text:
    Anna Zaldin et al., Plaintiffs, v Concord Hotel, Defendant. (Action No. 1.) William Modell et al., Appellants, v Kiamesha Concord, Inc., Respondent. (Action No. 2.)
    Argued September 12, 1979;
    decided October 23, 1979

      POINTS OF COUNSEL

      Herbert P. Polk and Frederic R. Mindlin for appellants.
    I. An innkeeper cannot claim the protection of section 200 of the General Business Law, a statute in derogation of the absolute liability imposed upon an innkeeper at common law, in a case where he has refused access to his safe to a guest. (Millhiser v Beau Site Co., 251 NY 290; Wilkins v Earle, 44 NY 172; Hulett v Swift, 33 NY 571; Federal Ins. Co. v Waldorf-Astoria Hotel, 60 Misc 2d 996; Epp v Bowman-Biltmore Hotels Corp., 171 Misc 338; Transit Comm. v Long Is. R. R. Co., 253 NY 345; Matter of Kyritsis v Fenny, 66 Misc 2d 329.) II. Even if section 200 of the General Business Law could be construed to exempt an innkeeper from liability in a case where he had refused access to his vault to a guest who had attempted to deposit jewelry in the vault, such an exemption should not be extended to an innkeeper who, as the one involved here, had not given notice of limited access in accordance with the requirements of the statute. (De Paemelaere v Davis, 77 Misc 2d 1; Insurance Co. of North Amer. v Holiday Inns of Amer., 40 AD2d 885.) III. There are no issues of fact which prevent conditionally striking the affirmative defense based upon section 200 of the General Business Law; such facts as there are should be set down for immediate trial under CPLR 3212 (subd [c]).

      Carl P. Goldstein and Richard A. Stoloff for respondent.
    I. The substantive requirements of the notice of availability of a safe for the use of guests of a hotel are set forth within the body of sections 200 and 206 of the General Business Law. (Briggs v Todd, 28 Misc 208; Ramaley v Leland, 43 NY 539; Hyatt v Taylor, 42 NY 258; Rawn v 14 East 60th St. Hotel Corp., 126 Misc 247; Zaldin v Concord Hotel, 65 AD2d 670; Rosenplaenter v Roessle, 54 NY 262; Bright Homes v Wright, 8 NY2d 157; Swetlow v Zindorest Park, 201 Misc 116, 202 Misc 628, 281 App Div 369; Epp v Bowman-Biltmore Hotels Corp., 171 Misc 338; De Paemelaere v Davis, 77 Misc 2d 1; Wilkins v Earle, 44 NY 172.) II. Plaintiffs neglected to avail themselves of the use of the safe which was provided by defendant, Kiamesha Concord, Inc., and, therefore, the hotel-keeper is not liable for any loss of "property”. (Rosenplaenter v Roessle, 54 NY 262; Hackfeld & Co. v United States, 197 US 442; People v Gaydica, 122 Misc 31; Esposito v St. George Swimming Club, 143 Misc 15; Bendetson v French, 46 NY 266; People ex rel. Town of Plattsburgh, N. Y. v Williams, 47 App Div 88; Penoyar v Kelsey, 150 NY 77; People ex rel. Hannan v Board of Health of City of Troy, 153 NY 513.) III. Where moving party has exclusive knowledge of the key facts summary judgment must be denied. (Platzman v American Totalisator Co., 57 AD2d 753; Golden v Wickhardt Co., 33 AD2d 652; Bingham v Wells, Rich, Greene, 34 AD2d 924; Terranova v Emil, 20 NY2d 493; Glick & Dolleck v Tri-Pac Export Corp., 22 NY2d 439.) IV. Where a statute provides for a constructive notice by posting, actual notice is the equivalent thereto. (Purvis v Coleman, 21 NY 111; Noce v Kaufman, 2 NY2d 347; Laffin v Ryan, 4 AD2d 21.)
   OPINION OF THE COURT

Fuchsberg, J.

We treat here with section 200 of the General Business Law, a statute delineating the responsibilities of the hotel industry with regard to the valuables of its millions of patrons.

Plaintiffs, registered guests, bring suit on a theory of absolute liability for the loss of two valuable diamond rings which disappeared from their hotel room. In its answer, the defendant hotel pleaded section 200 by way of affirmative defense. Asserting that the hotel’s vault was not available to guests at the time they attempted to place the jewelry there for safekeeping, plaintiffs moved for summary judgment (CPLR 3212) or, in the alternative, for an order striking the defense (CPLR 3211, subd [b]). Special Term held, inter alia, that the hotel’s failure to provide access to its safe at all times did not necessarily preclude it from claiming the protection of section 200, and, concluding that the "reasonableness of the vault hours should be left to the judgment of the triers of fact”, denied the motion. On review, the Appellate Division in effect ruled that, since the statute does not speak of "reasonable hours”, a hotel’s maintenance of vault facilities, even when available to guests only at limited times, generally entitles the hotel to the statutory benefits; on that basis, the court granted summary judgment to the defendant, dismissing the complaint on the law.

On our review, we hold that a hotel may not claim the limitations on liability afforded it by section 200 of the General Business Law at times when it fails to make a safe available to its guests. We therefore determine that summary judgment should not have been granted and the complaint, accordingly, should be reinstated. Our reasons follow.

Section 200 of the General Business Law reads: "Whenever the proprietor or manager of any hotel, motel, inn or steamboat shall provide a safe * * * for the safe keeping of any money, jewels, ornaments, bank notes, bonds, negotiable securities or precious stones, belonging to the guests * * * and shall notify the guests or travelers thereof by posting a notice stating the fact that such safe is provided * * * in a public and conspicuous place and manner in the office and public rooms * * * and if such guest or traveler shall neglect to deliver such property * * * for deposit in such safe, the proprietor or manager * * * shall not be liable for any loss of such property, sustained by such guest or traveler by theft or otherwise”. Beyond this, in the absence of a special agreement in writing, the statute goes on to limit a hotel’s liability for property so deposited with it, whether the loss is sustained "by theft or otherwise”, to a sum not exceeding $500. (See, generally, Wilkins v Earle, 44 NY 172, 185-186.)

Like most statutes, section 200 did not spring full blown out of a void. It hearkens back to the common law, under which innkeepers were absolutely liable for the full value of property patrons committed to their custody, and dates at least as far back as the fourteenth and fifteenth centuries. Justified by the fact that a traveler usually had nowhere but an inn to turn to as a refuge from bandits, the law shifted the responsibility for keeping travelers’ possessions secure onto those who, by maintaining hostelries, held out safe havens for wayfarers and their property. Generally speaking, the liability so imposed was akin to that of an insurer, the only exceptions being for losses occasioned by the guest’s own negligence or fraud, by the public enemy, or by an act of God. (See Hulett v Swift, 33 NY 571, 572-575; Beale, Law of Innkeepers, § 181.)

But modern history tells us that, with time, conditions facing both innkeeper and guest changed. Travel became more frequent, more regular and more patrolled; by and large, it thereby became less perilous. By the mid-nineteenth century, technological advances in modes of transportation, the mobility that these made possible, the resulting wider distribution of population, and other social and material changes spawned growing numbers of inns and hotels. Especially in urban and resort areas, these tended to be larger and less personal in their customer relations. Also, travelers were coming to have other means, chiefly insurance, by which they could protect themselves against losses from pilferage. With these changes came agitation for modification of the expansive common-law rule. Responding to these developments, first New York and Pennsylvania in 1855, and later other States, offered a legislative answer, which to this day largely remains unaltered (see Ann., 9 ALR2d 818).

This background in mind, we turn now to the events leading to the invocation of the statute in the case before us. It is agreed that on Friday afternoon the plaintiffs William and Shelby Modell, accompanied by their daughter and son-in-law, checked into the defendant’s large resort hotel. No one disputes but that the hotel provided a safe-deposit vault for the use of its guests and that, shortly after the plaintiffs’ arrival, the daughter requested and was assigned one of its boxes. Plaintiffs allege that she then placed two diamond rings belonging to her mother in the box and that, late the following afternoon, she withdrew them from the box for her mother to wear while attending the Saturday evening festivities sponsored by the hotel.

