text:
    In the Matter of Catholic Medical Center of Brooklyn and Queens, Inc., Appellant, v Department of Health of the State of New York et al., Respondents.
    Argued November 14, 1979;
    decided December 19, 1979

      APPEARANCES OF COUNSEL

      E. Roger Frisch and Richard M. Auerbach for appellant.

      Robert Abrams, Attorney-General (George C. Mantzoros and Shirley Adelson Siegel of counsel), for respondent.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed. (Matter of St. Luke’s Hosp. Center v Ingraham, 43 NY2d 771.) We also observe that the rate-fixing order of the Commissioner of Health, being quasi-legislative in nature, could not have been annulled except upon a compelling showing that the calculations from which it derived were unreasonable (see Matter of Sigety v Ingraham, 29 NY2d 110, 114). In making a quasi-legislative determination, the commissioner, of course, is not confined to factual data alone but also may apply broader judgmental considerations based upon the expertise and experience of the agency he heads, including, for instance, such matters as "the need for incentives to improve services and institute economies” and "economic factors in the area in which the hospital is located” (Public Health Law, § 2807, subd 3; see Matter of Fisher [Levine], 36 NY2d 146, 150; cf. 1 Davis, Administrative Law Treatise [2d ed], § 6.6).

Meyer, J.

(dissenting). In this article 78 proceeding the Catholic Medical Center seeks judgment annulling respondent’s decision which denied the center’s appeal for revision of its 1972 Medicaid reimbursement rates. Special Term held on the basis of the affidavit of the Assistant Commissioner of Health that the department had improperly deviated from the standard fixed by section 2807 of the Public Health Law in its effort to conform with wage and price limits imposed under the Economic Stabilization Program (85 Misc 2d 14). On appeal from that decision the Appellate Division reversed and ordered a hearing to determine whether the commissioner had in fact deviated from section 2807 (54 AD2d 933).

After holding the required hearing Special Term concluded that the commissioner had in fact failed to follow section 2807 and had instead imposed an ESP limitation of 2.5%. On appeal from the judgment entered on that decision, the Appellate Division reversed (62 AD2d 1053) solely on the basis that the matter was concluded by our affirmance in Matter of St. Luke’s Hosp. Center v Ingraham (43 NY2d 771). The order of the Appellate Division should be reversed and the matter should be remitted to it for consideration of the facts (CPLR 5613).

As the Attorney-General’s brief concedes, in reversing the judgment the Appellate Division reversed its own earlier decision. It did so, moreover, without considering the facts or reviewing the Special Term decision, apparently concluding from our decision in St. Luke’s, in which respondents had submitted essentially the same affidavit presented in this proceeding, that its earlier decision was in error on the law.

Clearly, however, the Appellate Division erred on the law for it was bound by its own prior decision as the law of the case (Mygatt v Coe, 142 NY 78; see Martin v City of Cohoes, 37 NY2d 162; 10 Carmody-Wait 2d, NY Prac, § 70:403). An exception to the law of the case rule may be made when in the interim the law declared by the Appellate Division has been changed by this court (Malnati v Metropolitan Life Ins. Co., 254 App Div 681; see 10 Carmody-Wait, op. tit., § 70:404). The only issue of law decided in St. Luke’s, however, was that that hospital had, as the Attorney-General’s brief in that case put it, "totally failed to meet its burden of proof’ or present any evidence whatever to indicate that the statements in the affidavit of former Assistant Commissioner McCann were incorrect.

Accepting the fact that the McCann affidavit in this proceeding is essentially the same as the McCann affidavit in St. Luke’s, I cannot join the majority in ignoring the fact that there has been presented in this case evidence which the Special Term Justice found established that Commissioner McCann’s statements were, in fact, incorrect. The commissioner did not, though under CPLR 5602 (subd [a], par 2) he was entitled to do so, appeal from the Appellate Division’s determination that a hearing was required. Having failed to do so, he cannot ignore, nor can this court, the evidentiary material introduced during that hearing any more than can a defendant who moves to dismiss at the end of the entire case ignore evidence, and the inferences from evidence, introduced as part of his own case (4 Weinstein-Korn-Miller, NY Civ Prac, par 4401.16) or than can a court by the entry of a nunc pro tunc order record a fact as of a prior date that did not then exist (Cornell v Cornell, 7 NY2d 164, 167-168; Guarantee Trust & Safe Deposit Co. v Philadelphia, Reading & New England R. R. Co., 160 NY 1, 7).

Apparently sensitive to that fact, respondents argue in the alternative that the evidence presented at Special Term was not probative because petitioner’s only witness was the assistant commissioner who, therefore, cannot be impeached by petitioner and that, in any event, the testimony does not establish, as Special Term found, that the commissioner acted arbitrarily. The answer to the first contention is that the assistant commissioner was examined by petitioner as an adverse witness with the sanction of the Trial Judge. The answer to the second is that review of the facts is for the Appellate Division in the first instance, unless the record before Special Term was wholly devoid of evidence to support the finding, and that some of the assistant commissioner’s answers clearly presented an issue of fact for Special Term’s determination.

It may well be that on remittal the Appellate Division would reverse on the facts. We have no right, however, either to assume that they would or to ignore the factual material in the record which differentiates this case from St Luke’s.

The majority affirms nevertheless on the basis that the commissioner’s determination was quasi-legislative and could not be annulled except upon a compelling showing that the calculations from which it is derived were unreasonable. The difficulty with that view is that there is nothing to suggest that the Appellate Division acted on that basis and that there is an unreversed finding that the commissioner’s determination was a deviation from section 2807 of the Public Health Law under which it was made. For like reason Matter of Sigety v Ingraham (29 NY2d 110, 114) and Matter of Fisher (Levine) (36 NY2d 146, 150) are both distinguishable from the present case.

I would, therefore, reverse and remit.

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

Order affirmed, with costs, in a memorandum.


source: Caselaw Access Project

license: Public Domain

text:
    The People of the State of New York ex rel. Michael Allen, Respondent, v Stephen Dalsheim, as Superintendent of the Ossining Correctional Facility, Appellant.
    Argued December 11, 1979;
    decided December 19, 1979

      APPEARANCES OF COUNSEL

      Robert Abrams, Attorney-General (Gerry E. Feinberg and Samuel A. Hirshowitz of counsel), for appellant.
    Respondent precluded.
   OPINION OF THE COURT

Memorandum.

The appeal should be dismissed.

Respondent was sentenced in 1975 to serve a maximum term of four years, with an expiration date of August 28, 1978. While on parole, he was declared a delinquent and was not returned to custody until more than four months later. A final parole revocation hearing not having been held promptly, however, the Appellate Division ordered that respondent’s petition for a writ of habeas corpus be granted and that he be returned to parole. Since a parolee continues to serve his sentence while in compliance with the terms of his release, respondent’s maximum expiration date could have been extended no more than four months by his delinquency (Penal Law, § 70.40, subd 1, par [a]; subd 3, par [a]). That date having long since passed, the superintendent’s appeal is moot (cf. People ex rel. Higgs v Superintendent Arthur Kill Correctional Facility, 46 NY2d 884; People ex rel. Christian v Vincent, 49 AD2d 914).

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

Appeal dismissed, without costs, in a memorandum.


text:
    The People of the State of New York, Appellant, v Michael Delancy, Respondent.
    Argued December 13, 1979;
    decided December 19, 1979

      APPEARANCES OF COUNSEL

      John R. King, District Attorney (Bridget R. Rahilly of counsel), for appellant.

      Bruce Marc Tenenbaum for respondent.
   OPINION OF THE COURT

Memorandum.

The Appellate Division reversed the judgment, vacated the plea and remanded the case to the County Court for further proceedings. The sole ground for this decision was a finding that the answers elicited by the trial court from the defendant before the acceptance of his guilty plea were insufficient to establish that it was knowingly and voluntarily made. Notably, since the defendant did not object to the plea and made no motion to set it aside, any error in that regard was not preserved (People v Adams, 46 NY2d 1047). It follows that, though the form of the order of the Appellate Division recited that it was “on the law”, the unpreserved nature of the error

compels us to conclude that, in substance, the reversal nevertheless was based, at least in part, on the exercise of discretion (People v Johnson, 47 NY2d 124, 126; cf. People v Cona, 49 NY2d 26, 32-34). Consequently, the appeal to our court does not satisfy the jurisdictional requisite that the order appealed from be one "on the law alone” (see CPL 450.90, subd 2). Dismissal is, therefore, inescapable.

Chief Judge Cooke and Judges Gabrielli, Jones, Wachtler, Fuchsberg and Meyer concur; Judge Jasen concurs in result.

Appeal dismissed in a memorandum.


text:
    In the Matter of John A. Vogler, Appellant-Respondent, v Harold J. Smith, as Superintendent of Attica Correctional Facility, Respondent-Appellant.
    Argued December 12, 1979;
    decided December 19, 1979
   Appeal and cross appeal dismissed, without costs. In view of the expiration of petitioner’s maximum sentence and his release from prison, petitioner’s appeal is moot. Respondent Superintendent of Attica Correctional Facility, who prevailed in the court below, may not complain of the basis for the dismissal of the proceeding (see Cohen and Karger, Powers of the New York Court of Appeals, § 91, p 395; Matter of Ton-DaLay v Diamond, 36 NY2d 856).


text:
    The People of the State of New York, Appellant, v Harry Weiss and Donald Trevorah, Respondents.
    Argued December 11, 1979;
    decided January 3, 1980

      APPEARANCES OF COUNSEL

      Carl A. Vergari, District Attorney (Cheryl Kosan and Anthony J. Servino of counsel), for appellant.

      Irving Anolik for Harry Weiss, respondent.

      George J. Bellantoni for Donald Trevorah, respondent.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed.

