author: Wachtler, J. Jones, J. (dissenting).

text:
    In the Matter of Stanley Steingut et al., Respondents, v Eugene Gold, as District Attorney of Kings County, et al., Appellants.
    Argued June 2, 1977;
    decided July 14, 1977

      Eugene Gold, District Attorney (Helman R. Brook of counsel), for appellants.

      Herald Price Fahringer and Patrick M. Wall for respondents.
   Wachtler, J.

On this appeal we are asked to rule on the correctness of the Appellate Division’s granting of an article 78 petition in the nature of a writ of prohibition. Inextricably involved in that question is whether the so-called "injured forum” provision of the Criminal Procedure Law conferred jurisdiction on Kings County to indict and prosecute the petitioners (CPL 20.40, subd 2).

The petitioners were indicted by a Kings County Grand Jury and jointly charged with two felony counts of corrupt use of position or authority in violation of the Election Law. Section 448 of the Election Law provides, in pertinent part, that:

"Any person who:
"1. While holding public office, or being nominated or seeking a nomination or appointment therefor, corruptly uses or promises to use, directly or indirectly, any official authority or influence possessed or anticipated, in the way of conferring upon any person, or in order to secure, or aid any person in securing, any office or public employment, or any nomination, confirmation, promotion or increase of salary, upon consideration that the vote or political influence or action of the person so to be benefited or of any other person, shall be given or used in behalf of any candidate, officer or party or upon any other corrupt condition or consideration; or

* * *

"3. Makes, tenders or offers to procure, or cause any nomination or appointment for any public office or place, or accepts or requests any such nomination or appointment, upon the payment or contribution of any valuable consideration, or upon an understanding or promise thereof

* * *

"Is guilty of a felony.”

A luncheon meeting in New York County between the Steinguts and one Hans Rubenfeld, a successful retail merchant, gave rise to the indictment. During the course of that meeting it is alleged that Robert Steingut, with the aid of his father, Stanley Steingut, the Speaker of the New York State Assembly, promised to assist Mr. Rubenfeld in obtaining appointment to the position of Advisor to the Civilian Complaint Review Board of the New York City Police Department. It is further alleged that in exchange for this assistance, Mr. Rubenfeld offered or promised to arrange a fund raising dinner among his friends and to raise or contribute funds for Robert Steingut’s campaign. The younger Steingut was then seeking election to the position of Councilman-at-Large in the City of New York from the County of Kings, a position which he now holds. It should be noted that the dinner was never held, although Rubenfeld did contribute $2,500 to the campaign.

After the indictment was returned the petitioners moved before Judge Polsky to have it dismissed, contending, inter alia, that the Kings County Grand Jury was without jurisdiction in that none of the alleged conduct constituting the crime, if any there be, took place in that county. While conceding that all of the discussions and transactions between Rubenfeld and the Steinguts took place in New York County, the Kings County District Attorney argues that jurisdiction was proper in Kings County by reason of the injured forum section of the Criminal Procedure Law (CPL 20.40, subd 2). The relevant portion of that provision confers jurisdiction over an offense to the courts of a county when:

"Even though none of the conduct constituting such offense may have occurred within such county:

* * *

"(c) Such conduct had, or was likely to have, a particular effect upon such county or a political subdivision or part thereof, and was performed with intent that it would, or with knowledge that it was likely to, have such particular effect therein”.

The definition of "particular effect” within a county is provided by CPL 20.10 (subd 4): "When conduct constituting an offense produces consequences which, though not necessarily amounting to a result or element of such offense, have a materially harmful impact upon the governmental processes or community welfare of a particular jurisdiction, or result in the defrauding of persons in such jurisdiction, such conduct and offense have a 'particular effect’ upon such jurisdiction.”

Petitioners motion to dismiss the indictment was denied. They then initiated this article 78 proceeding in the nature of prohibition in the Appellate Division, seeking to enjoin the respondents from prosecuting them under the Kings County indictment. A unanimous Appellate Division granted the petition.

Initially we address ourselves to the propriety of the use of the extraordinary remedy of prohibition under the circumstances here present. In doing so, we note the fact that the appellants have conceded below, and have not raised the question on the present appeal to our court, that an article 78 proceeding in the nature of prohibition is available in the instant case. The District Attorney apparently was of the opinion that prohibition was appropriate to test the power of the Kings County Grand Jury to return an indictment charging crimes allegedly wholly committed in another county. We feel, nevertheless, that the issue warrants our consideration.

As we have recently noted, "[t]he extraordinary remedy * * * of prohibition * * * lies only where there is a clear legal right, and * * * only when a court (if a court is involved) acts or threatens to act without jurisdiction in a matter over which it has no power over the subject matter or where it exceeds its authorized powers in a proceeding over which it has jurisdiction” (Matter of State of New York v King, 36 NY2d 59, 62, citing Proskin v County Ct. of Albany County, 30 NY2d 15, 18; Matter of Lee v County Ct. of Erie County, 27 NY2d 432, 436-437; Matter of Hogan v Culkin, 18 NY2d 330, 335-336; see La Rocca v Lane, 37 NY2d 575, 578-579; Matter of Nigrone v Murtagh, 36 NY2d 421, 423-424). The writ does not lie as a means of seeking a collateral review of an error of law, no matter how egregious that error might be, in a pending criminal proceeding, but only where the very jurisdiction and power of the court are in issue (Matter of State of New York v King, supra, at p 62, and cases cited therein). Further, in order for prohibition to be appropriate, the writ must be directed to some inferior judicial tribunal or officer and must seek to prevent or control judicial or quasi-judicial action only (Matter of Dondi v Jones, 40 NY2d 8, 13; see Comment: Writ of Prohibition in New York—Attempt to Circumscribe an Elusive Concept, 50 St John’s L Rev 76, 84).

In the instant case, the Steinguts challenge the geographical jurisdiction of Kings County to indict and prosecute them for their alleged offenses. It is well settled that prohibition is the proper remedy for such a challenge (23 Carmody-Wait 2d, NY Prac, p 806). Illustrative is Matter of Hogan v Culkin (18 NY2d 330, 336, supra) in which we held that "prohibition is the proper remedy whenever a court threatens to act without or in excess of its power, not only with respect to a lack of jurisdiction over the subject matter * * * but also where the Legislature has confined the exercise of jurisdiction to a court of some other county.” (See Matter of Murtagh v Liebowitz, 303 NY 311, 319; Matter of Di Lorenzo v Murtagh, 43 AD2d 938.) It is equally well settled that the challenge to geographical jurisdiction may be properly made prior to trial (Matter of Murtagh v Liebowitz, 303 NY 311, 319, supra).

It is manifest, therefore, that the writ of prohibition was properly sought in the instant case. The question remaining is whether the Appellate Division was correct in granting this extraordinary relief. The resolution of that issue, in turn, depends on whether or not Kings County had geographical jurisdiction to indict and to seek the prosecution of the Stein-guts. Since, as the appellants themselves concede, the acts constituting the alleged crime occurred entirely within another county, Kings County can be said to have the power to proceed against the petitioners only if jurisdiction to prosecute is conferred upon it by the injured forum statute (CPL 20.40, subd 2). Under the common law the rule is well established that every criminal offense may be inquired into and prosecuted only in the county where the offense was committed (Matter of Murtagh v Liebowitz, 303 NY 311, supra; People v Hetenyi, 277 App Div 310, affd 301 NY 757). Hence, absent the injured forum provision, it is clear that Kings County would lack geographical jurisdiction and, therefore, the Appellate Division’s grant of prohibition would be unquestionably appropriate.

Geographical jurisdiction to prosecute is a question of fact (see People v Tullo, 34 NY2d 712, 714; People v Hetenyi, 304 NY 80, 84). However, a county’s jurisdiction to prosecute for criminal activity need not be established beyond a reasonable doubt. All that is required is that jurisdiction can be fairly and reasonably inferred from all the facts and circumstances introduced into evidence (see People v Hetenyi, 304 NY 80, 84, supra). Where, as here, however, it is clear that all of the allegedly criminal activity occurred in another county, the jurisdiction of the county seeking to prosecute for that activity must be established before the Grand Jury (see People v Greene, 3 AD2d 768). Hence, in the present case, the Kings County prosecutor was required to put before the Grand Jury evidence establishing that county’s jurisdiction to proceed. Since Kings County’s jurisdiction was concededly wholly dependent on whether or not the injured forum provision came into play under the facts of this case, it was requisite that the prosecutor demonstrate the applicability of that statute before the Grand Jury.