Sometime after midnight, however, upon the conclusion of the hotel’s night club performance and before retiring, when the Modells and their daughter attempted to redeposit the jewelry, a hotel desk clerk informed them that the vault was closed and that they would have to retain possession of their valuables until it was opened in the morning. The defendant concedes that it would not allow guests access to the vault between the hours of eleven in the evening and eight in the morning. The Modells claim they thereupon secreted the jewelry in their room only to find, upon arising at about 9:00 a.m. that the chain lock with which they had secured the room had been cut from the outside and the rings were missing. They promptly notified the hotel and police of what they took to be a theft.

In now applying the statute to this factual framework, we first remark on the obvious: the statute’s wording is plain. This is not a new observation. Almost from the time the legislation was enacted, the courts recognized that "there is nothing in the statute itself indicating any intent other or less extensive than the unequivocal language imports” (Hyatt v Taylor, 42 NY 258, 261). So we by no means tread the quicksand that surrounds a case in which less than definitive statutory language requires a choice among differing interpretations, the resolution of which, in turn, compels a choice among differing canons of construction (cf. Matter of CountryWide Ins. Co. v Wagoner, 45 NY2d 581, 588). Rather, when, as here, a statute is free from ambiguity and its sweep unburdened by qualification or exception, we must do no more and no less than apply the language as it is written (see People ex rel. New York Cent. & Hudson Riv. R. R. Co. v Woodbury, 208 NY 421, 424-425; McKinney’s Cons Laws of NY, Book 1, Statutes, §§ 76, 94; 2A Sutherland, Statutory Construction [4th ed], §§ 46.01, 46.04).

Thus read, the statute offers the innkeeper an option: "provide” a safe for your guests and sharply restrict your liability; or, feel free to do absolutely nothing about a safe and continue the risk of exposure to open-ended common-law liability. But, whichever choice you make, since the statute is in derogation of the common-law rule, to obtain the benefit of the more circumscribed liability which section 200 affords, you must conform strictly with its conditions (see Millhiser v Beau Site Co., 251 NY 290).

The statute fixes no time when a safe may or must be provided. Nor does it mandate availability around the clock. A fortiori, it does not limit the operation of a safe to a "reasonable time”. These matters are left entirely up to the hotel. The statute makes .no effort to evaluate cost or convenience. Neither does it distinguish between large and small inns, between those that cater to the large convention and those that cater to the individual patron, between those that come alive at night and those that do so in the day, between those that have a wealthy clientele and those that do not. The legislative formula is uncomplicated. It says, straightforwardly, that "whenever” a safe is provided, the liability limitations shall be applicable. Conversely, at those times when an innkeeper chooses not to provide a safe for the use of its guests, he cannot claim the statutory protection.

In the face of the simplicity that characterizes the statute’s structure, the hotel relies on two venerable cases to import into the statute certain unexpressed exceptions. To the contrary, these cases, on close analysis, are in keeping with our interpretation. Thus, in Rosenplaenter v Roessle (54 NY 262), where a newly registered procrastinating guest lost his valuables during his delay in delivering them to the safe, the court indeed did suggest that "There must be a brief period after the arrival of a guest at a hotel before he can make the deposit, and during this brief period the statute affords the hotel keeper no protection” (54 NY 262, 267); however, the unwarranted interpolation of this element of uncertainty turns up only as dictum for, in the end, the result, not inconsistent with today’s holding, was to deny recovery. Similarly, Bendetson v French (46 NY 266), a case permitting common-law recovery against an innkeeper for a loss occurring after a guest had removed his valuables from a safe in preparation for his departure, should not be viewed as creating a permissible deviation from the terms of the statute; rather, as the opinion in that case makes clear, the loss was attributable to negligence on the part of baggage-handling hotel employees and, hence, essentially, the statute was not dispositive (46 NY 266, 270; Rosenplaenter v Roessle, supra, p 267).

The defendant, also, would have us read the statute as though the phrase "as soon as” had been substituted for the word "whenever” and, similarly, "equip” for "provide”. But neither the express language of the statute nor its avowed purpose permits us to sanction what, in effect, would amount to a substantive change, indeed, a literal rewriting of a carefully conceived and well-weathered statute. Had the Legislature meant to incorporate such qualifications, it easily could have done so. To the contrary, in the 125 years of the legislation’s long life, no such restriction has ever been essayed despite periodic legislative tinkering in other respects.

More specifically, nowhere does section 200 suggest that an innkeeper may provide a safe part of the time and yet gain the benefit of the exemption all the time. Taken to its logical conclusion, this would not only deprive guests of their common-law right to seek recovery of their full losses against the innkeeper. But, by curtailing the period during which the surrogate medium of a safe is to be available, it also would leave the guests bereft of a full-time replacement for the innkeeper’s former round-the-clock incentive to maintain security. Had a statute as explicit in concept and form as is the one here been intended to give a hotel the advantages of a dramatic limitation on its liability for losses while still retaining the privilege to encroach on the temporal scope of the quid pro quo — a safe such as would afford the guests protection — surely it would have said so.

The defendant, therefore, may not have been entitled to base an affirmative defense under section 200, and certainly was not entitled to receive summary judgment on that account. Nevertheless, on the record before us, it was correct to withhold granting summary judgment to plaintiffs. Especially since the plaintiffs’ daughter made no affidavit in support of the motion (see Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065, 1068; Utica Sheet Metal Corp. v Schecter Corp., 25 AD2d 928; 4 Weinstein-Korn-Miller, NY Civ Prac, par 3212.09), the further development of relevant facts may be in order, including, inter alia, ones relating to the circumstances surrounding the actual disappearance of the rings, to whether the theft occurred at the time when the safe was not available to these guests and, of course, to the value of the rings.

From all this flows our conclusion that the order of the Appellate Division should be modified, by reversing the grant of summary judgment to defendant and by reinstating the complaint, and otherwise should be affirmed.

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

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

      . The plaintiffs’ action was joined for trial with an action brought by the Zaldins, whose name captions the report of this appeal. The Zaldins did not join in the plaintiffs’ motion for summary judgment.

      . The hotel did not cross-move for summary judgment, but the other side’s motion for such relief allows the court to search the record and, if warranted, grant summary judgment in favor of the nonmovant (CPLR 3212, subd [b]; see, e.g., Wiseman v Knaus, 24 AD2d 869).

      . The notices which the hotel posted, stating the fact that a "safe is provided”, complied fully with the statute.

      . If the loss is the result of an innkeeper’s own negligence the statutory exemption from liability, where otherwise applicable, would not apply (see Jacobs v Alrae Hotel Corp., 4 AD2d 201, 203-204, affd 4 NY2d 769; Chatillon v Co-operative Apt. Co., 90 Misc 108, affd 171 App Div 910; see, also, Ann., 37 ALR3d 1276, 1288-1289). Because of the result we reach here and because plaintiffs’ cause of action, we note, is not premised on negligence but solely on the theory of absolute liability, we are not now called upon to decide whether in such event the $500 limitation would remain in effect (compare General Business Law, § 200, with § 201 ["in no event shall such keeper be liable beyond five hundred dollars, unless it shall appear that such loss occurred through his fault or negligence”]; see Adler v Savoy Plaza, 279 App Div 110, 117 [dissenting opn]).

      . The innkeeper’s liability for wearing apparel and other personal property not enumerated in section 200, although also absolute at common law, was similarly circumscribed by a contemporaneously adopted statute (see General Business Law, § 201; Wilkins v Earle, 44 NY 172, 178, supra; see, generally, Navagh, A New Look at the Liability of Innkeepers for Guest Property Under New York Law, 25 Fordham L Rev 62, 67-69).