The Appellate Division correctly determined that CPL 700.50 (subd 2) requires that recordings made pursuant to an eavesdropping warrant be sealed at the expiration of the warrant and at the close of each extension thereafter granted (People v Washington, 46 NY2d 116, 122-123). The People, having offered no satisfactory explanation for the untoward delay in sealing both sets of tapes, must now suffer the consequences of suppression. Failure to timely seal renders inadmissible both the tapes and any evidence seized pursuant to a search warrant issued after the obligation to seal arose based on information gleaned from the tapes. Evidence acquired pursuant to a warrant obtained prior to the time when sealing was required would not be so precluded.

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

Order affirmed in a memorandum.


text:
    Hannelore Lehnhoff, Respondent, v Shepherd Nathan et al., Appellants.
    Argued December 12, 1979;
    decided January 3, 1980
    APPEARANCES OF COUNSEL

      Robert Abrams, Attorney-General (Robert S. Hammer and Shirley Adelson Siegel of counsel), for appellants.

      David Jaroslawicz, Alfred S. Julien and Stuart A. Schlesinger for respondent.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be reversed, with costs, and the petition to the extent that it seeks reinstatement of salary and other benefits dismissed.

Under the collective bargaining agreement between the parties, respondent was entitled to suspend petitioner without pay upon a determination of probable cause to believe that petitioner’s "continued presence on the job represents a potential danger to persons or property or would severely interfere with operations.” The contract further provided that the probable cause determination, as well as any procedural questions concerning suspension without pay, which would include whether there was in fact such a determination, was to be submitted to arbitration. Petitioner received notice of suspension and commenced this proceeding to challenge respondent’s action. The propriety of the suspension, both procedurally and substantively, was a question for the arbitrator. Thus, a judicial resolution of the merits of the dispute was foreclosed (Matter of Wyandanch Union Free School Dist. v Wyandanch Teachers Assn., 48 NY2d 669; Matter of Acting Supt. of Schools of Liverpool Cent. School Dist. [United Liverpool Faculty Assn.], 42 NY2d 509).

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

Order reversed, etc.


text:
    In the Matter of Emanuel Revici, as Trustee of Trafalgar Hospital, Respondent. Blue Cross and Blue Shield of Greater New York, Appellant.
    Argued December 11, 1979;
    decided January 3, 1980

      APPEARANCES OF COUNSEL

      Edward T. Blaney, Jr., for appellant.

      David Smerling and Edward H. Honig for respondent.
   OPINION OF THE COURT

Order affirmed, with costs, for reasons stated in the memorandum at the Appellate Division (68 AD2d 828).

Concur: Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Meyer.


text:
    The People of the State of New York, Respondent, v Ronald Robertson, Appellant.
    Argued December 10, 1979;
    decided January 3, 1980

      APPEARANCES OF COUNSEL

      Stanley Neustadter for appellant.

      Mario Merola, District Attorney (David H. Fromm and Billie Manning of counsel), for respondent.
   OPINION OF THE COURT

Memorandum.

The order appealed from should be affirmed. We agree with the Appellate Division that the evidence indicating that defendant had control over the apartment was sufficient to support the conclusion reached by the jury that defendant constructively possessed the heroin (valued at $30,000) and drug paraphernalia located in the otherwise empty apartment. In light of the condition of the apartment and its contents, defendant’s manner of entry, combined with his possession of the key, the rent receipts and the realtor’s business card permitted the jury to find that the defendant had been in the apartment before and sufficed to prove control in this case (see People y Phiefer, 43 NY2d 719; cf. People v Gambino, 35 NY2d 932). As to defendant’s challenge to the search warrant, we deem it unnecessary to consider the legality of the initial police entry into the apartment, since there existed sufficient independent support for the warrant in the police officer’s testimony before the issuing court concerning the information provided by the landlord.

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

Order affirmed.


text:
    The People of the State of New York, Respondent, v Jerry Young, Appellant.
    Argued December 11, 1979;
    decided January 3, 1980

      APPEARANCES OF COUNSEL

      Arthur Birnbaum and Richard S. Fries for appellant.

      Mario Merola, District Attorney (Steven J. Greenblatt and Alan D. Marrus of counsel), for respondent.
   OPINION OF THE COURT

Memorandum.

The order appealed from should be affirmed. Our examination of the record persuades us that there exists no basis for disturbing the factual finding made by Supreme Court and affirmed by the Appellate Division that the inculpatory statements had been voluntarily made by defendant following an effective waiver of his rights to counsel and to remain silent. Nor can we conclude that the trial court erred in denying defendant’s requests for a mistrial based on peripheral references to another criminal act allegedly performed by the defendant, in light of the availability of less drastic means of alleviating whatever prejudice may have resulted. Indeed, in one instance the court instructed the jury to disregard the testimony, and in another instance the court indicated a willingness to consider such a request. Instead, defendant adhered to his unwarranted demand for a mistrial. Upon .this appeal, defendant continues to insist that a mistrial was mandated. We disagree.

We have considered defendant’s other contentions, and find them to be without merit.

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

Order affirmed.


text:
    The People of the State of New York, Respondent, v Anthony Pascale, Appellant.
    Argued December 11, 1979;
    decided January 3, 1980
    APPEARANCES OF COUNSEL

      S. Simpson Gray and Louis A. Garcia for appellant.

      Mario Merola, District Attorney (Cary W. Sucoff and Alan D. Marrus of counsel), for respondent.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed. The argument that the defendant should be relieved of his guilty plea was not raised by motion in the court of first instance prior to conviction and therefore has not been preserved for our review (People v Bell, 47 NY2d 839; People v Adams, 46 NY2d 1047). The denials of his postconviction motions are not before us on this appeal.

With respect to the claim of ineffective assistance of counsel, raised for the first time on appeal, there is nothing apparent in this record which would support this contention.

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

Order affirmed in a memorandum.


text:
    Richard Hamilton, Respondent, v Leopold Kobrin, Appellant.
    Decided January 3, 1980
   Appeal from order of Civil Court of the City of New York, dated October 16, 1979, dismissed, without costs, by the Court of Appeals sua sponte, upon the ground that the order does not finally determine the proceeding within the meaning of the Constitution.

Appeals from the orders of the Appellate Division, dated September 25, 1979 (M-2783 and M-3454), dismissed, without costs, by the Court of Appeals sua sponte, upon the ground that the orders do not finally determine the proceeding within the meaning of the Constitution.


text:
    The People of the State of New York, Respondent, v George Griffin, Appellant.
    Argued December 13, 1979;
    decided January 8, 1980

      APPEARANCES OF COUNSEL

      Steven A. Greenwold for appellant.

      John R. King, District Attorney (Bridget R. Rahilly and Gerald V. Hayes of counsel), for respondent.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed.

Defendant and Frederick Cunningham were tried and convicted of two counts of murder in the second degree for the homicide of Anthony Caputo, a service station attendant. Prior to trial, defendant sought unsuccessfully to suppress statements made by him and items of physical evidence taken from his residence and automobile. Defendant’s motion to sever was also denied.

Initially, in the absence of any contention in this court that the police lacked probable cause to arrest, the warrantless arrest at defendant’s home was proper (People v Payton, 45 NY2d 300, 310-312, probable jurisdiction noted 439 US 1044; see People v Jenkins, 47 NY2d 722). With respect to the voluntariness of defendant’s statements and consent to search, the record contains support for the hearing court’s findings, affirmed by the Appellate Division, that they were knowingly and voluntarily obtained (see People v Glass, 43 NY2d 283; cf. People v Wharton, 46 NY2d 924). Finally, no error was committed in denying defendant’s motion to sever. Any objection based on Bruton v United States (391 US 123) was obviated when the codefendant testified (People v Anthony, 24 NY2d 696).

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

Order affirmed in a memorandum.


author: Chief Judge Cooke

text:
    The People of the State of New York, Appellant, v John Stroh, Respondent.
    Argued December 10, 1979;
    decided January 8, 1980

      APPEARANCES OF COUNSEL

      John R. King, District Attorney (Bridget R. Rahilly of counsel), for appellant.

      Samuel Collins, Public Defender (Marshall L. Brenner of counsel), for respondent.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed.

Before making any incriminating statements, appellant stated that he “would like to either have an attorney or a priest to talk to, to have present”. By making this request, appellant asserted his right to counsel. (See People v Buxton, 44 NY2d 33.)

When a criminal defendant requests the assistance of counsel, the police are obligated to scrupulously honor that request. (People v Grant, 45 NY2d 366, 376.) In this case, the police failed to satisfy this obligation inasmuch as they continued to question defendant despite his expressed desire to seek the assistance of an attorney and to have counsel present at the questioning. Therefore, all statements made by defendant subsequent to his request for an attorney were properly suppressed by the court below. (People v Grant, 45 NY2d 366, supra; People v Munlin, 45 NY2d 427; People v Clark, 45 NY2d 432.)

Chief Judge Cooke

(dissenting in part). I agree that there must be a new trial, but on narrower grounds than those articulated by the majority.

Defendant, John Stroh, was arrested on the evening of July 8, 1975, and charged with second degree murder. In response to questioning, defendant made three statements. The first was orally made to a senior investigator of the State Police; the second was essentially a typewritten version of the first oral statement; the final statement was elicited by an Assistant District Attorney. Prior to making his initial oral statement, defendant stated to the investigator "hold it, I would like to either have an attorney or a priest to talk to, to have present”. The officer asked "who do you want” and defendant replied "contact a priest down in the parish, in Beacon”. The priest named by defendant was called, but did not arrive until some hours later. In the interim, defendant made the first oral statement and then executed the written statement.

Later that night, an Assistant District Attorney met with defendant, and, prior to eliciting any statements, obtained a waiver of defendant’s rights. Referring to the earlier statements, the assistant asked defendant if he had also waived his rights at that time. Defendant then informed the assistant "Well, I had asked for a lawyer before and nobody said nothing”. The assistant replied "O.K.” and then continued to question defendant.

