author: Burke, J. Chief Judge Desmond (concurring). Fuld, J. (dissenting).

text:
    In the Matter of Baldwin Trading Corporation. Sarah J. Guenther et al., as Executors of Henry C. Guenther, Deceased, et al., Respondents; Louis Koch et al., Appellants.
    Argued April 27, 1960;
    decided June 10, 1960.

      Charles H. Miller, Sidney Friedman and Donald L. Laufer for appellants.
    I. Directors of a dissolved corporation do not become trustees of an express trust upon dissolution of the corporation so as to toll the running of the Statute of Limitations. Section 29 of the General Corporation Law does not provide, either expressly or impliedly, that directors of a dissolved corporation are trustees. To the contrary, the history of its enactment establishes that such directors do not become trustees upon dissolution. II. The cases cited by the Appellate Division do not support the proposition that directors become trustees upon dissolution of the corporation. (Lammer v. Stoddard, 103 N. Y. 672; Ludington v. Thompson, 153 N. Y. 499; Matter of Ton, 150 Misc. 5.) III. Directors of dissolved corporations never have been considered trustees of express trusts so as to toll the running of the Statute of Limitations. (Potter
      v. Walker, 276 N. Y. 15; White v. Federal Deposit Ins. Corp., 122 F. 2d 770; Hassett v. Kimball, 144 Misc. 50; Cooper v. Hill, 94 F. 582; Gilmore v. Ham, 142 N. Y. 1.) IV. The instant proceedings are barred by the Statute of Limitations. The proceedings herein have been brought by or on behalf of a corporation and, therefore, are barred by either the six- or three-year period of limitation provided in the Civil Practice Act. (Brock v. Poor, 216 N. Y. 387; Niles v. New York Cent. & H. R. R. Co., 176 N. Y. 119; Cutler v. Fitch, 231 App. Div. 8; Security Trust Co. v. Pritchard, 201 App. Div. 142; Michel v. Betz, 108 App. Div. 241; Brennan v. Barnes, 133 Misc. 340; Laurendi v. Cascade Development Co., 5 Misc 2d 688, 4 A D 2d 852; Matter of Carton Plumbing & Heating Co. v. Fuscaldo, 179 Misc. 946; Gordon v. Elliman, 306 N. Y. 456; Gottfried v. Gottfried, 269 App. Div. 413; Purdy v. Humphrey, 192 Misc. 309, 274 App. Div. 841.) V. Even if the proceedings herein are not derivative in nature* they nonetheless are barred by the six-year Statute of Limitations applicable to contract actions provided in the Civil Practice Act. (Gordon v. Elliman, 306 N. Y. 456; Equity Corp. v. Groves, 294 N. Y. 8; Keys v. Leopold, 241 N. Y. 189; Guild v. Hopkins, 271 App, Div. 234, 297 N. Y. 477; Cwerdinski v. Bent, 256 App. Div. 612.) VI. Petitioners’ claimed lack of knowledge is without significance in determining the applicable period of limitations. (American Cities Power & Light Corp. v. Williams, 189 Misc. 829 ; Gottfried v. Gottfried, 269 App. Div. 413; Ziring v. Corrugated Container Corp., 183 Misc. 600; Reno v. Bull, 226 N. Y. 546.)

      David Friedman, Adolph J. Eckardt and Wallace J. Borker for respondents.
    I. No Statute of Limitations has accrued. (Matter of Bonnie Classics, 116 F. Supp. 646; Steinhardt Import Corp. v. Levy, 174 Misc. 184; Griffin v. Dyett, 262 App. Div. 368; Eisenberg v. Central Zone Property Corp., 306 N. Y. 58; Matter of Fisher v. New York State Employees’ Retirement System, 279 App. Div. 315, 304 N. Y. 899; Matter of Meyer, 98 App. Div. 7, 181 N. Y. 553; Matter of Menahan, 224 App. Div. 139; Matter of Jacobs, 257 App. Div. 28; Matter of Ashheim, 111 App. Div. 176, 185 N. Y. 609; Hutton v. Smith, 74 App. Div. 284, 175 N. Y. 375.) II. If any Statute of Limitations is applicable, it is the ten-year statute which had not run at the commencement of this proceeding. The acts of appellants made them trustees for the benefit of respondents-petitioners. (Marine Trust Co. of Buffalo v. Tralles, 147 Misc. 426; Alexander v. Quality Leather Goods Corp., 150 Misc. 577; Major v. American Malt & Grain Co., 110 Misc. 132; Kavanaugh v. Kavanaugh Knitting Co., 226 N. Y. 185; Jackson v. Smith, 254 U. S. 586; Asphalt Constr. Co. v. Bouker, 150 App. Div. 691, 210 N. Y. 643; Giovannangeli v. Levich & Pollach, 134 Misc. 245; Bloedorn v. Washington Times Co., 89 F. 2d 835; People ex rel. New York Tel. Co. v. Public Serv. Comm., 157 App. Div. 156; Wilson v. Brown, 107 Misc. 167; Hitch v. Hawley, 132 N. Y. 212; Matter of Myer v. Myer, 272 App. Div. 888; Matter of Anderson, Inc. [Yudell], 279 App. Div. 594; Matter of Cantelmo [Brewer], 275 App. Div. 231; Willey v. Diepress Co., 156 Misc. 762.) III. This proceeding is not derivative. (Security Trust Co. v. Pritchard, 201 App. Div. 142; Brennan v. Barnes, 133 Misc. 340; Southern Pacific Co. v. Bogert, 250 U. S. 483; Wouk v. Merin, 283 App. Div. 522; Silberfeld v. Swiss Bank Corp., 183 Misc. 234, 268 App. Div. 984; Hammer v. Werner, 239 App. Div. 38.) IV. This is not an action for breach of contract. (Gilmore v. Ham, 142 N. Y. 1; Coane v. American Distilling Co., 298 N. Y. 197.) V. Petitioners have a " proper ease ” for a settlement of accounts under section 106. (McDowall v. Sheehan, 129 N. Y. 200.) VI. Respondents are not barred by laches. (United Gold & Platinum Mines Co. v. Smith, 44 Misc. 567.)
   Burke, J.

The petitioners, representing deceased shareholders of the Baldwin Trading Corporation, a dissolved corporation, seek an accounting of the surviving directors pursuant to section 106 of the Stock Corporation Law. Special Term dismissed the petitions on the ground that the proceeding was barred by the six-year period of limitation ( Civ. Prae. Act, § 48, subd. 8). The Appellate Division reversed on the ground that the ten-year period (Civ. Prac. Act, § 53) was applicable. That court has certified as a question for review the propriety of its order.

Petitioners allege that the final distribution of the corporate assets was illegal as it was made without regard to the shareholder contributions and that certain shareholders received a disproportionate share of the assets.

The principal question presented because of the contrariety of the views of the courts below is whether a proceeding sought by stockholders to compel an accounting pursuant to section 106 of the Stock Corporation Law is one brought in the right of the corporation or the right of the individual stockholders.

The appellants construe the petitions as- an effort to seek redress for wrongs which flow from corporate mismanagement and wasting of corporate assets—hence a corporate action that must either be prosecuted in the name of the corporation (General Corporation Law, § 29) or form the basis of a stockholders ’ derivative action.

As section 106 specifies no time limitation, it is the argument of the appellants that the character of relief requested placed this proceeding in the category of cases governed by the six-year period of limitation of actions.

The legislative history surrounding the enactment of section 106 sheds little, if any, light on the inquiry. The essence of the legislation was to provide for a speedy termination of corporate affairs under judicial supervision and control upon proper notice to all parties concerned, thereby accomplishing at least two definite purposes: (1) the removing of any claim of liability against directors in dissolution, and (2) allowing individual stockholders a means of presenting individual or corporate claims without the necessity of instituting an individual action. (See legislative memoranda accompanying L. 1922, oh. 125.) The statute, however, is not to be interpreted by its text alone. It takes meaning from the rights granted to the corporate shareholders of a dissolved corporation, the status of the directors of a dissolved corporation, and the nature of the proceeding.

It is evident that an accounting proceeding brought pursuant to section 106 is an equitable proceeding. The right to such an action is specifically given to individual stockholders. Nowhere does section 106 mention a corporate action for it presupposes a dissolved corporation and implies, at least negatively, that the primary right to an accounting lies at the behest of directors seeking discharge, creditors seeking payment and shareholders seeking distributable assets.

Although directors of a corporation in dissolution are not trustees of an express trust, directors in dissolution have been classified as trustees of a trust fund created by operation of law for the benefit of the creditors of the corporation and its stockholders (see, e.g., Lammer v. Stoddard, 103 N. Y. 672; Ludington v. Thompson, 153 N. Y. 499; Marine Trust Co. v. Tralles, 147 Misc. 426 [Sup. Ct., Erie County, 1933]; Matter of Friedman, 177 App. Div. 755 [1st Dept., 1917]; De Martini v. McCaldin, 184 App. Div. 222 [1st Dept., 1918]; Wilson v. Brown, 107 Misc. 167 [Sup. Ot., Erie County, 1919]).

In the case of Darcy v. Brooklyn & Neto York Ferry Co. (127 App. Div. 167 [1908], affcl. 196 N. Y. 99), the action was in equity against trustees to compel them to account for breach of duty. The Appellate Division wrote (p. 169): “ That the property of a corporation [dissolved] is a trust fund in the hands of its directors for the payment of its debts has long been settled. (Bartlett v. Drew, 57 N". Y. 587; Hastings v. Drew, 76 id. 9 * * *) ”. It was held that the trustees could not transfer the funds in their hands in disregard of the rights of their cestuis, no matter how honest their motives be. In affirming, this court wrote (196 N. Y. 99, 102): “The liability of the directors is predicated not on the ground that their action in making the transfer was fraudulent but upon * * * violation of duty ’ ’.

At that time the predecessor statute of section 29 of the General Corporation Law referred to dissolution directors as trustees. However, in 1932, this section was amended (L. 1932, ch. 552) and the word “ trustees ” was removed from the statute. The legislative memoranda discloses that the' purpose was to prevent a change of status then existing between directors of a going corporation and those in dissolution.

But it is clear that directors have always been found to stand in a confidential position. They act as fiduciaries in the operation of corporate affairs, especially in regard to minority interests. We have continued to recognize that the basic status of corporate directors was essentially that of trust guardians of corporate property (Sialkot Importing Corp. v. Berlin, 295 N. Y. 482 [1946]).

While directors of a “going” corporation are only under a duty to account for a six-year period (Civ. Prac. Act, § 48, subd. 8), it does not necessarily follow that the directors of a dissolved corporation must of necessity be governed by the same or any definite period of limitation. A basis for distinction does exist. In a going concern there are yearly meetings of stockholders, balance sheets are struck yearly, and books are kept and maintained in the principal office wherein they may be inspected. (Stock Corporation Law, §§ 10, 45, 55, 77). However, when the corporation is dissolved and no longer continues to function, even as a cle facto corporation, individual stockholders have little, if any, means of ascertaining the exact state of the corporate affairs. In the case of the dissolved corporation, it may be readily inferred that laches or some form of estoppel was intended to govern the presentation of corporate and individual claims. Here, there is no claim that Trading continued to function actively and prosecute corporate business, but rather, it is quite clear that Trading had ceased to exist for all purposes except final liquidation.

