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

text:
    Henry I. Stukuls, Appellant, v State of New York, Respondent.
    (Claim No. 59376.)
    Argued May 5, 1977;
    decided July 7, 1977

      Thomas P. Gilhooley and Theodore Fenstermacher for appellant.

      Louis J. Lefkowitz, Attorney-General (Alan W. Rubenstein and Ruth Kessler Toch of counsel), for respondent.
   Fuchsberg, J.

This claim for libel and slander was brought against the State by Dr. Henry I. Stukuls, a former member of the faculty of the State University College at Cortland. The allegedly defamatory matter was uttered and published by Dr. Whitney T. Corey, a vice-president for academic affairs at the college, who, in the absence of Dr. Richard Jones, the college’s president, would also act in the latter’s stead.

The case comes to us on appeal from the disposition of two motions, that of Dr. Stukuls for pretrial discovery and the State’s cross motion under CPLR 3211 (subd [a], par 7) to dismiss the claim for failure to state a cause of action. The cross motion was granted by the Court of Claims because it was of the opinion that the doctrine of absolute privilege was applicable; it then dismissed the discovery motion as moot. The Appellate Division affirmed, but by a divided court, the dissent taking the view that only a qualified privilege was available in this case. For the reasons which follow, we hold that the doctrine of absolute privilege was not a bar to the claim.

The defamation is said to have taken place when, as both parties agree, Dr. Corey, at a meeting with the members of a five-man ad hoc faculty committee which had been chosen to pass on, Dr. Stukuls’ qualifications for tenure, read the contents of a letter which it is not denied accused Dr. Stukuls, a married man, of having attempted to seduce a young woman who was a student in one of his classes. It is not disputed that the truth of the assertions, made by an unnamed author, had never been verified though the letter had arrived at the college months earlier. Dr. Stukuls has never actually seen the letter, heard it read or been afforded the opportunity to do so. However, the Court of Claims Judge, after making an in camera inspection of it upon the return of the motion for discovery, found "[t]here is no question that, if not true, statements contained in the letter were libelous.” Dr. Corey, in his affidavit, does not suggest that the claimant’s expressed understanding of the import of the letter is either inaccurate or exaggerated, nor does he add any qualifying matter to indicate that its description is taken out of context.

In his verified claim and supporting affidavit, the claimant adds that Dr. Corey was opposed to the grant of tenure and, because of a malicious and willful design to have it denied, had, among other things, chosen to advantage himself of President Jones’ absence from the country to take the letter from the president’s private file so that he might use it as a means of affecting the committee’s judgment, read the letter to the committee though he knew its accusations had been the subject of a rumor that had been circulated and discredited many months earlier, and, as he has since admitted to Dr. Stukuls and to others, removed favorable student course evaluations and letters from Dr. Stukuls’ personnel file before submitting it to the committee. The claimant pleads that, as a consequence of the uttering and publishing of the defamatory matter, he was denied tenure and was greatly injured in his personal and professional reputation.

Against that background, and bearing in mind that on a motion under CPLR 3211 (subd [a], par 7) we are concerned with whether the pleading states a cause of action rather than the ultimate determination of the facts (see Rovello v Oroñno Realty Co., 40 NY2d 633), we turn to the central question on this appeal: Is defendant protected by an absolute privilege or a qualified one?

The difference between the two rests in the role of malice. A qualified privilege is one that is available only in the absence of malice, while an absolute privilege, a veritable immunity, is impervious to proof, and therefore to a charge, of malice (Andrews v Gardiner, 224 NY 440, 446).

Absolute privilege is an ancient doctrine. Long recognized by English law as a means to protect freedom of speech and deliberation in Parliament, it was later embodied in American Constitutions, including that of New York State (NY Const, art III, § 11), so that our legislators would enjoy an uninhibited range of freedom to propose, oppose, debate, adopt or reject ideas as precursors to legislative action (see Yankwich, Immunity of Congressional Speech—Its Origin, Meaning and Scope, 99 U of Pa L Rev 960; see, also, Hinds’ Precedents of the House of Representatives, § 2670 et seq.; and § 1655). By a parallel development in the judicial sphere it has served to bolster our Judges’ freedom to act without fear or favor in the furtherance of a "vigorous and independent administration of justice” (Yates v Lansing, 5 Johns 282, 292 [Kent, Ch. J.], affd 9 Johns 395). Instinct in the immunity from suit for libel and slander granted to the ministers of each of these two branches of government, legislators and Judges both, is recognition that the exercise of the responsibilities of those offices requires the making or pronouncement of judgments, the exercise of discretion, the expression and encouragement of even controverted fact and opinion, and the recognition, evolution or enforcement of public policy.

The right of nonjudicial and nonlegislative governmental officials to assert such an immunity is of relatively recent origin. It had its genesis in England in 1895 (Chatterton v Secretary of State of India [1895], 2 QB 189) and was adopted in this country a year later (Spalding v Vilas, 161 US 483 [postmaster general]). Significantly, both cases involved cabinet officers and were based upon the rationale that such highranking officials, "who speak for the government or as its mouthpiece”, formulate and pronounce policy in varying degrees and, therefore, in a broad sense are an embodiment of government itself, should not, while carrying out their official duties, be apprehensive that their motives might become the subject of inquiry in a civil suit (Veeder, Absolute Immunity In Defamation, 10 Col L Rev 131, 141).

In England, the doctrine’s application for the most part continued to be applied to top-level officials whose conduct constitutes an "act of state” (Szalatnay-Stacho v Fink [1947], 1 KB 1), but in the United States it has followed a more checkered jurisprudential course. Our Federal courts, which at first adopted the concept of absolute privilege for the executive branch of Government with great hesitancy, gradually extended the zone of its application to encompass an ever-broadening range of officials. That trend culminated in a variegated group of opinions in a five to four decision noteworthy for the divergence of the views of the members of the court on the public policy to be applied (Barr v Matteo, 360 US 564; see Becht, Absolute Privilege of the Executive in Defamation, 15 Vand L Rev 1127, esp pp 1135-1148; cf. Prosser, Torts [4th ed], § 114, p 783).