      . The amendments to the statute (originally L 1855, ch 421) are as follows: notice to be posted in public rooms instead of bedrooms (L 1883, ch 227); limiting to $500 value of articles hotel required to receive for safekeeping and to $250 for loss of any property received of undisclosed value (L 1892, ch 284); added "steamboat” to places entitled to statutory protection (L 1897, ch 305, § 1); inserted "motel” following "hotel” (L 1960, ch 839). (See Millhiser v Beau Site Co., 251 NY 290, 293-294.)


source: Caselaw Access Project

author: Chief Judge Cooke.

license: Public Domain

text:
    In the Matter of Leon RR, Alleged to be a Permanently Neglected Child. St. Lawrence County Department of Social Services, Respondents; Leon RR et al., Appellants.
    Argued September 11, 1979;
    decided October 23, 1979

      POINTS OF COUNSEL
    A. Michael Gebo for appellants.
    I. The court erred in admitting the complete case record of the Department of Social Services. (Matter of Bradley U, 55 AD2d 722; Johnson v Lutz, 253 NY 124; Williams v Alexander, 309 NY 283; Palmer v Hoffman, 318 US 109; Smith v Smith, 163 NY 168; Hayes v State of New York, 50 AD2d 693, 40 NY2d 1044; Kelly v Wasserman, 5 NY2d 425; Matter of Del Valle v Sugarman, 44 AD2d 523; Matter of Suzanne Y., 92 Misc 2d 652.) II. The evidence was not sufficient to establish that Leon, Jr., was permanently neglected within the meaning of the statute. (Matter of Bennett v Jeffreys, 40 NY2d 543; Matter of Klug, 32 AD2d 915; Matter of Orlando F., 40 NY2d 103; Matter of Raymond "M”, 81 Misc 2d 70; Matter of Karas, 59 AD2d 1022; Matter of Joyce A. R., 52 AD2d 882; Matter of Sydney, 84 Misc 2d 932; Matter of Santosky, 89 Misc 2d 730.) III. There were not extraordinary circumstances which warrant the application of Matter of Bennett v Jeffreys. (Matter of Sanjivini K., 40 NY2d 1025, 63 AD2d 1021; Matter of Abbott House v Barbara J., 55 AD2d 604; Matter of Leticia Rose M., 54 AD2d 909; Matter of Suzanne Y., 92 Misc 2d 652, 66 AD2d 723; Matter of Corey L v Martin L, 45 NY2d 383; Stanley v Illinois, 405 US 645; Matter of Bennett v Marrow, 59 AD2d 492.)

      Terrence J. Whelan and Ethan K. Phillips for respondent.
    I. Leon’s case record was properly admitted into evidence as a business record under CPLR 4518 (subd [a]) in light of the fact that exclusion in toto, as requested by appellant’s trial counsel, would have prevented the consideration of a wealth of clearly competent evidence and the Family Court made clear that it would not consider any inadmissible entries. (Matter of Del Valle v Sugarman, 44 AD2d 523; Neill v Jodum Cab Corp., 38 AD2d 562; Matter of Bradley U, 55 AD2d 722; Matter of "Male” G., 97 Misc 2d 283; Kelly v Wasserman, 5 NY2d 425; Chemical Leaman Tank Lines v Stevens, 21 AD2d 556; Toll v State of New York, 32 AD2d 47; Lichtenstein v Montefiore Hosp. & Med. Center, 56 AD2d 281; Johnson v Lutz, 253 NY 124; Hayes v State of New York, 50 AD2d 693.) II. Leon’s parents failed "substantially and continuously”, to plan for their child’s future and such failure, standing alone, was sufficient to support a finding of permanent neglect. (Matter of Suzanne Y., 92 Misc 2d 652, 66 AD2d 723; Matter of Judy V., 60 AD2d 719; Matter of Orlando F., 40 NY2d 103.) III. Leon’s prolonged separation from his natural parents requires a finding of "extraordinary circumstances” under Matter of Bennett v Jeffreys and dictates that the child’s "best interests” be served by permanent termination of appellant’s parental rights. (Matter of Corey L v Martin L, 45 NY2d 383; Matter of Suzanne N. Y., 66 AD2d 723; Matter of Benitez v Llano, 39 NY2d 758; Matter of Kim Marie J., 59 AD2d 716; Matter of Amy S., 89 Misc 2d 42; Matter of Sanjivini K., 53 AD2d 863.)
   OPINION OF THE COURT

Chief Judge Cooke.

This is a proceeding to terminate parental rights instituted by petitioner St. Lawrence County Department of Social Services on the ground that respondents’ youngest child, Leon, is permanently neglected (Social Services Law, § 384-b, subd 7). The threshold issue raised on the appeal concerns the propriety of the admission into evidence of the child’s entire case file by petitioner as a business record over the objection of the natural parents. Ultimately, it must be determined whether petitioner proved, by a fair preponderance of the evidence, that respondents’ future plans for the child were inadequate despite diligent efforts on the part of the agency to strengthen and encourage the parent-child relationship.

After fact-finding and dispositional hearings, Family Court granted the petition permanently terminating respondents’ parental rights and directing that preference for Leon’s adoption be given to his foster parents. A divided Appellate Division affirmed, conceding that while the evidence concerning the inadequacy of respondents’ plans for the child was "less than overwhelming”, the best interests of the child mandated that parental rights be terminated (66 AD2d 118, 122).

Reversal is required. The case file admitted by the court was replete with inadmissible hearsay which played a large part in the ultimate disposition of the case. Moreover, not only did petitioner fail to demonstrate the inadequacy of respondents’ future plans for the child, but the record conclusively demonstrates that it had so aligned itself against the natural parents as to render its efforts, if that is what they might be termed, to reintegrate Leon into his natural family insufficient to satisfy its statutory burden.

At the age of 19 months, Leon, together with two older siblings, was removed from the custody of his parents in a neglect proceeding. With one minor interruption, Leon has remained with his present foster parents for some eight years although his brother and sister were returned to the natural parents in 1976. At that time, Family Court directed that petitioner develop a plan to reintegrate the child into his natural family.

That plan, developed with the aid of a clinical psychologist who had conducted perfunctory interviews with Leon and his parents, provided that respondents visit Leon for a brief period at the foster home every other week. Those visits were monitored by a caseworker to assess their impact on the child. Despite the rather stifling conditions imposed on the manner of these visits, respondents were eventually permitted to take the child on a number of short, unsupervised trips in their car and, on one occasion, bring him to their home for a six-hour period. At the suggestion of petitioner, respondents secured a more suitable home in which to rear their children and eliminated a number of problems which had resulted in the initial loss of custody. Again, at the suggestion of the petitioner, the natural parents underwent an evaluation of their relationship with Leon at a State hospital and, until transportation and other difficulties forced them to discontinue, attended Parent Effectiveness Training classes sponsored by a different agency.

From the onset of Leon’s placement in the foster home in 1971, however, it was apparent that petitioner’s primary concern was not in uniting the child with his family. Rather than attempting to encourage the relationship between parent and child, the agency fueled the foster parents’ sincere, but misplaced, desire to adopt the child, even suggesting at one time that they file a permanent neglect petition with the department "backing them”. Unsupervised visitation was discouraged on the basis of hearsay reports that Leon had become upset each time he saw his natural parents. Eventually, after a monitored visit in February, 1977, after which a psychologist concluded that Leon retained no affection for his natural parents, this permanent neglect proceeding was instituted.

At the fact-finding hearing, petitioner offered its entire case file on the child and his parents into evidence. Respondents’ objection, that admission of these materials en masse would be severely prejudicial as they could very well contain damaging hearsay, was rejected by the court. The court indicated, however, that while the entire file would be received in evidence, it would disregard all matters which would not survive a hearsay challenge. This was error. That this facile practice cuts against the grain of our adversary system is obvious. But, more important, it raises a substantial probability of irreparable prejudice to a party’s case for there is simply no way of gauging the subtle impact of inadmissible hearsay on even the most objective trier of fact. Nor is notice or an opportunity to respond afforded. These considerations are pointedly illustrated by this case in which the courts below placed strong reliance upon hearsay evidence to terminate respondents’ parental rights.

Each report in the files and each of the statements contained in those reports were admissible only if they qualified as business records (CPLR 4518, subd [a]). To constitute a business record exception to the hearsay rule, the proponent of the record must first demonstrate that it was within the scope of the entrant’s business duty to record the act, transaction or occurrence sought to be admitted. But this satisfies only half the test. In addition, each participant in the chain producing the record, from the initial declarant to the final entrant, must be acting within the course of regular business conduct or the declaration must meet the test of some other hearsay exception (Johnson v Lutz, 253 NY 124, 128; Toll v State of New York, 32 AD2d 47, 50). Thus, not only must the entrant be under a business duty to record the event, but the informant must be under a contemporaneous business duty to report the occurrence to the entrant as well (Richardson, Evidence [10th ed — Prince], § 299). The reason underlying the business records exception fails and, hence, the statement is inadmissible hearsay if any of the participants in the chain is acting outside the scope of a business duty (Johnson v Lutz, supra).