Therefore, whether the directors be labeled “ Trustees ”, “Liquidating Directors” or “Statutory Liquidators”, they occupy a position of fiduciary responsibility having a unique advantage over the shareholders. The directors here should be held to the same standards of trust as apply to other fiduciaries. In De Martini v. McCaldin (184 App. Div. 222, 226, supra) the standard as applied to directors was restated in this way: ‘ ' Here, the corporation having no creditors, the stockholders were the equitable owners of the property. ‘ Whoever has an interest in the trust property or funds is entitled to sue for an accounting with respect thereto.’ (1 C. J. 631.) There is nothing unfamiliar about the maintenance of a suit against a trustee for an accounting at the hands of one who is the equitable owner of the property held by the trustee. The right to maintain the action is the same whether the trustee is vested with the legal title and was duly made a trustee or is a trustee ex maleficio. ’ ’

It should be noted that the proceeding is not brought on the basis of a fraud (which is imperfectly allegedy-ñeroo v. Bull, 226 N. Y. 546) but on the basis of a right granted by section 106 of the Stock Corporation Law. It is not an action at lawNfor damages sustained as the result of mismanagement or waste but rather for a return of trust funds alleged to have beenXfraudulently and secretly distributed. We find nothing in thex petitions that lends credence to appellants’ interpretation of .the petitions. The petitions in this case contain no allegations that Trading was improperly dissolved or that its assets were appropriated, or that the corporation was injured through the mismanagement of the directors. Cases like Brock v. Poor (216 N. Y. 387); Niles v. New York Cent. & H. R. R. R. Co. (176 N. Y. 119), and Kavanaugh v. Kavanaugh Knitting Co. (226 N. Y. 185), upon which appellants heavily rely, are inapposite.

Brock was concerned solely with the misappropriation of the assets of a going corporation. Niles involved a conspiracy to undermine a solvent corporation by refusing to pay debts and carry on the corporate business. Kavanaugh dealt with the proposed dissolution of a prosperous corporation which would have wasted corporate assets and substantially affected the plaintiff’s proportionate interest.

Here, Trading was not improperly dissolved. The pledged shares, when released, were immediately distributed in final liquidation.- The wrong complained of is not that they were liquidated but that they were not ratably distributed. We fail to see how the injury complained of would be a direct injury to Trading so as to justify the application of a derivative action theory to this proceeding. The manner of distribution could not and did not affect -the worth of the corporation. There has been no wasting of corporate assets in the true sense, but merely a disproportionate distribution of property among individual shareholders. If the allegations are true that, at the time of final distribution, the estates of the petitioners received neither their prorata share of Baldwin stock or other property in kind, absent a defense, an improper distribution may have resulted. Therefore, .although the released shares, when received, were taken in the corporate name, the actual owners of this property were the individual shareholders of the dissolved corporation. Hence the status of the directors here bears the hallmark of a trusteeship. Therefore, if any period of limitation should be applied, the ten-year period would govern (O'iv. Prac. Act, § 53).

Accordingly, the order of the Appellate Division should be affirmed, with costs, and the question certified answered in the affirmative.

Chief Judge Desmond (concurring).

I vote to affirm.

I agree with Judge Burke that the applicable time limitation is ten years ('Civ. Prac. Act, § 53). I agree with the Appellate Division majority that, since this is a proceeding against trustees for a compulsory accounting of their trust, no time, limitation begins to run until repudiation of the trust (4 Bogert, Trusts and Trustees, pt. 2, § 952; 3 Scott, Trusts, § 409; Mabie v. Bailey, 95 N. Y. 206; Douglas v. Phenix Ins. Co., 138 N. Y. 209; Lammer v. Stoddard, 103 N. Y. 672, 673; Gilmore v. Ham, 142 N. Y. 1, 10; Yeoman v. Townshend, 74 .Hun 625, 627). This settled rule applies to all sorts of trusts (Devoe v. Lutz, 133 App. Div. 356, 358, 359, and cases cited). Directors of a corporation in dissolution are truly and actually, not figuratively or by analogy, trustees for the owners of the corporation stock (General Corporation Law, § 29; Heath v. Barmore, 50 N. Y. 302; Sturges v. Vanderbilt, 73 N. Y. 384; Cunningham v. Glauber, 133 App. Div. 10,12).

Therefore, section 106 of the Stock Corporation Law is, so far as applicable here, a simple provision setting up a proceeding whereby the cestuis may require their trustees to account, much like section 259 of the Surrogate’s Court Act. It is not a proceeding ex contractu or ex delictu, nor is it brought on behalf of the corporation. The inclusion in these petitions of charges of misapplication of the trust assets does not change the nature of the proceeding or bring it within subdivision 8 of section 48 of the Civil Practice Act. It would be quite remarkable if the Legislature, in giving the stockholders a device (General Corporation Law, § 106) for compelling their trustees to file an account, had produced a result where trustees who had secretly disposed of the assets six years before, would get complete immunity not only from liability but even from filing an account.

Fuld, J. (dissenting).

The petitioners, complaining of an illegal and disproportionate distribution of corporate assets made by directors to themselves and others, seek an accounting in order to fix the liability of the directors responsible for the asserted diversion. Although the proceeding is brought under section 106 of the Stock Corporation Law, that provision does no more than provide that, upon the petition of a stockholder (or creditor), the Supreme Court may order an accounting by the directors. The fact, remarked by the court (opinion, p. 147), that “ no time limitation ” for seeking an accounting is specified, indicates not the absence of any statutory time bar, but rather ¡that the applicable Statute of Limitations of the Civil Practice Act is to control.

In my view, and it is well expressed by the Appellate Division dissenting Justices, the action brought is controlled by the six-year Statute of Limitations prescribed by subdivision 8 of section 48 of the Civil Practice Act. That the subject corporation is dissolved does not mean that the action is not brought, within the meaning of-subdivision 8, “by or on behalf of [the] corporation (See Stock Corporation Law, § 105, subd. 8; General Corporation Law, § 29.) Nor does the fact of dissolution alter or change the status or responsibility of the directors who handled the liquidation and allegedly effected the illegal diversion. Subdivision 8 of section 48 refers to an action against a “ director ” without regard to whether the corporation is or is not functioning.

While I agree that directors of a corporation, whether functioning or dissolved, are fiduciaries and are duty bound to safeguard, administer and properly apply the corporate assets, they cannot as liquidators of a dissolved corporation be regarded as trustees of an express trust so as to render applicable the ten-year Statute of Limitations or import into the case the doctrine, relied upon in the concurring opinion, that no time limitation begins to run “ until repudiation of the trust ”. (Cf., e.g., Gilmore v. Ham, 142 N. Y. 1, 9-10.) After a corporation is dissolved, its net assets are distributable to the stockholders pro rata subject to any existing preferences, and any breach of duty committed in distributing the assets renders the directors liable to an accounting. Misdirection of the assets to others is subject to subdivision 7 of section 49 of the Civil Practice Act — with' its three-year Statute of Limitations—while wrongful retention of assets by a director is subject to subdivision 8 of section 48, or, if the plaintiffs do not sue on behalf of the corporation, to subdivision 1 of section 48—with its six-year statute.

The cases are at one in holding that a period of limitations — six years, for instance—may not be extended or enlarged by casting the claim in some other form, by electing to proceed in equity, for example, when an action at law has already been barred. (See, e.g., Cohen v. Hughes, 291 N. Y. 698; Cwerdinski v. Bent, 281 N. Y. 782, affg. 256 App. Div. 612; Brick v. CohnHall-Marx Co., 276 N. Y. 259, 264; Hanover Fire Ins. Co. v. Morse Dry Dock & Repair Co., 270 N. Y. 86, 89-90; Hifler v. Calmac Oil & Gas Corp., 258 App. Div. 78, 89; Corash v. Texas Co., 264 App. Div. 292, 296.) In other words, if there be concurrent remedies, the resort to one rather than the other will not enlarge the shorter period prescribed by the applicable Statute of Limitations. Consequently, the fact, noted in the court’s opinion (p. 147), that an accounting proceeding, brought pursuant to section 106, is an “ equitable proceeding ” cannot assist the plaintiffs. Subdivision 8 of section 48 covers actions at law as we'll as in equity, but, even were this not so, where, as here, there was available a concurrent legal remedy to redress an illegal diversion of corporate assets, namely, a suit by the stockholder for his prorata share, the statute may not be extended by the device of seeking an accounting, that is, by switching the form of relief or attaching to it a different label.

The circumstance that the corporation has been dissolved and that the illegal diversion occurred in the course of liquidating the corporation should make no difference in view of the fact that its existence continued after dissolution for the purpose, among others, of “ collecting and distributing its assets ” (Stock Corporation Law, § 105, subd. 8; also, General Corporation Law, §29). Whether or not it is more difficult for stockholders or creditors of a dissolved corporation to ascertain the state of affairs of such corporation—and I do not believe that it is (see Stock Corporation Law, § 10, as well as common-law rights of inspection) —is beside the point since ignorance of facts giving rise to a cause of action does not, absent a charge of fraud, serve to extend the operation of the Statute of Limitations. (See Chance v. Guaranty Trust Co., 282 N, Y. 656.)'

I would reverse the order of the Appellate Division and dismiss the petitions.

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

Order affirmed, etc.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    The People of the State of New York, Respondent, v. Robert John Foley, Appellant.
    Argued June 8, 1960;
    decided July 8, 1960.

      Cornelius J. Carey and Harold W. Main for appellant.
    I. The confession of defendant was erroneously received in evidence. (Spano v. New York, 360 U. S. 315; People v. Leyra, 302 N. Y. 353; People v. McMahon, 15 N. Y. 384; People v. Mondon, 103 N. Y. 211; People v. Koch, 299 N. Y. 378; People v. Caralt, 135 Misc. 842; People ex rel. Moore v. Hunt, 258 App. Div. 24; People v. Ferola, 215 N. Y. 285.) II. The acts of defendant both prior and subsequent to the killing negate any intent and are consistent with an amnesia. III. The instructions to the jury as to the types of verdict were erroneous. (People v. Wallens, 297 N. Y. 57; People v. Leavitt, 301 N. Y. 113.) TV". The receipt in evidence of certain People’s exhibits was prejudicial and inflammatory.