The statute in question requires that in order for Kings County to exercise jurisdiction the criminal activity must have had or be likely to have a "particular effect” within that county (CPL 20.40, subd 2). A "particular effect” within the county is defined as a "materially harmful impact upon the governmental processes or community welfare of’ the county seeking to assert jurisdiction (CPL 20.10, subd 4). Further, in order for jurisdiction to attach the criminal activity in the foreign county must have been "performed with intent that it would, or with knowledge that it was likely to, have such particular effect” in the injured county (CPL 20.40, subd 2).

The Kings County prosecutor claims that the mere fact that the election was to take place in Kings County is sufficient to establish these elements. The inherent limitations of this argument are obvious. If the injured forum jurisdictional statute were to be triggered by the amorphous fact that the voters of the county would be called upon to vote in an election allegedly tainted by criminal activity localized in a single county, then if the election was one for a State-wide office any county within the State would be able to assert jurisdiction to indict and prosecute. This is clearly not the intent of the statute. The type of injury or offense contemplated by the statute must be perceptible and of the character and type which can be demonstrated by proof before a Grand Jury. Appropriate application of the statute is best illustrated in the Practice Commentary: "Paragraph (c) of this subdivision (subd. 2) may be illustrated by a criminal mischief offense in which the culprit maliciously blows up a dam in Putnam County near the Westchester County line, thus flooding some Westchester territory—a result which he either intends or knows is likely to occur. In such case, jurisdiction of the crime lies in Westchester as well as in Putnam.” (Denzer, Practice Commentary, McKinney’s Cons Laws of NY, Book 11 A, CPL 20.40, p 55).

In the case before us there was no perceptible material harmful impact such as the physical intrusion noted in the commentary or other types of impact (e.g., the failure of a prisoner to be returned to the county of confinement [see People v Scannelli, 49 AD2d 648], or the sale of illicit drugs in one jurisdiction for the purpose of resale in another [cf. People v Puig, 85 Misc 2d 228, 233]).

Indeed the nebulous nature of the impact claimed by the prosecutor in this case is best illustrated by the fact that the indictment itself does not even allege the effect which the purported crime would have on Kings County. Rather, in the most conclusory fashion, the indictment simply states "the defendants’ conduct had and was likely to have a particular effect on Kings County”. Certainly the invoking of the extraordinary injured forum jurisdictional statute requires the specification of a more concrete and identifiable injury.

It is clear, therefore, that the statute in question could have no application in a case of this sort. As a result, the indictment, relying as it does on the injured forum statute as its sole jurisdictional base, is defective on its face.

Further even if we were to presume that the statute could have application in connection with an offense of this sort, the county seeking to prosecute would be required to establish before the Grand Jury both the materially harmful impact upon the governmental processes of that county and that the criminal activity in question was performed with the intent or knowledge that such a materially harmful impact was likely to occur in that county. In the case now before us, the prosecutor failed to put before the Grand Jury any evidence either that there was a materially harmful impact upon the governmental processes of Kings County or that the allegedly criminal activity was performed with the intent or knowledge that such a particular effect would occur in that county.

Kings County lacked the power to indict and prosecute these petitioners because jurisdiction to proceed was not conferred on it by virtue of the injured forum statute since that statute does not apply in this type of case, and, even if it did, there was no showing before the Grand Jury of the elements requisite to the triggering of its provisions. Consequently the Appellate Division was correct in granting the article 78 petition in the nature of prohibition.

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

Jones, J. (dissenting).

A majority of this court reaches out to conclude that petitioners have demonstrated their right to a writ of prohibition to bar their trial on the indictment handed down by the Kings County Grand Jury. Until today, entitlement to this extraordinary remedy has depended on the applicant’s establishing, on the face of the indictment, the existence of a "clear legal right” to abort the pending criminal proceeding—the prerequisite to the issuance of an order of prohibition (Matter of State of New York v King, 36 NY2d 59, 62). To arrive at its determination, the majority has been forced, however, to go behind the indictment by which these defendants are accused and to rely on an examination of the evidentiary showing made before the Grand Jury. On the basis of such evidence it concludes that the Grand Jury of Kings County lacked geographical jurisdiction to indict for the criminal acts which were committed in New York County.

The indictment here contained all the allegations necessary to confer on the Kings County Grand Jury geographical jurisdiction over the stated violations of subdivisions 1 and 3 of section 448 of the Election Law. By its excursion well beyond the four corners of the indictment the majority has accomplished an unwarranted and inappropriate expansion of the availability of the extraordinary remedy of prohibition, an expansion for which I find no historical predicate and which is quite at variance with the traditionally summary nature of the remedy (Matter of Roberts v County Ct. of Wyoming County, 34 NY2d 246, 248).

When, in the implementation of its indigenous function to bar a court from acting in excess of jurisdiction, prohibition has been employed to prevent proceedings violative of statutory venue provisions, the deficiency in venue has been patent on the face of the accusatory instrument to which the collateral challenge is addressed. Thus, in Matter of Hogan v Culkin (18 NY2d 330), from the surface fact that the writ of habeas corpus directed to a State institution in Dutchess County was returnable in New York County, it was apparent that the venue of the writ was improper, inasmuch as CPLR 7004 (subd [c]) required writs directed to State institutions to be returned in the county of detention. In Matter of Murtagh v Leibowitz (303 NY 311) the information lodged in Kings County against the defendant charged the crime of neglect of duty committed in that county, based on his failure to report to the Mayor of the City of. New York, whose office was in New York County. Because the sole failure to report set forth in the information was a single, indivisible act of omission that occurred only where defendant was bound to make the report, the information itself, without further inquiry, disclosed that Kings County was not a proper place for trial of the crime charged.

Unlike the Hogan and Murtagh cases, the instrument by which petitioners are charged here demonstrates no patent error in venue; quite to the contrary, it sets forth a wholly adequate basis for Kings County’s assumption of geographical jurisdiction under CPL 20.40 (subd 2) and 20.10 (subd 4). The indictment alleges that certain described misconduct by petitioners—the situs of which is undesignated—"had and was likely to have a particular effect upon Kings County and a political subdivision and part thereof and was performed with intent that it would and with knowledge that it was likely to have such particular effect therein”. On the basis of that allegation, and for all else in the indictment, the Grand Jury of Kings County had jurisdiction to return the accusatory instrument (CPL 190.55, 190.60) and the courts of that county had jurisdiction to entertain trial of the charges (CPL 20.40, subd 2). That being so, resort to the extraordinary remedy of prohibition should be foreclosed.

Whether the indictment itself was warranted—i.e., whether there was sufficient evidence to sustain the charge, and in particular whether the petitioners’ conduct in New York County produced consequences having a materially harmful impact upon the governmental processes or community welfare of Kings County such that it had "a particular effect” on that county as defined in CPL 20.10 (subd 4)—can only be determined by an examination of the proof before the Grand Jury. It is in undertaking that examination that the majority departs from the summary nature of prohibition and also permits petitioners to duplicate the process of review available to them under CPL 210.30, pursuant to which a motion to dismiss the indictment for insufficiency of evidence before the Grand Jury may be, and in this case has been, made. Prohibition, the summary remedy available when a clear legal right to abrupt termination of a criminal proceeding has been shown, has not until today been an alternative procedure for challenge and review of sufficiency of Grand Jury evidence (Matter of Miranda v Isseks, 41 AD2d 176).

Bearing in mind the very restricted office of the extraordinary remedy (Matter of State of New York v King, 36 NY2d 59, 62-64, supra), and the desirability, in furtherance of the orderly administration of justice, of avoiding the "erect[ion] [of] an additional avenue of judicial scrutiny in a collateral proceeding” (La Rocca v Lane, 37 NY2d 575, 579), I cannot concur in the expansion of prohibition accomplished in the present case. To tolerate the interruption of criminal proceedings by prohibition in the circumstances of this case is doubly inappropriate. It not only ignores the general principle enunciated in Matter of State of New York v King (36 NY2d, at p 62, supra) "that even if there has been an excess of jurisdiction or power, the extraordinary remedy will not lie if there is available an adequate remedy at law, of which appeal is but one” (surely petitioners can urge on direct appeal from any conviction all contentions they now advance); it also invites the proliferation of collateral attacks which was unanimously condemned by our court in the King case (36 NY2d, at pp 63-64). In my view, under the precedents, on the basis of this indictment and of the challenges to it mounted here by petitioners, prohibition should not lie.