At the outset, there is no quarrel with the rule of law that once a defendant requests an attorney, the police may not immediately seek a waiver of his rights and proceed to elicit incriminating statements. This rule is firmly embedded in our decisional law (see People v Dean, 47 NY2d 967; People v Grant, 45 NY2d 366; People v Clark, 45 NY2d 432; People v Buxton, 44 NY2d 33), and its viability is not open to question. Thus, had defendant asserted his right to counsel at the commencement of the interrogation, there is no doubt that the three statements would have been rendered inadmissible. As it is, however, it may not be held on this record that defendant indicated a request for an attorney until immediately prior to the third statement, and only that statement should be suppressed.

Defendant’s initial request of the police officer was ambiguous: he asked for either a priest or an attorney. It was not improper for the officer to clarify the situation by asking "who do you want”, so long as this was not accomplished in a manner which would tend to dissuade defendant from exercising his rights. Indeed, defendant did at that juncture clarify his request, indicating his desire was for a priest. The officer did not attempt to influence the choice either way. Having had an opportunity to articulate his wish for an attorney, defendant failed to do so.

In contrast, when speaking with the assistant, defendant did indicate a desire for an attorney. It was only at this time that defendant’s statement reflected a request for legal counsel. And it was then that the law enforcement authorities became duty bound not to seek a waiver of defendant’s rights or proceed with questioning. Their failure to do so renders the third statement inadmissible.

Accordingly, I vote to modify by limiting the grant of the motion to suppress to the third statement.

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

Order affirmed in a memorandum.


text:
    In the Matter of Charles J. Wilcox, as District Attorney of Rensselaer County, Respondent, v M. Andrew Dwyer, Jr., as Judge of the County Court of Rensselaer County, et al., Appellants, and Clinton Saddlemire, Respondent.
    Argued January 3, 1980;
    decided January 8, 1980

      APPEARANCES OF COUNSEL

      Robert Abrams, Attorney-General (Peter J. Dooley, Shirley Adelson Siegel and Lawrence L. Doolittle of counsel), for M. Andrew Dwyer, as Judge of the County Court of Rensselaer County, appellant.

      Jerome K. Frost and Mary D. Audi for Clarisse Philips, appellant.

      Charles J. Wilcox, District Attorney (Robert L. Adams of counsel), respondent pro se.

   OPINION OF THE COURT

Memorandum.

The judgment of the Appellate Division should be reversed and the petition dismissed, without costs. The People may appeal from the sentence (CPL 450.20, subd 4; 450.30, subd 2). On the appeal they may argue that procedures prescribed by statute were not followed at the sentencing (People v Yanicelli, 33 NY2d 621, 40 NY2d 598). That would include a claim that the court improperly denied the People access to the presentencing report by misinterpreting CPL 390.50 (subd 2). In view of the fact that the issue may be raised on direct appeal, it was error for the Appellate Division to have entertained the application for article 78 relief in the nature of prohibition.

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

Judgment reversed, etc.


text:
    In the Matter of Peter Conlon, Appellant, v Supreme Court of the State of New York, Westchester County, et al., Respondents.
    Submitted December 17, 1979;
    decided January 8, 1980
   Motion to dismiss the appeal herein granted and the appeal dismissed, without costs, upon the ground that no substantial constitutional question is directly involved (Cohen and Karger, Powers of the New York Court of Appeals, §§ 56, 57).


text:
    Leonard Pressler, Appellant, v New England Traders, Inc., et al., Respondents.
    Submitted December 17, 1979;
    decided January 8, 1980
   Motion, insofar as it seeks leave to appeal from the July 19, 1979 order of the Appellate Division, denied. Motion, insofar as it seeks leave to appeal from the October 25, 1979 order of the Appellate Division denying reargument or leave to appeal to the Court of Appeals, dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution.


text:
    Robert Tumolillo, Appellant, v Mercedes Tumolillo, Respondent.
    Submitted December 10, 1979;
    decided January 8, 1980
   Motion for leave to appeal denied upon the ground that an appeal lies as of right (CPLR 5601, subd [a], par [iii]; see Belsky v Lowenthal, 45 NY2d 946; Dalrymple v Shults Chevrolet, 39 NY2d 795).


author: Meyer, J.

text:
    In the Matter of Esther Linfield, Appellant, v Ewald B. Nyquist, as Commissioner of Education of the State of New York, Respondent.
    Argued December 13, 1979;
    decided January 10, 1980

      APPEARANCES OF COUNSEL

      Murray A. Gordon and Joan Stern Kiok for appellant.

      James H. Whitney, Robert D. Stone, Jean M. Coon and John T. Feck for respondent.
   OPINION OF THE COURT

Memorandum.

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

Petitioner’s sole contention on this appeal is that the penalty of dismissal from her position as a tenured high school teacher is excessive. However, in light of the affirmed findings of incompetent and inefficient service in this case, we cannot say, as a matter of law, that the sanction of dismissal was inappropriate. (Matter of Pell v Board of Educ., 34 NY2d 222.)

We recognize that, in consequence of the by-law provision cited by the dissenter, the action of the board of education will work a dismissal of appellant from the entire New York City public school system. Nonetheless, although in one view this result may appear harsh, to decline to uphold the determination would be to force the board of education to continue to employ a teacher who has been found, after a hearing, to be incompetent.

Meyer, J.

(dissenting). I respectfully dissent. The certificate of termination specifically stated that "Any license or certificate of whatever type is hereby revoked * * * Employee may not apply for nor be granted any other license or certificate without express approval of The Chancellor,” and sections 250 and 251 of the By-Laws of the Board of Education as then in effect provided that a person dismissed "shall not be eligible for re-employment under any licenses held by him at such time of severance from service” and that an application for a license by such a person "shall not be received or entertained * * * except on the recommendation of the Superintendent of Schools approved by the Board of Education”.

Petitioner’s dismissal, therefore, constituted not only loss of her job but of her right to teach. Bearing in mind that petitioner taught five classes, on some of which she was complimented, and that her problem was not being able to control a class of difficult special students with serious learning disabilities, I find the penalty of dismissal to be not only shocking but draconian.

Accordingly, I would modify by remitting the matter to the board for the fixation of a penalty other than dismissal.

Chief Judge Cooke and Judges Jasen, Gabrielli, Jones and Wachtler concur in memorandum; Judge Meyer dissents and votes to modify in a separate opinion in which Judge Fuchs-berg concurs.

Order affirmed.


text:
    The People of the State of New York, Respondent, v Wayne Blanchard, Appellant.
    Argued December 14, 1979;
    decided January 10, 1980

      APPEARANCES OF COUNSEL

      Daniel A. Ross for appellant.

      Mario Merola, District Attorney (Thomas L. Gazianis and Steven R. Kartagener of counsel), for respondent.
   OPINION OF THE COURT

Order affirmed. We agree with the majority at the Appellate Division that there is sufficient evidence in the record to sustain the charges upon which defendant now stands convicted.

Concur: Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Meyer.


text:
    The People of the State of New York, Appellant, v Clifford Griffith, Also Known as Clifford Griff and Carlton Griffith, Respondent.
    Argued December 14, 1979;
    decided January 10, 1980

      APPEARANCES OF COUNSEL

      Robert M. Morgenthau, District Attorney (Brian Rosner, Robert M. Pitler and Barbara L. Petras of counsel), for appellant.

      Laura Hoffberg and Joel A. Reiss for respondent.
   OPINION OF THE COURT

Order reversed for reasons stated in the dissenting opinion by Mr. Justice Vincent A. Lupiano at the Appellate Division (63 AD2d 138, 143-147) and the case remitted to the Appellate Division, First Department, for determination of the facts (CPL 470.25, subd 2, par [d]; 470.40, subd 2, par [b]).

Concur: Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Meyer.


text:
    The People of the State of New York, Respondent, v Joel Phillips, Appellant.
    Argued December 14, 1979;
    decided January 10, 1980

      APPEARANCES OF COUNSEL

      Irving Anolik for appellant.

      Robert M. Morgenthau, District Attorney (Marc Frazier Scholl and Vivian Berger of counsel), for respondent.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed for the reasons stated by that court.

The plea entered in the Criminal Court of the City of New York was a nullity and had no binding effect on subsequent proceedings (see People v Bartley, 47 NY2d 965).

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

Order affirmed in a memorandum.


text:
    In the Matter of Annie Bolden, Appellant, v Barbara Blum, as Commissioner of the New York State Department of Social Services, et al., Respondents.
    Submitted December 31, 1979;
    decided January 10, 1980
   Motion to amend remittitur by striking award of costs to respondent Blum granted, return of remittitur requested and, when returned, it will be amended by deleting the words "with costs” and substituting therefor the words "without costs”. [See 48 NY2d 946.]


text:
    In the Matter of Joanne Frost, Respondent, v Barbara Blum, as Commissioner of the New York State Department of Social Services, et al., Appellants.
    Submitted December 24, 1979;
    decided January 10, 1980
   Motion to dismiss the appeal taken by Muriel O’Connor granted and said appeal dismissed, without costs, upon the ground that she failed to appeal to the Appellate Division from the adverse judgment of Supreme Court. (See CPLR 5511; Cohen and Karger, Powers of the New York Court of Appeals, § 94.)


text:
    Robert S. Stewart, Respondent, v State Farm Mutual Automobile Insurance Company et al., Appellants.
    Submitted December 31, 1979;
    decided January 10, 1980
   Motion for leave to appeal dismissed, with $20 costs, upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution and involves the exercise of discretion of a type not reviewable by the Court of Appeals (see United Ind. Corp. v Schreiber, 39 NY2d 1015).


text:
    Daniel M. Vermut, Appellant, v R & M Liquors, Inc., et al., Respondents.
    Submitted December 31, 1979;
    decided January 10, 1980
   Motion to dismiss the appeal herein denied. Cross motion to amend the notice of appeal denied as unnecessary inasmuch as the appeal is deemed to have been taken from the Appellate Division order dated June 4, 1979 (see CPLR 5512, subd [a]; 5520, subd [c]). Respondent Schusselberg’s papers on appeal are to be served and filed on or before February 11, 1980.


author: Jasen and Jones, JJ.

text:
    In the Matter of Raymond E. Cornelius.
    Decided January 11, 1980
   OPINION OF THE COURT

Memorandum.