In this case, petitioner was under a statutory duty to maintain a comprehensive case record for Leon containing reports of any transactions or occurrences relevant to his welfare (Social Services Law, § 372; 18 NYCRR 441.7 [a]), thus satisfying this aspect of the business records test (see Kelly v Wasserman, 5 NY2d 425, 429). Some of the entries in the case file were based on firsthand observations of Leon’s caseworker which were recorded shortly after the occurrences, rendering them admissible. Many of the remaining entries, however, consisted of statements, reports and even rumors made by persons under no business duty to report to petitioner. Especially in the context of this case, it is essential to emphasize that the mere fact that the recording of third-party statements by the caseworker might be routine, imports no guarantee of the truth, or even reliability, of those statements. To construe these statements as admissible simply because the caseworker is under a business duty to record would be to open the floodgates for the introduction of random, irresponsible material beyond the reach of the usual tests for accuracy —cross-examination and impeachment of the declarant. Unless some other hearsay exception is available (Toll v State of New York, supra), admission may only be granted where it is demonstrated that the informant has personal knowledge of the act, event or condition and he is under a business duty to report it to the entrant (Johnson v Lutz, supra; cf. Model Code of Evidence, rule 514).

Indeed, given the complexity and sheer volume of this case record, the better practice would have been for petitioner to have given respondents notice and an opportunity to examine the file prior to the hearing (cf. Richardson v Perales, 402 US 389, 404-405). As a practical matter, respondents had no way of determining that the statements appearing in the file would jeopardize their parental rights until the file was introduced at the hearing. This furnished them little, if any, real opportunity to ascertain the respective business duties of the entrant and declarant, to examine those persons concerning the circumstances surrounding the entry and to introduce evidence to rebut the statements contained in the file. As a matter of fundamental fairness, then, before such a massive document is sought to be introduced into evidence, the proponent, normally as a matter of good practice, should give his adversary notice of that intention sufficiently far in advance of trial to allow the opponent an opportunity to investigate (Meyer, Should Notice be a Prerequisite to Use of Prima Facie Evidence, 19 NYLF 785, 788-790). If notice is not given, upon timely application the court, in its discretion, may properly grant a reasonable continuance so that the opponent may at least acquaint himself with the contents of the document.

Although the admission of the entire case file, standing alone, is sufficient to warrant reversal, it is appropriate, given the magnitude of the rights involved, to reach the merits of the proceeding. At the outset, it must be emphasized that termination of parental rights does not hinge upon a comparison of the relative benefits offered a child, by his natural family to those offered by the foster family (see Matter of Sanjivini K., 47 NY2d 374). Nor may it be accomplished with reference to one’s belief of where the best interests of the child might lie. To be sure, the State, in its role as parens patriae, has a strong interest in protecting its children. Yet, but interposing itself between parent and child, the State not only involves itself in one of the most delicate of societal relationships, but treads on sensitive constitutional ground as well (Pierce v Society of Sisters, 268 US 510, 535; cf. Matter of Hofbauer, 47 NY2d 648). Simply stated, parents who are fit to raise their child are constitutionally entitled to do so (Stanley v Illinois, 405 US 645, 657-658). As we have stated previously, "a court may not terminate all parental rights by offering, a child for adoption when there has been no parental consent, abandonment, neglect or proven unfitness, even though some might find adoption to be in the child’s best interests” (Matter of Sanjivini K., supra, at p 382; see, also, Matter of Corey L v Martin L, 45 NY2d 383, 391-392).

Petitioner brought this proceeding to terminate respondents’ parental rights on the theory that Leon was a permanently neglected child, necessitating that it prove that respondents "failed for a period of more than one year following the date , such child came into the care of an authorized agency substantially and continuously or repeatedly to maintain contact with or plan for the future of the child, although physically and financially able to do so, notwithstanding the agency’s diligent efforts to encourage and strengthen the parental relationship when such efforts will not be detrimental to the best interests of the child” (Social Services Law, § 384-b, subd 7, par [a]; see, also, Family Ct Act, § 611). The record convincingly establishes that respondents availed themselves of every opportunity to visit their son notwithstanding the many obstacles thrown in their path by petitioner. There remains, then, only the question of the adequacy of respondents’ plan for the future of their child and an inquiry into the efforts of petitioner to strengthen the parent-child relationship.

The statute requires that respondents formulate a feasible plan not only for the future of the child but for themselves as well (see Matter of Orlando F., 40 NY2d 103, 110). This requirement presupposes, at a minimum, that the parents take steps to correct the conditions that led to the removal of the child from their home (see Matter of Ray A. M., 37 NY2d 619, 622-623). Yet, the planning requirement also obligates the parents to project a future course of action, taking into account considerations of how the child will be supported financially, physically and emotionally. Certainly, a degree of prescience and insight that some people lack — especially the parents of a child who has been involuntarily removed from their custody — is demanded. For this reason, the adequacy of the parents’ plan must not be evaluated with reference to unrealistically high standards (see Gordon, Terminal Placements of Children and Permanent Termination of Parental Rights: The New York Permanent Neglect Statute, 46 St John’s L Rev 215, 237). It is also the reason that the Legislature wisely imposed an obligation on the part of the agency to strengthen the relationship between parent and child.

On this record, it is impossible to conclude that respondents’ plans for Leon’s future were inadequate. Respondents have done all that might reasonably be expected of them in preparing for the return of their child. They have taken pains to remedy a number of personal problems which led to the initial removal of three of their children. They have secured employment, located more suitable living quarters, and have followed, with one minor exception, what little guidance was furnished them by petitioner. They have sought psychological counseling to better cope with their problems and those of the boy. Indeed, in view of the fact that Family Court, with the consent of petitioner, has ordered Leon’s older siblings returned to respondents, it is difficult to comprehend in what manner respondents’ plan for the future of Leon is inadequate.

We would be remiss, however, to permit the actions of petitioner throughout Leon’s placement to pass without comment. An agency such as petitioner is vested with a unique and, to be sure, most difficult responsibility. It must at once serve as the guardian of the best interests of the child (Social Services Law, § 371) and yet, render diligent efforts to strengthen the very relationship which, in some cases, it has circumscribed (Social Services Law, § 384-b, subd 7). These duties, however, are by no means contradictory; indeed, they are complementary. One of the fundamental values in our society is that which respects and fosters the relationship between parent and child. Thus, our permanent neglect statute reflects a cultural judgment that society should not terminate the parent-child relationship unless it has first attempted to strengthen it.

The actions of petitioner in this case fell far short of its statutory mandate to exercise due diligence to foster the parent-child relationship (Social Services Law, § 384-b, subd 7, par [a]). Indeed, the record indicates that petitioner actually hindered respondents’ efforts to maintain contact with Leon and plan for his future. Not only did it align itself with and encourage the expectations of the foster parents who wished to adopt the child but, more egregiously, from the onset of placement it actively sought to plant the seeds from which a finding of permanent neglect might grow. Petitioner’s claim that the best interests of the child excused it from encouraging the parental relationship must be rejected. Given the frequency of contact between parent and child permitted by petitioner, the rigorous conditions imposed on those visits and the duration of Leon’s foster care, it is hardly surprising that a child of tender years might adversely react to any change of custody. This possibility, standing alone, did not relieve petitioner of its duty — an obligation which it never undertook.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the petition for permanent termination of parental rights dismissed.

Judges Jasen, Gabeielli, Jones, Wachtler, Fuchsberg and Meyer concur.