On my analysis, therefore, it would not be necessary to reach the substantive jurisdictional issue as to whether, on the basis of the evidence submitted to the Grand Jury, Kings County had authority to indict and try petitioners for the alleged criminal acts committed in New York County. Were I, however, to reach this underlying issue which the majority finds dispositive, I would have no hesitancy in concluding that Kings County did indeed have such jurisdiction. Our statute, grounded in what has come to be referred to as the "injured forum principle”, provides that: "A person may be convicted in an appropriate criminal court of a particular county * * * [e]ven though none of the conduct constituting [the] offense may have occurred within such county [if] [s]uch conduct had, or was likely to have, a particular effect upon such county * * * and was performed with intent that it would, or with knowledge that it was likely to, have such particular effect therein” (CPL 20.40, subd 2, par [c]). "Particular effect” of an offense is further defined in CPL 20.10 (subd 4): "When conduct constituting an offense produces consequences which, though not necessarily amounting to a result or element of such offense, have a materially harmful impact upon the governmental processes or community welfare of a particular jurisdiction * * * such conduct and offense have a 'particular effect’ upon such jurisdiction.”

The crime here alleged was that petitioners, being persons nominated for or holding public office, corruptly promised to use their official authority and influence to secure for Hans Rubenfeld an office and public employment with the New York City Police Department in return for Rubenfeld’s promise to arrange a dinner and provide financial support for the candidacy of Robert Steingut for Councilman-at-Large in New York City to be elected from Kings County—all in violation of section 448 of the Election Law. Whatever the actual situs of the alleged criminal conduct—whether outside or in Kings County—its direct venal impact would almost exclusively have had a particular effect on Kings County, the county in which the election in question was being held. While New York County, where the alleged criminal transaction occurred, might have a theoretical interest in the integrity of the electoral process, it was an election to be held in Kings County that was the target of the alleged corrupt use of position and authority. The conduct charged would, and here must have been intended to, produce consequences having a materially harmful impact on the governmental processes and community welfare of Kings County. To suggest as does the majority that the vitality of the injured forum statute depends on a "perceptible” injury or offense (whatever the word "perceptible” may mean in this context) (p 317) is to risk emasculation of the statute when such suggestion appears to be no more than a make-weight for the conclusion reached in this case.

Petitioners’ submission, in substance, is that unless the alleged conduct played a significant part in the outcome of the particular election it cannot be said to have had a materially harmful impact on Kings County. They would attach the concept of materiality to the word "impact”. Thus, one should be able, in their view, to escape punishment for corrupt attempts to influence the electoral process in another county unless he was fairly successful in his efforts. The definition of the substantive crime, of course, carries no suggestion that "corrupt use of position or authority” becomes criminal only if it is at least moderately effective. The jurisdictional statute neither adds to nor subtracts from the definition of the substantive crime. It prescribes, in effect, that to permit prosecution in a jurisdiction other than that in which the criminal conduct occurred, the conduct must have an impact which is materially harmful in the prosecuting jurisdiction. The evil in election crimes is not that they necessarily affect the outcome of elections; it is that cognizable attempts to affect the outcome, without more, strike at the integrity of the electoral process. Thus, any concrete effort criminally to influence an election in Kings County by very definition has a materially harmful impact on the governmental processes and community welfare in that county. "Materially” modifies "harmful”, not "impact”, and any corrupt use of position or authority, if established, is materially harmful to the electoral process. Thus, in my view, were the issue to be reached I would conclude that Kings County had jurisdiction to indict and try petitioners for the crimes with which they are charged.

Resolution of petitioners’ remaining contention, with regard to the substantive crime—that the position assertedly promised to Rubenfeld was neither an "office or public employment” nor a "public office or place within the contemplation of section 448”—should not and cannot now be resolved. Orderly and adequate opportunity for the initial determination of this issue and for appellate review thereof would be assured under ordinary criminal procedures.

Finally, I note that the analysis and discussion in this opinion proceed of course, as they must, on the basis of the allegations set forth in the indictment. It would not appear until a trial whether there is evidence to support findings that what is alleged to have taken place actually occurred, or just what significance properly should be attached to what did happen. Until there is a conclusion, there is a presumption of innocence.

Accordingly, in the state of the record now before us, because in my view prohibition does not lie, I would reverse the order of the Appellate ^Division and remit the case to that court for entry of an order dismissing the petition to prohibit further proceedings on the indictment.

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

Judgment affirmed, without costs.


source: Caselaw Access Project

author: Chief Judge Breitel.

license: Public Domain

text:
    Penn Central Transportation Company et al., Appellants, v City of New York et al., Respondents.
    Argued April 27, 1977;
    decided June 23, 1977

      John E. F. Wood, John M. Friedman, Jr., Peter H. Jacoby, John M. Johnston and Edna R. Sussman for appellants.

      W. Bernard Richland, Corporation Counsel (Leonard Koerner, Stanley Buchsbaum and L. Kevin Sheridan of counsel), for respondents.

      Louis J. Lefkowitz, Attorney-General (Samuel A. Hirshowitz and Philip Weinberg of counsel), amicus curiae.

      Paul S. Byard, Ralph C. Menapace, Jr., Terence H. Benbow, William C. Chanler, Francis H. Horan, Richard H. Pershan, Francis T. P. Plimpton, Orville Schell, Jr., Whitney North Seymour, Robert F. Wagner, Jr. and Bethuel M. Webster for The Committee to Save Grand Central Station and others, amici curiae.

   Chief Judge Breitel.

In broad terms, the problem in this case is determining the scope of governmental power, within the Constitution, to preserve, without resorting to eminent domain, irreplaceable landmarks deemed to be of inestimable social or cultural significance. In controversy is the constitutionality of regulation which would prohibit appellants, owner and proposed developer of the air rights above Grand Central Terminal, from constructing an office building atop the terminal.

Undisputed is the principle, rooted in the due process clause of the Constitution, that government may not, by regulation, deprive a property owner of all reasonable return on his property. There are two issues nevertheless. The first is the extent to which government, when regulating private property, must assure what is described as a reasonable return on that ingredient of property value created not so much by the efforts of the property owner, but instead by the accumulated indirect social and direct governmental investment in the physical property, its functions, and its surroundings. The second issue is whether above-the-surface development rights, transferable to adjacent sites under the city landmark ordinance, may be considered in computing return on the property when the landmark property and some of the sites to which the rights may be transferred share a common owner.

Plaintiffs, Penn Central Transportation Company and its affiliates, who have a fee interest in Grand Central Terminal, and UGP Properties, Inc., lessee of the development rights over the terminal, seek a declaration that the landmark preservation provisions of the Administrative Code of the City of New York, as applied to the terminal property, are unconstitutional. They also seek to enjoin defendants, the City of New York and the City Landmarks Preservation Commission, from enforcing those provisions against the subject property. Trial Term granted the requested relief, but a divided Appellate Division reversed and granted judgment to defendants. Plaintiffs appeal.

The order of the Appellate Division should be affirmed. Although government regulation is invalid if it denies a property owner all reasonable return, there is no constitutional imperative that the return embrace all attributes, incidental influences, or contributing external factors derived from the social complex in which the property rests. So many of these attributes are not the result of private effort or investment but of opportunities for the utilization or exploitation which an organized society offers to any private enterprise, especially to a public utility, favored by government and the public. These, too, constitute a background of massive social and governmental investment in the organized community without which the private enterprise could neither exist nor prosper. It is enough, for the limited purposes of a landmarking statute, albeit it is also essential, that the privately created ingredient of property receive a reasonable return. It is that privately created and privately managed ingredient which is the property on which the reasonable return is to be based. All else is society’s contribution by the sweat of its brow and the expenditure of its funds. To that extent society is also entitled to its due.

Moreover, in this case, the challenged regulation provides Penn Central with transferable above-the-surface development rights which, because they may be attached to specific parcels of property, some already owned by Penn Central or its affiliates, may be considered as part of the owner’s return on the terminal property.

Thus, the regulation does not deprive plaintiffs of property without due process of law, and should be upheld as a valid exercise of the police power.

Grand Central Terminal was formally opened to the public in 1913. Undisputed is its architectural, historical, and cultural significance (for further detail see opn at App Div, 50 AD2d 265, 269). On August 2, 1967, in accordance with the provisions of the New York City Administrative Code, the terminal was designated a landmark by the Landmarks Preservation Commission, and the designation was confirmed by the Board of Estimate on September 21, 1967 (see Administrative Code of City of New York, § 207-2.0).