In the State courts, except for cases against officials of cabinet rank, the decisions have been divided and often inconsistent. This has led to much judicial and other soul-searching, with most of the commentators in the end arriving at the conclusion that absolute priilege for officials of the executive branch of government should be reserved for only those at its highest echelons (Becht, op. cit., pp 1148-1171; see, also, Restatement, Torts 2d, § 591, and Comments thereto; § 598A; Handler & Klein, Defense of Privilege in Defamation Suits Against Government Executive Officials, 74 Harv L Rev 44, 50, n 24; Gray, Private Wrongs of Public Servants, 47 Cal L Rev 303).

New York has been reluctant to extend the applicability of absolute privilege to cases that would represent a departure from the policies which originally brought the doctrine into being. Thus, we have applied it to a borough president, who, as a member of the Board of Estimate, then New York City’s senior legislstive body, and the elected head of one of the five boroughs which make up that megalopolis, was one of its chief executives (Sheridan v Crisona, 14 NY2d 108) and to members of the New York City Board of Higher Education, which is specifically empowered by statute to "govern and administer” the city’s entire system of colleges (Education Law, § 6202; see, also, Education Law, § 6203; Lombardo v Stoke, 18 NY2d 394). Other courts in our State have granted the benefits of absolute privilege to the State Commissioner of Education, "the chief executive officer of the state system of education” (Education Law, § 305, subd 1); Laurence Univ. v State of New York, 41 AD2d 463), to a town supervisor, the chief executive officer of that unit of government (Town Law, § 29; see, also, County Law, § 150; Duffy v Kipers, 26 AD2d 127) and to members of a city board of education entrusted with authority to administer all the schools within the jurisdiction of its school system (Educaion Law, § 2501 et seq.; Smith v Helbraun 21 AD2d 830).

By way of contrast, only a qualified privilege has been extended to the head of a New York State school for deaf mutes (Hemmens v Nelson, 138 NY 517, 523), to employees, as distinguished from board members, of a board of education (Green v Kinsella, 36 AD2d 677), to a State examiner of accounts (Peeples v State of New York, 179 Misc 272, qualifiedly disapproved in Ward Telecommunications & Computer Servs. v State of New York, 42 NY2d 289 [decided herewith]), and to a high school principal (McAulay v Maloff, 82 Misc 2d 447; see, also, Walker v Best, 107 App Div 304; cf. Restatement, Torts 2d, § 598A, supporting only a "conditional privilege” for "inferior” State officials). It is interesting that, in Lombardo v Stoke (supra, pp 398-399), while recognizing an absolute immunity for members of the board of higher education, we would not willy-nilly do so for the president of one of its constituent colleges, but thought it better to save that question for another day. That day is now.

This analysis leads us to conclude that, unless an official is a principal executive of State or local government or is entrusted by law with administrative or executive policy-making responsibilities of considerable dimension, policy considerations do not require that he be given an absolute license to defame. The privilege exists to protect those who bear the greatest burdens of government or those to whose official functioning it is essential that they be insulated from the harassment and financial hazards that may accompany suits for damages by the victims of even malicious libels or slanders. This at least serves a recognized public purpose. But to cloak public officers who do not have such a need with the privilege to wrongfully vilify others with impunity while their critics remain fully liable for their own tortious communications, would tend to squelch criticism of government by its citizens while serving no sufficiently countervailing public purpose. After all, the immunity is intended for the welfare of the public and not for governmental employees (cf. Doe v McMillan, 412 US 306, 319-324; Hyman v Press Pub. Co., 199 App Div 609, 611). A less discriminating resort to absolute immunity would remove a desirable "check upon calumny” (Andrews v Gardiner, 224 NY 440, 448 [Cardozo, J.]).

Public officials who are not entitled to the immunizing shield of an absolute privilege are not left without the considerable, albeit incomplete, protections from liability for defamation afforded those who communicate orally or in writing in good faith in the course of the performance of their duties of office. Judge (later Chief Judge) Desmond’s survey of the law of qualified privilege, applicable alike to public officials and to others, makes that clear: "' "A communication made bona fide upon any subject matter in which the party communicating has an interest, or in reference to which he has a duty, is privileged if made to a person having a corresponding interest or duty, although it contained criminating matter which, without this privilege, would be slanderous and actionable; and this though the duty be not a legal one, but only a moral or social duty of imperfect obligation” ’ (Byam v. Collins, 111 N. Y. 143,150). 'The rule of law that permits such publications grew out of the desirability in the public interest of encouraging a full and fair statement by persons having a legal or moral duty to communicate their knowledge and information about a person in whom they have an interest to another who also has an interest in such person. Such privilege is known as a qualified privilege. It is qualified because it does not extend beyond such statements as the writer makes in the performance of such duty and in good faith believing them to be true’ (Bingham v. Gaynor, 203 N. Y. 27, 31). When defendant’s statements are presumptively privileged the rule is that, in order to render them actionable, it is 'incumbent on the plaintiff to prove that [they were] false and that the defendant was actuated by express malice or actual ill-will. While there are numerous cases in the books in which it is said that as to privileged communications the good faith of the defendant and the existence of actual malice are questions of fact for the jury, the expression must not be misunderstood. Those questions are for the jury only where there is evidence in the case warranting their submission to the jury, and the burden of proof is on the plaintiff (Ashcroft v. Hammond, 197 N. Y. 488, 495-496; see Hemmens v. Nelson, 138 N. Y. 517, 529). Falsity is not sufficient for an inference of malice. ' ''It must be * * * consistent only with a desire to injure the plaintiff to justify * * * [sending] the question of malice to the jury” ’ (Fowles v. Bowen, 30 N. Y. 20, 26; see Loewinthan v. Le Vine, 299 N. Y. 372, 375). 'By actual malice is meant "personal spite or ill will, or culpable recklessness or negligence” ’ (Hoeppner v. Dunkirk Print. Co., 254 N. Y. 95, 106).” (Shapiro v Health Ins. Plan of Greater N. Y, 7 NY2d 56, 60-61.)

Now applying the principles to which we have alluded, we note first that, while Dr. Corey’s role in communicating with the tenure committee no doubt was an important one to the parties involved, and not least of all to himself as acting president and vice-president of the college, neither of his two offices falls within the class of executive positions in our State and local government for whom the extraordinary doctrine of absolute privilege is intended. The State University’s decision-making process is vested in its trustees and Chancellor. It is they who administer our system of higher education at its policy-making level, which embraces even the ultimate determination of whether tenure is to be granted (see Education Law, §§ 354, 355; 8 NYCRR 335.3; cf. Gadzella v Neumaier, 67 Misc 2d 585). Dr. Corey was not carrying out those functions. His actions under scrutiny here were ones undertaken during the discharge of his own official duties (cf. Ward Telecommunications & Computer Servs. v State of New York, 42 NY2d 289, supra [decided herewith]).