      Henry A. Fischer, Jr,, District Attorney, for respondent.
    I. The confession of defendant was properly received in evidence. (Spano v. New York, 360 U. S. 315; People v. Leyra, 302 N. Y. 353; People v. McMahon, 15 N. Y. 384; People v. Mondon, 103 N. Y. 211; People v. Kennedy, 159 N. Y. 346; People v. Scully, 4 N Y 2d 453; People v. Doran, 246 N. Y. 409; People v. Trybus, 219 N. Y. 18; People v. Randazzio, 194 N. Y. 147; People v. Rogers, 192 N. Y. 331; People v. McGloin, 91 N. Y. 241.) II. The acts of defendant-appellant, both prior and subsequent to the killing, spell out only an intentional premeditated and deliberate murder, and they are totally inconsistent with an amnesia. III. The court’s instructions to the jury were full, complete, accurate and free from error. (People v. Crumble, 286 N. Y. 24.) TV". Photographs taken at the scene of the crime were properly admitted in evidence and were not prejudicial or inflammatory. (People v. Sanducci, 195 N. Y. 361; People v. Totterman, 181 N. Y. 385; People v. Ferraro, 161 N. Y. 365; People v. Fish, 125 N. Y. 136.)
   Per Curiam.

Whether or not the use at the trial of the confession sworn to before the Justice of the Peace was testimonial compulsion ” in the strict sense, its introduction in evidence in a capital case was under all the circumstances so contrary to our concepts of proper trial practice that a new trial is required. There is serious danger that prejudice resulted from the erroneous reception of this evidence. The jury may well have regarded the fact that the confession was sworn to before the magistrate in the courtroom as a virtual guarantee of its trustworthiness, as overwhelming proof that the statement contained a true account of what had happened and, indeed, the fact that it had been sworn to before a judicial officer was heavily relied upon at the trial to overcome the defendant’s repudiation of it and his claim that he had “ blacked out ” and was not aware of what he was doing when he committed the homicide.

Chief Judge Desmond and Judges Dye, Fuld, Froessel, Van Voorhis, Burke and Foster concur.

Judgment of conviction reversed and a new trial ordered.


text:
    The People of the State of New York, Respondent, v. Thomas Michael McCallum, Appellant.
    Argued May 19, 1960;
    decided July 8, 1960.

      John A. Murray and Gerald W. O’Connor for appellant.
    I. The court’s ruling denying defendant’s attorney an opportunity to examine the police report constitutes reversible error. (People v. Gezzo, 307 N. Y. 385.) II. Inasmuch as defendant had no attorney or access to the record on his appeal to the Appellate Division, Fourth Department, he did not receive the “adequate appellate review ” guaranteed him by the Constitution of the State of New York and the Constitution of the United States of America. (Griffin v. Illinois, 351 U. S. 12; People v. Kalan, 2 N Y 2d 278; People v. Pride, 3 N Y 2d 545; People v. Breslin, 4 N Y 2d 73; People v. Pitts, 6 N Y 2d 288; People v. Wilson, 7 N Y 2d 568.) III. Appellant’s intoxication was such that he could not form the intent to commit the crimes alleged to have been committed in the indictment.

      Carman F. Ball, District Attorney (Leonard F. Walentynowicz of counsel), for respondent.
    I. The guilt of defendant was proved beyond a reasonable doubt, as required by law. Aside from the question of intoxication, there was overwhelming proof to indicate that defendant did, in fact, commit the crimes with which he was charged. II. The question of intoxication was properly resolved against defendant. (People v. Leonardi, 143 N. Y. 360.) III. No reversible error was committed by the trial court in refusing trial counsel’s request to examine a police report. (People v. Gezzo, 307 N. Y. 385.) IV. This court is without power to modify the sentence imposed. (People v. Speiser, 277 N. Y. 342.) V. Defendant was afforded full and complete adequate appellate review. (People v. Kalan, 2 N Y 2d 278; People v. Breslin, 4 N Y 2d 73; People v. Pitts, 6 N Y 2d 288; Griffin v. Illinois, 351 U. S. 12; Eskridge v. Washington Prison Bd., 357 U. S. 214; Burns v. Ohio, 360 U. S. 252; Betts v. Brady, 16 U. S. 455; Sykes v. Swenson, 201 Md. 662, 345 U. S. 937.)
   Per Curiam.

On his appeal to the Appellate Division, defendant had neither an attorney nor access to the original judgment roll or to the copy of the stenographic minutes of the proceedings of the trial certified by the court stenographer and filed pursuant to section 456 of the Code of Criminal Procedure. This fell below what is required by People v. Kalan (2 N Y 2d 278); People v. Pride (3 NY 2d 545); People v. Breslin (4 N Y 2d 73); People v. Pitts (6 N Y 2d 288), and People v. Wilson (7 N Y 2d 568), which stem from Griffin v. Illinois (351 U. S. 12).

The judgment should be reversed and the case remitted to the Appellate Division for further proceedings in accordance with this opinion.

Chief Judge Desmond and Judges Dye, Fuld, Froessel, Van Voorhis, Burke and Foster concur.

Judgment reversed, etc.


author: Foster, J.

text:
    Bright Homes, Inc., Appellant, v. Henry Wright et al., Defendants; Robert E. Herman, as State Rent Administrator, Intervenor-Respondent, et al., Intervenor-Defendant.
    Argued June 8, 1960;
    decided July 8, 1960.

      Arthur Lenhoff and George E. Gasner for appellant.
    I. The final provision of the resolution of June 25, 1957 of the Common Council of Lackawanna is not an act of “ clairvoyance ” but is in line with any legislative measures ever taken because of an alleged emergency which interferes with the fundamental rights such as freedom of contract and sanctity of private property. (Chastleton Corp. v. Sinclair, 264 U. S. 543.) II. It is well settled that the interpreter of a statute must presume that no phrase in the statute is superfluous. The presumption is that each phrase in the statute serves a purpose. Accordingly, only strongest evidence can rebut the presumption. The opinion of the Appellate Division is not based on any evidence. It presents instead only a guess. (Matter of New York & Brooklyn Bridge, 72 N. Y. 527; Matter of Smothers, 309 N. Y. 487; Cahen v. Boyland, 1 N Y 2d 8; Matter of Carter v. Kalamejski, 255 App. Div. 694, 280 N. Y. 803.) III. The construction by a public officer of a legislative act, such as the resolution, can be given significance only if it has been continued for a long period of time. (City of New York v. New York City Ry. Co., 193 N. Y. 543; Davies Warehouse Co. v. Bowles, 321 U. S. 144; Matter of Lockport Union-Sun & Journal v. Preisch, 7 A D 2d 502.) IV. It is a basic principle of New York law that the legislative intent is to be determined primarily from the language used in the legislative enactment. Under the guise of interpretation, the interpreter must not suppress the expressed will of the legislative body. (Meltzer v. Koenigsberg, 302 N. Y. 523; McCluskey v. Cromwell, 11 N. Y. 593; Matter of Rathscheck, 300 N. Y. 346; McKuskie v. Hendrickson, 128 N. Y. 555; Department of Welfare of City of N. Y. v. Siebel, 6 N Y 2d 536; Matter of Burch v. Hawkins, 9 A D 2d 6; Teeter v. Allstate Ins. Co., 9 A D 2d 176.) V. The fact that the resolution provided for an extension of rent control until June 30, 1959 and that June 30,1959 was also the date fixed in the 1957 State Rent Control Law does by no means allow a cogent conclusion that the terminal date of the resolution must be disregarded. (New Amsterdam Cas. Co. v. Stecker, 3 N Y 2d 1.) VI. A comparison of the resolutions of the Common Council enacted in 1955 and 1957 is significant. VII. Statutes restricting the use of real property and therefore in derogation of common-law rights have always been restrietively interpreted, and even more clearly a proviso in favor of freedom of property cannot be excised by judicial legislation. (Lawrence Constr. Corp. v. State of New York, 293 N. Y. 634; Matter of 440 E. 102nd St. Corp. v. Murdock, 285 N. Y. 298; City of Albany v. Anthony, 262 App. Div. 401; Parkhattan Corp. v. Coster, 275 App. Div. 763, 299 27. Y. 722.)

      Emory Gardiner and Harold Zucker for intervenor-respondent.
    Reasonably read, the resolution of June 25, 1957 evinces a clear and positive intent to continue rent controls so long as the basic statute is in effect. (Meltzer v. Koenigsberg, 302 N. Y. 523; Matter of Capone v. Weaver, 6 N Y 2d 307; Matter of Greenwald, 186 Misc. 654; Matter of Nelson, 152 Misc. 245; Young v. Du Bois, 60 Misc. 381; Matter of Schmidt v. Wolf Contr, Co., 269 App. Div. 201; Matter of Kramer, 283 App. Div. 149; City of New York v. New York City Ry, Co., 193 N. Y. 543; United States v. American Trucking Co., 310 U. S. 534; Leighton v. Bearman, 278 App. Div. 72, 302 N. Y. 865; Lightbody v. Russell, 293 N. Y. 492.)
   Foster, J.

Plaintiff, Bright Homes, Inc., the appellant herein, was granted a summary declaratory judgment by the Supreme Court in Erie County to the effect that rent controls in the City of Lackawanna ended July 1, 1959. The Appellate Division has reversed such judgment by a divided court, and granted the cross motion of the State Rent Administrator, as an intervenor, for summary judgment to the effect that rent controls as to occupied residential space in the City of Lackawanna did not end on June 30,1959.

Appellant is the owner of Albright Court, a housing project in the City of Lackawanna, Erie County, containing 36 apartment buildings, each with 4 or more apartments. The legal problem presented by this case is whether rent controls still apply to appellant’s property, or whether they ended on June 30, 1959 in accordance with a resolution of the Common Council of the City of Lackawanna adopted on June 25, 1957. The language of the resolution is as follows:

" It is hereby declared that an emergency exists in the City of Lackawanna due to.the shortage of housing accommodations, by reason of such emergency, the Common Council of the City of Lackawanna hereby elects pursuant to the statutes in such case made and provided to continue the application of rent control on all housing accommodations except 1, 2 and 3-family houses whether or not occupied by the landlord.
1 " A certified copy of this resolution shall be forthwith transmitted to the Temporary State Housing Bent Control Commission.
‘ ' This resolution shall remain in full force and effect until June 30,1959.”

The Appellate Division has held that the terminal date fixed in the resolution should be treated as surplusage, and ergo that rent controls still exist in Lackawanna. The effect of this decision is somewhat more extensive than its language might indicate, for if the decision is correct the city is now powerless to decontrol rents and hence, presumably, controls would continue indefinitely (L. 1959, ch. 695). By the statute cited the Legislature froze all residential rents in communities which had elected prior to June 30, .1957 to continue controls "without a terminal date.

The theory that the terminal section of the resolution was to be treated as surplusage was arrived at by a process of interpretation. The court below said in substance that the contemporary history of rent control statutes and their historical background indicated that the Common Council did not intend to limit the resolution to the date fixed — in other words that the expiration date used in the resolution should be treated as a " mere vestige of the language used by the draftsman ’ ’. This rather vague language is taken from an opinion in the case of Matter of Carter v. Kalamejski (255 App. Div. 694, 699, affd. 280 N. Y. 803), and there it doubtless had a logical sequence. Section 872 of the Education Law was in part rewritten into section 312-a of the same statute, and by oversight an inconsistent part of a sentence from 872 was allowed to remain in the new section. Hence the holding that the inconsistent language was an error in draftsmanship. Here we are unable to perceive how the declaration of a terminal date is a vestige of anything, or other than a plain and forthright statement of intention. It cannot be excised without resort to judicial conjecture and surmise.