On July 18, 1968, plaintiffs submitted to the Landmarks Preservation Commission an application for a permit to construct the proposed office building, seeking a certificate that the work would have no exterior effect on protected architectural features (Administrative Code, § 207-5.0). The request was denied on September 20, 1968. Then plaintiffs applied to the commission for a certificate that the proposed building, even if it would have had an exterior effect, was appropriate to the site (Administrative Code, § 207-6.0). Three separate alternative proposals, each calling for erection of a substantial office building atop the terminal, were submitted. On August 26, 1969, the certificate of appropriateness was denied. Not involved, because not raised in light of the denial of a certificate of appropriateness, are the plans for the interior of the terminal. None of these administrative determinations was ever directly challenged in the courts (cf. Lutheran Church in Amer. v City of New York, 35 NY2d 121, 126-128).

Instead, on October 7, 1969, plaintiffs brought this action seeking judicial invalidation of the landmark preservation provisions of the Administrative Code as applied to the terminal. Plaintiffs also sought damages for a temporary "taking” of property from the time of original designation as a landmark to the time of the requested judicial invalidation. Of course, any so-called temporary "taking” is more accurately described as a deprivation of property without due process of law (French Investing Co. v City of New York, 39 NY2d 587, 593-595, app dsmd 429 US 990).

Trial court found the landmark preservation provisions, as applied, constitutionally deficient, but severed the question of damages. As noted, the Appellate Division, with two dissenters, reversed, and granted judgment to defendants.

This is not a zoning case. In many ways, the restrictions imposed on the use of the property are similar to zoning restrictions, but the purposes are different, and in determining whether regulation is reasonable, the purposes behind the regulation assume considerable significance (id., p 596). Zoning restrictions operate to advance a comprehensive community plan for the common good. Each property owner in the zone is both benefited and restricted from exploitation, presumably without discrimination, except for permitted continuing nonconforming uses. The restrictions may be designed to maintain the general character of the area, or to assure orderly development, objectives inuring to the benefit of all, which property owners acting individually would find difficult or impossible to achieve (see, e.g., Berenson v Town of New Castle, 38 NY2d 102, 109-110; Matter of 113 Hillside Ave. Corp. v Zaino, 27 NY2d 258, 262-263).

Nor does this case involve landmark regulation of a historic district. Historic district regulation, like zoning regulation, may be designed to maintain the character, both economic and esthetic or cultural, of an area (see Maher v City of New Orleans, 516 F2d 1051, esp p 1060, cert den 426 US 905; Opinion of the Justices to the Senate, 333 Mass 773, 778-780). The difference, generally, is that zoning does this largely by regulating construction of new buildings, while historic district regulation concentrates instead on preventing alteration or demolition of existing structures. In each case, owners although burdened by the restrictions also benefit, to some extent, from the furtherance of a general community plan.

Nor does this case partake of the principles applicable to a taking in eminent domain. As noted earlier, there is no taking for which just compensation must be paid. And it is the concept of just compensation which is so integrally related to value based on return. Instead, landmark regulation is a limitation on exploitation of property, an attribute shared with the classifications of zoning and historic districting. Yet landmark regulation is different because the burden of limitation is borne by a single owner. He may or may not benefit from that limitation but his neighbors most likely will. In contrast both an owner and his neighbors benefit to some degree and in some manner from zoning and historic districting.

Restrictions on alteration of individual landmarks are not designed to further a general community plan. Landmark restrictions are designed to prevent alteration or demolition of a single piece of property. To this extent, such restrictions resemble "discriminatory” zoning restrictions, properly condemned, affecting properties singled out in a zoning district for more restrictive or more liberal zoning limitations (see Udell v Haas, 21 NY2d 463, 476-478). There is, however, a significant difference. Discriminatory zoning is condemned because there is no acceptable reason for singling out one particular parcel for different and less favorable treatment. When landmark regulation is involved, there is such a reason: the cultural, architectural, historical, or social significance attached to the affected parcel. Even when regulation is designed to achieve such an acceptable purpose, however, the landowner must be allowed a reasonable return or equivalent private use of his property (cf. French Investing Co. v City of New York, 39 NY2d 587, 596, supra). That is, in the case of commercial property, the owner must be assured of a continued reasonable return on the property.

Reasonable return, however, is an elusive concept, incapable of easy definition. For the reasonableness of the return must be based on the value of the property, and the value of the property necessarily depends on the return permitted or available. The inevitable circularity of reasoning is obvious (see Berger, The Accommodation Power in Land Use Controversies: A Reply to Professor Costonis, 76 Col L Rev 799, 818-819). In most landmark cases, however, it is acceptable to use alternative bases of valuation, assessed valuation perhaps, as a basis for determining the reasonableness of return (see Administrative Code, § 207-1.0, subd [v]). At best, the computation is rough and successful if it is fairly approximate. In considering reasonable return the owner’s desire to expand the property physically or functionally affects the base upon which the return is to be computed. Again, there may be a circularity of cause and effect.

Grand Central Terminal is no ordinary landmark. It may be true that no property has economic value in the absence of the society around it, but how much more true it is of a railroad terminal, set amid a metropolitan population, and entirely dependent on a heavy traffic of travelers to make it an economically feasible operation. Without people Grand Central would never have been a successful railroad terminal, and without the terminal, a major transportation center, the proposed building site would be much less desirable for an office building.

Of course it may be argued that had Grand Central Terminal never been built, the area would not have developed as it has. Thus, the argument runs, construction of the terminal triggered growth of the area, and created much of the terminal property’s current value. Indeed, the argument has some validity. But, in reality, it is of little moment which comes first, the terminal or the travelers. For it is the interaction of economic influences in the greatest megalopolis of the western hemisphere—the terminal initially drawing people to the area, and the society developing the area with shops, hotels, office buildings, and unmatched civil services—that has made the property so valuable. Neither factor alone accounts for the increase in the property’s value; both, in tandem, have contributed to the increase.

Of primary significance, however, is that society as an organized entity, especially through its government, rather than as a mere conglomerate of individuals, has created much of the value of the terminal property. Although recent financial troubles and consequent governmental assistance make the fact more apparent, railroads have always been a franchised and regulated public utility, favored monopolies at public expense, subsidy, and with limited powers of eminent domain, without which their existence and character would not have been possible (cf. Ball v New York Cent. R. R. Co., 229 NY 33, 43; Schaghticoke Powder Co. v Greenwich & Johnsonville Ry. Co., 183 NY 306, 316). Even in the best of times, railroads were dependent on government-granted monopolies for their rights of way, government grants for their land, and government assistance for such projects as grade crossing eliminations. Railroads were given franchises to use city streets without charge, often to the detriment of neighboring residents and often without leaving the city power to terminate the franchise (cf. Kellinger v Forty-Second St. & Grand St. R. R. Co., 50 NY 206, 210, 212; New York Cent. & Hudson Riv. R. R. Co. v City of New York, 202 NY 212, 221-224). Through the years, Penn Central and its predecessors have benefited mightily from this assistance. Today, government influence is even more pervasive, extending even to the real estate tax exemption enjoyed by Grand Central Terminal itself (Real Property Tax Law, § 489-ff).

Government has aided the terminal in dess direct ways, as well. It is no accident that much of the city’s mass transportation system converges on Grand Central. Numerous subways and bus routes pass through or near the terminal. Without the assistance of the city’s transit system, now municipally owned and subsidized, the property, with or without a towering office structure atop it, would be of considerably decreased value. It is true that most city property benefits to some extent from public transportation, but the benefit is peculiarly concentrated and great in the area surrounding Grand Central Terminal.

Absent this heavy public governmental investment in the terminal, the railroads, and connecting transportation, it is indisputable that the terminal property would be worth but a fraction of its current economic value. Plaintiffs may not now frustrate legitimate and important social objectives by complaining, in essence, that government regulation deprives them of a return on so much of the investment made not by , private interests but by the people of the city and State through their government. Instead, to prevail, plaintiffs must establish that there was no possibility of earning a reasonable return on the privately contributed ingredient of the property^ value.

To put the matter another way, the massive and indistinguishable public, governmental, and private contributions to a landmark like the Grand Central Terminal are inseparably joint, and for most of its existence, made both the terminal and the railroads of which it was an integral part, a great financial success for generations of stockholders and bondholders. Their investment has long been eliminated or impaired by the recent vicissitudes of the Penn Central complex. It is exceedingly difficult but imperative, nevertheless, to sort out the merged ingredients and to assess the rights and responsibilities of owner and society. A fair return is to be accorded the owner, but society is to receive its due for its share in the making of a once great railroad. The historical, cultural, and architectural resource that remains was neither created solely by the private owner nor solely by the society in which it was permitted to evolve.