Basically, Dr. Corey’s functions are akin to those exercised by the heads of the schools in McAulay v Maloff (82 Misc 2d 447, supra) and Hemmens v Nelson (138 NY 517, supra), to neither of whom the doctrine was found applicable. As Justice Mahoney observed in the course of his dissent at the Appellate Division in the present case, "it is difficult to perceive how the goal of protecting our highest administrative, judicial and legislative officials from undue harassment is advanced by extending the salutary doctrine of absolute privilege tp all presidents of public colleges” (53 AD2d 368, 373). In fact, one would be hard put to rationalize a recognition of absolute immunity for the president of a public college while limiting the presidents of the many outstanding private colleges in our State, with their often broader, more independent and additional responsibilities in fund-raising and policy-making areas, to the significant safeguards of qualified privilege alone (cf. Bounds v Mutual of Omaha Ins. Co., 37 AD2d 1008, 1009).

Indeed, it seems to us that the proliferation of government into more and more activities which in the past had been confined to the private sector militates against any automatic equating of governmental employment with absolute immunity or its ready extension beyond the areas into which it has heretofore been permitted. (See Pecue v West, 233 NY 316, 321; Andrews v Gardiner, 224 NY 440, supra; 1 Seelman, Libel and Slander § 272, p 367.)

However, the claimant’s row will not be one easy for him to hoe. The indication is strong that the communication for which Dr. Stukuls faults Dr. Corey and, therefore, the State, as his employer, was one made in the course of Dr. Corey’s employment. The subject in connection with which the communication presumably was made was one in which Dr. Corey had an official interest, if not a duty. That also may hold true with respect to his personal recommendation, which here was adverse. The letter reading did not take place before a large or disinterested audience, but at a meeting of the small, and perhaps sophisticated, committee of five people, in each of whom a corresponding interest, or duty, resided. In his affidavit, Dr. Corey further asserts that he made an affirmative attempt to narrowly confine the publication of the contents of the letter by exacting a pledge that the committee members would keep the information to themselves, though Dr. Stukuls argues that the inference to be drawm from the apparently unsuccessful attempt at secrecy is that there was a consciousness of wrongdoing.

Furthermore, if the letter was presented as rumor or suspicion rather than as fact, Dr. Stukuls wdll be confronted wdth an additional obstacle. For, as to a defamatory rumor as distinguished from a defamatory fact, mere knowledge or belief that the rumor is false will not necessarily defeat the privilege, provided it was "(a) * * * state[d] * * * as rumor or suspicion and not as fact, and (b) the relation of the parties, the importance of the interests affected and the harm likely to be done make the publication reasonable.” (Restatement, Torts 2d, § 602.) This gives recognition to the fact that "there are occasions on which it may be entirely proper to give information of a rumor or a mere suspicion, as such, without any belief or reason to believe that it represents the truth” (Prosser, Torts [4th ed], § 115, pp 795-796).

Of course, even then, the protection of the privilege wdll still be subject to defeasance by excessive publication (Restatement, Torts 2d, § 604), or by the publication of defamatory matter solely for an improper purpose (id., § 605), including its publication "solely from spite or ill wdll” (id., § 603, Comment a). (See Brewer v Second Baptist Church of Los Angeles, 32 Cal 2d 791, 797 [Traynor, J.]; Prosser, Torts [4th ed], § 115, pp 792-796.) But, in this case, given the undisputed responsibilities of the committee, the relationship which Dr. Stukuls and Dr. Corey each bore to its functioning in this instance and the embarrassment which could ensue if, not having been presented to the committee for whatever it was worth, the rumor, if that it was, were to surface later as fact or rumor, it might be well-nigh impossible for Dr. Stukuls to successfully carry the burden of proving that malice was the one and only cause for the publication. (See Restatement, Torts 2d, § 613, subd [1], par [h].)

On the other hand, on the basis of the allegations in his claim and his affidavit taken as a whole, it cannot be said in advance of discovery that Dr. Stukuls will not be able to raise an issue of fact. That Dr. Corey uttered the defamatory matter before the committee does not necessarily mean that he was doing so to advance its interests. He may have been acting duplicitously while motivated solely by his ill will towards Dr. Stukuls. In fact, at this juncture, we do not know whether Dr. Corey was under a professional obligation to see to it that the letter came to the attention of the committee at all. If, for instance, it was rumor, or known to him or other college authorities to be false or to be no more than a republication of a rumor which previously had been discredited, he may not have had any obligation to communicate; rather, under such circumstances, he may have been under a contrary obligation, that is, not to use such misleading, unreliable or defamatory matter.

It therefore could be found as a fact, after taking into account such things as the college’s practice with regard to communications of that sort, the surreptitious manner in which Dr. Corey communicated it to the committee, his contemporaneous extraction of favorable documents from Dr. Stukuls’ file and such other facts as may be developed on discovery, that Dr. Corey was embarked on but a spiteful course of his own. In short, whether the defamatory matter was presented as rumor would be important, but not necessarily determinative.

Dr. Stukuls should therefore have been given the opportunity to discover the source and contents of the letter; at whose initiative its reading in fact came about; what relationship it bore, if any, to the past circulation of a rumor; what part the revelation of the letter played in the committee’s recommendation and in President Jones’ ultimate decision to recommend against tenure to the university; the statements which accompanied the reading of the letter, including those which tended to characterize it as fact or rumor; the extent of Dr. Corey’s knowledge of its truth or falsity and his efforts, if any, to acquire that information; the practice, if one there was, with regard to the use of such letters in arriving at tenure decisions at the college; the nature of the other documents removed from claimant’s file by Dr. Corey and when and why that was done; whether Dr. Stukuls was confronted with the contents of the letter and afforded an opportunity to respond to it; and such other matters as the Court of Claims in its judgment may deem appropriate.

Accordingly, the order of the Appellate Division should be reversed and the case remitted to the Court of Claims for consideration and disposition of the motion for discovery in accordance with this opinion.