There is of course a general legislative history of rent controls. In 1950 the State took over exclusive control of residential rents (L. 1950, ch. 250). In 1951 the State Residential Rent Law was substantially amended (L. 1951, ch. 443), and this enactmént provided that the act should terminate on June 30, 1953. Thereafter legislation was adopted to continue various controls for two-year periods (L. 1953, ch. 321; L. 1955, ch. 685; L. 1957, ch. 755; L. 1959, ch. 695). The State enactment we are immediately concerned with is that passed in 1957 (L. 1957, ch. 755). This enactment provided in part that rent controls in any city or town in three named counties, including Erie County, were terminated on June 30, 1957, except that the governing body of such a municipality by resolution, adopted no later than June 30, 1957, declaring the continuance of emergency conditions, could elect to be excluded from the termination date of rent controls “ to the extent specified in such resolution.'” (Emphasis supplied.) It was under the terms of this statute that the resolution in question was drawn. Under the public policy of the State, as manifested by the Legislature, the Common Council could have abandoned rent control entirely. It chose not to do so but limited the extension to June 30, 1959 in language that is plain and unambiguous. The court below has indicated that a determination in advance that an emergency would cease to exist amounted to clairvoyance. The same accusation of clairvoyance might be leveled against the State Legislature in connection with its various enactments of rent control. But this line of reasoning is beside the point. Whether it was anticipated or not that the emergency would cease to exist the council nevertheless had power to terminate controls.

It is true of course that the literal language of a statute is not always controlling in the interpretation thereof, but this is a principle to be adopted with extreme caution and only where the plain intent and purpose of a statute would otherwise be defeated. We have no such clear-cut case here, and it cannot be assumed that the terminal date fixed in the resolution was intended to have no purpose. The rule is quite to the contrary, and every phrase in a legislative enactment must he given its ordinary and consistent meaning (Matter of New York & Brooklyn Bridge, 72 N. Y. 527; Matter of Smathers, 309 N. Y. 487). The reason for this is clear. Courts are not supposed to legislate under the guise of interpretation, and in the long run it is better to adhere closely to this principle and leave it to the Legislature to correct evils if any exist. If harm has been done by the resolution in question there is nothing about it that cannot be corrected by the Legislature. In any event the legislative intent of the Common Council of Lackawanna must be determined primarily from the language of its resolution (Meltzer v. Koenigsberg, 302 N. Y. 523; McKuskie v. Hendrickson, 128 N. Y. 555). This language is strongly indicative that the Common Council did not want rent control for more than two more years, and there is nothing whatever to indicate that it wanted controls continued indefinitely.

The judgment should be reversed, without costs, the cross motion denied, and the judgment of the Special Term granting a summary declaratory judgment in favor of the plaintiff should be reinstated.

Chief Judge Desmond and Judges Dye, Fuld, Froessel, Van Voorhis and Burke concur.

Judgment of Appellate Division reversed and that of Special Term reinstated, without costs.


text:
    The People of the State of New York, Appellant, v. Kenneth A. Hale, Respondent.
    Argued May 27, 1960;
    decided July 8, 1960.

      Carman F. Ball, District Attorney (Joseph S. Mattina of counsel), for appellant.
    The People did properly prove a violation of section 887 (subd. 4, els. [b], [c]) of the Code of Criminal Procedure. (People v. Moss, 309 N. Y. 429; People v. Gould, 306 N. Y. 352; People v. Evans, 19 Misc 2d 1071, 7 N Y 2d 1030; People ex rel. Champlin v. Gray, 185 N. Y. 196.)

      John W. Condon, Jr., and Grace Marie Ange for respondent.
    The People failed to prove a violation of section 887 (subd. 4, els. [b], [c]) of the Code of Criminal Procedure. Accordingly, the judgment of conviction was properly reversed. (People v. Gould, 306 N. Y. 352; People v. Moss, 309 N. Y. 429; People v. Bell, 306 N. Y. 110; People v. Evans, 19 Misc 2d 1071, 7 N Y 2d 1030; People v. Liebenthal, 5 N Y 2d 876; People v. Lopez, 7 N Y 2d 825.)
   Foster, J.

Defendant, while standing about the Shelton Square Bus Terminal in Buffalo, New York, made indecent, lewd and homosexual proposals to a police officer. Charged with “'vagrancy*’ under the Code of Criminal Procedure (§ 887, subd. 4, els. [b], [c], [d]), he was convicted in the City Court of Buffalo under clauses (b) and (c). The Supreme Court, Erie County, has reversed on the law and dismissed the information.

The sole question presented is whether the acts complained of constitute vagrancy under the statute, as charged. The relevant portions of subdivision 4 of section 887 provide: ‘ ‘ The following persons are vagrants: * * * 4. A person * * * (b) who offers or offers to secure another for the purpose of prostitution, or for any other lewd or indecent act; or (c) who loiters in or near any thoroughfare or public or private place for the purpose of inducing, enticing or procuring another to commit lewdness, fornication, unlawful sexual intercourse or any other indecent act.”

We have construed clause (h) of subdivision 4 as applying to so-called “pimps” or “procurers” who solicit on behalf of third persons (People v. Gould, 306 N. Y. 352). An indecent proposal or solicitation by a person on Ms own behalf does not fall within tMs subdivision and clause. ' Clause (c), however, expressly covers tMs case. The language is clear and unambiguous. One who loiters in or near a thoroughfare or public or private place, for the purpose of inducing another to commit (1) lewdness, (2) fornication, (3) unlawful sexual intercourse, (4) or any other indecent act, is classified as a vagrant. Certainly this defendant, loitering in a public place, sought to entice another to commit lewdness and indecent acts.

It is true that we have described subdivision 4 of section 887 as a general prostitution statute which “ condemns various aspects and incidents of pandering and prostitution” (People v. Gould, supra, p. 354; People v. Moss, 309 N. Y. 429), but we have never held that clause (c) of subdivision 4 does not condemn other conduct encompassed within its express language. WMle clause (c) does apply to loitering pimps and prostitutes, it applies equally to loitering homosexuals. Nor is it of any importance on tMs appeal that the defendant might have been charged with disorderly conduct (Penal Law, § 722, subd. 8; People v. Lopes, 7 N Y 2d 825; People v. Liebenthal, 5 N Y 2d 876) for his acts also constituted vagrancy.

The order of the ¡Supreme Court, Erie County, should be reversed, and the case remitted to that court for its determination of the facts in accordance with sections 543-a and 543-b of the Code of Criminal Procedure.

Chief Judge Desmond and Judges Dye, Fuld, Froessel and Burke concur with Judge Foster ; Judge Van Voorhis dissents and votes to affirm upon the ground that subdivision 4 of section 887 of the Code of Criminal Procedure is a general prostitution statute and, if guilty, appellant should have been convicted under subdivision 8 of section 722 of the Penal Law.

Order reversed, etc.


author: Fuld, J. Van Voorhis, J. (dissenting).

text:
    Robert W. Ando, Appellant, v. Essie M. Woodberry et al., Respondents.
    Argued May 25, 1966;
    decided July 8, 1960.

      Samuel J. Moskowitz and Graham M. Scheinman for appellant.
    A plea of guilty to traffic offenses involving the very issue in the civil suit is admissible as an admission against interest. (Nappi v. Falcon Truck Renting Corp., 286 App. Div. 123, 1 N Y 2d 750; Same v. Davison, 253 App. Div. 123; Walther v. News Syndicate Co., 276 App. Div. 169; Stanton v. Major, 274 App. Div. 864; Barnum v. Morresey, 245 App. Div. 798; Race v. Chappell, 304 Ky. 788; Morrissey v. Powell, 304 Mass. 268; Dzura v. Phillips, 275 Mass. 283; Public Serv. Co, v. Chancey, 94 N. H. 259; Freas v. Sullivan, 130 Ohio St. 486; Olk v. Marquardt, 203 Wis. 479; Gangi v. Fradus, 277 N. Y. 452; Matter of Hart v. Mealey, 287 N. Y. 39; Schindler v. Royal Ins. Co., 258 N. Y. 310; Matter of Rechtschaffen, 278 N. Y. 336.)
    Peter E. De Blasio for respondents.
    I. There was no error in precluding plaintiff from introducing the certificate of conviction in evidence. (Walther v. News Syndicate Co., 276 App, Div. 169.) II. If the trial court did commit error in precluding plaintiff from introducing the certificate of conviction of defendant Nichols in evidence, the alleged error would not be reversible because it was harmless since the facts clearly belied plaintiff’s claim of defendant’s negligence and plaintiff’s freedom from contributory negligence.
   Fuld, J.

This appeal calls upon us to decide a question of first impression in this court: May a defendant’s prior plea of guilt to a traffic offense be introduced as evidence of his carelessness in a civil action for damages ?

The relevant facts are simple and undisputed. Robert Ando, a police officer, driving a motorcycle, and Edward Nichols, driving an automobile owned by Essie Woodberry, were both proceeding north on Fifth Avenue, New York' City, on the afternoon of December 28, 1955. Car and motorcycle collided when Mr. Nichols attempted to make a left turn at 110th Street, and Officer Ando was injured as a result of the collision. Mr. Nichols was given a summons which charged him with failing to make a proper turn and failing to signal before turning, and he subsequently appeared in the Manhattan Traffic Division of Magistrates’ Court and pleaded guilty to both charges.

Upon the negligence trial, held in the Supreme Court, the only witnesses to the occurrence of the accident were the plaintiff and the -defendant Nichols who drove the ear. According to the plaintiff, Hr. Nichols, after first pulling over to the right, made a left turn without prior warning or signal and struck Ms motorcycle. Mr Nichols not only denied that he had moved to the right, hut asserted that he had given a signal upon making the turn. In order to strengthen his case, the plaintiff attempted to prove Mr. Nichols ’ plea of guilt in Traffic Court on the theory that it constituted an admission, hut, upon the defendants’ objection, the trial court excluded the proffered evidence. The jury returned a verdict in favor of the defendants and the Appellate Division, two Justices dissenting, affirmed the judgment subsequently rendered.

In deciding whether proof of a plea of guilty to a traffic violation should be received as evidence in chief in a subsequent civil action, it is well to recall the principle, basic to our law of evidence, that “ All facts having rational probative value are admissible ” unless there is sound reason to exclude them, unless, that is, “some specific rule forbids” (1 Wigmore, Evidence [3d ed., 1940], p. 293). It is this general principle which gives rationality, coherence and justification to our system of evidence and we may neglect it only at the risk of turning that system into a trackless morass of arbitrary and artificial rules.

In view of the fact that Mr. Nichols’ plea of guilty to the charges leveled against Mm—failing to signal and making an improper turn—-is relevant to the issue of Ms negligence in turning off Fifth Avenue, we must simply decide whether there is any justification for excluding it. Two possible grounds of exclusion suggest themselves; the first, that such testimony is hearsay and, the second, that its introduction violates public policy.