Plaintiffs contend that the terminal currently operates at a loss. Even if that be true, it is not of critical importance. What is significant, instead, is whether the property, managed efficiently, is capable of producing a reasonable return. If the courts were forced to look to the property as it is, rather than as it could be, any inadequacy of managers of property could frustrate any land use restrictions.

Perhaps of greater importance, the property may be capable of producing a reasonable return for its owners even if it can never operate at a profit. For it should be evident that plaintiffs’ heavy real estate holdings in the Grand Central area, including hotels and office buildings, would lose considerable value and deprive plaintiffs of much income, were the terminal not in operation. Some of this income must, realistically, be imputed to the terminal.

The situation is analogous to that of a flagship store in a regional shopping center. The flagship store may not produce enough income to justify its construction or maintenance, but it may draw enough customers into the other, smaller stores, to make its operation worthwhile, and to extract concessions from the owners of the remainder of the center (see G.R.F., Inc. v Board of Assessors of County of Nassau, 41 NY2d 512, 514). So it is with Grand Central Terminal. The terminal acts, in effect, as a magnet for Penn Central’s other, more profitable, enterprises.

The discussion thus far is in accord with the teachings of Lutheran Church in Amer. v City of New York (35 NY2d 121, supra). The Lutheran Church, owner of the landmark site, established, as plaintiffs here have not, that economic considerations did not permit maintenance of the landmark building in its existing form (id., p 132). Moreover, the Lutheran Church was a charitable institution which, over the years, did not and could not reap the same pecuniary benefits of massive governmental investment enjoyed by the railroads and Grand Central Terminal. Yet, the regulatory provisions prohibited replacement of the landmark building without any new ameliorative provisions, other than the pre-existing tax exemption to which it had always been entitled, to assure that the property remained capable of usefulness on a reasonable economic basis. The same problem was reached and discussed in Matter of Trustees of Sailors’ Snug Harbor v Platt (29 AD2d 376, esp p 378). In recognizing the invalidity of the landmark regulation as applied to Lutheran Church, however, this court, as had the court in the Sailors’ Snug Harbor case (supra), declined to strike down the landmarks preservation provisions of the city administrative code (id., pp 131-132). In this case, by contrast, there has been no showing that the property, owned not by a charitable enterprise but by an entity existing to make a profit, is incapable in its economic context of producing a reasonable return, even if its development is limited.

Moreover, plaintiffs have not been wholly deprived of the development rights above the terminal. Those rights have been made transferable to other parcels of land in the vicinity, at least eight of them owned by Penn Central, including the sites of the Biltmore, Commodore, Barclay, and Roosevelt Hotels.

The many defects in New York City’s program for development rights transfers have been detailed elsewhere (Costonis, The Chicago Plan: Incentive Zoning and the Preservation of Urban Landmarks, 85 Harv L Rev 574, 585-589). The area to which transfer is permitted is severely limited, complex procedures are required to obtain a transfer permit, and the program, it has been said, has the unfortunate consequence of encouraging large, bulky buildings around landmarks which are dwarfed by comparison. But the possibility that a better program could have been devised does not preclude analysis and justification of the existing one in this particular application.

That several of the potential receiving parcels are encumbered by long-term leases or currently improved with suitable buildings does not make the development rights worthless. The knowledge that at some future time, when the lease term has run out or the improvements have lost their utility, a larger building could be constructed, should increase the value of the building plot, at least so long as there is a market demand for new construction (see Costonis, "Fair” Compensation and the Accommodation Power: Antidotes for the Taking Impasse in Land Use Controversies, 75 Col L Rev 1021, 1067).

Moreover, in this case, construction of new office buildings was at least given serious consideration on two of the available receiving parcels, the sites of the Biltmore and Roosevelt Hotels. Defendants contend that the alternative sites, and particularly the Biltmore site, are better suited for office building construction than even the terminal site. But that is beside the point. Important instead is the availability of receiving parcels, in common ownership with the landmark site, on which the development rights, or some of them, could be used. It is significant, as well, that the challenged regulation permitted splitting of the development rights among several receiving parcels, to allow optimal use of the rights.

Development rights, once transferred, may not be equivalent in value to development rights on the original site. But that, alone, does not mean that the substitution of rights amounts to a deprivation of property without due process of law. Land use regulation often diminishes the value of the property to the landowner. Constitutional standards, however, are offended only when that diminution leaves the owner with no reasonable use of the property. The situation with transferable development rights is analogous. If the substitute rights received provide reasonable compensation for a landowner forced to relinquish development rights on a landmark site, there has been no deprivation of due process. The compensation need not be the "just” compensation required in eminent domain, for there has been no attempt to take property (see French Investing Co. v City of New York, 39 NY2d 587, 595, supra; cf. Costonis, "Fair” Compensation and the Accommodation Power, 75 Col L Rev 1021, 1061-1070).

The case at bar, like the French case (supra), fits neatly into this analysis. In French the development rights on the original site were quite valuable. The regulations deprived the original site of any possibility of producing a reasonable return, since only park uses were permitted on the land. And, the transferable development rights were left in legal limbo, not readily attachable to any other property, due to a lack of common ownership of the rights and a suitable site for using them. Hence, plaintiffs were deprived of property without due process of law. The regulation of Grand Central Terminal, by contrast, permitted productive use of the terminal site as it had been used for more than half a century, as a railroad terminal. In addition, the development rights were made transferable to numerous sites in the vicinity of the terminal, several owned by Penn Central, and at least one or two suitable for construction of office buildings. Since this regulation and substitution was reasonable, no due process violation resulted.

To recapitulate, a property owner is not absolutely entitled to receive a return on so much of the property’s value as was created by social investment. And, even as to the privately created ingredient of the property’s value, a plaintiff seeking to show that an otherwise reasonable land use regulation constitutes a deprivation of due process of law must demonstrate affirmatively that the regulation eliminates all reasonable return (see Mary Chess, Inc. v City of Glen Cove, 18 NY2d 205, 209-210; Shepard v Village of Skaneateles, 300 NY 115, 118). Plaintiffs in this case have failed to meet that burden. In none of their analyses do they include the benefits provided to Penn Central’s varied real estate holdings by the terminal’s operation. These real, albeit indirect, benefits alone might suffice to provide Penn Central with a reasonable return. But there is more. The development rights above Grand Central Terminal have been made transferable, and could be transferred to several sites owned by Penn Central and suitable for office building construction. These substitute rights are valuable, and provide significant, perhaps "fair”, compensation for the loss of rights above the terminal itself. Hence, no constitutional violation has been established.

In times of easy affluence, preservation of historic landmarks through use of the eminent domain power might be desirable, or even required. But when a less expensive alternative is available, especially when a city is in financial distress, it should not be forced to choose between witnessing the demolition of its glorious past and mortgaging its hopes for the future. The landmark preservation provisions of the Administrative Code represent an effort to take a middle way (Marcus, Mandatory Development Rights Transfer and the Taking Clause: The Case of Manhattan’s Tudor City Parks, 24 Buff L Rev 77, 78, 107-110). The statute needs improvement. In some cases it protects property owners inadequately (Lutheran Church in Amer. v City of New York, 35 NY2d 121, supra). But, in its generality and as applied to Grand Central Terminal, the statute does not deprive plaintiffs of due process of law.

In concluding the analysis, it is recognized that one does not pursue a path guided by ample precedent or wholly developed principles. The area is not merely difficult; it has at present viewing impenetrable densities. Theo last word has not only not been spoken; it has hardly been envisaged. For this case, and for the cases which may follow in its wake, deference to the unknown must be accorded. Moreover, the analysis has not been one which had been fully developed in the valuable presentations by counsel either at nisi prius, the Appellate Division, or in this court. In fairness then, and in order to assure that the better application of the rule be evolved, if counsel be so advised, they should be entitled to present at nisi prius any additional submissions which, in the light of this opinion, may usefully develop further the factors discussed. On the present record, however, the result directed by the Appellate Division is correct and in accordance with the views expressed in this opinion.

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

Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke concur.

Order affirmed.


text:
    Allen V. Rose et al., Respondents, v Spa Realty Associates, a Copartnership Consisting of Norman M. Schlesinger et al., Appellants.
    Argued June 9, 1977;
    decided July 5, 1977

      Thomas R. Newman, Phil A. Rodriguez, Joseph A. Fiore and Aaron E. Rennert for appellants.