Jones, J.

I agree that the publication by Dr. Corey of the defamatory letter to the faculty evaluation committee is not entitled to the shelter of an absolute privilege. What I perceive as a deficiency in Judge Fuchsberg’s opinion, however, impels me to write this concurrence. Although that opinion now takes note of the special treatment the law accords publication of defamatory rumor, I still regard its analysis and application of this aspect of the qualified or conditional privilege—a privilege to which all concede this publication was entitled at a minimum—as insufficient in its development and incorrect in its focus.

"[T]here are occasions on which it may be entirely proper to give information of a rumor or a mere suspicion, as such, without any belief or any reason to believe that it represents the truth.” (Prosser, Torts [4th ed], § 115, pp 795-796.) Section 602 of the Restatement Second of the Law of Torts is squarely in point:

"Publication of Defamatory Rumor
"One who upon an occasion giving rise to a conditional privilege publishes a defamatory rumor or suspicion concerning another does not abuse the privilege, even if he knows or believes the rumor or suspicion to be false, if
"(a) he states the defamatory matter as rumor or suspicion and not as fact, and
"(b) the relation of the parties, the importance of the interests affected and the harm likely to be done make the publication reasonable.”

In my analysis this case should be remitted for proof as to whether Dr. Corey brought the defamatory letter to the attention of the evaluation committee for the purpose of advancing the interests of that committee in reaching its determination, and whether in so informing the committee he reported the contents of the letter to it only as rumor and suspicion (rather than fact) which would be relevant to its deliberations. If such be the proof, that will end the matter in judgment for the State. If, on the contrary, the proof shows that the report was not made for the benefit of the committee or that Dr. Corey reported the contents of the letter as fact rather than rumor, it will then be appropriate to proceed to the inquiry contemplated by Judge Fuchsberg, i.e., whether the publication was made with malice. It is the characterization that Dr. Corey gave his communication to the committee, not whether the letter turns out to have been cast in terms of rumor or suspicion rather than of fact, which will be determinative.

The law with respect to publication of defamatory rumor was anticipated in this State at least as early as 1922 when our court in Pecue v West (233 NY 316, 323) recognized that different consequences would attach to a publication if the author "reports it not as a rumor but as a statement of fact for which he vouches”, and pointedly noted there that "[w]e are not dealing with a case where a citizen transmits to a district attorney for his investigation information, suspicions, rumors, gossip, for what they are worth”, adding "[mjalice could not be inferred from such an act, nor would it evince bad faith or recklessness.” (Cf. Doane v Grew, 220 Mass 171.)

It makes great common sense that there should be no liability in circumstances in which there is a qualified or conditional privilege, if the publisher reports the defamatory matter to advance the legitimate interests of the recipient and he states it only for what it is—rumor or suspicion and not fact. The present case admirably illustrates this principle. The faculty evaluation committee was charged with responsibility to pass on Dr. Stukuls’ qualifications for tenure. The legitimate interests of that committee dictated that its members be informed of all available relevant information, certainly including that in the Dr. Stukuls file. It is not disputed that the letter which Dr. Corey brought to the committee’s attention came from the president’s file on Dr. Stukuls. It appears that Dr. Corey may be said to have been invited, by reasonable implication if not expressly, to furnish the committee with data relevant to its deliberations. In his position this would have been natural if not mandatory. It may even be asserted that, having knowledge of the existence of the defamatory letter in the president’s file, Dr. Corey was under a professional obligation to see to it that the letter came to the attention of the committee—not as an accurate and true statement of fact as to what was charged in the letter, but as a rumored report with respect to the truth of which Dr. Corey had no knowledge and made no representations. Other situations can readily be visualized in which the legitimate interests of the recipients and the relation to them of the publisher would make failure to report known rumors an undoubted dereliction of duty. In such instances it would be irrational to predicate liability on an assertion that the publisher knew of the falsity of the publication or that he acted in reckless disregard of its truth or falsity, i.e., the concept traditionally labeled "malice” in the law of defamation (cf. Restatement, Torts 2d, § 600). Indeed, any such inquiry would be irrelevant; the qualified or conditional privilege itself extends in the circumstances to publication of what is stated by the publisher to be rumor or suspicion, even though known by him to be wholly without foundation.

That this rule should be applied to cases like the present may be otherwise demonstrated. Assume the defamed teacher later were to make a sexual assault on a student and in consequence a claim or action were instituted against the educational institution. It takes no imagination to visualize the relish with which the claimant’s attorney would view proof that for some reason a letter charging similar prior sexual misbehavior, known to have been in the files, was kept from the committee whose recommendation led to retention of the teacher on the faculty.

On the other hand, if the proof shows that Dr. Corey did not act for the purpose of advancing the legitimate interests of the evaluation committee, but made the report to the committee solely from spite or ill will against Dr. Stukuls, there would be an abuse of the qualified or conditional privilege giving rise to liability. If the report to the committee was made for the purpose of advancing the legitimate interests of the committee, however, the fact that the report was inspired in part by resentment or indignation at Dr. Stukuls’ rumored misbehavior would not constitute an abuse of the privilege. (Restatement, Torts 2d, § 603, Comment a; see § 605.)

In sum it is my view that, irrespective of the presence or absence of the traditional element of "malice” or of ill will, the qualified or conditional privilege which attached to Dr. Corey’s communications with the faculty committee would not have been abused and the State would not be liable if the letter about Dr. Stukuls was presented to the faculty committee for its benefit and was identified as rumor or suspicion only, with no vouching on his part, directly or indirectly, that its contents were true.

I agree with Judge Fuchsberg that it was error at the Appellate Division to have affirmed the dismissal of the claim on the ground of absolute privilege. I would, therefore, reinstate the claim and remit the case to the Court of Claims for consideration and disposition of claimant’s motion for discovery and for other appropriate proceedings.

Wachtler, J. (dissenting).

In my view an absolute privilege should attach in the instant case and, therefore, I dissent.

The appellant was seeking continuing appointment ("tenure”) as a member of the psychology department of the State University College at Cortland. Pursuant to the procedures established for reviewing an applicant’s credentials and qualifications, an ad hoc committee ("committee”), consisting of five members of the faculty at the college, was established. This committee was to investigate the applicant and render an advisory recommendation to the president of the college.