Since a prior plea of guilt represents an admission, it is not obnoxious to the hearsay rule. (See 4 Wigmore-, op. óit., §§ 1048, 1049, pp. 2-7.) Accordingly, the courts of this State, as well as of other jurisdictions, have generally sanctioned the receipt in evidence in a negligence action of a prior plea of guilty to a traffic violation. (See People v. Formato, 286 App. Div. 357, 363-364; Walther v. News Syndicate Co., 276 App. Div. 169, 176; Stanton v. Major, 274 App. Div. 864; Same v. Davison, 253 App. Div. 123, 124; Barnum v. Morresey, 245 App. Div. 798; Rednall v. Thompson, 108 Cal. App. 2d 662, 666; Koch v. Elkins, 71 Idaho 50, 54; Dimmick v. Follis, 123 Ind. App. 701, 703; Race v. Chappell, 304 Ky. 788, 792; Morrissey v. Powell, 304 Mass. 268, 271; Remmenga v. Selk, 150 Neb. 401, 415; Public Serv. Co. v. Chancey, 94 N. H. 259, 261; Freas v. Sullivan, 130 Ohio St. 486, 491; Olk v. Marquardt, 203 Wis. 479, 485.) Thus, when Mr. Nichols pleaded guilty to the traffic infractions charged against him, his plea of guilty amounted to a statement or admission by him that he did the act charged. As such, it should be treated like any other admission or confession, and subject to the same rules relating to its weight and effect.

The defendants insist, however, that there is a public policy which requires us to treat the admission implicit in pleading guilty to a traffic offense differently from others. It is the policy of this State, they urge, that a traffic infraction be distinguished from a crime and that it be recognized that a plea of guilt is entered in traffic court for numerous reasons unrelated to actual guilt. To support their contention, they point to subdivision 29 of section 2 of the Vehicle and Traffic Law, Matter of Hart v. Medley (287 N. Y. 39) and Walther v. News Syndicate Co. (276 App. Div. 169, supra).

The portion of the Vehicle and Traffic Law relied upon provides that “ a traffic infraction is not a crime, and the penalty or punishment imposed therefor * * * shall not affect or impair the credibility as a witness, or otherwise, of any person convicted thereof” (Vehicle and Traffic Law, § 2, subd. 29; see, also, Civ. Prac. Act, § 355). Whatever else this provision may mean, it is clear that it is directed solely against the use of a conviction of a traffic infraction to “ affect or impair * # * credibility as a witness ” of the person convicted and not against the use of a plea as evidence in chief. The statute does no more than restate the rule of the common law that a prior conviction may be shown to attack the credibility of a witness only if it was a conviction of a crime. (See People v. Joyce, 233 N. Y. 61, 71; People v. Brown, 2 A D 2d 202, 203; see, also, Civ. Prac. Act, § 350.)

Since a traffic infraction was declared not to be a crime, it was but natural for the Legislature to, in effect, codify the settled rule prohibiting the use of a conviction of such an offense to impeach the offender when called to testify as a witness. Had more than this been intended, had it been the legislative design to render evidence of a traffic infraction unavailable for any purpose in a subsequent civil action, it could easily have so provided. (See, e.g., Minn. Stats. Ann., § 169.94, subd. 1; Colo. Rev. Stat., 13-4-140.) The Legislature of this State having written a clearly limited rule of exclusion, we may not apply it beyond its terms to exclude the use of a guilty plea as evidence in chief.

Nor may legislative policy be taken to justify its exclusion. Certain violations of the Vehicle and Traffic Law were denominated traffic infractions and distinguished from crimes in order to establish a new type of offense, one “ with the stigma of criminality removed.” (Squadrito v. Griebsch, 1 N T 2d 471, 476.) The legislation simply represented a recognition of the fact that most traffic violations do not involve the degree of moral turpitude associated with crime.

Our case law, likewise, offers no support for the defendants’ position. It is quite true that in Matter of Hart v. Mealey (287 N. Y. 39, supra), where the issue was whether there was sufficient evidence to justify a determination by the Commissioner of Motor Vehicles that a driver’s license be revoked on account of reckless driving, this court remarked on the “weakness ” of evidence of a conviction after trial—not of a plea of guilt, as was inadvertently assumed by the Appellate Division—as proof of the facts involved. The Hart case, however, did not involve any issue of admissibility and, therefore, has no bearing on the issues before us. The case of Walther v. News Syndicate Co. (276 App. Div. 169, supra) did hold that a judgment of conviction of a traffic infraction after trial was inadmissible in a subsequent civil action, but it recognized that its decision represented a limited exception to the general rule announced by this court in Schindler v. Royal Ins. Co. (258 N. Y. 310; see, also, Matter of Rechtschaffen, 278 N. Y. 336) and, even more significant, it expressly distinguished the case before it from those in which a plea of guilty is involved. “In such eases,” wrote the court, “the record or proof of the defendant’s guilty plea is. received' * * * as a, declaration or admission against interest(Walther v. News Syndicate Co., 276 App. Div. 169, 176, supra.) Consequently, even if we were to assume that the. Appellate. Division was correct in its conclusion in the WaUher case—and. we observe that we have never had occasion to consider the question there presented—the opinion supports, rather than detracts from, the conclusion that a, guilty plea deliberately recorded by the defendant is admissible against him on the issue of his negligence in a subsequent civil action.

In addition to their reliance on policy and precedent, the defendants offer an argument based on what they label ‘ ' experience ’ They contend that one charged with a traffic violation pleads guilty, even though he believes himself innocent, in order to avoid the expenditure of time and money which would he involved if guilt were denied and the: charge contested. Based on this assumption, they suggest that the plea of guilt must be. looked upon as one of ml& contendere. The contention has no merit. In the first place, the plea of nolo contendere has long been abolished in this State: (see People v. Daiboch 265 N. Y. 125, 128) and may not. be resurrected without legislative sanction. In the second place, while we are willing to assume that pleas to traffic charges are not infrequently prompted by considerations of expediency, we have no reliable means of judging- how significant a portion of all guilty pleas to traffic, charges are of this character. But, quite apart from this, there is no basis for the defendants’ unverified generalization or ‘ ' hunch ’ ’ in cases, where, as here, the alleged violation was attended with injury to the- person or property of a third party and the plea carries with it serious consequences to- the- offender’s future status as a motor vehicle operator (Vehicle and Traffic Law, § 71).

What the defendant Nichols is actually arguing is that, when he pleaded guilty, he “really didn’t mean what he said”. This claim, however, goes to the weight of evidence and entitles the defendant not to exclusion of the plea, but to an “opportunity to explain” it. (Chamberlain v. Iba, 181 N. Y. 486, 490; see, also, Wachtel v. Equitable Life Assur. Soc., 266 N. Y. 345, 351; Gangi v. Fradus, 227 N. Y. 452; Hirsch v. New York Life Ins. Co., 267 App. Div. 404, 406; 4 Wig-more, op. cit., pp. 23-24.) After the defendant has given his explanation, his reasons for pleading guilty, it is for the jurors to evaluate his testimony and decide whether the plea is entitled to any weight. As this court Avrote some years ago Avith respect to extra-judicial admissions, it is for the jury, noting “ the conditions and circumstances under which [such admissions] were made ”, to determine their “ effect * * * and their probative weight and value, which may range from the lowest, or none at all, to conclusiveness.” (Gangi v. Fradus, 227 N. Y. 452, 457, supra.) The traditional treatment accorded to admissions by our courts takes account of the very claim here made, namely, that the defendant’s guilty plea was not an admission that he committed the acts charged against him.

To the claim that the jury will be unduly prejudiced by the introduction of a plea of guilt despite the opportunity to explain it away, we content ourselves with the statement that this underestimates the intelligence of jurors and overlooks their awareness of those very circumstances said to destroy the meaning and significance of the plea. If voluntarily and deliberately made, the plea was a statement of guilt, an admission by the defendant that he committed the acts charged, and it should be accorded no less force or effect than if made outside of court to a stranger.

The judgment of the Appellate Division should be reversed and a new trial granted, with costs to abide the event.

Van Voorhis, J. (dissenting).

The law of evidence has its roots in experience, and in common experience men and women charged Avith minor traffic violations plead guilty to avoid inconvenience whether they are innocent or guilty. In the Federal courts it is possible for a defendant in a criminal action to plead nolo contendere, the accepted meaning of which is that the defendant chooses not to contest and takes the consequences of conviction but without admitting the truth of the charge against him. Such a plea could not be received in evidence as a voluntary admission against interest under the reasoning of the opinion by Judge Fulo in this case. The State procedure does not give opportunity to plead nolo contendere but that is exactly what persons accused of minor traffic violations generally mean to do and are understood to have done when they enter guilty pleas in such instances. They are subject to the punishment provided by law for the offenses to which they have pleaded guilty, but the criminal statutes do not impose the additional burden of having the conviction used in a civil action as a factual admission by the person charged that he or she did or omitted the act on which the traffic infraction depends. It is irrelevant that nolo contendere is not a form of plea that is used in the State courts, inasmuch as we are not confronted in this case with any of the consequences of conviction under the criminal law. We have before us merely the collateral effect of such a plea as bearing upon the civil rights of the party in an action for damages. It is contrary to ordinary experience to give that effect to this plea of guilty in the Magistrates’ Court, as the Appellate Division has correctly held. When Mr. Nichols pleaded guilty in the Manhattan Traffic Division of Magistrates’ Court to failure to make a proper turn or to signal, he rendered himself liable to whatever penalties were involved but in my view it cannot be said with justice or a sense of reality that he conceded whatever facts he was accused of by the arresting officer. I think that it was not intended that the first steps in the enforcement or defense of damage claims in automobile negligence accident eases should be taken in traffic courts or police courts, nor does it aid their most effective functioning if that is so (contrast Walther v. News Syndicate Co., 276 App. Div. 169, with Schindler v. Royal Ins. Co., 258 N. Y. 310).

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

Judgment reversed, etc.

      . The Minnesota statute declares that “No record of the conviction of any person for any violation of [the Highway Traffic Regulation Act] shall be admissible as evidence in any court in any civil action” (Minn. Stats. Ann., § 169.94, subd. 1).

      . Under the so-called “ point system. ”, in effect, in Hew York, a plea of guilt, fbr instance, to the charge- of faffing to- signal or of making am improper turn, is taken into account in determining whether the offenidiE’s license should be suspended or revoked. (See pamphlet issued by the Commissioner of Motor Vehicles, entitled, “What You Heed* to- Know About Hew York State’s Point System for Persistent Traffic Law Violators”.)


author: Fuld, J.

text:
    In the Matter of Vito Campanelli, Deceased. Josephine Campanelli, as Administratrix of the Estate of Decedent, Respondent ; General Mutual Insurance Company, Appellant; Lucille C. Biondo et al., Respondents.
    Argued May 19, 1960;
    decided July 8, 1960.