Order reversed, etc.


author: Jones, J. Chief Judge Cooke

text:
    In the Matter of Fidelity and Deposit Company of Maryland, Respondent, v Parsons & Whittemore Contractors Corporation, Appellant.
    Argued September 12, 1979;
    decided October 25, 1979

      POINTS OF COUNSEL

      Stephen P. H. Rachlis for appellant.
    I. Under contract law and the decisions of this court, Fidelity agreed to arbitrate. (Fisser v International Bank, 282 F2d 231; Nussdorf v Esses & Co., 63 AD2d 619; Matter of Level Export Corp. [Wolz, Aiken & Co.], 305 NY 82; Madawick Contr. Co. v Travelers Ins. Co., 307 NY 111; J. S. & H. Constr. Co. v Richmond County Hosp. Auth., 473 F2d 212.) II. Joint and several liability requires arbitration. III. Sureties are not entitled to special exemption from normal rules of incorporation by reference. (Matter of Transamerica Ins. Co. [Yonkers Contr. Co.], 49 Misc 2d 512; Matter of Ledo Realty Corp. [Continental Cas. Co.], 43 Misc 2d 380; Griffin v Semperit of Amer., 414 F Supp 1384; Coastal States Gas Corp. v Atlantic Tankers, 546 F2d 15.) IV. The decisions below raise serious public policy considerations. V. The decisions below conflict with those of Federal courts. (Compania Espanola de Petroleos, S. A. v Nereus Shipping, S. A., 527 F2d 966; Antco Shipping Co. v Sidermar S. p. A., 417 F Supp 207; Coastal States Trading v Zenith Nav. S. A., 446 F Supp 330; Son Shipping Co. v De Fosse & Tanghe, 199 F2d 687.) VI. Decisions below conflict with those in other States. (J & S Constr. Co. v Travelers Ind. Co., 520 F2d 809.) VII. Fidelity has not raised a triable issue concerning agreement to arbitrate. (Sperling v Great Amer. Ind. Co., 7 NY2d 442; Matter of Schachter [Witte & Co.], 41 NY2d 1067.)

      William Hart and Robert M. MacAllister for respondent.
    I. Fidelity has not agreed to arbitrate with Parsons and therefore cannot be compelled to do so. (Matter of Lehman v Ostrovsky, 264 NY 130; Sherwood Vil. Coop. A v Had-Ten Estates Corp., 29 AD2d 771; Matter of Philip Export Corp. [Leathertone, Inc.], 275 App Div 102; Matter of Transamerica Ins. Co. [Yonkers Contr. Co.], 49 Misc 2d 512; Matter of Marlene Inds. Corp. [Carnac Textiles], 45 NY2d 327; Matter of Ledo Realty Corp. [Continental Cas. Co.], 43 Misc 2d 380; Matter of National Recreational Prods. [Gans], 46 AD2d 618; Matter of Lehman v Ostrovsky, 264 NY 130; Matter of Level Export Corp. [Wolz, Aiken & Co.], 305 NY 82; Madawick Contr. Co. v Travelers Ins. Co., 307 NY 111.)
   OPINION OF THE COURT

Jones, J.

By incorporation in its performance bond of a subcontract containing a broad arbitration clause, the surety company agreed that disputes arising under the subcontract between the general contractor and the subcontractor would be submitted to arbitration and that it would be bound by the determinations made in such arbitration. This being so, the surety company was not entitled to a stay of such arbitration. It did not agree, however, that separate and distinct controversies, if any, which might arise under the terms of the performance bond between the general contractor as obligee thereunder and the surety company would be submitted to arbitration. Accordingly the stay should be upheld with respect to arbitration of such matters.

Parsons & Whittemore Contractors Corporation, engaged as general contractor in the construction of a building in Hemp-stead, Long Island, entered into a subcontract with Central Rigging and Contracting Corporation. The subcontract contained two provisions pertinent to the disposition of this appeal. The first, contained in article F, set forth Central’s obligation to furnish a performance bond:

"ARTICLE F
"Bonds
"F.l. The Contractor [Central] shall, within two (2) weeks from the date of this Contract furnish or cause to be furnished (i) a bond covering the faithful performance of the Contract and the payment of all obligations thereunder in the penal sum equal to one hundred percent (100%) of the Contract Price and (ii) a labor and materials payment bond or bonds (for payment of all persons performing labor or furnishing materials in connection therewith) for fifty percent (50%) of the maximum price of this Contract.
"F.2. The bonds shall be in such form and substance as is acceptable to P&W and shall be issued by a first class insurance company and shall bind the insurance company jointly and severally with the Contractor and all his subcontractors and shall remain in full force and effect from the date of execution of this Contract and until one (1) year from the issuance of the acceptance certificate pursuant to Article XXVI of the General Conditions of the Contract.”
The second, incorporated as part of article XXV of the General Conditions of Contract, was the arbitration clause: "All disputes arising out of this Contract, its interpretation, performance or breach, shall be submitted to arbitration at New York City in accordance with the rules then obtaining of the American Arbitration Association.”
In conformity with the requirements of article F, Central executed a performance bond with Fidelity and Deposit Company of Maryland which provided that "Principal and Surety bind themselves [etc.] jointly and severally” and, after describing the subcontract between Parsons and Central, continued, "which subcontract is by reference made a part hereof’.

Following an alleged default in performance by Central, Parsons served a demand for arbitration addressed both to Central and to Fidelity in which the nature of the dispute was stated as "Breach of contract on the part of Central Rigging and Contracting Corporation. Guarantee by Fidelity and Deposit Company of Maryland of performance of such contract”, followed by identification of the subcontract and the performance bond. The relief sought was an "award for damages for a sum not less than $3,053,778.00”. Fidelity promptly made an application to stay the arbitration, which application was opposed by Parsons. Special Term stayed the arbitration and the Appellate Division affirmed. We granted leave to appeal and now modify the disposition below.

Respondent surety company contends, and the courts below agreed, that Fidelity is entitled to a stay because it is not required to arbitrate its liability under the performance bond, which otherwise contains no provision for arbitration, in consequence of the incorporation by reference in that bond of the subcontract which did contain an arbitration clause. This conclusion withstands analysis only in part. A critical distinction must be drawn between disputes arising under the subcontract between Parsons and Central (in the resolution of which Fidelity as surety on the performance bond has a very real and practical interest) and possible unrelated differences which may arise between Fidelity and Parsons as to the liability of the surety company under the terms of its performance bond. Additionally the agreement made by the surety company must be precisely defined.

As to disputes between the general contractor and the subcontractor concerning failure of performance by the latter, those two parties expressly agreed that their differences should be submitted to arbitration for resolution. By contrast, there was no agreement on the part of any party that controversies arising as to rights and obligations under the terms of the performance bond would be submitted to arbitration.

In defining the agreement made by the surety company it is accurate to say that it cannot be held to have agreed to participate in arbitration proceedings with respect to any dispute whatsoever. Certainly there is no language in the performance bond on which to base any argument that it was obligated to submit disputes arising under its performance bond (as distinguished from disputes arising under the subcontract) to resolution by arbitration. The arbitration clause in the subcontract provided only for arbitration of disputes arising under that contract. But that does not end the analysis of the obligations of the surety company. Although it did not agree to participate in any arbitration, it did accept the agreement of the general contractor and the subcontractor that disputes between them would be settled by arbitration. An implicit corollary of that acceptance was agreement by the surety company that for purposes of later determining its liability under its performance bond, it would accept and be bound by the resolution reached in the arbitration forum of any dispute between the general contractor and the subcontractor.

The consequence of this analysis of the rights and obligations of the parties under the documents which they executed in this instance is that the underlying dispute between Parsons and Central as to alleged defaults in performance of the subcontract by Central are to be submitted to and resolved in arbitration, as both of those parties appear to recognize. If there be an arbitration award adverse to Central and if it thereafter becomes necessary to adjudicate the obligations of Fidelity to Parsons under the provisions of the performance bond, the question of Central’s liability may not be relitigated but the arbitration award will be binding both on Fidelity and on Parsons. This being so, Fidelity is not entitled to a stay of arbitration of the underlying dispute. It may be that Fidelity could not be compelled to participate in that arbitration on the one hand, or on the other that Fidelity could not force its way into the arbitration proceedings over the objection of one or both of the parties to the subcontract. Those issues, however, are not tendered on the appeal before us. For present purposes it suffices to hold that, inasmuch as it has agreed to accept the arbitral determination as to Central’s liability to Parsons, to the extent that it is interested in or affected by that determination it is not entitled to a stay of arbitration.

This result makes good sense and must be deemed to have been within the contemplation and intention of the parties. The liability of the surety on a performance bond customarily follows the liability of the principal on the bond. By express provision of both the subcontract and the performance bond, the liability of Central as principal and Fidelity as surety was joint and several; all reason argues against adjudication of such joint and several liability of the two obligors in separate forums.