      Edward Flower and Lark J. Shlimbaum for respondents. I.
   Chief Judge Breitel.

Plaintiffs, planners of an extensive housing development on land in Saratoga Springs purchased from defendants, seek specific performance of an oral agreement to modify the written agreement of sale. The modification reduced the quantity of the land to be conveyed as a first stage under the written agreement. Supreme Court, after a nonjury trial, ordered that the lesser quantity be conveyed to plaintiffs upon payment in full in cash. From an order of the Appellate Division modifying the judgment to allow plaintiffs to purchase the lesser quantity on credit terms, defendant sellers appeal.

There are two issues of law arising under subdivision 1 of section 15-301 of the General Obligations Law. The statute provides that written agreements expressly proscribing oral modification cannot be changed by oral executory agreement. The first issue is whether partial performance of an oral modification suffices to take the modification out of the statutory requirement of a writing. The second, and alternative, issue is whether equitable estoppel may be invoked to bar a party from relying on the statute. Also at issue, if the oral modification be effective, is the payment term for the modified transaction.

The order of the Appellate Division should be reversed and the judgment of Supreme Court reinstated as provided below. Partial performance of an oral agreement to modify a written contract, if unequivocally referable to the modification, avoids the statutory requirement of a writing. Moreover, when a party’s conduct induces another’s significant and substantial reliance on the agreement to modify, albeit oral, that party may be estopped from disputing the modification notwithstanding the statute. Finally, because defendant sellers conditioned the reduction in the amount of land to be conveyed upon full cash payment, plaintiff purchasers, by proceeding with the project and the sales of sites and houses, necessarily and impliedly accepted the sellers’ payment term.

On June 26, 1972, plaintiff partnership Develco Associates, expecting to construct an 800-unit housing development, entered into a many-paged written agreement with numerous attachments to purchase from defendant partnership Spa Realty a maximum of 76 acres of land in Saratoga Springs. Under the agreement, conveyance was to be in stages, with the purchasers having a number of options as to the amount of land that would ultimately be purchased. Both the prices and the payment terms, ranging from all cash to specified credit provisions, varied with the quantity of land to be conveyed. The agreeemnt expressly stated that "it may not be changed or terminated orally”.

Had all gone as planned, purchasers would soon have divided the 76 acres into four parcels, delivered to the sellers plans for obtaining the necessary governmental approvals for an initial 48 dwelling units, and taken title for cash to a one-acre subparcel for the construction of at least four model homes. Although neither party was obligated to proceed further unless approvals for at least 150 dwelling units had been obtained, title to parcel number one was to be conveyed by June 1,1973.

But before title to any of the property had changed hands, and while sellers, through their lawyer, were successfully pursuing their obligation to obtain the necessary first 48 approvals, trouble was encountered. The purchasers became aware that, due to the sewage problem, it was unlikely that construction of 150 dwelling units on parcel number one would be approved. As a result, in late November, 1972, Joseph Baratía, one of the purchasers, informed Norman Schlesinger, one of the sellers, that sellers should apply for approval only of a second 48 units.

The trial court expressly found, and it was not at issue in the Appellate Division, that the sellers had agreed with the suggestion that there be sought, not the additional 102 approvals necessary to reach the 150 minimum of the written agreement, but only a second 48. Although there is some controversy over whether he was acting on behalf of the sellers, the lawyer retained by the sellers to handle the first 48 approvals apparently also acted in connection with the second 48. In fact, on March 9, 1973, Schlesinger wrote the purchasers that, as had been requested, the plans for a second 48 units, and not the originally intended additional 102, had been submitted by the sellers for governmental approvals.

Extensive trial testimony was devoted to the payment term for the 96 unit sites, that precise quantity never having been covered in any of the options in the written agreement. When the manner of payment was first discussed is disputed. But both purchasers and sellers agree: Whenever price was mentioned Schlesinger insisted upon all cash. There was never any writing of any kind fixing the manner of payment.

Despite the understanding of November, 1972 not to proceed with the written plan of conveying 150 units, both parties continued with the "development”. On December 21, title to the one-acre subparcel was closed, and by the following June the four model homes had been completed. Final approvals for the initial 48 units were received in February, 1973, and, as noted, the necessary approvals for the second 48 units were being pursued. Purchasers arranged a promotional "grand opening”, and approximately 19 agreements to purchase were signed by prospective homeowners. Overall, plaintiff purchasers invested substantial sums, allegedly $284,000.

In July, 1973, purchasers sought to close title on the 96 units. But the parties, over a protracted period, could not agree on manner of payment. Purchasers wanted the transaction financed on credit; sellers insisted on all cash. This action for specific performance or money damages followed.

The trial court, as noted, held that the written agreement had been effectively modified to allow purchase of the lesser quantity of 96 units. This holding was not disturbed by the Appellate Division. It is the payment term of the pruchase that is still in dispute. Purchasers argue that the provision in the written agreement governing the sale of 150 units and providing for a one-sixth down payment and a purchase money mortgage is controlling. Sellers, on the other hand, argue that payment on an all-cash basis inextricably conditioned any modification.

Although the General Obligations Law (§ 5-703, subd 2) subjects the sale of real property to the Statute of Frauds, it was not pleaded by defendants and is therefore not involved in this case.

From the foregoing summary it is evident that there are no significant disputes on the facts. Reversal of the order of the Appellate Division is required for the reasons to follow.

Parties to a written agreement who include a proscription against oral modification are protected by subdivision 1 of section 15-301 of the General Obligations Law. Any contract containing such a clause "cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement * * * is sought”. Put otherwise, if the only proof of an alleged agreement to deviate from a written contract is the oral exchanges between the parties, the writing controls. Thus, the authenticity of any amendment is ensured (DFI Communications v Greenberg, 41 NY2d 602, 606-607).

On the other hand, when the oral agreement to modify has in fact been acted upon to completion, the same need to protect the integrity of the written agreement from false claims of modification does not arise. In such case, not only may past oral discussions be relied upon to test the alleged modification, but the actions taken may demonstrate, objectively, the nature and extent of the modification. Moreover, apart from statute, a contract once made can be unmade, and a contractual prohibition against oral modification may itself be waived (Beatty v Guggenheim Exploration Co., 225 NY 380, 387-388). Thus, section 15-301 nullifies only "executory” oral modification. Once executed, the oral modification may be proved. (E.g., Velveray Corp. v Jolo Plastics Corp., 19 AD2d 69, 70-71, affd 13 NY2d 1165; Semerad, Practice Commentary, McKinney’s Cons Laws of NY, Book 23A, General Obligations Law, § 15-301, p 588; see, generally, 10 NY Jur, Contracts, §404.)

Where there is partial performance of the oral modification sought to be enforced, the likelihood that false claims would go undetected is similarly diminished. Here, too, the court may consider not only past oral exchanges, but also the conduct of the parties. But only if the partial performance be unequivocally referable to the oral modification is the requirement of a writing under section 15-301 avoided (see, e.g., Bakhshandeh v American Cyanamid Co., 8 AD2d 35, 38, affd 8 NY2d 981; Bright Radio Labs, v Coastal Commercial Corp., 4 AD 2d 491, 494, affd 4 NY2d 1021; cf. on the parallel rule governing the Statute of Frauds, Walter v Hoffman, 267 NY 365, 369; Burns v McCormick, 233 NY 230, 232, 234; McKinley v Hessen, 202 NY 24, 30; 56 NY Jur, Statute of Frauds, §§245,246).

There is, however, another qualification to the mandates of section 15-301. Analytically distinct from the doctrine of partial performance, there is the principle of equitable estoppel. Once a party to a written agreement has induced another’s significant and substantial reliance upon an oral modification, the first party may be estopped from invoking the statute to bar proof of that oral modification (see, e.g., Zolar Pub. Co. v Doubleday & Co., 529 F2d 663, 667-668; cf. Imperator Realty Co. v Tull, 228 NY 447, 453; Thomson v Poor, 147 NY 402, 409-410; Gray v Met Contr. Corp., 4 AD2d 495, 497; The Savage is Loose Co. v United Artists Theatre Circuit, 413 F Supp 555,559). Comparable to the requirement that partial performance be unequivocally referable to the oral modification, so, too, conduct relied upon to establish estoppel must not otherwise be compatible with the agreement as written (see The Savage is Loose Co. v United Artists Theatre Circuit, 413 F Supp 555, 559, supra).

In the present case, the conduct of the parties evidences an indisputable mutual departure from the written agreement. To be an effective modification, however, it must satisfy the rules last discussed.