      Paul F. Donohue for appellant.
    I. The clear and unambiguous language of section 29 of the Workmen’s Compensation Law provides for a lien against any third-party recovery as to amounts which a carrier may be required to pay into the aggregate trust fund. (Kussack v. Ring Constr. Corp., 1 A D 2d 634.) II. The decision of the Surrogate was erroneous as a matter of law. (Matter of Grasso, 1 Misc 2d 704; Harris Structural Steel Co. v. Dean, 182 Misc. 763, 184 Misc. 688.) III. Claimant in a death benefit case acquires by virtue of the statutory lien an annuity-like benefit.

      Bernard Meyerson and Harry Heller for respondent.
    The clear and simple language of section 29 of the Workmen’s Compensation Law gives the carrier a lien for compensation, medical and burial expenses, actually paid to dependents of deceased, and the attempt to saddle dependents with appellant’s contributions to a special fund is without support in the act and is nothing more but an attempt to shift the cost of operating an insurance business from appellant to respondent. (Moeller v. Associated Hosp. Serv. of Capital Dist., 304 N. Y. 73; Matter of Doyle v. Town of North Hempstead, 277 App. Div. 816; Matter of Richter v. Town of Islip, 276 App. Div. 42; Royal Ind. Co. v. Atchison, T. & S. F. Ry. Co., 272 App. Div. 246, 297 N. Y. 619; Matter of Tate v. Estate of Dickens, 276 App. Div. 94; Juba v. General Bldrs. Supply Corp., 7 N Y 2d 48.)
   Fuld, J.

Vito Campanelli died in 1953 as a result of injuries received, while working on his job, through the negligence of others not in the same employ. His widow, respondent herein, took compensation and, in addition, as the law permits, instituted a third-party action against those responsible. She obtained a judgment of $150,000, but this was reduced by the Appellate Division to $105,000 (Campanelli v. Kretzer & Son, 1 A D 2d 1025) and was thereafter settled in that amount while a further appeal was pending to this court.

Following this disposition, the widow brought a proceeding in the Surrogate’s Court for approval of the ‘ ' compromise settlement ” — in which her share proved to be $25,987.67. Some $5,000 in funeral expenses and compensation benefits had already been paid by the carrier and in her petition the widow acknowledged that it had a lien for such sum against the proceeds of the recovery in the law action. The carrier, however, objected to the settlement upon the ground that the widow had failed to include, as an estimated lien against her own share, an amount which it might be required by the Workmen’s Compensation Board to advance, as deficiency compensation ”, to cover possible future payments to her. In order to permit immediate distribution of the recovery in the third-party action, the Surrogate approved the settlement, reserving decision on the carrier’s objection until the board had made a final determination with respect to the award of death benefits. In so doing, he directed the widow to retain out of her share of the' recovery a specified sum to satisfy the carrier’s possible lien for deficiency compensation.

The board thereafter made an award to the widow of death benefits at stated weekly rates; decided that her net third-party recovery of $25,987.67 entitled the carrier, on the basis of her life expectancy and the likelihood of remarriage, to suspend payments of compensation benefits to her from June 16,1956 to July 19, 1982, on which date payments were to be resumed; computed the present value of the unpaid death benefits, representing the “deficiency compensation ”, to be $2,512.15 and directed the carrier to pay that amount into the aggregate trust fund pursuant to section 27 of the Workmen’s Compensation Law. After the carrier made the payment, it applied to the Surrogate’s Court for reimbursement. The Surrogate denied the application, the Appellate Division unanimously affirmed, and we granted leave to appeal.

Section 27 provides for the creation of an aggregate trust fund into which an employer or carrier may, or in instances such as the present must, pay a lump sum to cover all future “ periodical payments ” of death benefits. It calls upon the board to compute the present value of those benefits and ‘ require payment of such amount into the aggregate trust fund ” together with a sum to cover administrative expenses. The same section also provides for a waiting period to permit the termination of a possible third-party suit, the crediting of any third-party recovery to the award and the computation of any deficiency to be paid into the fund. Upon the making of such payment, it is explicitly stated, the employer or carrier is “ discharged from any further liability for payment of such death benefits or other compensation ” (§ 27, subd. 3). The fund assumes full responsibility for any further payments to the widow if the amount deposited proves inadequate. If the fund is the loser in such cases—if, for instance, the widow lives beyond her life expectancy—it gains in other eases where the beneficiary dies or remarries before the compensation provided for is paid out.

To support its contention that it has a lien for the $2,512.15 against the widow’s share of the recovery, the carrier maintains that section 27 must be read together with section 29. Subdivision 1 of section 29, after sanctioning a third-party action by the representatives of the deceased employee, recites that the carrier “ shall have a lien on the proceeds of any recovery ” to the “ extent of the total amount of compensation awarded under or provided or estimated by this chapter for such case ”, and subdivision 4 likewise speaks in terms of “ estimated ” compensation. In view of these provisions, the carrier urges, it is entitled to obtain from the widow’s $25,000 recovery the $2,512.15 which it was required by section 27 to pay into the aggregate trust fund to cover possible payments accruing after 1982.

Whether a literal reading of section 29 would permit the construction sought by the carrier, it is manifest that to construe the statute so as to require reimbursement of the carrier for all compensation benefits, both past and estimated future ones, would do violence to the very design and purpose underlying the statute (Workmen’s Compensation Law, §§ 16, 27).

If there is no third-party action recovery, a carrier stands responsible for the full amount of the death benefits to be paid to the widow. If there is a recovery, and it is sufficient to take care of the widow until her death or remarriage, as determined by the applicable mortality and remarriage tables (Workmen’s Compensation Law, § 16), then, it need pay no death benefits at all. If, however, the recovery is not sufficient for such purpose, the carrier must pay the difference. In the case before us, this means that, after the period of time has passed which it would, take to use up the widow’s $25,000, the carrier again becomes responsible for weekly payments to the widow. This responsibility it may discharge, as indicated, by the payment of a designated amount of “deficiency compensation” into the aggregate trust fund. It is obvious, though, that, if such deficiency compensation were deducted from the widow’s $25,000 recovery, that sum would not last until 1982; it would necessarily be used up in a correspondingly shorter period and additional deficiency compensation would be required. If this too were to be deducted from the proceeds, still further compensation would be needed and, if the carrier’s argument were sound, the process would have to be repeated again and again. Such an unreasonable result could not possibly have been within the legislative design. As the Surrogate aptly observed in the course of his thoughtful and comprehensive opinion, " To allow the carrier to recoup the amount paid into the special fund out of a recovery in a third-party action would transfer this possible future burden to the very beneficiary whom the deposit by the carrier was intended to benefit.”

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

Chief Judge Desmond and Judges Dye, Van Voorhis, Burke and Foster concur; Judge Froessel concurs in result only.

Order affirmed.


text:
    The People of the State of New York, Respondent, v. Herbert Borum, Appellant.
    Argued June 7, 1960;
    decided July 8, 1960.

      Nathan A. Bork for appellant.
    I. The dismissal of the appeal by the Appellate Division was a denial of appellant’s constitutional rights as guaranteed by the Fourteenth Amendment to the United States Constitution and section 6 of article I of the Constitution of the State of New York. (Griffin v. Illinois, 351 U. S. 12; People v. Wilson, 7 N Y 2d 568.) II. The Appellate Division’s denial of appellant’s request for assignment of counsel deprived appellant of his rights in violation of the Sixth and Fourteenth Amendments of the United States Constitution and sections 6 and 11 of article I of the Constitution of the State of New York. (People v. Richetti, 302 N. Y. 290; Matter of Bojinoff v. People, 299 N. Y. 145; People v. Koch, 299 N. Y. 378; People v. McLaughlin, 291 N. Y. 480; Johnson v. Zerbst, 304 U. S. 458; Powell v. Alabama, 287 U. S. 45; People v. Kalan, 2 N Y 2d 278.)

      Manuel W. Levine, District Attorney (Henry P. DeVine of counsel), for respondent.
    Appellant was not unlawfully deprived of his right to appeal by the Appellate Division. (People v. Pitts, 6 N Y 2d 288; People v. Kalan, 2 N Y 2d 278; People v. Wilson, 7 N Y 2d 568; People v. Kolakowski, 7 N Y 2d 924; People v. Breslin, 4 N Y 2d 73.)
   Fuld, J.

In question is the validity of the Appellate Division’s dismissal of the defendant’s appeal for failure to prosecute. The dismissal was ordered, on the district attorney’s motion, some months after the court had denied the defendant’s application for permission to appeal, “as a poor person,” on the original papers comprising the record. The ground for the denial of the defendant’s application was apparently that urged by the prosecutor, that the appeal lacked substantial merit.

The right to appeal is assured to all defendants, rich and poor alike, by section 517 of the Code of Criminal Procedure and, since this statutory right to appeal does not depend upon the existence of meritorious points, an appellate court may not insist upon an indigent defendant showing substantial merit before entertaining his appeal. What our statute gives, a court may not take away or severely limit. The right to appeal requires a review of the merits upon appeal and is not satisfied by a mere consideration of those merits upon a submission of affidavits on an application for leave to have the appeal heard on the original papers. Whether the Legislature may constitutionally enact such a requirement is not, of course, before us (cf. Burns v. Ohio, 360 U. S. 252; Ellis v. United States, 356 U. S. 674; Johnson v. United States, 352 U. S. 565, revg. 238 F. 2d 565), but, certainly, absent such legislation, the Appellate Division could not require an indigent defendant to prove that his appeal had substantial merit before permitting him to prosecute it, as a poor person, on the original record. (See People v. Wilson, 7 N Y 2d 568; People v. Pitts, 6 N Y 2d 288.)

The Appellate Division order should be reversed and the case remitted to that court for further proceedings not inconsistent with this opinion.

Chief Judge Desmond and Judges Dye, Froessel, Van Voorhis, Burke and Foster concur.

Order reversed, etc. ' .


author: Froessel, J. Burke, J. (dissenting).

text:
    In the Matter of Lincoln Building Associates, Appellant, v. Joseph Jame, Respondent.
    Argued May 19, 1960;
    decided July 8, 1960.

      Ralph W. Felsten for appellant.
    I. The Business Bent Law is unconstitutional and void. (Lincoln Bldg. Associates v. Barr, 1 N Y 2d 413; Defiance Milk Prods. Co. v. Du Mond, 309 N. Y. 537; Chastleton Corp. v. Sinclair, 264 U. S. 543; O’Gorman & Young v. Hartford Ins. Co., 282 U. S. 251.) II. The statute is unconstitutional whenever, as here, the emergency on which it was and must be based no longer obtains. (Twentieth Century Associates v. Waldman, 294 N. Y. 571; East N. Y. Sav. Bank v. Hahn, 293 N. Y. 622, 326 U. S. 230; Orinoco Realty Co. v. Bandler, 233 N. Y. 24; Municipal Gas Co. v. Public Serv. Comm., 225 N. Y. 89; Abie State Bank v. Bryan, 282 U. S. 765; Peck v. Fink, 2 F. 2d 912, 266 U. S. 631; Whaley v. Norment, 6 F. 2d 716; District of Columbia v. McKee, 24 F. 2d 894; Home Bldg. & Loan Assn. v. Blaisdell, 290 U. S. 398; Matter of Hotel Assn. of N. Y. City v. Weaver, 3 N Y 2d 206; People v. Nebbia, 262 N. Y. 259, 291 U. S. 502; Farrington v. Pinckney, 1 N Y 2d 74; Knapp v. Fasbender, 1 N Y 2d 212.) III. The presumption of constitutionality falls where, as here, the proof adduced demonstrates that the situation with which the statute deals does not threaten the public health, safety or general welfare. (Liggett Co. v. Baldridge, 278 U. S. 105; Weaver v. Palmer Bros. Co., 270 U. S. 402.) IV. The. rate of rentals asked for available office space is no test of the existence of an emergency. (Fischer Co. v. Woods, 187 N. Y. 90; Lawton v. Steele, 152 U. S. 133; Good Humor Corp. v. City of New York, 264 App. Div. 620, 290 N. Y. 312.)