Pursuant to article VI (§ 22, subd f) of the New York Constitution and section 44 (subd 8, par [b]) of the Judiciary Law, this court initiated on December 19, 1979 a review, on its own motion, of whether Family Court Judge Raymond Cornelius should be suspended in consequence of a Federal indictment against him filed December 18, 1979. Judge Cornelius responded to the court in writing. The New York State Commission on Judicial Conduct, which was given notice and opportunity to make its views known to the court, has not responded.

In the exercise of our discretion at this preliminary phase of this matter, we conclude that it is inappropriate in these circumstances to impose the severe sanction of suspension from judicial duties merely upon the filing of this indictment. Further, it would be inappropriate and perhaps prejudicial and unfair to both Judge Cornelius and the Federal prosecution for interpretations or inferences to be drawn from the action of this court concerning this matter pending in Federal court. Thus, the majority refrains, for the most sensitive and judicious reasons, from responding with greater specificity to the dissenting opinion. This is, after all, a preliminary, temporary disposition, not unlike a bail or preliminary injunction application.

Finally, we note that even the dissenters vote for Judge Cornelius to continue receiving his judicial salary during the period of the suspension they would impose.

On balance, the public is better served in this matter by Judge Cornelius’ continued judicial service while he receives his salary. This is not to say that in an appropriate case that we would hesitate to suspend a Judge pursuant to article VI (§ 22, subd f) of the New York Constitution and section 44 (subd 8, par [b]) of the Judiciary Law.

Jasen and Jones, JJ.

(dissenting). We cannot agree with the determination made by the majority and are obliged to express our dissent.

The decision of this court must be based exclusively on the facial charges alleged in the indictment, to wit, that Judge Cornelius conspired with others to "suborn perjury, fabricate evidence and materials and introduce at State proceedings knowingly false, misleading and perjured testimony”. The Judge is not charged with having engineered the subornation or fabrication of testimony, but rather, as prosecutor, with having offered such testimony in evidence after having been alerted by an investigator in the prosecutor’s office, the Federal Bureau of Investigation and others to its origin and falsity.

We recognize that the time-honored and salutary presumption of innocence obtains as far as the individual charged is concerned until there has been a conviction. We are similarly fully conscious that the charges now leveled at the Judge may be dismissed before trial or on trial prove to be wholly unsubstantiated. Nonetheless, we cannot ignore or disregard the fact that a Federal Grand Jury on presentation of the United States Attorney has returned an indictment. In this circumstance, in our opinion, assurance in the public interest that the judiciary shall be beyond even the appearance of impropriety requires the subordination of the personal interest of any individual Judge. Distressing as that may prove to be, upholding the integrity of the Bench permits no less.

Because, however, at this stage there have been charges only and neither their proof nor possible explanation has been subjected to examination, we would be opposed to any cessation of judicial compensation. To us suspension from exercising the powers of his office would not be predicated on any prediction or estimate of the Judge’s individual guilt but rather would be dictated by overriding considerations of demanding public interest. In our view, therefore, the imposition of any penalty at this time would be inappropriate. That Judge Cornelius would be receiving full compensation during a period of perhaps several months when he would be rendering no judicial service should not be considered an unsuitable use of public funds; it would rather be the legitimate price the public must pay if it is to be assured that a member of the judiciary shall not be permitted to continue to exercise the powers of his office when charges of the nature here involved are filed against him, even though there has yet been no substantiation of them.

Chief Judge Cooke and Judges Gabrielli, Wachtler, Fuchsberg and Meyer concur in memorandum; Judges Jasen and Jones dissent and vote for suspension in another memorandum.

On the court’s own motion, it is determined that Honorable Raymond E. Cornelius not be suspended from his office of Judge of the Family Court of the State of New York, Monroe County.


text:
    City of New York, Environmental Protection Agency et al., Respondents, v Harold Feinberg et al., Respondents, and State Division of Human Rights, Appellant.
    Argued January 4, 1980;
    decided January 15, 1980

      APPEARANCES OF COUNSEL

      Alan J. Saks and Ann Thatcher Anderson for appellant.

      Allen G. Schwartz, Corporation Counsel (Maureen F. Brennan and L. Kevin Sheridan of counsel), for respondents.
   OPINION OF THE COURT

Order affirmed, with costs (see Matter of State Div. of Human Rights v Averill Park Cent. School Dist., 46 NY2d 950; State Div. of Human Rights [Ghee] v County of Monroe, 48 NY2d 727; Matter of Westinghouse Elec. Corp. v State Div. of Human Rights, 49 NY2d 234).

Concur: Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Meyer.


text:
    The People of the State of New York ex rel. Eldridge Levy, Respondent, v Stephen Dalsheim, as Superintendent of Ossining Correctional Facility, et al., Appellants.
    Argued January 10, 1980;
    decided January 15, 1980

      APPEARANCES OF COUNSEL

      Robert Abrams, Attorney-General (Stephen Marcus and Shirley Adelson Siegel of counsel), for appellants.

      Roger Brazill, Donald H. Zuckerman and William E. Heller-stein for respondent.
   OPINION OF THE COURT

Order affirmed, without costs, for the reasons stated in the memorandum at the Appellate Division (66 AD2d 827).

Concur: Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Meyer.


text:
    The People of the State of New York ex rel. Isaac Hernandez, Respondent, v Stephen Dalsheim, as Superintendent of Ossining Correctional Facility, et al., Appellants. The People of the State of New York ex rel. Charles Ryan, Respondent, v New York State Board of Parole et al., Appellants.
    Argued January 10, 1980;
    decided January 15, 1980

      APPEARANCES OF COUNSEL

      Robert Abrams, Attorney-General (Robert J. Schack and Shirley Adelson Siegel of counsel), for appellants.

      Arthur T. Connick for Isaac Hernandez, respondent.

      J. Radley Herold for Charles Ryan, respondent.
   OPINION OF THE COURT

Order affirmed, without costs (see People ex rel. Levy v Dalsheim, 48 NY2d 1019, decided herewith).

Concur: Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Meyer.


text:
    In the Matter of Alfonso Pelaez, Respondent, v Waterfront Commission of New York Harbor, Appellant.
    Argued January 7, 1980;
    decided January 15, 1980

      APPEARANCES OF COUNSEL

      Ellen J. Bronzo and David B. Greenñeld for appellant.

      Michael Linn for respondent.
   OPINION OF THE COURT

Memorandum.

The order appealed from should be reversed and the matter remitted for a determination of the issue raised by the article 78 proceeding.

The Appellate Division erred in concluding that the order of Special Term, which directed that petitioner’s suspension should be one with pay until the completion of the disciplinary hearing on the charges against him, was nonfinal. The petition was one aimed only at challenging the payless suspension. Special Term, having ordered petitioner to be paid during the suspension, resolved the entire proceeding and no action other than the purely ministerial one involved in restoring petitioner to the payroll remained to be taken by the commission.

Nor does the fact that the disciplinary hearing was still pending before the commission at the time render the order nonfinal (see, e.g., Matter of Board of Educ. v Nyquist, 48 NY2d 97; Matter of Jerry v Board of Educ., 35 NY2d 534; Cohen and Karger, Powers of the New York Court of Appeals, § 31, pp 127-128). In this regard, we note that any challenge to the outcome of the hearings would have to be brought by way of an independent article 78 proceeding (cf. Matter of Sofair v State Univ. of N. Y. Upstate Med. Center Coll. of Medicine, 44 NY2d 475, 479).

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

Order reversed, with costs, and the matter remitted to the Appellate Division, Second Department, for further proceedings in accordance with the memorandum herein.


text:
    The People of the State of New York, Respondent, v George Torres Santiago, Appellant.
    Argued December 14, 1979;
    decided January 15, 1980

      APPEARANCES OF COUNSEL

      Donald S. Morenstein and Stephen Ross for appellant.

      Eugene Gold, District Attorney (Beth S. Lasky of counsel), for respondent.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed. Since the jury could have found that the defendant’s méthod of operation resulted in this instance in the use of the force of the movement of the train upon the victim to overcome her resistance to the taking of her purse, there was sufficient evidence that his act constituted attempted robbery rather than simple larceny (Penal Law, § 160.00). Furthermore, there was evidence that the victim’s death was caused either "in the course of and in furtherance of’ the attempted robbery or of "immediate flight therefrom” (Penal Law, § 125.25, subd 3). There was, therefore, a sufficient predicate for the felony murder conviction.