In December, 1974, the committee met to consider appellant’s application and called 17 witnesses in connection with the matter. One of these witnesses, Dr. Whitney Corey, was then the vice-president for academic affairs and the acting president of the college. During the course of the meeting, Dr. Corey, in response to inquiries from the committee, read portions of a previously undisclosed letter written about the appellant by an unidentified student. Appellant contends that the letter was defamatory and instituted this action against the State as Dr. Corey’s employer. Appellant moved for pretrial discovery and the State cross-moved to dismiss the claim, asserting the defense of absolute privilege. The Court of Claims granted the State’s cross motion, and the Appellate Division affirmed, by a divided court.

The issue presented is whether the acting president of a college within the State University system is accorded an absolute privilege with respect to allegedly defamatory statements of another reported by him in the course of his official duties. If that be the case, no liability may be imposed even if the statements were uttered with actual malice (see Sheridan v Crisona, 14 NY2d 108). If, on the other hand, Dr. Corey enjoys only a qualified privilege, an action sounding in defamation would lie if the appellant could establish actual malice (see Hemmens v Nelson, 138 NY 517).

This question was left unanswered by this court’s holding in Lombardo v Stoke (18 NY2d 394, 398-399) where we noted that: "Whether or not the president of a municipal college may, under appropriate circumstances, raise the defense of absolute privilege * * * is a question we do not now decide in view of the record before us. In their complaint, the plaintiffs have actually alleged that the defamatory statement was issued 'with the knowledge and consent’ of the defendant board [of higher education] and published after the board 'ratified and approved’ the text. Accordingly, we need concern ourselves only with the scope of the board’s privilege which, under the circumstances, may be invoked by President Stoke who was allegedly acting at the board’s direction and on its behalf.” We then held that the board was entitled to absolute privilege in connection with a press release it had issued (Lombardo v Stoke, supra, p 399). Analysis of our decision in that case and of other leading cases leads me to the inescapable conclusion that the protection of absolute privilege is appropriate under the circumstances of this case.

Public policy considerations and the desire to promote the free flow of information necessary to the efficient administration of public affairs led this court to provide an executive official an absolute privilege "to publish false and defamatory matter * * * in the exercise of his executive function if the matter has some relation to the executive proceeding in which the official is acting” (Cheatum v Wehle, 5 NY2d 585, 592, citing 3 Restatement, Torts, § 591). While the Cheatum case dealt with executive officers of the State, courts have recognized that similar considerations of public policy mandated the extension of the shield of absolute immunity to other executive officials as long as the allegedly defamatory remarks were made within the scope of their official duties (see, e.g., Sheridan v Crisona, 14 NY2d 108, supra [a borough president]; Lombardo v Stoke, 18 NY2d 394, supra [the board of higher education]; Laurence Univ. v State of New York, 41 AD2d 463 [Commissioner of Education and his subordinates]; Duffy v Kipers, 26 AD2d 127 [town supervisor]; Smith v Helbraun, 21 AD2d 830 [Board of Education of the City of Peekskill]). These decisions make clear the rule that where the executive official is acting within the scope of his official duties and the matter is one of general importance and public concern, he is cloaked with an absolute privilege. The privilege is extended in order to secure and enhance the public policy of this State to encourage efficient governmental administration.

In the case now before us, the granting or withholding of tenure at State institutions of higher learning is clearly a matter of public interest. The public is best served only if the most qualified applicants receive appointments. In this regard, the committee was established for the purpose of advising the president in matters of tenure, and it cannot be gainsaid it is essential that the committee be fully and candidly apprised of all matters which might in any way relate to the applicant’s fitness and qualifications. Concomitantly, the acting president of a college within the State University system, when in possession of information potentially pertinent to the committee’s inquiry, is clearly acting within the scope of his official duties and must be free to communicate that information to the committee in an open and unfettered manner.

Further, the burden of investigating the credibility of the information in the possession of the school official should not be placed upon his shoulders. Rather, it is the committee that is charged with making a report and recommendation concerning tenure. Hence, it is the committee which should investigate the information received by it and determine the weight to be accorded that information. To require that the acting president verify all information received by him before he could transmit it to the committee would distort the established procedure for tenure decisions and tend to deprive the committee of the benefit of complete candor and full disclosure of essential information. The protection of the interests of the public at large therefore requires that Dr. Corey be accorded this absolute privilege.

Of course, we need but note that this absolute privilege only attaches where the official is acting in his official capacity and within the context of an official proceeding (Lombardo v Stoke, 18 NY2d 394, 401, supra). Further, the subject of the communication must be relevant to the matter at issue (see James v Powell, 14 NY2d 881). Thus, while Dr. Corey’s statements before the committee are protected by absolute privilege, were he to read the same letter to the general public from the steps of the schoolhouse, no such protection would be granted.

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

Opinion by Judge Fuchsberg in which Judge Cooke concurs; Chief Judge Breitel and Judge Gabrielli concur in another opinion by Judge Jones; Judge Wachtler dissents and votes to affirm in a separate opinion in which Judge Jasen concurs.

Order reversed, without costs, claim reinstated and case remitted to the Court of Claims for further proceedings in accordance with the opinions herein.

      . The claim is brought against the State alone under the doctrine of respondeat superior (cf. Jones v State of New York, 33 NY2d 275; Goodyear Aluminum Prods, v State of New York, 12 AD2d 692).

      . Dr. Corey says that he "met” with the committee. Although the dissent refers to his role there as that of a "witness”, that designation, which appears to be taken from a brief of one of the litigants, has no foundation in the record. Nothing indicates that his appearance was testimonial in nature. In any event, no special significance is to be attributed to either characterizaion in the context of this case.

      . We are not concerned in this case with auxiliary grants of absolute privilege to others, such as lawyers and witnesses, who occupy other vital places in adjudicatory, and legislative proceedings (see Prosser, Torts [4th ed], § 114, pp 777-779).

      . Absolute immunity does not apply to a communication outside an official’s competence (Cheatum v Wehle, 5 NY2d 585, 593).

      . Lombardo v Stoke (supra, p 402) reveals that Judge Keating’s comments in his concurring opinion that absolute privilege "should be sparingly extended” was consonant with the views of a majority of that court. Judges Van Voorhis and Burke expressly joined that opinion; Judge Scileppi, by his dissent, evidenced a readiness for even a firmer position against extension.