Contrary to the view of the courts below, for purposes of section 15-301 the agreement to modify reached by the parties, even as to the quantity term alone, was not fully executed. Perforce, an "executed” agreement is one that has been fully performed (see 1 Bouvier’s Law Dictionary [Rawle’s 3d rev], Executed Contract, p 1111; cf. Jemison v Citizens’ Sav. Bank, 122 NY 135, 142-143; see, also, 1 Williston, Contracts [3d ed], § 14). The conduct of both parties indubitably prepared the ground for completion of the sale of 96 unit sites. But title had not been conveyed, and no consideration had changed hands.

Hence, to enforce what is less than a fully executed oral modification, the statute must be satisfied. Even the single Schlesinger letter of March 9, in which he informed purchasers that approval for a second 48 units had been sought, does not supply the writing required by the statute. It is, at best, an incomplete expression of the parties’ modification agreement. (see DFI Communications v Greenberg, 41 NY2d 602, 606, supra; cf. Bakhshandeh v American Cyanamid Co., 8 AD2d 35, 37, affd 8 NY2d 981, supra). It not only lacked a payment term, but its only true significance was that sellers admitted some arrangement to proceed with the lesser quantity of land. But the modification is not precluded by those circumstances.

As discussed earlier, the parties did not wish to and did not abandon' the enterprise, even on discovering that the first stage of a minimum of 150 units would probably not be approved. Instead, they modified the quantity term to 96 and continued with the enterprise. Additional approvals were sought, four model homes were built, and substantial sums were invested. But, it bears repeating, partial performance alone is not enough; the performance must be unequivocally referable to the oral agreement to modify.

The seeking of the second batch of 48 approvals by sellers, evidenced, among other things, by the Schlesinger letter of March 9, is critical. Instead of applying for approvals of the initially intended additional 102 units to satisfy the original contractual minimum of 150, application for approvals of a second batch of 48 units brought the total to only 96, a shortage of 54.

Nowhere in the written agreement was conveyance of land for 96 units treated. An option to purchase land for only 48 units was included, the payment to be all cash. There was also an option to purchase all of the land at once, the payment to be partially on credit. But nothing pertained to closing title on 96. The partial performance at issue, therefore, is unequivocally referable to the oral modification and is entitled to effect; it was not compatible with any option in the written agreement.

An alternative ratio decidendi is applicable. Sellers knowingly acquiesced while purchasers continued to progress the "development”. Sellers were aware of the investment in constructing the model homes, the drawing of plans, and the promotion of the reduced project. Schlesinger even admitted he had visited the model homes. More important, sellers actively lulled purchasers into thinking the oral modification had been accepted. By seeking approval for only a second 48 units, sellers exhibited their agreement to the reduced quantity. Key is that such conduct was not otherwise compatible with the written agreement. Sellers are therefore estopped from invoking the statute to bar purchasers’ proof that the written agreement had been orally modified.

Left unresolved by the foregoing is the principal dispute between the parties: the manner of payment for the reduced quantity of land sold. There are credit terms in the written agreement, but they relate to the larger quantities of land originally contemplated for transfer. And the cash terms in the writing relate to even smaller quantities than the 96 units now in dispute. Thus, the conditions for exercising those payment terms are no longer present. Moreover, any attempt to isolate modification of the quantity term from the issue of payment is, as a practical matter, unrealistic.

This is not to say that for lack of an articulated agreement on the payment term no modification was reached. Both parties intended to effect a sale of the lesser quantity of land and acted on that intention. True, Barrata did not in words consent to defendants’ undisputed insistence on cash. But failure to agree expressly on the payment terms does not alone prevent an enforceable agreement (see Restatement, Contracts 2d, § 32, esp Comment a; 1 Williston, Contracts [3d ed], § 37, pp 109-111).

Of course the task of the court would be simpler had the parties, in negotiating the modified agreement, adhered, step-by-step, to hornbook rules of contract formation. But 'that is not realistic. It is more common to find parties disagreeing over terms, yet otherwise proceeding to act as if there were an enforceable agreement. So, too, in the instant case where both parties acted as if the land was to be sold, in the absence of an agreement for other than cash, sellers’ insistence on cash stands. To repeat the words of the Trial Judge, in calling for performance, purchasers "impliedly and necessarily” accepted the terms imposed.

The general rule in the absence of agreement on credit terms for the purchase of property is that cash is required (see, e.g., N. E. D. Holding Co. v McKinley, 246 NY 40, 44 [Cardozo, Ch. J.]; Birnhak v Vaccaro, 47 AD2d 915, 916, both cases involving land purchase agreements). In this connection it should be recalled that the option to take title to the land required for 48 home sites was to be for cash. Nor are land transactions requiring cash payment to the seller unusual, it then being the burden, if he cannot pay cash, for the purchaser- to arrange for credit financing with a third party. Since this was a development, there would be a quick turnover from resales to home buyers. Indeed, the purchase money mortgage for the first parcel was only for 18 months, and similar provision for comparable short-term mortgages was made for the financing of the other parcels and even for the option to purchase the 76-acre tract at one time.

One final note is needed. Purchasers urge they should still be allowed, even before closing of title to the 96 unit sites, to exercise the option in the written agreement to purchase the entire 76-acre tract. That option was avaiable to purchasers at least until June 1, 1973, and an additional 30-day period to exercise it was afforded by the Appellate Division. The Supreme Court properly conditioned exercise of that as well as all other options available to purchasers under the written agreement upon the prior closing of title to the 96 unit sites. Closing of title to the 96 sites, however, should be extended 30 days after service of the order with notice of entry resettling the judgment at Supreme Court otherwise substantially in the form originally directed by Supreme Court.

Accordingly, the order of the Appellate Division should be reversed, without costs, to reinstate the judgment at Supreme Court except for that court to resettle the date for closing of title to the land for which specific performance has been directed, and to provide any other directions appropriate to effecting the resolution of the issues as previously determined by it and now by this court, in accordance with this opinion.

Judges Jasen, Gabrielli, Jones, Wacthler, Fuchsberg and Cooke concur.

Order reversed, without costs, and the case remitted to Supreme Court, Saratoga County, for the entry of judgment in accordance with the opinion herein.


author: Memorandum. Fuchsberg, J. (dissenting).

text:
    Fred G. Moritt, Appellant, v Governor of the State of New York et al., Respondents.
    Argued June 1, 1977;
    decided July 7, 1977

      Melvin C. Garner for appellant.

      Louis J. Lefkowitz, Attorney-General (Robert S. Hammer and Samuel A. Hirshowitz of counsel), for respondents.
   Memorandum.

The order of the Appellate Division is affirmed, without costs. We conclude that New York State may constitutionally require a showing of State-wide support in addition to a showing of numerical support so long as no substantial burden is imposed on access to the primary ballot (Williams v Rhodes, 393 US 23, 34). The United States Supreme Court has recognized that there is an important State interest "in requiring some preliminary showing of a significant modicum of support before printing the name of a political organization’s candidate on the ballot” (Jenness v Fortson, 403 US 431, 442). The States may therefore fix reasonable standards to assure that a candidate has some level of popular support. Subdivision 5 of section 136 of the Election Law does not impose an unconstitutionally onerous burden on a Democratic Party candidate, such as petitioner, seeking to place his name on a primary ballot. There are 39 Congressional districts in New York State and the statute requires only that a candidate have 100 signatures from each of one half of those Congressional districts. Thus, 2,000 of the required 20,000 signatures must be distributed geographically among 20 Congressional districts and the remaining 18,000 may come from one district or any combination of districts. We do not think that this requirement is the type of restriction on access to the ballot which is invidiously discriminatory and violative of the equal protection clause (see Williams v Rhodes, supra).

On the other hand, the geographical distribution requirement serves to preclude a concentration of party members in one area of the State that may, solely for petition purposes, exercise exclusive control over the nominating process. The challenged statute is thus a permissible method of preventing manipulation of the ballot by superficial petition signing. The statute guarantees that those seeking State-wide office have some minimal measure of broad based numerical and geographical support and imposes no excessively prohibitive burden on a candidate seeking a position on a primary ballot. In light of the rationally based legitimate State purpose served by subdivision 5 of section 136, it is inappropriate to conclude, as does the dissenter, that the distribution requirement is "irrelevant”. It can be acknowledged that, because the number of enrolled party members does and probably always will vary widely from one Congressional district to another, the strict application of the one man-one vote principle announced by the Supreme Court would strike down the criteria of subdivision 5 of section 136. The arithmetic application appears to be present. The Supreme Court, however, has said that the one man-one vote equation is not mechanically or automatically to be applied at all levels of government or to every aspect of the electoral process. As indicated above, strong and sound reasons of electoral polity support the exaction of a broad geographical representation. Because this is so, and because of the near practical impossibility of implementing a precise one man-one vote rule in party nominating procedures, we do not think the Supreme Court would strike down the considered enactment of our State Legislature in subdivision 5 of section 136. In our analysis full respect for the articulation of the Supreme Court rule to date does not require us to do so.