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

Order affirmed in a memorandum.


text:
    The People of the State of New York ex rel. Ernest Emanuel, Appellant, v John J. Quinn, as Acting Commissioner of the New York State Board of Parole, Respondent.
    Argued January 10, 1980;
    decided January 15, 1980
   Appeal dismissed, without costs. Inasmuch as petitioner has now served beyond his minimum term, the proceeding is moot. (Cf. Matter of Vogler v Smith, 48 NY2d 974; Matter of Gannett Co. v De Pasquale, 43 NY2d 370, 376, affd 443 US 368; Matter of Lyon Co. v Morris, 261 NY 497.)


text:
    The People of the State of New York ex rel. Charles Spinks, Appellant, v John C. Dillon, as Sheriff of Onondaga County, et al., Respondents.
    Argued January 10, 1980;
    decided January 15, 1980
   Appeal dismissed, without costs, on the ground that relator, having been released from incarceration, is not entitled to a writ of habeas corpus (CPLR 7002, subd [a]; People ex rel. Wilder v Markley, 26 NY2d 648).


text:
    The People of the State of New York ex rel. John Wallace, Appellant, v State of New York et al., Respondents.
    Argued January 7, 1980;
    decided January 15, 1980
   Appeal dismissed, without costs, on the ground that relator, having been released from incarceration, is not entitled to a writ of habeas corpus (CPLR 7002, subd [a]; People ex rel. Wilder v Markley, 26 NY2d 648).


text:
    Howard Golden et al., Appellants, v Edward I. Koch, Individually and as Mayor of the City of New York, Respondent.
    Submitted January 11, 1980;
    decided January 15, 1980
   Motion to vacate statutory stay denied. Motion for a preference granted and case set down for argument on February 11, 1980. Cross motion for a stay denied as unnecessary (CPLR 5519, subd [a], par 1).


author: Jasen, J. Gabrielli, J.

text:
    Schubtex, Inc., Appellant, v Allen Snyder, Incorporated, Respondent.
    Argued September 4,1979;
    decided November 27, 1979

      POINTS OF COUNSEL

      Myron J. Meadow and Michael K. Stanton for appellant.
    I. There was no explicit, unequivocal agreement to arbitrate. (Matter of Marlene Inds. Corp. [Carnac Textiles], 45 NY2d 327; Matter of Duplan Corp. [Duplan Yarn Div.] v Davis Hosiery Mills, 442 F Supp 86; Matter of Garrett Corp. [Ix & Sons N. Y. Corp.], 16 Misc 2d 152, 9 AD2d 741, 8 NY2d 819.) II. Snyder’s belated invoice was timely and promptly rejected thus negating an agreement to arbitrate with respect to the goods referred to in the rejected invoice. III. Snyder failed to timely demand arbitration in accordance with the purported agreement upon which it relies. (Matter of Blends, Inc. [Schottland Mills], 35 AD2d 377, 29 NY2d 575; Stein v Gepo Realty Corp., 264 App Div 265, 289 NY 274; Matter of Federated Textiles v Glamour Girl, 265 App Div 252.)

      Cecil A. Citron and Michael Wexelbaum for respondent.
    I. The trial court’s findings of fact are not within the scope of review by the Court of Appeals. (Estate of Canale v Binghamton Amusement Co., 37 NY2d 875; Rudman v Cowles Communications, 30 NY2d 1.) II. A valid and binding agreement to arbitrate was made between the parties. (Matter of Marlene Inds. Corp. [Carnac Textiles], 45 NY2d 327; Matter of Weinrott [Carp], 32 NY2d 190; J. S. & H. Constr. Co. v Richmond County Hosp. Auth., 473 F2d 212; Aerojet-General Corp. v American Arbitration Assn., 478 F2d 248; Coenen v Pressprich & Co., 453 F2d 1209, 406 US 949; Hanes Corp. v Millard, 531 F2d 585; Incontrade, Inc. v Oilborn Int. S. A., 407 F Supp 1359; Bigge Crane & Rigging Co. v Docutel Corp., 371 F Supp 240; Vespe Contr. Co. v Anvan Corp., 399 F Supp 516; Hussey Metal Div. of Copper Range Co. v Lectromelt Furnace Div., McGraw-Edison Co., 471 F2d 556.) III. Respondent’s demand for arbitration was timely made. (Piccolino v Massa, 33 AD2d 643; Sweeney v Gould Paper Co., 1 AD2d 147; Crow v Gleason, 141 NY 489; Morris Demolition Co. v Board of Educ., 40 NY2d 516.) IV. Schubtex’s alleged rejection of Snyder’s invoice is irrelevant in light of the other findings of the trial court. (Matter of Tannenbaum Textile Co. v Schlanger, 287 NY 400.)
   OPINION OF THE COURT

Jasen, J.

The significant issue on this appeal is the applicability of this court’s decision in Matter of Marlene Inds. Corp. (Carnac Textiles) (45 NY2d 327) to the arbitration case before us.

Respondent Allen Snyder, Inc., a converter of yarn, had various dealings with petitioner Schubtex, Inc., a jobber, in connection with the sale and purchase of certain synthetic textiles. The orders were taken orally at petitioner’s place of business, typed at respondent’s office on its printed order/ contract form, and mailed to petitioner. The confirmation of order form used in all of these dealings, including the one in controversy, contained the statement that the "contract is subject to the terms on the * * * reverse side hereof, including the provisions for arbitration”.

Pursuant to the terms of the agreement in controversy, respondent shipped some of the textiles to petitioner and requested that the latter assort the remaining goods. Petitioner refused to dp so. A demand for arbitration and notice of intention to arbitrate respondent’s claim for damages arising out of the alleged breach of contract was served upon petitioner, who thereupon sought a stay of arbitration, denying the existence of an express agreement to arbitrate. A temporary stay of arbitration was issued, pending the outcome of a trial which was ordered to resolve the issues of fact involved.

Following trial, Supreme Court determined that a valid agreement to arbitrate was made. The court found that on the basis of the history of the parties’ relationships, petitioner was aware that the agreement to purchase textiles would be subject to the arbitration clause contained in the written confirmation of order and that petitioner "adopted it, accepted it and undertook to be bound by it with full knowledge of its provisions and with full knowledge of the obligations which it entailed.” As a result, Supreme Court vacated the previous stay of arbitration. On appeal, the Appellate Division unanimously affirmed the judgment of Supreme Court, without opinion, but granted leave to appeal to this court. We would reverse.

Although our scope of review is limited when issues of fact have been resolved by affirmance at the Appellate Division (see Matter of Hofbauer, 47 NY2d 648, 654; Estate of Canale v Binghamton Amusement Co., 37 NY2d 875; CPLR 5501, subd. [b]; see, also, Cohen and Karger, Powers of the New York Court of Appeals, § 108, pp 453-455), such findings are conclusive on this court only if there is evidence in the record to support them. In our opinion, the evidence adduced at trial is insufficient as a matter of law to support a finding of an express agreement to arbitrate.

In Matter of Marlene Inds. Corp. (Carnac Textiles) (supra), we held that an arbitration clause printed on the back of a written acknowledgment of order was a material alteration of the proposed purchase order and that it, therefore, could not be binding upon the prospective purchaser merely by virtue of the prospective purchaser’s retention, without objection, of the acknowledgment of order form containing the clause. (See Uniform Commercial Code, § 2-207, subd [2], par [b].) The rationale underlying Marlene was that a litigant ought not to be forced into arbitration and, thus, denied the procedural and substantive rights otherwise available in a judicial forum, absent evidence of an express intention to be so bound. In other words, unless it can be shown that the parties contemplated the use of arbitration, they will not be held to have relinquished their right to litigate their disputes in the courts.

Applying this rule to the case before us, we conclude that there has been no such showing. The trial court, in determining that a valid agreement to arbitrate was made, based its finding solely upon the prior dealings of the parties. Although evidence of a prior course of dealing is relevant in determining whether the parties have agreed to submit their dispute to arbitration and a determination that their oral agreement included a provision for arbitration could in a proper case be implied from a course of past conduct or the custom and practice in the industry, such a determination must be supported by evidence which affirmatively establishes that the parties expressly agreed to arbitrate their disputes. As the concurring members of the court concede, "evidence of a trade usage or of a prior course of dealings may normally be utilized to supplement the express terms of a contract for the sale of goods” (p 9). We would note also that this doctrine has been held to be applicable to arbitration agreements. (E.g., Matter of Acadia Co. [Edlitz], 7 NY2d 348; Matter of Helen Whiting, Inc. [Trojan Textile Corp.], 307 NY 360.) However, a determination that a written provision for arbitration has, in fact, been incorporated in the oral agreement of the parties in consequence of either trade usage or a prior course of dealings must be supported by evidence in the record. We conclude that there was no such evidence in this case.

Here, in each of the two prior dealings relied upon by the courts below, the only reference to arbitration appears in the written confirmation of order form sent to the buyer after the negotiation of an oral contract. There is no evidence that in their prior dealings the parties ever arbitrated any dispute pursuant to the arbitration clause or that the clause was material in their negotiations. In this situation, as our decision in Marlene clearly indicates, no binding agreement to arbitrate could have arisen. Moreover, inasmuch as the mere retention by the buyer of the form containing the arbitration clause failed to create such an agreement in the first instance, repeated use of the same ineffective form should not be held to have done so in subsequent transactions. Therefore, the trial court’s finding that the prior dealings of the parties created an express agreement to arbitrate is unsupported by the evidence and the stay of arbitration, sought by petitioner, was improperly denied.

Accordingly, the order of the Appellate Division should be reversed, with costs, and petitioner’s application for a stay of arbitration granted. The question certified is not answered as unnecessary.

Gabrielli, J.

(concurring). I concur in result, but am unable to join in the majority opinion because of the erroneous suggestion contained therein, in dicta, that a court may impose an agreement to arbitrate upon the parties to a contract, despite the absence of any express agreement, solely on the basis of past dealings or a trade custom. I consider such a rule to be an abrupt departure from prior settled law in this State, and am especially disturbed by the fact that the majority has apparently chosen to adopt this principle without any expressed justification.

Petitioner Schubtex, Inc. (Schubtex), appeals to this court, pursuant to leave granted by the Appellate Division, from an order of that court which affirmed a judgment of Supreme Court vacating a stay of arbitration. The order of the Appellate Division should be reversed, for there exists no agreement to arbitrate this dispute.

The controversy between these parties is based on an alleged breach by Schubtex of a contract to purchase fabrics from respondent Allen Snyder, Inc. (Snyder). Schubtex initiated the transaction by placing an oral order for fabrics with Snyder. Subsequently, Snyder mailed Schubtex a printed "confirmation of order” form containing an arbitration agreement. Schubtex simply retained that form and neither objected to its contents nor signed it. At no time did the parties discuss the inclusion of an arbitration agreement. When Schubtex subsequently refused to accept certain fabrics, Snyder sought to arbitrate the dispute. Schubtex then commenced this proceeding seeking to stay the arbitration, on the ground there was no agreement to arbitrate.