      . The word "rumor” has been well defined as signifying "a flying or popular report, the common talk * * * not the remarks of a single person” (Smith v Moore, 74 Vt 81, 86).


source: Caselaw Access Project

author: Jones, J. Wachtler, J. (concurring) Fuchsberg, J. (concurring).

license: Public Domain

text:
    Ward Telecommunications and Computer Services, Inc., Appellant, v State of New York, Respondent.
    (Claim No. 57961.)
    Argued June 3, 1977;
    decided July 7, 1977

      Miriam M. Netter for appellant.

      Louis J. Lefkowitz, Attorney-General (Richard J. Dorsey and Ruth Kessler Toch of counsel), for respondent.
   Jones, J.

We hold that official audit reports issued on behalf of the State Comptroller by the Division of Audit and Accounts are subject to an absolute privilege in any action for defamation based on the content of such reports.

With the Counties of Essex and Franklin as its two local sponsors, North Country Community College was established at Saranac Lake, New York, in 1967 pursuant to article 126 of the Education Law. In 1971 at the request of North Country, the State Comptroller’s office made an audit of the college pursuant to the authority of section 1 of article V of the New York State Constitution and section 8 of the State Finance Law. After comments by the college in response to the audit findings, the audit report was released to the press on March 27,1973.

The audit presented a wide-ranging review of the financial affairs of the college from its inception through fiscal 1970-1971. In commenting on the college’s use of outside consultants, reference was made to the engagement of a local computer service company (claimant) to maintain payroll records and to process all college payrolls. Costs of this service were detailed, and then, after a reference to the incompleteness of the figures available, there followed the statement of which plaintiff now complains: "Nevertheless we believe that these costs are excessive for the services actually rendered and that the contracts should be terminated.”

Claimant thereupon filed a claim against the State charging defamation. The Appellate Division reversed the judgment claimant obtained in the Court of Claims and dismissed its claim. There should be an affirmance; we agree that the publication in question was subject to an absolute privilege.

We have recently had occasion to consider the history and the somewhat "checkered jurisprudential course” of the doctrine of absolute privilege in the law of defamation (Stukuls v State of New York, 42 NY2d 272 [decided herewith]). Note was taken there of the somewhat broader application of the doctrine to legislators and judges than to members of the executive branch of government. With respect to the latter category, the protective shield of absolute privilege has been raised uniformly only for officials of cabinet rank. In Stukuls we held that such privilege did not extend to communications of the acting president and vice-president of a local college unit of the State University of New York although he was acting in his official capacity.

Appellant argues that because the audit report in this instance, as would certainly be true of almost all such audit reports, was actually prepared by employees of the division rather than by the Comptroller himself, there should be but a qualified privilege. We reject this contention. The Comptroller is expressly authorized to assign examination and audit work to examiners appointed by him pursuant to law. Section 43 of the Executive Law provides in part:

"§ 43. Examiners
"1. Whenever the comptroller may deem it necessary to enable him to perform the duties imposed upon him by law with regard to the inspection, examination and audit of the fiscal affairs of the state or of the several officers, departments, institutions, public corporations or political subdivisions thereof, he may assign the work of such inspection, audit and examination to any examiner or examiners appointed by him pursuant to law.”

As a practical matter, such assistance and delegation obviously are unavoidable. To hold that a report prepared and signed by the Comptroller personally is subject to an absolute privilege, whereas one prepared under his supervision by examiners appointed by him for that purpose and released on his responsibility is not so protected would be wholly to ignore the realities of the operation of State government. It has been held that the absolute privilege of the executive head of department extends to those of subordinate rank who exercise delegated powers (Barr v Matteo, 360 US 564; Lombardo v Stoke, 18 NY2d 394; Laurence Univ. v State of New York, 41 AD2d 463).

As a matter of principle, it appears to us that according an absolute privilege to the office of the Comptroller in connection with examinations and audits of State and municipal agencies is essential to the effective discharge of the responsibilities vested in the Comptroller by our State Constitution (art V, § 1). The public interest demands that there be no legal or practical constraint placed on the content of his reports or deterrent to their availability to public scrutiny (Spalding v Vilas, 161 US 483, 498). Statutory provision is made to assure the public access to the reports (General Municipal Law, § 35). If defamatory error be made in the preparation or writing of such reports a remedy lies in intradepartmental regulation and, if need be, employee discipline. That such remedy leaves an injured party unrecompensed and may not be wholly effectual is not of sufficient disadvantage to overbalance the public interest in open publication of uninhibited audit reports. We recognize the significant and peculiar impact, both therapeutic and preventative, which these reports play in the complexity and turbulence of governmental activities today. While we agree that the protection of an absolute privilege should be accorded but sparingly, it appears at least as important to shelter the official audit reports released by the Comptroller as the after-dinner remarks of the State Conservation Commissioner (see Cheatum v Wehle, 5 NY2d 585 [Dye, J.]).

We conclude, therefore, that the Comptroller and his subordinates by delegation had an absolute privilege with respect to the alleged libelous matter which appeared in the official audit report prepared in this instance. To the extent that the decision in Peeples v State of New York (179 Misc 272) may be read contrarily, it is disapproved.

In making the disposition which we do in this case, we note the significant distinction between actions of employees of executive departments of State government undertaken on their own behalf in the discharge of their own official duties (as in Stukuls) and actions (as here) performed by delegation on behalf of the department head. In the former instances there is no absolute privilege; in the latter, there is.

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

Wachtler, J. (concurring)

I am in agreement with the majority’s conclusion that an absolute privilege attached to the audit report. I would point out, however, the inconsistency between the majority’s holding in this case and in Stukuls v State of New York (42 NY2d 272 [decided herewith]).

The majority notes "the significant distinction between actions of employees of executive departments of State government undertaken on their own behalf in the discharge of their own official duties (as in Stukuls) and actions (as here) performed by delegation on behalf of the department head”, and concludes that "[i]n the former instances there is no absolute privilege; in the latter, there is” (at pp 292-293). I find no such distinction.

In both this case and Stukuls the allegedly defamatory statement was made by a State employee of less than cabinet rank. In both cases the employee was acting in connection with and in the performance of his official duties, and there was a strong public policy and interest in the free flow of information in the decision-making process. In my view, therefore, and for the reasons set forth in my dissenting opinion in Stukuls, absolute privilege should attach in each of these cases.

