therefore, the Authority will continue to disapprove petitions to remove package stores to modern ‘ shopping centers ’.”