Upon the trial of this issue, Snyder presented evidence of several similar prior transactions between it and Schubtex. In each of those transactions, as here, Schubtex had verbally placed an order, Snyder had sent Schubtex a form containing an arbitration provision, and Schubtex had retained that form in silence. It was Snyder’s contention that by failing to object to the arbitration clause contained in the form in this instance, and in light of the prior course of dealings between the parties, this contract should be deemed to include an agreement to arbitrate. Supreme Court appears to have adopted this analysis, concluding in an oral decision that "on the basis of the history of their relationships with the respondent, the petitioners were fully aware of the arbitration clause. They adopted it, accepted it and undertook to be bound by it with the full knowledge of its provisions and with full knowledge of the obligations which it entailed”. The Appellate Division affirmed the judgment of Supreme Court without opinion, and petitioner appeals to this court by permission of the Appellate Division.

The majority of this court has concluded that there must be a reversal because there is no evidence to support a finding either that the parties had entered into a consistent course of past dealings including the use of arbitration as their normal method of dispute resolution, or that arbitration is so prevalent in the textile industry as to constitute a trade usage. I agree that such evidence was lacking, but deem that largely irrelevant, since I strongly disagree with the majority’s suggestion that the existence of an arbitration agreement could "in a proper case be implied from a course of past conduct or the custom and practice in the industry” (p 6) despite the absence of an express agreement to arbitrate.

In Matter of Marlene Inds. Corp. (Carnac Textiles) (45 NY2d 327) we concluded that the inclusion of an arbitration clause in a contract constitutes a material alteration of that contract as a matter of law. Accordingly, we there held that an arbitration clause is not made a part of a contract simply by the retention without objection by one party to that contract of an unsigned and unaccepted form, sent it by the other party, which contains an arbitration clause (see Uniform Commercial Code, § 2-207). Applying Marlene to the instant case, it is evident that this contract must be deemed to contain no arbitration clause unless Snyder has been able to prove the existence of such an agreement by sufficient evidence independent of the form itself.

The conclusion reached by the courts below is premised upon the belief, apparently accepted by the majority of this court today, that an arbitration clause may be incorporated into a contract simply because arbitration may be the prevalent means of resolving disputes in an industry and has in fact been provided for by the parties in prior agreements, despite the absence of any express agreement to arbitrate disputes arising from the object contract. Unfortunately, this approach to determining the existence of an agreement to arbitrate runs counter to the settled law of this State.

It is true, of course, that evidence of a trade usage or of a prior course of dealings may normally be utilized to supplement the express terms of a contract for the sale of goods (Uniform Commercial Code, § 2-202, subd [a]; see, also, § 1-205). General rules of contract law, however, are not always applicable to arbitration clauses because of overriding policy considerations. A purported agreement to arbitrate is severable from the other provisions of a contract (Matter of Weinrott [Carp], 32 NY2d 190, 198), and it has long been true, if it were ever in doubt, that "the threshold for clarity of agreement to arbitrate is greater than with respect to other contractual terms” (Matter of Doughboy Inds. [Pantasote Co.], 17 AD2d 216, 219 [Breitel, J.]). There obviously exists good reason to proceed cautiously in determining whether a particular contract contains an arbitration agreement. As we stated in Matter of Marlene Inds. Corp. (Carnac Textiles), (45 NY2d, at pp 333-334, supra):

"It has long been the rule in this State that the parties to a commercial transaction 'will not be held to have chosen arbitration as the forum for the resolution of their disputes in the absence of an express, unequivocal agreement to that effect; absent such- an explicit commitment neither party may be compelled to arbitrate’ (Matter of Acting Supt. of Schools of Liverpool Cent. School Dist. [United Liverpool Faculty Assn.], 42 NY2d 509, 512; accord Gangel v De Groot, 41 NY2d 840, 841; Matter of Riverdale Fabrics Corp. [Tillinghast-Stiles Co.], 306 NY 288, 289; Matter of Lehman v Ostrovsky, 264 NY 130, 132). The reason for this requirement, quite simply, is that by agreeing to arbitrate a party waives in large part many of his normal rights under the procedural and substantive law of the State, and it would be unfair to infer such a significant waiver on the basis of anything less than a clear indication of intent (see Matter of Riverdale Fabrics Corp. [Tillinghast-Stiles Co.] supra, p 289; Siegel, New York Practice, § 588, p 835).

"Since an arbitration agreement in the context of a commercial transaction 'must be clear and direct, and must not depend upon implication, inveiglement or subtlety * * * [its] existence * * * should not depend solely upon the conflicting fine print of commercial forms which cross one another but never meet’ (Matter of Doughboy Inds. [Pantasote Co.], 17 AD2d 216, 220). Thus, at least under this so-called 'New York Rule’ (Squillante, General Provisions, Sales, Bulk Transfers and Documents of Title, 33 Business Law 1875, 1881), it is clear that an arbitration clause is a material addition which can become part of a contract only if it is expressly assented to by both parties (see Matter of Doughboy Inds. [Pantasote Co.] supra; accord Frances Hosiery Mills v Burlington Inds., 285 NC 344; see, also, Duesenberg, General Provisions, Sales, Bulk Transfers, and Documents of Title, 30 Business Law 847, 853).”

It may be argued, that our decision in Marlene does not entirely and specifically control the instant case. In Marlene, we determined that the inclusion of an arbitration clause in a contract constitutes a material alteration of that contract as a matter of law. We were not then directly faced with the issue of the nature and quality of evidence necessary to prove the existence of an agreement to arbitrate. However, the rationale upon which a court rests its holding is as much a part of the law as the specific holding itself, and the same reasons which mandated the result reached in Marlene are equally applicable to this case. Our decision in Marlene was premised upon what we recognized to be the requirement imposed by New York law that an agreement to arbitrate can be found to exist only where there is an "express, unequivocal agreement” and “an explicit commitment” to submit disputes to the arbitral forum. In light of this plain statement of policy, it makes little sense to now hold that the existence of such an agreement may be proven solely upon the basis of trade usage and prior dealings. Such evidence is used to incorporate into contracts certain provisions which the parties have failed to expressly include, but which the law assumes they would have included had they considered the matter. Where there exists good reason to require an explicit agreement, however, it would seem most imprudent to allow a presumption of intent to supplant the need for such an agreement.

This is especially true since there exists no prior decision by this court impelling such a result. In Matter of Acadia Co. (Edlitz) (7 NY2d 348), we held only that an arbitration clause contained in a written contract continues in existence when the parties orally agree to renew the written agreement. Since we were there concerned with the renewal of an existing contract containing a valid arbitration agreement, our decision in Acadia Co. is not relevant to the instant dispute. Similarly, Matter of Helen Whiting, Inc. (Trojan Textile Corp.) (307 NY 360) provides no guidance in resolving this case, for there we held only that a written arbitration agreement need not be signed if there exists sufficient proof that the parties actually agreed to submit their disputes to arbitration. We have never held that the existence of an arbitration clause may be implied in the absence of proof of an express agreement, and I cannot concur in the majority’s decision to adopt such a rule today.

This is not to say, of course, that evidence of a trade usage or a prior course of dealings is irrelevant in determining whether the parties have agreed to submit their dispute to arbitration. For example, if there exists conflicting testimony as to whether the parties did in fact enter into an explicit agreement to arbitrate, evidence of the customs of the industry and the prior dealings of the parties might well be relevant in assessing that testimony. Such evidence alone, however, does not serve to prove the existence of an arbitration agreement where there simply exists no evidence or claim that an express agreement to arbitrate was in fact entered into.

Since the record in this case contains no evidence of an express agreement to arbitrate, I would reverse the order appealed from and grant a stay of arbitration on that ground alone.

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

Order reversed, etc.

      . An agreement to arbitrate is enforceable only if it is in writing (CPLR 7501), although that writing need not be signed as long as it does embody the agreement between the parties (Crawford v Merrill Lynch, Pierce, Fenner & Smith, 35 NY2d 291, 299). Since I would hold that there exists no arbitration agreement between these parties, I express no opinion as to whether a unilateral form not accepted by the other party may serve as the necessary writing (cf. Uniform Commercial Code, § 2-201, subd [2]).

      . It should be noted that the determinations in this case by both Supreme Court and the Appellate Division were made prior to our decision in Matter of Marlene Lids. Corp. (Carnac Textiles) (45 NY2d 327, supra). Since our decision in Marlene Mr. Justice Nathaniel T. Helman, the author of the decision in the instant case at Trial Term, has reached the opposite result in light of Marlene in a case involving facts similar to those in this case (Matter of Kayser-Roth Corp. [Gould Fabrics], Supreme Ct, New York County, April 10, 1979).


author: Gabrielli, J.

text:
    Andy Associates, Inc., Respondent, v Bankers Trust Company, Appellant, et al., Defendants.
    Argued November 19, 1979;
    decided December 13, 1979

      POINTS OF COUNSEL

      Richard Gyory, Herbert B. Ruskin and Daniel E. Clifton for appellant.
    I. The decision below disregarded the record of title. (Doyle v Lazarro, 33 AD2d 142, 33 NY2d 981; Buffalo Academy of Sacred Heart v Boehm Bros., 267 NY 242; Tarbell v West, 86 NY 280; Gillig v Maass, 28 NY 191; New-York Life Ins. Co. v White, 17 NY 469.) II. The recorded assignment to Andy provided no notice. (Buffalo Academy of Sacred Heart v Boehm Bros., 267 NY 242; Doyle v Lazarro, 33 AD2d 142, 33 NY2d 981; Lamed v Donovan, 84 Hun 533, 155 NY 341; Gray v Delpho, 97 Misc 37; Van Keuren v Corkins, 66 NY 77; Clark v Mackin, 95 NY 346.) III. The lease provided no notice. (Galli

      v B P Oil, 95 Misc 2d 95; Gibson v Thomas, 180 NY 483; Brown v Volkening, 64 NY 76.) IV. The third mortgage provided no notice. (Tarbell v West, 86 NY 280; New York Life Ins. Co. v White, 17 NY 469; People’s Trust Co. v Tonkonogy, 144 App Div 333; Todd v Eighmie, 4 App Div 9; Lyons Holding Corp. v Home Tit. Ins. Co., 250 App Div 640.) V. The information in other recorded documents provided no notice. (Gibson v Thomas, 180 NY 483.)