Fuchsberg, J. (concurring).

The audit report which contained the alleged libel was issued and published by the Comptroller. It was rendered in the exercise of the Comptroller’s official duties of superintending the fiscal concerns of the State. Though the text was prepared by others to whom its preparation was delegated, it nonetheless was issued as his report. The names of those who prepared it were not published as its source; his was. It was actually distributed to the public by Walter J. Holmes, as public relations officer for the Comptroller personally. Under these circumstances, the Comptroller must be deemed to have adopted and issued the report as his own, clothing it with the full authority of his office. The Comptroller is a senior State official, elected in his own right and occupying a status of greater independence and one higher in rank than that of a cabinet officer. Therefore, while I agree with Judge Jones that there should be an affirmance, I believe it should suffice in this case to rest that determination on the fact that communications by the Comptroller of the State of New York, made as such, are absolutely privileged.

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

Order affirmed.


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

text:
    The People of the State of New York, Respondent, v Charles S. Dickman, Appellant.
    Argued June 9, 1977;
    decided July 14, 1977

      Charles B. Draper for appellant.

      Aldo L. DiFlorio, District Attorney (Jon Louis Wilson of counsel), for respondent.
   Jones, J.

We hold that defendant is entitled to a new trial because of errors committed by the trial court.

On the complaint of an evidently distressed young woman, defendant was arrested for reckless driving. The complainant testified that early in the afternoon of Friday, May 30, 1975 as she was driving home from work she passed defendant in his car, whereupon he proceeded to harass her by "several times driving up behind her at a high rate of speed and then slowing abruptly just short of her car. She pulled over to the side of the road and defendant passed her, but promptly slowed down to a near stop in front of her car. The same thing happened a second time. On her way to the State Police Barracks to report defendant’s conduct complainant encountered a State trooper to whom she related what had occurred.

Defendant was convicted after a jury trial at which the only witnesses were the complainant and defendant. Defense counsel filed an affidavit of errors with Niagara County Court, seeking a reversal of the, conviction and a dismissal of the information. In response the District Attorney wrote the County Judge: "I have reviewed the motion of Charles Draper, Attorney for the above, and after researching the matter I feel that in the interest of justice and with this in mind that the motion should be granted. Therefore, there will be no answering affidavit forthcoming.” County Court affirmed the conviction and leave to appeal was granted by a member of our court.

Defendant had made a pretrial motion for an informational ruling as to the prosecution’s entitlement to use prior convictions to impeach his credibility should he take the witness stand. The hearing court had ruled that a 1974 conviction of the crime of reckless driving and two 1975 convictions of traffic violations for an improper turn and unsafe driving could be so employed. When defendant took the stand on his direct examination, before proceeding to testify with reference to the charge against him, he disclosed all three convictions.

With full recognition that the trial court is vested with authority, to be exercised in a sound discretion, to determine the permissible scope of cross-examination in each particular case, we note, nevertheless, that the exercise of this discretion is not beyond the reach of appellate review. While the issue concededly is troublesome, we conclude that there was an abuse of discretion in this instance.

It is not suggested that cross-examination of this defendant with regard to his prior conviction for reckless driving would have been admissible other than on the issue of credibility. Nor did the 1974 conviction come within any of the branches of the decision in People v Molineux (168 NY 264). As to cross-examination to impeach credibility it may be verbalized that the prior conviction demonstrated a disposition "to further self-interest at the expense of society or in derogation of the interests of others”, and thus that it was relevant on the question of defendant’s credibility. Evaluation in that perspective, where the cross-examination was accompanied with appropriate limiting instructions, might be acceptable had the charge on which defendant was being tried not been the same charge for which he had previously been convicted. The inescapable reality in this circumstance is that, whatever the clarity and vigor of any restrictive instructions, there was a very great, and to us unacceptable, risk that the jury might have considered the conviction, just two years before, as demonstrating more persuasively that defendant was disposed to drive recklessly, than that he might be disposed to lie on the witness stand. "[C]ross-examination with respect to crimes or conduct similar to that of which the defendant is presently charged may be highly prejudicial, in view of the risk, despite the most clear and forceful limiting instructions to the contrary, that the evidence will be taken as some proof of the commission of the crime charged rather than be reserved solely to the issue of credibility.” (People v Sandoval, 34 NY2d 371, 377.) To be weighed as well here is the fact that in this case defendant was the only available source of the material testimony in support of his defense (id., p 378). If he were to have been kept off the witness stand by the court’s ruling the validity of the fact-finding process would have been significantly impaired.

We agree with the County Court, too, that it was error, as respondent candidly concedes and as the dissent agrees, to have ruled that the prosecution might inquire as to the traffic violations (Vehicle and Traffic Law, § 155; People v Sandoval, 34 NY2d 371, 377, supra).

We note further that it was error over timely objection to have allowed cross-examination as to defendant’s visits to taverns other than on the day of the offense with which he was charged.

The critical issue in this case, on our analysis, is whether in view of the strong and appealing nature of the prosecution’s proof these errors can be said to have been harmless. There was at least "a significant probability, rather than only a rational possibility * * * that the jury would have acquitted the defendant had it not been for the * * * errors which occurred”. (People v Crimmins, 36 NY2d 230, 242.) The jury’s choice was between the complainant’s version of the events and that of defendant; credibility was critical and proof that defendant had otherwise been shown to be an irresponsible driver could be expected quite naturally to be accorded significant weight. We conclude that these errors, at least in cumulative impact, were not harmless.

We have examined appellant’s other contentions and are of the opinion either that they are without merit or that the errors claimed were not preserved for appellate review.

Accordingly, the order of County Court, Niagara County, should be reversed, defendant’s conviction set aside, and a new trial ordered.

Gabrielli, J. (dissenting).

The defendant’s conviction for the crime of reckless driving should be sustained. The testimony at trial revealed, and the jury implicitly found, that the defendant harassed the complainant with his automobile while she was driving north on Route 78 in Niagara County by continually and suddenly speeding up and then abruptly stopping directly in the front and also to the rear of complainant’s automobile. A State trooper whom the complainant was finally fortunate enough to encounter, described her condition as "hysterical” as she related the incident to him. Both the defendant and complainant testified that they had never before met and that complainant had done nothing to provoke the defendant in the operation of his automobile in such an erratic manner. The defendant admitted stopping at two taverns and having a drink at each before the incident occurred.