The determination that we make in this case is supported by our decision in Madawick Contr. Co. v Travelers Ins. Co. (307 NY 111). In that case an insurance company had issued a policy of liability insurance protecting a subcontractor against its contractual obligation to indemnify the general contractor against liability that might be imposed on the latter. The insurance policy contained no arbitration provision but the policy was expressly written with reference to the subcontract which created the contractual liability of the subcontractor-insured and which did contain a provision for arbitration of disputes between the general contractor and the subcontractor. We rejected the argument of the insurer that in the absence of an arbitration clause in the insurance policy it was not obligated to defend or participate in the arbitration proceeding brought by the general contractor against the subcontractor. We held there, as here, that in consequence of the adoption of the provisions of the subcontract in the insurance policy, the insurer’s obligation embraced the submission to arbitration expressly agreed to by the parties to the subcontract. To the extent that our prior decision in Matter of Lehman v Ostrovsky (264 NY 130) may be read as supporting a different conclusion it is overruled.

Accordingly, for the reasons stated, the order of the Appellate Division should be modified, with costs, to the extent of denying Fidelity’s application to stay arbitration of disputes arising between Parsons and Central under the provisions of the subcontract, and as so modified, affirmed.

Chief Judge Cooke

(dissenting in part). The parties to this dispute are told here that the surety is bound by a determination in arbitration between Parsons and Central but are left in doubt concerning whether Fidelity can be compelled to or can demand the right to participate in that proceeding. It is this gap in the majority’s decision that is found objectionable and from which this dissent emanates.

Arbitration was sought on the alleged breach by Central as well as Fidelity’s liability therefor as surety. The prevailing opinion concludes that Fidelity has a sufficient interest to participate in the arbitration between Parsons and Central, yet leaves for another day one of the questions presented on this appeal: whether Fidelity can be compelled to arbitrate a dispute concerning an alleged breach of the subcontract. At the same time, however, it is determined that Fidelity did not agree to participate in any arbitration by incorporating the subcontract into its bond. Rather, so the reasoning goes, Fidelity merely accepted the agreement to arbitrate between Parsons and Central and thereby agreed to be bound by a determination in a proceeding between those parties. Such positions are the points of departure.

The arbitration clause in the subcontract provides that "[a]ll disputes arising out of this Contract, its interpretation, performance or breach, shall be submitted to arbitration”. Parsons and Central thereby agreed to submit to arbitration; but the language of the clause does not limit this method of resolution to disputes between the contractor and subcontractor. The majority is correct in determining that Fidelity defined its obligation under the bond by incorporating this clause. The obligation thus defined, however, is not merely that Fidelity would be bound by a determination in arbitration between Parsons and Central, but rather, that Fidelity agreed to submit to arbitration disputes concerning the subcontract. Indeed, this conclusion is impliqit in the majority’s overruling of Matter of Lehman v Ostrovsky (264 NY 130).

The incorporation of the subcontract and the language of the arbitration clause necessarily require that Fidelity be a party to the arbitration concerning Central’s alleged breach.

Accordingly, I dissent in part and vote to modify the Appellate Division order to stay arbitration only with respect to Fidelity’s liability on the bond.

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

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

       The demand for arbitration by Parsons against Fidelity in this case was presumably made to avoid the predicament, resulting from lack of notice to and nonparticipation by the surety company in the arbitration proceeding, which was faced by the property owner in Post Corp. v Maryland Cas. Co. (403 Mich 543) when he later sued on a performance bond to recover for the award made in arbitration as agreed to by the owner and the contractor.


author: Gabrielli, J.

text:
    In the Matter of North Manursing Wildlife Sanctuary, Inc., Appellant. City of Rye, et al., Respondents.
    Argued September 6, 1979;
    decided October 18, 1979

      POINTS OF COUNSEL

      Arthur J. Voute, Donald A. Mead and Richard L. Magro for appellant.
    I. The public policy of the State of New York is to preserve and protect wildlife by the preservation of open space as living educational classrooms. II. It is the law of this case that the North Manursing Wildlife Sanctuary falls within paragraph (a) of subdivision 1 of section 421 of the Real Property Tax Law and is therefore exempt from the taxes heretofore imposed by the City of Rye. (Matter of North Manursing Wildlife Sanctuary v City of Rye, 52 Misc 2d 96, 28 AD2d 891, 960.) III. The purpose for which appellant was formed and its operation thereunder qualify it for tax exemption under paragraph (a) of subdivision 1 of section 421 of the Real Property Tax Law, as amended. IV. The tax-exempt status of appellant should be continued and the judgment of Trial Term be reinstated, with costs and disbursements.

      Anthony T. Antinozzi, Corporation Counsel, for respondents.
    Petitioner is not organized exclusively for one or more of the purposes specified in paragraph (a) of subdivision 1 of section 421 of the Real Property Tax Law; nor is its property used exclusively for such purpose or purposes. (Matter of Ithaca Masonic Temple Corp. v Calistri, 33 AD2d 857; Matter of Board of Educ. v Baker, 241 App Div 574; People v Brooklyn Gardens Apts., 283 NY 373; People ex rel. German Masonic Temple Assn. of City of N. Y. v Goldfogle, 136 Misc 100, 229 App Div 863, 255 NY 586; Matter of Kennedy, 240 App Div 20, 264 NY 691; People ex rel. Savings Bank of New London v Coleman, 135 NY 231; Matter of Grace v New York State Tax Comm., 37 NY2d 193; F. O. R. Holding Co. v Board of Assessors of Town of Clarkstown, 45 AD2d 875; People ex rel. Unity Cong. Soc. of City of N. Y. v Mills, 189 Misc 774; People ex rel. Watchtower Bible & Tract Soc. v Mastin, 191 Misc 899.)
   OPINION OF THE COURT

Gabrielli, J.

This is a proceeding brought pursuant to article 7 of the Real Property Tax Law to challenge the assessment of real property taxes against certain land owned by petitioner and located within respondent City of Rye. Supreme Court, Westchester County, ruled in favor of petitioner and ordered that the property be removed from the tax rolls. The Appellate Division reversed the judgment of Supreme Court, concluding that the property is indeed subject to real property taxes. Petitioner now appeals to this court as of right, pursuant to CPLR 5601 (subd [a], par ii). For the reasons discussed below, the order appealed from must be reversed, and the matter remitted to the Appellate Division for review of the facts.

Petitioner is a not-for-profit corporation organized pursuant to the laws of this State. It owns over six acres of land on North Manursing Island, which is a residential community located on Long Island Sound within the boundaries of the City of Rye. Half of the land is upland, whereas the remainder is tidal and underwater land. The property is maintained by petitioner in its natural state, and is allegedly being used as a wildlife sanctuary for birds and small animals. Petitioner contends that the land is exempt from real property taxes by section 421 (subd 1, par [a]) of the Real Property Tax Law, which in pertinent part provides an absolute exemption for "[r]eal property owned by a corporation or association organized or conducted exclusively for religious, charitable, hospital, educational, moral or mental improvement of men, women or children or cemetery purposes, or for two or more such purposes, and used exclusively for carrying out thereupon one or more of such purposes”.

Respondents argued before the courts below that petitioner’s property is not entitled to a tax exemption for either of two reasons. First, respondents contended that the use of real property as a wildlife sanctuary does not constitute a charitable use exempt under the statute. Alternatively, respondents appear to have contended, albeit with some lack of clarity, that even if a bona fide wildlife sanctuary conducted by a legitimate nonprofit organization is exempt from taxation, the instant property nonetheless is not exempt because petitioner organization either is merely "a guise or pretense for directly or indirectly making any * * * pecuniary profit * * * 0r * * * [is] not in good faith organized or conducted exclusively for” an exempt purpose (Real Property Tax Law, § 421, subd 1, par [d]). In addition to responding to these arguments on the merits, petitioner also argued that the doctrine of res judicata precludes litigation of these issues because they have previously been resolved in a manner adverse to respondents in prior litigation between the parties. Supreme Court dealt with respondents’ arguments on the merits, and ruled that the property is entitled to an exemption pursuant to section 421 (subd 1, par [a]). The Appellate Division, however, held that the use of property as a wildlife sanctuary, without more, cannot constitute an exempt use, and accordingly reversed the judgment of Supreme Court without reaching the question whether petitioner is a bona fide nonprofit organization.