Thus, we find that the present version of the statute does not suffer from the infirmity of the former version of subdivision 5 of section 136 invalidated in Socialist Workers Party v Rockefeller (314 F Supp 984, affd 400 US 806) since, unlike counties, the State’s Congressional districts all have nearly equal populations. While, as noted, there are differences in the numbers of registered Democrats among the various districts, because of shifting registration patterns the present version of the statute is probably the most feasible means of implementing a legitimate State policy and at the same time accommodating the mandate of the one man-one vote principle as articulated by the Supreme Court (compare Moore v Ogilvie, 394 US 814; Socialist Workers Party v Rockefeller, supra). For example, absolute precision in adherence to an infallible one man-one vote principle would make it necessary to allocate a separate district system for each political party and within the political party for each election year.

Our consideration of appellant’s challenge to the constitutionality of subdivision 2 of section 131 of the Election Law under the Federal Constitution is, of course, precluded by reason of the res judicata effect we must accord the unanimous determination of the three-Judge Federal court that the claim did not present a "substantial constitutional question” (Moritt v Rockefeller, 346 F Supp 34, affd 409 US 1020). On the merits, however, we find no merit to his claim and hold that subdivision 2 of section 131 of the Election Law does not violate the one man-one vote principle, or the provisions of the New York State Constitution relied upon by petitioner.

Fuchsberg, J. (dissenting).

Petitioner, Fred G. Moritt, claims his two unsucessful candidacies for nomination for State-wide office were stymied by unconstitutional provisions of New York’s Election Law. His attack centers on section 131 (subd 2) and section 136 (subd 5).

The first of these sections, subdivision 2 of section 131, allows each member of a political party’s State committee "to cast a number of votes which shall be in accordance with the ratio which the number of votes cast for the party candidate for governor on the line * * * of the party at the last preceding general state election * * * bears to the total vote cast on such line * * * in the entire state”; a candidate for nomination who receives 25% or more of the vote of the State committee is automatically placed on the primary ballot. The second, subdivision 5 of section 136, requires a candidate who does not receive such a percentage to obtain petitions signed "by not less than twenty thousand or five per centum, whichever is less, of the then enrolled voters of the party in the state, of whom not less than one hundred or five per centum, whichever is less, of such enrolled voters shall reside in each of one-half of the congressional districts of the state”.

In 1972, petitioner declared his candidacy for the Democratic Party nomination for Associate Judge of the Court of Appeals. He was unable to obtain 25% of the vote of the State Democratic Committee. Thereupon, he commenced an action in Federal court seeking to declare the statutes unconstitutional. The majority of the three-Judge court dismissed the action, solely on the grounds of abstention (Moritt v Rockefeller, 346 F Supp 34) and the United States Supreme Court summarily affirmed, without opinion (409 US 1020).

During the spring of 1974, petitioner again sought the Democratic Party nomination, this time for Attorney-General. Again unsuccessful in obtaining 25% of the vote of the State Democratic Committee, he commenced this action in Supreme Court, Kings County, where he obtained a judgment declaring subdivision 2 of section 131 and subdivision 5 of section 136 unconstitutional. The Appellate Division unanimously reversed and the appeal is now here as of right.

Before consideration of the merits, I note that neither res judicata (based on the United States Supreme Court’s summary affirmance) nor mootness preclude a determination on the merits. As to res judicata, the Federal court did not enter a judgment of constitutionality, but abstained; it therefore did not necessarily pass upon the issues sought to be litigated here (see Newin Corp. v Hartford Acc. & Ind. Co., 37 NY2d 211, 216). Nor is the Supreme Court’s determination, which "is an affirmance of the judgment only”, entitled to any greater respect (Mandel v Bradley, 432 US 173). As to mootness, since a challenge to these provisions of the Election Law is likely to reoccur and yet, as a result of time limitations, evade review, the case should not be considered moot (Matter of Carr v New York State Bd. of Elections, 40 NY2d 556, 559; cf. Matter of Oliver v Postel, 30 NY2d 171, 177.)

On the merits, I find petitioner’s attack on subdivision 5 of section 136 of the Election Law to be persuasive and would modify the order of the Appellate Division to. declare that portion of the statute which requires signatures to be obtained from "not less than one hundred or five per centum, whichever is less, of such enrolled voters * * * residing] in each of one-half of the congressional districts of the state” to be unconstitutional.

A State may, of course, limit the number of candidates to be placed on the ballot (e.g., Jenness v Fortson, 403 US 431, 442). But the reason for denying access must rest upon some rational distinction. Obviously, the requirement for 20,000 signatures furthers a legitimate State interest that candidates demonstrate sufficient support to lessen the possibility of a plethora of quixotic candidacies which could cause "confusion, deception and even frustration of the democratic process at the general election” (Jenness v Fortson, supra, p 442). And the gross numerical requirement in this case comports with those in other statutes which have resisted attack on that score (see American Party of Tex. v White, 415 US 767, 782-783 [1% of the vote for Governor in the last general election which amounted to 22,000 signatures]; cf. Storer v Brown, 415 US 724, 738, [5% of total vote cast in last general election]).

The geographical requirement is another thing. It does not further a legitimate State interest. It is now axiomatic that "one man-one vote” equal protection standards mandate that "[o]nce the geographical unit for which a representative is to be chosen is designated, all who participate in the election are to have an equal vote * * * wherever their home may be in that geographical unit” (Gray v Sanders, 372 US 368, 379). This principle, first applied to the apportionment of a State Legislature, has since been extended to activities of political parties engaged in the process of nominating candidates for public office by either the primary or convention method (see, e.g., Seergy v Kings County Republican County Committee, 459 F2d 308; Bode v National Democratic Party, 452 F2d 1302; cf. Moore v Ogilvie, 394 US 814).

Thus, State-wide elective office must be filled by a vote of the entire State population. Its distribution by locality is irrelevant. Otherwise, as under subdivision 5 of section 136 of our Election Law, a minority of enrolled party members could wield a veto power over the choice made by a majority (see Moritt v Rockefeller, 346 F Supp 34, 41 [Tenney, J., dissenting in part], affd 409 US 1020, supra). For, if the geographical distribution of signers of designating petitions under subdivision 5 of section 136 are not in accordance with the figures or percentage arbitrarily fixed by that statute, a candidate will not be placed on the primary ballot even if he obtains the signatures of a majority of the enrolled members of the party in the State as a whole. Such a consequence, to borrow the majority’s terminology, can hardly be termed "mechanical”. It is a substantive matter of the first rank.

Another glaring example of the way in which subdivision 5 of section 136 operates to place an unequal burden on Statewide candidates arises out of the geographical concentration of the Congressional districts in New York State. As the majority indicates, Congressional district lines are drawn, as required by constitutional mandate, so as to make the districts nearly equal in population. Because of the heavily concentrated New York City metropolitan area population, 24 of the State’s 39 Congressional districts are located in one small corner of the State. Candidates from that area may, therefore, travel between any two points to reach voters within the required 20 districts by public transportation within an hour; candidates from the western, northern and central parts of the State are hundreds of miles and hours and hours away from the same availability of electors. (See map annexed.)

However, no such infringement is found in the "weighted-voting” provisions of subdivision 2 of section 131 of the Election Law. That statute simply provides for a voice in the nominating process equal to the party’s voting strength in the particular area and "does not inhibit entry into the political arena, deny the right to vote, or debase the weight of some votes” (New York State Democratic Party v Lomenzo, 460 F2d 250, 251). Indeed there is nothing unconstitutional per se in weighted voting (see Franklin v Krause, 32 NY2d 234 [semble], remittitur amd 33 NY2d 646, app dsmd 415 US 904), which serves to render the party nominating system manageable despite constantly shifting party enrollments.

Accordingly, the order of the Appellate Division should be modified to the extent of declaring the geographical distribution requirement set forth in subdivision 5 of section 136 of the Election Law unconstitutional and otherwise affirmed.

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

Order affirmed.