      Lawrence E. Fabian and Arthur S. Penn for respondent.
    I. The recorded assignment of mortgage to Andy Associates, which was not outside the chain of title, and the original mortgage to Marseilles Management provided notice to Bankers of the mortgage. (People’s Trust Co. v Tonkonogy, 144 App Div 333; Curtis v Moore, 152 NY 159; Spicer v First Nat. Bank of Fort Edward, 55 App Div 172, 170 NY 562; Larned v Donovan, 84 Hun 533, 155 NY 341; Doyle v Lazarro, 33 AD2d 142; Tarbell v West, 86 NY 280; Buffalo Academy of Sacred Heart v Boehm Bros., 267 NY 242; Cambridge Val. Bank v Delano, 48 NY 326; New York Life Ins. Co. v White, 17 NY 469.) II. The satisfaction of mortgage executed and recorded by Bonjay East was null and void and said satisfaction did not give Bankers’ mortgage priority over Andy Associates’ mortgage. (Bacon v Van Schoonhoven, 87 NY 446; Clark v Mackin, 95 NY 346; Van Keuren v Corkins, 66 NY 77; Ostrander v Bell, 199 App Div 304, 234 NY 566; Larned v Donovan, 84 Hun 533, 155 NY 341; Vohmann v Michel, 185 NY 420.) III. The recorded lease and second mortgage also provided Bankers Trust with notice of Andy Associates, Inc.’s, mortgage interest. (Cambridge Val. Bank v Delano, 48 NY 326.)
   OPINION OF THE COURT

Gabrielli, J.

Plaintiff Andy Associates, Inc., commenced this action to foreclose a second mortgage on premises located at 240 West 103rd Street, New York, New York. Defendant Bankers Trust Co., holder of a junior mortgage interest in the same premises, challenged Andy Associates’ claim of priority on the ground that Andy Associates’ predecessor in interest had failed to record its lien in the office of the county clerk as required by section 291 of the Real Property Law. Under that provision, an unrecorded conveyance of an interest in real property is deemed void as against a subsequent good faith purchaser for value who acquires his interest without actual or constructive notice of the prior conveyance. The sole question presented on this appeal is whether Bankers Trust qualifies as a "good faith” purchaser without notice, so that it is entitled to the protections afforded by section 291. Having examined the recorded state of title as it existed at the time Bankers Trust acquired its mortgage, we conclude that Bankers Trust is chargeable with having had constructive notice of Andy Associates’ prior claim. Accordingly, we hold that Bankers Trust may not invoke section 291 of the Real Property Law to defeat Andy Associates’ right of priority, notwithstanding that such right was derived from an earlier unrecorded conveyance.

To place the case in proper perspective, it is required that the entire seemingly involved background be described as succinctly as possible to facilitate an understanding of the rights of the parties to this action.

The events which gave rise to the present controversy may be traced to July 2, 1951, when the owner of the property located at 240 West 103rd Street, Marseilles Associates, leased the premises to Marseilles Management, a separate corporation, for a term of 21 years. Simultaneous with the execution of the lease, the tenant paid the landlord, Marseilles Associates, a lump sum of $62,500, which represented a security deposit to insure the tenant’s faithful performance of its obligations under the lease. In return, and in order to insure the eventual repayment of this sum, Marseilles Associates gave its tenant, Marseilles Management, a promissory note and a mortgage on the leased premises. This mortgage contained a separate, specific clause which prohibited the tenant from assigning its rights under it, except where the assignment was made in connection with a simultaneous assignment of the lease or, in the alternative, where the assignment was made to the owner of the premises "as security for the faithful performancé by the tenant of the terms, covenants and conditions” set forth in the lease. Presumably, the purpose of the latter assignability provision was to enable the landlord to take back an assignment of its own mortgage as a means of protecting its right to retain the tenant’s security deposit in the event of the tenant’s failure to meet the obligations imposed by the lease.

Pursuant to this clause, Marseilles Management, the tenant, completed the leasing arrangements by executing an assignment, outright on its face, of the mortgage to Marseilles Associates, the landlord and mortgagor. Thus, when the transaction was finally closed, the landlord held both the tenant’s $62,500 cash payment and the mortgage on the leased premises for the limited purpose of securing the tenant’s faithful performance of the terms of the lease. If the tenant fulfilled its obligations, it would immediately become entitled to the return of its security deposit and would, as well, become entitled to exercise its rights as mortgagee, including its right of foreclosure. Only if the tenant defaulted on some aspect of the lease would the landlord gain the unconditional right to retain the $62,500 security deposit and to consider its obligations under the mortgage canceled. All of the documents which comprised the 1951 transaction between Marseilles Associates and Marseilles Management, including the. lease, the mortgage and the assignment of the mortgage, were subsequently recorded in the office of the county clerk as required by section 291 of the Real Property Law.

The next transaction in the sequence of developments leading to the present litigation occurred in 1954, when the tenant, Marseilles Management, assigned its lease along with its conditional rights under the 1951 mortgage to an organization called Marseilles Hotel Corp. Under this assignment, Marseilles Hotel stepped into the shoes of the former tenant and thus became entitled to the return of the $62,500 security deposit as well as to the rights conferred by the mortgage upon full compliance with the terms of the lease. Andy Associates, the plaintiff in this case, ultimately succeeded to the tenant’s rights in the mortgage as a result of a further assignment to it by Marseilles Hotel. Unfortunately, although Marseilles Hotel did record its acquisition of the leasehold interest in the premises, it never recorded its acquisition of Marseilles Management’s interest in the 1951 mortgage in the office of the county clerk. Thus, despite the fact that Andy Associates eventually recorded the assignment made to it by Marseilles Hotel, there remained a "gap” in the recorded "chain of title” leading to Andy Associates’ interest in the mortgage.

Several years after Andy Associates acquired its interest in the 1951 mortgage, changes began to occur in the ownership of the property at 240 West 103rd Street. First, in 1968, Marseilles Associates, the original owner and landlord, transferred the property to another corporation, Broadway-Marseilles Corp. In conjunction with this transfer, Marseilles Associates assigned to Broadway-Marseilles its right to hold the 1951 mortgage as collateral security for the tenant’s faithful performance of the terms of the outstanding lease. In form, this assignment was outright. Broadway-Marseilles’ interests were in turn transferred to a third party, Bonjay East, Inc., in 1972 and 1973 respectively. Finally, in March of 1973, for reasons which remain unclear, Bonjay East recorded an instrument which purported to represent a "satisfaction” of the 1951 mortgage.

Approximately 10 months later, defendant Bankers Trust became embroiled in this complex chain of transactions when it made a loan to Bonjay East in exchange for Bonjay East’s execution of a new mortgage on the premises at 240 West 103rd Street. It appears that Bankers Trust entered into this transaction on the strength of the recorded satisfaction and on the unwarranted assumption that the property was no longer encumbered by the 1951 mortgage.

The various interests that were created by the foregoing series of events clashed for the first time in 1976, when Andy Associates commenced this action to foreclose on the property pursuant to the 1951 mortgage. By that time, the 21-year leasehold interest that had been established in 1951 had run its course, and the tenant or its successor in interest had become entitled to the return of that part of the original $62,500 security deposit that had not yet been repaid. Moreover, with the termination of the tenancy, the landlord’s right to hold the 1951 mortgage as collateral security was extinguished, and all of the rights conferred by the mortgage presumably had reverted to Andy Associates, the tenant’s assignee. Hence, by 1976 Andy Associates had a right to foreclose against the property as a means of recovering the outstanding portion of the security deposit.

Nonetheless, Bankers Trust opposes the attempted foreclosure, contending that its later mortgage should not be held subordinate to Andy Associates’ rights. It is Bankers Trust’s position that, under section 291 of the Real Property Law, Andy Associates’ interest should be deemed void as against Bankers Trust, because Andy Associates’ interest was derived from an unrecorded instrument, the assignment made by Marseilles Management to Marseilles Hotel. Both the trial court and the Appellate Division rejected Bankers Trust’s contention, however, finding that the records filed in the county clerk’s office at the time Bankers Trust acquired its mortgage contained sufficient evidence of Andy Associates’ prior claim to put Bankers Trust on "constructive notice” that the property had been and continued to be encumbered. Thus, the lower courts held, Bankers Trust could not defeat Andy Associates’ right of priority, despite the fact that Andy Associates’ predecessor in interest had failed to record.

In upholding the determinations made below, we proceed from the premise that the recording act, which is embodied in article 9 of the Real Property Law, was enacted to accomplish a twofold purpose. First, it was intended to protect the rights of innocent purchasers who acquire an interest in property without knowledge of prior encumbrances (see Jackson v Post, 15 Wend 588; Hall v Nelson, 23 Barb 88; Fox v Sizeland, 170 Misc 390; see, generally, 6A Powell, Real Property, par 912; 4A Warren’s Weed New York Real Property, Recording, § 1.02). Second, the statute was designed to establish a public record which would furnish potential purchasers with notice, or at least "constructive notice”, of previous conveyances and encumbrances that might affect their interests (see Jackson v Post, 15 Wend 588, supra). Given these statutory purposes, it follows that a purchaser of an interest in land such as Bankers Trust has no cause for complaint under the statute when its interest is upset as a result of a prior claim against the land the existence of which was apparent on the face of the public record at the time it purchased (see, e.g., Doyle v Lazarro, 33 AD2d 142, affd 33 NY2d 981; cf. Pallone v New York Tel. Co., 34 AD2d 1091, affd 30 NY2d 865).