We have recently held that section 421 (subd 1, par [a]) does provide an absolute exemption for real property used as a wildlife sanctuary by a charitable organization (Mohonk Trust v Board of Assessors, 47 NY2d 476). Hence, the order of the Appellate Division must be reversed, for it was based on an erroneous interpretation of the statute. Since the Appellate Division did not consider respondents’ challenge to the validity of petitioner’s claim to be a qualified organization, however, we must remit the matter to that court for review of this essentially factual question. As there must be a remittal, we deem it appropriate to first discuss the factors which will be pertinent to that inquiry.

Preliminarily, we note that in light of our decision in Mohonk Trust, there can be no question but that the purposes of petitioner, as stated in its certificate of incorporation and as limited by its activities in operating a wildlife sanctuary, are indeed exempt purposes. The certificate reads as follows: "The purposes for which the corporation is to be formed are: to secure, hold and develop land as a sanctuary for wild birds, including migratory species, and animals; to protect, preserve and promote the continuation of the species of wild birds and animals native to the section where this corporation shall exist; to promote their culture and to introduce and study new species of wild birds; to introduce and disseminate information concerning new species; and to restrict the killing or destruction of wild birds, and to provide a preserve for those presently existing”. These purposes are exempt purposes.

Moreover, as is discussed in more detail below, if it is determined on remittal that the property is indeed being used as a wildlife sanctuary and that petitioner is a legitimate corporation organized or conducted for an exempt purpose, the property will be entitled to an exemption even if the surrounding landowners do in fact benefit from the mere existence and operation of the sanctuary. Similarly, the wisdom of locating a wildlife sanctuary on North Manursing Island and the need for such a sanctuary in that area are factors not normally pertinent to the tax-exempt status of the property, except insofar as they may be of some relevance in determining the legitimacy of the organizational purposes.

For property to be entitled to an exemption on the ground that it is being used for a charitable purpose, it must a fortiori be used for a public purpose. For example, one may not establish a trust solely for the benefit of oneself and one’s family, and then obtain a tax exemption for property owned by such a trust by claiming that it is a charitable organization. While charity may begin at home, section 421 (subd 1, par [a]) provides an exemption only for charitable uses which benefit the public, not for so-called "charities” which benefit only their creators. Similarly, a wildlife sanctuary which is closed to members of the public, and which may be enjoyed only by those who contribute to its establishment and maintenance, is not entitled to a charitable exemption. This is not to say that a wildlife sanctuary must be completely open to the public in order to obtain a tax exemption, for restricted access to and use of a wildlife sanctuary is essential lest the sanctuary fail of its purpose. A distinction must be drawn, however, between limiting access to and use of a sanctuary to numbers of visitors and types of activities compatible with the nature of a sanctuary on the one hand, and excluding the putilic altogether or failing to encourage public access while allowing special or unrestricted privileges to the members of the organization on the other.

In the instant case, there appears to be some question whether petitioner’s property is a wildlife sanctuary operated for the benefit of the public or whether it is in fact a private park maintained for the benefit of the landowners of North Manursing Island. Our examination of the record persuades us that it cannot be said as a matter of law that there was insufficient evidence to support the determination made by Supreme Court with respect to the public uses of the property. Nonetheless, a reviewing court could rationally conclude on the basis of this record that the decision of Supreme Court was against the weight of the evidence. That, however, is a question for the Appellate Division on remittal, for it may not now be answered by this court in light of our limited powers of review.

We would note, however, that the fact, if it is a fact, that the residents of North Manursing Island regularly benefit from the operation of the wildlife sanctuary, does not mean that the property is not entitled to an exemption for this will in large part be true of any wildlife sanctuary founded by individuals who continue to reside or operate a business in the area (Mohonk Trust v Board of Assessors, 47 NY2d 476, 485, supra). But the tax exemption must be denied if it appears that the primary beneficiaries are the individuals who founded and maintained the organization and that any purported public benefit is a mere pretext or token to shield what is essentially a private enclave from taxation.

It has been suggested that the exemption provided wildlife sanctuaries by section 421 (subd 1, par [a]) may readily be abused either by landowners who seek to remove their land from the tax rolls while at the same time continuing to enjoy the benefits of such land, or by those who seek a "temporary” tax exemption until it becomes more profitable to develop the land. As to the first suggestion, there exists no bar to an exemption in such a case, as long as the title to the land has indeed been transferred to an organization organized or conducted for exempt purposes and the land is used for such a purpose to the benefit of the public. This argument is simply another version of that which we rejected in Mohonk Trust, namely, that exempt status should be denied because those who have donated property to an exempt organization continue to enjoy the same benefits afforded other members of the public who live in the vicinity of the land. It is based on the erroneous premise that the continued enjoyment of property, in common with other members of the public, by one who has donated that property to an exempt organization, in some way detracts from the benefit to the public. This, is simply not true, for as long as the property is owned by a nonprofit organization which serves an exempt public purpose and which uses the property to further that purpose, the requirements for an exemption are met. Section 421 (subd 1, par [a]) is intended to encourage the dedication of property for certain specified public purposes, and the fact that the donor of such property continues to enjoy some benefit resulting from the use of the property by the charitable organization is irrelevant to its tax-exempt status so long as that benefit is one actually shared with the public and does not result from some continued special connection between the organization and the donor.

As to the suggestion that the exemption provided wildlife sanctuaries by section 421 (subd 1, par [a]) will in some way encourage "temporary” tax exemptions for land which is in actuality simply being kept from the market by a private interest until its value increases, this fear is illusory. For the land to be entitled to an exemption, it must first be transferred to a charitable organization. Once the land is owned by an exempt organization, the property must be used to further the exempt purposes of that organization. If the organizational structure permitted some other result, the organization would simply not be entitled to an exemption by section 421 (subd 1, par [a]) in the first place (see Real Property Tax Law, § 421, subd 1, par [d]; see, also, Not-For-Profit Corporation Law, § 204; EPTL art 8). Similarly, when such an organization is dissolved, the disposition of its assets is strictly regulated by law to prevent the misapplication of property held for an exempt purpose (see Not-For-Profit Corporation Law, § 1005, subd [a], par [3]; EPTL 8-1.4). In short, there exist abundant legal impediments to the type of fraud which might otherwise permeate this sort of tax exemption.

One final issue commands our attention. Petitioner contends that in light of prior litigation between it and respondents as to the tax-exempt status of the property in 1967, this proceeding should be barred by the doctrine of res judicata. We reject that suggestion. In the prior litigation, as here, the city contended both that a wildlife sanctuary was not an exempt purpose, and that the property was not in fact being used as a public wildlife sanctuary. Following protractéd litigation, both of these contentions were rejected and no appeal was taken from the Supreme Court decision finally terminating that proceeding. While it might at first appear that this prior litigation necessarily resolved the issues presented in this dispute, closer examination of the situation persuades us that this is not so. Insofar as the prior dispute determined that a wildlife sanctuary is an exempt use, that decision was based upon an earlier version of section 421 of the Real Property Tax Law, which provided an absolute exemption for certain land uses which are now afforded merely a conditional exemption that may be removed by local law or ordinance (compare Real Property Tax Law, § 421, subd 1, pars [a], [b], with L 1965, ch 1063, § 1). The City of Rye has adopted just such a local law. Hence, the determination that the property was exempt under the prior law does not mandate the conclusion that it is absolutely exempted by the present statute (see Matter of American Bible Soc. v Lewisohn, 40 NY2d 78, 83-84). Accordingly, examination of this issue was not foreclosed by the doctrine of res judicata. As to the claim that petitioner is not functioning as a legitimate nonprofit organization, the determination in the prior litigation was necessarily limited to the manner in which petitioner was organized and conducting its affairs in 1967, shortly after it was first incorporated. Hence, it does not bar inquiry into the present use of the property and the manner in which petitioner currently conducts its affairs.

Accordingly, the order appealed from should be reversed, with costs, and the matter remitted to the Appellate Division for a review of the facts.

Chief Judge Cooke and Judges Jasen, 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 opinion herein.


author: Jasen, J.

text:
    The People of the State of New York, Respondent, v Leroy Poole, Appellant.
    Argued September 7, 1979;
    decided October 18, 1979

      POINTS OF COUNSEL

      Asher H. Miller and William E. Hellerstein for appellant.
    The court’s refusal to allow the defense to examine documents prepared by an officer who testified at the Huntley hearing deprived appellant of a full and fair hearing. (People v Rosario, 9 NY2d 286, 368 US 866; Jencks v United States, 353 US 657; People v Gilligan, 39 NY2d 769; People v Paige, 48 AD2d 6, 52 AD2d 658, 40 NY2d 966; People v Malinsky, 15 NY2d 86; People v Consolazio, 40 NY2d 446, 433 US 914; People v Chappie, 38 NY2d 112; People v Schompert, 19 NY2d 300, 389 US 874; People v Grant, 45 NY2d 366; People v Ramos, 40 NY2d 610.)