      Louis J. Lefkowitz, Attorney-General (Paxton Blair and Abe Wagman of counsel), in his statutory capacity under section 71 of the Executive Law.
    This court’s decision in Lincoln Bldg. Associates v. Barr (1 N Y 2d 413) should be followed and the order appealed from affirmed because such changes in conditions between 1955 and 1959 as are revealed by the present record have been recognized in successive relaxations of the rent control statute, thus preserving its character as a constitutional measure. (Matter of Hotel Assn. of N. Y. City v. Weaver, 3 N Y 2d 206; United States v. Carolene Prods. Co., 304 U. S. 144.)
    JSTo appearanpe for respondent.
   Froessel, J.

On this appeal, petitioner landlord challenges the constitutionality of the 1959 re-enactment and extension (L. 1959, ch. 809) of the Business Rent Law (L. 1945, eh. 314, as amd.) insofar as it is applicable to office space.

In Lincoln Bldg. Associates v. Barr (1 N Y 2d 413) this same landlord similarly challenged the constitutionality of the predecessor 1955 statute. We there held that the landlord “ did no more than raise a conflict of testimony and opinion — a debatable question as to the existence of an emergency and the need for rent control as to office space ” (pp. 419-420). We noted, however, that the disposition of that appeal was in no way determinative of the constitutionality of office space controls in any later year”, and further stated: “Rent controls, all will agree, ought not achieve a status of permanence in our economy. They have no justification except in periods of emergency * * *. Here, however, there is a rational basis for the legislative finding. Whether and for how long the Legislature may lawfully continue office rent control must, and shall, be a question open for future review” (p. 420).

Upon review of the record before us, we find that, although the end of office space controls appears to be in sight, a ‘ ‘ rational basis ” for the re-enacted statute at issue on this appeal yet remains. The evidence presented by the landlord, as developed at the trial, served only to demonstrate that the intensity of the emergency which prevailed in 1955 (the period reviewed in the Barr case) has moderated to some extent, but not in substantial degree. Since 1955, however, the Legislature, mindful of our admonition in the Barr case, and in prudent recognition of the fact that the intensity of the emergency has been diminishing as additional space is made available through construction of new office buildings, has implemented a program of gradual relaxation of controls. At this juncture, in fact, the law controlling office space is substantially different from that which we previously considered.

By virtue of sections 2 and 3 of chapter 735 of the Laws of 1956, a landlord, by offering a tenant a two-year lease at the emergency rent, was enabled to decontrol the demised premises, effective after the two-year period if the tenant accepted the proffered lease, or after six months if refused. This procedure for decontrol was initially limited to demised office space for which the annual rent was $20,000 or more. In each succeeding year since 1956 that sum has been reduced. Thus for 1957 it was $10,000; 1958, $7,500; and for 1959, $5,000 (L. 1957, ch. 452, § 5; L. 1958, ch. 886, § 3; L. 1959, ch. 809, § 2; Business Bent Law, § 8, subd. [ggj, par.' [2]; § 12). By section 1 of chapter 433 of the Laws of 1960, enacted after the commencement of the instant litigation, the sum has been further reduced to $2,500.

It is our opinion that such a process of gradual, rather than abrupt, cessation of controls, commensurate with the moderation in market conditions, effectuates a transition from controls to normal landlord-tenant relations in a rational and orderly manner, without economic disruption and dislocation. Such a program “ designed to protect and. promote the public health, safety and general welfare ” is hardly capricious and arbitrary, or otherwise violative of constitutional guarantees.

The order appealed from should be affirmed, with costs.

Burke, J. (dissenting).

We dissent as we did in Lincoln Bldg. Associates v. Barr (1 N Y 2d 413, 420). We think the present is a more extreme example of the use of State police power in a matter of an individual’s constitutional right than was there approved. We may assume that the United States Supreme Court in approving the use of the police power for the protection of the health and welfare of the public in other cases had in mind a practical emergency as distinguished from a theoretical; a distinction between a lack of all kinds of business space caused by events beyond the control of the community and the availability of all kinds of business space at rentals which merely reflect the wage and price increases which have been obtained by the tenants in their own business activities in a generally inflated economy, a difference between conditions which in fact were caused by war and those which in truth are the consequences of an unparalleled prosperity in which the tenants as well as the landlords share.

The circumstances shown in this record can hardly be found to constitute a threat to the safety, health or welfare of the people of the State.

The order of the Municipal Court accordingly should be reversed.

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

Order affirmed.


author: Froessel, J.

text:
    The People of the State of New York, Respondent, v. Wesley Johnson and Charles Woodson, Appellants.
    Argued June 9, I960;
    decided July 8, 1960.

      Morton I. Hamburg and Anthony F. Marra for Wesley Johnson, appellant.
    I. The circumstantial evidence presented did not exclude to a moral certainty every other hypothesis but that of appellant’s guilt. (People v. Schwab, 182 Misc. 959; People v. Razezics, 206 N. Y. 249; People v. Foley, 307 N. Y. 490; People v. Gunther, 284 App. Div. 990; People v. Lewis, 275 N. Y. 33; People v. Woltering, 275 N. Y. 51; People v. Taddio, 292 N. Y. 488.) II. Appellant’s guilt was not proved beyond a reasonable doubt. (People v. Taddio, 292 N. Y. 488.) III. The trial court committed reversible error in allowing evidence of appellant’s prior conviction to be read to the jury. (People v. Zackowitz, 254 N. Y. 192; People v. De Santis, 305 N. Y. 44.)

      Sheldon W. Halpern and Anthony F. Marra for Charles Woodson, appellant.
    I. The court erred in refusing to direct a verdict of acquittal. The circumstantial evidence presented failed to identify the items found in the possession of defendant Johnson as the same items that were stolen from the burglarized stores. (People v. Schwab, 182 Misc. 959; People v. Namolik, 8 A D 2d 685; People v. Foley, 307 N. Y. 490; People v. Orr, 270 N. Y. 193; People v. Kobryn, 3 A D 2d 132; People v. Razezics, 206 N. Y. 249; People v. Taddio, 292 N. Y. 488; People v. Weiss, 290 N. Y. 160; People v. Woltering, 275 N. Y. 51.) II. The circumstantial evidence failed to show that appellant shared in the possession of the alleged fruits of the crime. (People v. Orr, 243 App. Div. 394; People v. Farone, 221 App. Div. 310; People v. Galbo, 218 N. Y. 283.) III. The evidence leads more readily to a conclusion of innocence than to a conclusion of guilt. IV. The trial court acted arbitrarily and committed prejudicial error in preventing defense counsel from pursuing a subject of inquiry after that subject had been opened by the court itself. (People v. Buchanan, 145 N. Y. 1; Chambers v. Goldklang, 31 Misc. 247; People v. Mleczko, 298 N. Y. 153; People v. Marendi, 213 N. Y. 600; People v. Jackson, 7 N Y 2d 142.) V. The trial court erred in allowing appellant’s stipulation that he had been previously convicted of a crime to be read to the jury. (People v. Zackowitz, 254 N. Y. 192.) VT. Evidence of the prior conviction was inadmissible as a matter of law under section 275-b of the Code of Criminal Procedure. (People v. De Santis, 305 N. Y. 44.) VII. It was an abuse of discretion for the trial court to allow the stipulation to be read to the jury. (People v. Marendi, 213 N. Y. 600.)

      Frank S. Hogan, District Attorney (Peter J. O’Connor and Richard G. Denzer of counsel), for respondent.
    I. Defendants’ guilt was established beyond a reasonable doubt. (People v. Galbo, 218 N. Y. 283; Knickerbocker v. People, 43 N. Y. 177; People v. Foley, 307 N. Y. 490; People v. Razezics, 206 N. Y. 249; People v. Perry, 277 N. Y. 460; Jaffray v. Brown, 74 N. Y. 393; People v. Weiss, 290 N. Y. 160; People v. Woltering, 275 N. Y. 51; People v. Schwab, 182 Misc. 959.) II. No prejudicial error was committed by the trial court when it prevented cross-examination of the witness Shagan in certain areas. III. The trial court properly permitted the People to prove defendants’ prior convictions in connection with the burglars’ instruments count. (People v. Marendi, 213 N. Y. 600; People v. Walker, 198 N. Y. 329; People v. Sickles, 156 N. Y. 541.)
   Froessel, J.

After a joint trial, defendants were convicted of the crimes of burglary in the third degree (Penal Law, § 404) and possession of burglars’ instruments after prior conviction (Penal Law, § 408). We are satisfied that the evidence amply supports the jury’s finding that defendants were guilty of the crimes charged, and that the curtailment by the trial court of the line of inquiry pursued by defense counsel on cross-examination of the medical student, Bernard Shagan, was not prejudical error.

We turn now to defendants’ claim that error was committed by the trial court in permitting a stipulation as to defendants’ prior convictions to be read to the jury in connection with the count charging defendants with possession of burglars’ instruments. Defendants maintained that this was in violation of section 275-b of the Code of Criminal Procedure, which then provided: “ The indictment shall not allege that the defendant has previously been convicted of any crime nor shall it set forth any record thereof, unless such prior conviction affects the degree of the crime charged in the indictment. Although in consequence of that provision the admission in evidence of a prior conviction is generally prohibited, it is to be noted that an exception has been reserved for cases where the prior conviction affects the degree of the crime charged in the indictment ”. It is our opinion that the prior conviction of each of the defendants clearly “affected” the “ degree of the crime charged within the meaning of the exception to section 275-b.

Section 408 of the Penal Law provides that possession of burglars’ instruments is a misdemeanor, but further provides that, “ if ” the person charged “ has ¡been previously convicted of any crime, he is guilty of a felony ” (for ¡kindred statutes see Penal Law, §§ 483-b, 782, 1897, subds. 4, 5, 6). It follows that the degree of the crime is raised from misdemeanor to felony by virtue of the prior conviction, and the substantive nature of the crime is thus altered (see 43 Cornell L. Q. 684, 688-689).