It has been contended, however, that Bankers Trust cannot be charged with having had record notice of Andy Associates’ prior right, notwithstanding the fact that the assignment of the 1951 mortgage to Andy Associates was duly recorded by the time Bankers Trust acquired its lien. This contention is premised upon the so-called "gap” in Andy Associates’ chain of title which resulted from Marseilles Hotel’s failure to record the assignment made to it by Marseilles Management. Relying upon this "gap”, Bankers Trust urges us to apply to this case the well-established rule that a subsequent purchaser is not chargeable with constructive notice of conveyances that are recorded outside his direct chain of title (Doyle v Lazarro, 33 AD2d 142, affd 33 NY2d 981, supra; see Buffalo Academy of Sacred Heart v Boehm Bros., 267 NY 242; Tarbell v West, 86 NY 280; New York Life Ins. Co. v White, 17 NY 469; 4A Warren’s Weed New York Real Property, Recording, § 5.01; 6A Powell, Real Property, par 916). The property rights represented by the 1951 mortgage, it is argued, flowed directly from Marseilles Management to Marseilles Associates, the original landlord, and then proceeded down the chain through Broadway-Marseilles and finally to Bonjay East, which recorded a "satisfaction”. The absence of any record of a conveyance of mortgage rights from Marseilles Management to Marseilles Hotel, it is claimed, deprived Bankers Trust of a means of discovering Andy Associates’ conflicting interest and, in effect, removed that interest from the direct "chain of title”. For this reason, Bankers Trust contends, it may not be held to have had constructive notice of Andy Associates’ claim to the property.

Despite the surface appeal of this argument, we find that the peculiar facts presented in this case compel its rejection here. Initially, it must be noted that the terms of the 1951 mortgage, which was itself duly recorded in the office of the county clerk, plainly indicated that two separate but harmonious chains of interest could be created through successive assignments of the mortgage instrument, thus putting any potential purchaser or title examiner on notice as to the restrictions on possible subsequent assignments. On the one hand, the rights possessed by the tenant Marseilles Management under the mortgage, including the right to foreclose in the event the security deposit was wrongfully withheld, could be passed on to other tenants along with the assignment of the leasehold interest. On the other hand, a more limited interest, the right of the landlord to hold the mortgagé as collateral security for the tenant’s faithful performance of the lease, could be assigned to successive owners of the premises as title to the property changed hands. It goes without saying that these separable interests could and, in fact, necessarily would give rise to two distinct chains of title, both of which should have been "searched” and investigated by Bankers Trust in the course of its title search.

Tracing the various interests in this case back to their origins, we find that Bonjay East, from which Bankers Trust’s present claim is derived, never acquired more than a limited, collateral interest in the 1951 mortgage. When the mortgage was assigned by the original mortgagee, Marseilles Management, to the landlord-mortgagor, Marseilles Associates, it was given only for the limited purpose of securing the landlord against a default by the tenant. Although the assignment was on it face outright, the restrictive clause in the mortgage gave notice that this might not be the case. The collateral character of this interest in the 1951 mortgage did not change as it was passed from Marseilles Associates to Broadway-Marseilles and then from Broadway-Marseilles to Bonjay East. Hence, while Bonjay East had the power to satisfy the landlord’s collateral security interest in the mortgage, it did not have the broader right to discharge the mortgage itself. That right resided solely in the party which acquired its interests through the tenant, in this case Andy Associates. Consequently, the "satisfaction” recorded by Bonjay East could not legally have operated to discharge the mortgage (see Vohmann v Michel, 185 NY 420).

It is true that, in the ordinary case, a purchaser is entitled to rely upon a "satisfaction” of a mortgage recorded by a person who appears to hold the instrument as an assignee (Bacon v Van Schoonhoven, 87 NY 446). There is generally no requirement that the purchaser make further inquiries to ascertain whether the purported assignee actually possessed the authority to discharge the mortgage obligations (Bacon v Van Schoonhoven, supra). Indeed, section 321 (subd 1, par [b]) of the Real Property Law codifies this principle and extends it by providing that "[w]hen it appears from the record that the mortgage has been assigned, whether or not the assignment was made as collateral security, the discharge shall be signed by the person who appears from the record to be the last assignee thereof’. Nothing in the statute or the related case law, however, can be construed to override the even more fundamental rule that a satisfaction entered by one who was without authority to do so cannot serve to insulate a subsequent purchaser from prior claims, when the existence of such claims was apparent from the face of the record (see Larned v Donovan, 84 Hun 533, affd 155 NY 341; see, also, Vohmann v Michel, 185 NY 420, supra). In other words the provisions, and thus the benefits, of section 321 (subd 1, par [b]) are available only if the mortgage assignment appears to be outright and notice is not otherwise given on the record that the assignment may be as collateral security only.

Here, the recorded mortgage which Bonjay East purported to discharge by its recorded satisfaction indicated by its own terms that Bonjay East was not an assignee with the power to record such a discharge. The power to discharge the mortgage remained extant in another party, and, accordingly, the purported satisfaction recorded by the collateral assignee only was ineffective. Thus, Bankers Trust cannot claim the benefit of either section 321 (subd 1, par [b]) or the recorded satisfaction. On a separate ground, we point out that Bankers Trust cannot escape the imposition of notice of Andy Associates’ outstanding interest in the mortgage and notice that the tenant’s rights in the mortgage had not been merged in the collateral security interest possessed by the landlord-mortgagor by reason of any default by the tenant in the lease.

Initially, we take judicial notice of the fact that the property at issue here is located in New York City, which utilizes the "block and lot” method of indexing recorded conveyances (Administrative Code of City of New York, § 1052-24.0; see Real Property Law, § 328; 4A Warren’s Weed New York Real Property, Recording, § 3.09; Marks, Maloney and Paperno, Mortgages and Mortgage Foreclosure in New York [rev ed], § 362; see, also, County Law, §§ 918-920). This indexing method, unlike the traditional "grantor-grantee” and "mortgagor-mortgagee” system (see Real Property Law, § 316), enables the title searcher readily to find all conveyances within a given time frame which affect a particular parcel of land (see 6A Powell, Real Property, par 916). Under this system, there is no need for the title searcher to resort to the more tedious and cumbersome method of tracing a chain of title through successive grantors and assignors and, consequently, there is little or no danger that a particular outstanding interest will be overlooked because it was recorded outside of the direct "chain of title”. Thus, it appears that where the "block and lot” indexing method is used, there is no logical reason to afford potential purchasers additional protection by applying the time-honored rule that a purchaser is not chargeable with constructive notice of conveyances recorded outside of his direct chain of title. That rule, which was developed in cases where the purchaser had to rely upon the grantor-grantee system of indexing, simply represented a pragmatic judicial response to the exigencies of conducting a title search under such a system (see 6A Powell, Real Property, par 916). Its application in a case such as this, where the "block and lot” indexing system was available would seem, at the very least, a somewhat anachronistic result (see, generally, Cross, Record "Chain of Title” Hypocrisy, 57 Col L Rev 787).

In light of the well-established policy in favor of applying the recording act in such a way as to effect its underlying purpose (see, e.g., Larned v Donovan, 84 Hun 533, affd 155 NY 341, supra), we decline to extend the rule limiting constructive notice to recorded conveyances that are within the purchaser’s direct chain of title to instances in which the purchaser had access to a "block and lot” or tract indexing system. Accordingly, we hold that, in this case, Bankers Trust is chargeable with constructive notice of Andy Associates’ outstanding interest in the mortgage. This recorded fact, coupled with the recorded recitation in the 1951 mortgage regarding the assign-ability of the mortgage, was sufficient to place Bankers Trust on notice that it could not rely on the satisfaction entered by Bonjay East and that any interest it acquired in the property located at 240 West 103rd Street would have to be subordinated to that possessed by Andy Associates. Thus, Andy Associates is entitled to prevail in its foreclosure action.

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

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

Order affirmed.

      . "Conveyance” is defined by subdivision 3 of section 290 of the Real Property Law, in pertinent part, as an instrument by which an interest in real property is created, transferred, mortgaged or assigned, or through which the title to any real property may be affected.

      . The tenant’s right to recover its security deposit and mortgage was, of course, dependent upon its faithful performance of the terms of the lease. Since the question whether the tenant actually fulfilled its obligations has not been raised in the present appeal, we will assume for the sake of clarity that all covenants were duly performed.

      . In the usual case, the documents that are recorded in conjunction with a mortgage assignment recite only that the rights in the mortgage have been transferred. Such documents do not ordinarily reveal whether the assignment was made unconditionally or, rather, was made for the limited purpose of providing collateral security. Hence, there is often no way of ascertaining from the face of the record whether the assignee of record has the power to execute and record a satisfaction of the mortgage, and the subsequent purchaser who relies on a satisfaction entered by an assignee would always be taking a risk. It is this uncertainty that section 321 (subd 1, par [b]) of the Real Property Law was designed to eliminate. The effect of the statute is to enable innocent purchasers to rely upon a satisfaction entered by the assignee of record without having to inquire whether the assignee’s authority to discharge the mortgage was limited by some private agreement. In contrast, where the record itself indicates that the assignee purporting to discharge the mortgage held the instrument only as collateral security, the purchaser is on notice that the recorded satisfaction is suspect. Under such circumstances, the purchaser cannot be permitted to rely on the recorded satisfaction under section 321 (subd 1, par [b]).