      Robert M. Morgenthau, District Attorney (Gary Centola, Jerrold L. Neugarten and Bruce Allen of counsel), for respondent.
    Poole was not denied a full and fair suppression hearing because the record does not support his contention that there was additional Rosario material regarding one of the People’s witnesses. Furthermore, a prosecutor is not required to turn over non-Rosario documents used by a witness to refresh his recollection prior to taking the witness stand. (People v Rosario, 9 NY2d 286, 368 US 866; People v Consolazio, 40 NY2d 446, 433 US 914; People v Andre W., 44 NY2d 179; Brady v Maryland, 373 US 83; People v Gezzo, 307 NY 385; Goldman v United States, 316 US 129; Imperatore v United States, 193 F2d 409; United States v Atkinson, 513 F2d 38; Bata v Bata, 279 App Div 182, 306 NY 96; Matter of Hewett, 271 App Div 1054, 297 NY 565.)
   OPINION OF THE COURT

Jasen, J.

The issue on this appeal is whether a defendant in a criminal case, after a witness has testified against him, has the unqualified right to inspect the prosecutor’s file in order to determine whether relevant pretrial statements of the prosecution witness are being improperly withheld by the prosecutor from the defense.

The relevant facts are not in dispute. Defendant Poole was arrested by Detective Thomas Rynne of the New York City Police Department and charged with various crimes including murder in the second degree. After being informed repeatedly of his constitutional rights, defendant made several incriminating statements to Detective Rynne and to other law enforcement officials. Prior to trial, defendant moved to suppress these statements and a hearing was held to determine the admissibility of defendant’s multiple admissions and confessions.

At that hearing, Detective Rynne was called as a witness by the People to testify both as to the substance of and the circumstances surrounding the admissions which defendant had made in his presence. After the prosecutor completed his questioning, defense counsel made a request for Rosario material before commencing his cross-examination. In response, the prosecutor turned over Detective Rynne’s memo book and represented that the memo book was, in fact, the only Rosario material "relative to the officer’s testimony”. The defense counsel then requested "to see every document that the officer filled out”, reasoning that it was "for [him] to determine whether a document is relevant”. The prosecutor responded by asserting once again that he had turned over all the Rosario material "relative to [the] testimony of the officer.” In addition, the prosecutor stated that defense counsel, by making this request, was seeking disclosure of the entire investigative file "under the guise of RosarioAt that point, counsel for codefendant Henry Jordan suggested that the court review the prosecutor’s file in camera, the prosecutor joining in that request. Defendant’s counsel, however, did not assent to this request, but instead maintained that it was his unqualified right to inspect the file and to determine for himself what material would be relevant. The court refused to allow him to do so.

As the cross-examination progressed, Detective Rynne, at the request of defense counsel, used a police report to refresh his recollection. When the contents of that document were revealed to defense counsel, it became apparent that the report related in some manner to the admissions made by defendant. As a result, counsel again requested that he be allowed to inspect the prosecutor’s entire file. The prosecutor acknowledged that his file contained many documents referring to defendant’s admissions and that it also included many documents authored by Detective Rynne, but maintained that all pretrial statements of Detective Rynne which related to the subject matter of his testimony at the hearing had already been turned over to the defense. On the basis of this representation, the court once again denied defendant’s request to inspect the file.

At the conclusion of the hearing, the court ruled that the statements made by defendant were given voluntarily to the police. Thereafter, defendant pleaded guilty to murder in the second degree in satisfaction of the entire indictment. The Appellate Division unanimously affirmed that conviction.

It is a well-established rule that a defendant in a criminal trial is entitled to examine a prosecution witness’ prior statements, which relate to the witness’ testimony, for impeachment purposes before commencing his cross-examination. (People v Rosario, 9 NY2d 286, supra; see Jencks v United States, 353 US 657.) However, we are not concerned in this case with this salutary rule which, by its very nature, presupposes the existence of relevant prior statements of a prosecution witness. Rather, the question before us is whether a defendant, through his attorney, may inspect the prosecutor’s file to determine, in the first instance, what material, if any, contained therein is "relevant” and, therefore, subject to use by the defendant during cross-examination.

At the time of defendant’s request for Rosario material, the prosecutor had represented to the court that the officer’s memo book, duly turned over to the defense, constituted the only relevant writing of the prosecution witness falling within the Rosario rule. As stated before, the defendant responded that he should not be bound by the prosecutor’s representation and that defense counsel must "make that determination [of relevance], and not the District Attorney * * * not even the Court.” In effect, defendant asked the court to afford him the right to examine all reports, statements and papers contained in the prosecutor’s file so that he might determine for himself whether any such material was useful to him. This, the trial court properly declined to do.

To endorse such a position would allow a defendant to embark on an unrestrained "tour of investigation seeking generally useful information” which this court in Rosario expressly noted was not the purpose of the rule. (People v Rosario, 9 NY2d, at p 290, supra.) Rather, the only purpose of the Rosario rule is to afford the defendant a fair opportunity to cross-examine the People’s witnesses at trial. This right is necessarily limited insofar as the statements sought must be relevant to the subject matter of the witness’ testimony and contain nothing which the necessities of effective law enforcement would require to be kept confidential. (People v Malinsky, 15 NY2d 86, 90; People v Rosario, 9 NY2d 286, 289, supra.)

Within this context, we have periodically refined the Rosario rule to ensure that the defendant receives the full benefit of a witness’ statements for impeachment purposes. For example, this court has held that "the judge presiding may not allow the People to keep from the defendants’ counsel statements or notes made by a witness upon the ground that nothing in them could assist the defense or that no prejudice would result from withholding them.” (People v Malinsky, 15 NY2d 86, 90-91, supra; People v Gilligan, 39 NY2d 769, 770.) Indeed, it has been observed that even the sound discretion of the Trial Judge exercised in an in camera review to determine the utility of such statements is an inadequate substitute for the single-minded zeal of a defense attorney seeking to protect his client’s right to test the credibility of the People’s witnesses. (People v Gilligan, 39 NY2d 769, supra.) However, Rosario has never been interpreted so broadly as to grant defense counsel an open invitation to peruse the prosecutor’s file.

In our view, the representation of a prosecutor, as an officer of the court, ought generally to suffice to determine the threshold issue of whether or not any prior statements of a witness exist. However, in cases where either a defendant can articulate a factual basis for the assertion that a prosecutor is improperly denying the existence of prior statements or a prosecutor admits the existence of such statements but contends that they are irrelevant to the testimony of the witness, we believe the better rule would be to place upon the court the responsibility to determine whether or not any relevant statements of the witness exist. (Cf. People v Andre W., 44 NY2d 179, 184; People v Consolazio, 40 NY2d 446, 453.) In such situations, the trial court ought to inspect, in camera, the questioned document, or indeed the entire file if need be, to resolve any dispute on this issue. In no event should the defendant be allowed unrestricted access to the entire file of the prosecutor for this purpose. Such a procedure would extend the letter and spirit of Rosario and its progeny beyond its legitimate purpose — to afford the defendant a fair opportunity to use a witness’ prior relevant statements for impeachment purposes. Of course, for a prior statement to be relevant, it must relate to the subject matter of a witness’ testimony.

In the case before us, the prosecutor willingly offered his file to the trial court for an in camera inspection. It was the insistence of the defendant that he be allowed personally to inspect the file which prompted the trial court’s refusal to undertake such an examination. Therefore, inasmuch as the defendant failed to assent to the in camera inspection by the court to determine the relevancy of the material contained in the file to the subject matter of the witness’ testimony, he may not now claim that he was deprived of a full and fair hearing.

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

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

Order affirmed.

        (People v Rosario, 9 NY2d 286, mot for rearg den 9 NY2d 908, cert den 368 US 866, mot for rearg den 14 NY2d 876, mot for rearg den 15 NY2d 765.)