The Legislature in enacting section 275-b intended to remedy a situation such as existed in People v. De Santis (305 N. Y. 44). There, a prior felony conviction affected only the pumshment, upon conviction for a subsequent felony, as prescribed in sections 1941-1942 of the Penal Law (¡N". Y. Legis. Ann., 1957, pp. 51-52). We have here a different situation where, by reason of a prior conviction, an act otherwise denominated a misdemeanor becomes a felony, which latter grade or degree of crime carries with it, aside from punishment, other serious consequences. The crimes for which the term “ degree ” is most commonly used, such as burglary (Penal Law, §§ 400-407), assault (Penal Law, §§ 240-245) and robbery (Penal Law, §§ 2120-2129), for example, cannot be “ affected ” in any manner by a prior conviction, except with respect to punishment in felony cases; hence those crimes fall within the general rule of section 275-b.

We note that the procedure followed below in this case, which has been preserved by the exception to section 275-b, is that which prevailed at common law. A prior conviction, as here, which affects the degree, or substantive nature, of the crime charged, must be alleged in the indictment, and proof thereof must be adduced at the trial before the jury (see Johnson v. People, 55 N. Y. 512; People v. Sickles, 156 N. Y. 541, 543-547; People v. Marendi, 213 N. Y. 600, 618; People v. De Santis, supra, p, 46; 43 Cornell L. Q„ supra, p, 685). Subdivision 2 of section 482 of the Code of Criminal Procedure does not dictate otherwise. It merely prescribes a “ procedure ” for bringing to tbe sentencing Judge’s attention, after judgment of conviction is bad, any “ previous convictions ” for crimes committed by the particular defendant which may not he alleged in the indictment ” and would have material bearing upon the severity of the punishment ” to he administered (see N, Y. Legis. Doe., 1959, No. 65[M]),

Accordingly, the judgments appealed from should he affirmed.

Chief Judge Desmond and Judges Dye, Fuld, Van Voorhis, Burke and Foster concur.

Judgments affirmed.


text:
    Joseph R. Clevenger, Appellant, v. Baker Voorhis & Co., Defendant, and Matthew Bender & Co., Respondent.
    Argued May 24, 1960;
    decided July 8, 1960.

      Joseph R. Clevenger, appellant in person.
    I. The complaint states a cause of action for misrepresentation of editorship of “ Clevenger’s Annual Practice ” by printing misleading title page of 1959 edition so worded and arranged as to conceal actual editorship by defendants in order to misrepresent ostensible revision by plaintiff, thereby injuring his reputation by inserting 200 discreditable text errors in said edition. (Dulberg v. Mock, 1 N Y 2d 54; Harrison v. Winchell, 207 Misc. 275; Arch-bold v. Sweet, 5 Car. & P. 219.) II. Misuse of the name of the editor bars conditional right to use his name in title of book. (Granz v. Harris, 198 F. 2d 585; Lee v. Gibbings, 67 L. T. 263.)

      John L. McCormick and Thomas C. P. Martin for respondent.
    I. Defendant, by law and by contract, had the right to use plaintiff’s name on the title page of the 1959 Annual. II. Defendant was under no duty to state in each revision of the work who were the editors thereof. (Jones v. American Law Book Co., 125 App. Div. 519.) III. The 1959 revision nowhere set forth, either expressly or by implication, that plaintiff was the editor thereof. (Archbold v. Sweet, 5 Car. & P. 219,172 Eng. Rep. 947, 1 Moo. & Rob. 162, 174 Eng. Bep. 55; Dash v. Jennings, 272 App. Div. 1073; Donovan v. Aeolian Co., 270 N. Y. 267.)
   Froessel, J.

The sole issue before us on this appeal is whether the complaint states facts sufficient to constitute any cause of action. Under familiar rules, we must accord the complaint a liberal construction (Civ. Prac. Act, § 275), and if it states, in some recognizable form, any cause of action known to our law, then it was improperly dismissed below (Dulberg v. Mock, 1 N Y 2d 54, 56; Al Raschid v. News Syndicate Co., 265 N. Y. l, 3).

According to the complaint, plaintiff has been a member of the Bar since 1912, ‘ ‘ is the author of 86 Law Books of approved merit”, and “has edited 500 Practice Annuals”. In 1922 he wrote and published “ Clevenger’s Annual Practice of New York”, and the following year sold this work, together with copyright, to defendants. From 1923 to 1956 he edited the annual editions of the work, and ‘ ‘ by careful and competent annual Revision * * * achieved state-wide reputation of being a reliable Editor of reliable guide to New York Practice ”. In 1956 he ' ‘ terminated his editorship ’ ’ and ' ‘ revoked his consent to use of his name as Editor of any later Edition thereof ’ ’.

Notwithstanding that termination and revocation, the published 1957 edition of the work stated on the title page, below the words “ Annually Revised ”, that it had been edited and annotated by plaintiff. In November, 1957 defendants issued a ‘ ‘ Title Page Correction ’ ’ in the form of a gummed sheet reading:

“ 1922-1956 Revisions by Jos. R. Clevenger, A.B., LL.B 1957 Revision by Publisher’s Editorial Staff ”, and instructed its subscribers to paste this sheet over the words reading: “ Edited and Annotated by Jos. R. Clevenger, A.B., LL.B of the New York City Bar ”. According to the complaint, the format of this title page correction was in accord with defendants’ publishing practice and we judicially notice the fact that the title pages of the latest annual supplements to such leading works as Gilbert-Bliss and Cahill-Parsons (published by defendants herein), Carmody-Wait (copublished by one of the defendants herein), Nichols-C'ahill, Williston on Contracts, and Wigmore on Evidence, among others, all state that the annual supplement was edited or prepared by the publisher’s editorial staff, or by a named individual or individuals.

In 1959, “ without plaintiff’s consent or approval ”, the work was published with a title page that read, in pertinent part, as follows:

“ Clevenger’s Annual Practice of New York * * * 1959 Annually Revised ”

The 1959 edition was in fact revised by defendants’ editorial staff, not by plaintiff, and it is alleged that ‘ ' defendants purposely excluded from title page of 1959 Edition all names except plaintiff's name of ' Clevenger's' in order to mislead Lawyers to believe erroneously that plaintiff edited said 1959 Edition because they could see only the name ‘ Clevenger’s ’

The complaint further alleges that there were ' ‘ over 200 misleading Errors of omission and commission in Texts of Practice Acts and Court Rules ” in the 1959 edition, which are specifically alleged by section and rule number, and which allegedly consisted of omitting parts of amended sections and rules, omitting names of counties authorized to collect fees, misdescribing amendments, omitting or misstating effective dates of sections added or amended, omitting many current citations, and misstating, misclassifying and misapplying annotations, By virtue of the misleading format of the title page, ‘ many Lawyers and Law Librarians ' ’ attributed these errors to plaintiff, causing him to feel disgraced, dishonored and humiliated, and irreparably impairing his * ‘ reputation as Lawyer and Law Writer, laboriously built up by careful and competent work over a period of fifty years ”, with the result that he ‘ ' has lost all employment, for first time in his lifetime, and can no longer obtain employment ”, The complaint seeks compensatory and exemplary damages in the sum of $200,000.

We agree with the dissenting Justices in the Appellate Division that the complaint states a cause of action in libel. The gravamen of the wrong pleaded is that the numerous errors of omission and commission in the 1959 edition of the work, impliedly attributed to plaintiff by the misleading format of the title page, have ‘‘ irreparably impaired” his otherwise excellent reputation as a reliable legal writer and lawyer. Since a jury could reasonably find that the wording and arrangement of the title page in question would mislead the reader to believe that the revision work had been done by plaintiff, the facts pleaded amount to actionable defamation. As this court noted in Ben-Oliel v. Press Pub. Co. (251 N. Y. 250, 256): To publish in the name of a well-known author any literary work, the authorship of which would tend to injure an author holding his position in the world of letters, has been held to be a libel. (Lee v. Gibbings [1892], 67 L. T. 263; Newell Slander & Libel [4th ed.], p. 39, note, p, 42.) ” (See, also, d’Altomonte v. New York Herald Co., 154 App. Div. 453, mod. and affd. 208 N. Y. 596; Locke v. Benton & Bowles, 253 App. Div. 369.)

The doctrine enunciated in the Ben-Oliel case (supra) has deep roots in the common law, and the case of Archbold v. Sweet (5 Car. & P. 219,172 Eng. Rep. 947; 1 Moo. & Rob. 162,174 Eng. Rep. 55), decided by an English court in 1832, is practically on all fours with the present case. (See, also, Lee v. Gibbings, 67 L. T. 263, 264-265.) Archbold, a well-known legal writer of the time, was the author of a text on criminal pleading and evidence. After editing two editions of the work, he sold the copyright to the defendant who published a third edition thereof, not edited by Archbold, with the following title page: “A Summary of the Law relative to Pleading and Evidence in Criminal Cases, with Precedents of Indictments, &c., and the Evidence necessary to support them. By J. F. Archbold, Esq., Barrister at Law. Third Edition, with very considerable Additions, including Lord Lansdowne’s Act, &c.”

This third edition contained many inaccuracies, and Archbold brought an action for damages, claiming that many members of the legal profession had attributed the editorship of the third edition to him, and that he was thereby " greatly injured in his reputation ” as a barrister and a legal author. Defendant moved for a nonsuit, arguing, in much the same vein as defendants here, that, having purchased the copyright, he had a perfect right to publish the third edition, and that the mere failure to indicate the name of the actual editor of the third edition was not actionable. In refusing to nonsuit plaintiff, the court noted (5 Car. & P., supra, pp. 224-225): Taking up this title page and reading it, I should certainly feel satisfied that the third edition was by Mr. Archbold,” The case was submitted to the jury, who were instructed, in pertinent part, as follows (5 Car. & P., p. 227): “ The question of fact is this, whether the third edition would be understood by those who bought it to be the work of the plaintiff; for, if so, I think the errors are such as would be injurious to the plaintiff’s reputation.”

The crux of the Archbold decision was that the title page was so worded and arranged as to convey to the reader the erroneous impression that the latest edition was the sole work of Mr. Archbold, since his was the only name that appeared thereon as author. That is precisely the claim advanced by the plaintiff here. The fact that Clevenger’s name preceded, rather than followed, the title of the work is hardly a controlling distinction, since the nub of the claimed defamatory misrepresentation in the present case, as in the Archbold case, is that the only person identified on the title page as having anything to do with the writing of the work is the plaintiff. Defendants herein, like the defendant in the Archbold case, had a perfect right to state that plaintiff was the author of the original text, but the purchase of the copyright did not carry with it a license to defame by impliedly misrepresenting plaintiff as reviser of an annual edition that contained many inaccuracies and with which he had nothing to do.

As to the theories other than defamation mentioned in the briefs and in the opinions below, we do not think the pleaded facts properly support any of them.

The judgment appealed from should be reversed, and the order of Special Term denying defendants’ motion to dismiss the complaint reinstated, with costs in this court and in the Appellate Division.

Chief Judge Desmond and Judges Dye, Fuld, Van Voorhis, Burke and Foster concur.

Judgment reversed, etc.