It is a firmly established maxim that "The nature and extend of cross-examination is subject to the sound discretion of the Trial Judge” (People v Schwartzman, 24 NY2d 241, 244; People v Sandoval, 34 NY2d 371, 375; People v Sorge, 301 NY 198). This is particularly true with respect to impeaching a defendant witness by the use of prior convictions. Thus, in People v Sandoval (supra), we provided that the Trial Judge may render a threshold ruling with respect to the admissibility of prior convictions to impeach the defendant’s credibility. In this case, I believe the Trial Judge, in exercising his authority to make such a preliminary determination, may properly have concluded that defendant’s prior conviction for reckless driving, less than two years before the instant charge, demonstrated his disposition "to further self-interest at the expense of society or in derogation of the interests of others” and thus was relevant to his credibility as we stated in both People v Sandoval (supra, p 377) and People v Duffy (36 NY2d 258, 262). Operating a motor vehicle in a reckless manner, dangerous to both pedestrians and motorists using the highways, reveals a desire to disregard the interests and safety of other members of society. As we held in Sandoval (supra, p 377), such a "demonstrated determination * * * goes to the heart of honesty and integrity”. I would therefore conclude that the Trial Judge’s determination to permit introduction of the defendant’s prior conviction for reckless driving should not be disturbed and, consequently, the fact that defense counsel elected to have the defendant reveal this conviction on direct examination was not reversible error.

In view of the admissibility of the conviction of the crime of reckless driving, the conceded error in holding admissible defendant’s prior convictions for two minor traffic infractions was harmless error. It strains credulity to argue that there was a "significant probability” that the defendant would have been acquitted of the reckless driving charge if these convictions for making an improper right turn and unsafe backing were not revealed to the jury on direct examination.

Futhermore, I do not find error in the questioning of the defendant with respect to his visits to a local tavern on the day of the incident since the fact that defendant imbibed alcoholic beverages is certainly relevant in this case to his state of mind and, in particular, the element of recklessness. Futhermore, evidence that the defendant was under the influence of alcohol at the time of the incident giving rise to the reckless driving charge was properly admissible to impeach his testimony with regard to what occurred (People v Webster, 139 NY 73, 86-87; Richardson, Evidence [10th ed], § 507, pp 497-498; 3 Wigmore, Evidence [3d ed], § 933, p 480). Any alleged error in questioning the defendant with respect to his habit or custom of frequenting certain taverns in the area was not preserved for appellate review since defense counsel objected to this line of questioning only after the prosecutor had already elicited from the defendant the response that he frequented a particular tavern every day. Only when the prosecutor asked the defendant whether he frequented other taverns did defense counsel object. In sum, I find that no reversible error occurred in the course of defendant’s trial and would therefore affirm the reckless driving conviction.

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

Order reversed, etc.


author: Gabrielli, J. Jones, J. (concurring) Chief Judge Breitel, (dissenting)

text:
    Leon E. Wein, Appellant, v Arthur Levitt, as Comptroller of the State of New York, Respondent.
    Argued June 9, 1977;
    decided July 14, 1977

      William J. Quirk for Leon E. Wein, appellant and Leon Edward Wein, appellant pro se.

      Louis J. Lefkowitz, Attorney-General (Shirley Adelson Siegel and Samuel A. Hirshowitz of counsel), for respondent.
   Gabrielli, J.

In this declaratory judgment action, the plaintiff raises a direct constitutional challenge to the legislative enactment regarding State borrowing, and seeks a declaration that a "save harmless” provision providing for indemnification of State investment officials, is illegal.

By chapter 893 of the Laws of 1975 (Workmen’s Compensation Law, § 87-c) the Legislature directed that the State Insurance Fund invest in obligations of public benefit corporations known as "buildout authorities” (Housing Finance Agency, Medical Care Facilities Finance Agency, Dormitory Authority and Environmental Facilities Corporation). Section 87-c (subd 5, par a), which provides that the State Insurance Fund and the State shall, "save harmless and indemnify each and every state officer with responsibility for the custody or investment of such fund”. Plaintiff brought this action on the single allegation that this indemnity provision is violative of the provisions of section 11 of article VII of the New York State Constitution which prohibits the State from contracting a debt unless the debt shall be authorized for some single work or purpose by the people at a general election.

The Justice at Special Term, dealing with plaintiff’s sole allegation, found the indemnity provision valid and granted defendant’s cross motion for summary relief and a declaratory judgment. Plaintiff appeals directly to this court pursuant to the provisions of CPLR 5601 (subd [b], par 2).

The Legislature’s direction and mandate to the managers of the State Insurance Fund to make the prescribed investments arose out of a special session, called to deal with the financial emergency then existing. During the regular session in 1976, the Legislature passed chapter 115 which explained that the traditional markets for bonds and notes of certain public benefit corporations had dried up and the agencies were being denied access to the capital markets, threatening these corporations with default on their outstanding obligations; and that such threat required the enactment of chapter 893 at the previous special session to restore those agencies to financial health and "to ameliorate the disastrous consequences, to taxpayers, to holders of agency obligations and to residents of the state, of an inability by these agencies to meet their obligations”.

With perhaps an excess of caution, the drafters of section 87-c provided not only for indemnity in subdivision 5, but also for immunity in subdivisions 3 and 4. In subdivision 3 there is a legislative declaration that "any and all obligations” of the buildout authorities "are reasonable, prudent, proper and legal investments for the state insurance fund and for all state officers with responsibility for the custody or investment of such fund or of its assets”; and subdivision 4 provides that no officer shall incur any liability by reason of such investment. While it is true that a State officer with State immunity perhaps might not be immune in an action properly brought in Federal court (Scheuer v Rhodes, 416 US 232), thus warranting a further indemnity provision as enacted in subdivision 5, the prospect of such a recovery is a remote possibility at best, especially in view of the legislative declaration that any and all purchases are prudent and proper.

These layers of protection, excluding the indemnity provision, illustrate the very heavy odds against anyone ever having to be indemnified under the provision complained of by plaintiff. He has not disclosed any instance where a lawsuit is even contemplated against managers of the State Insurance Fund for section 87-c purchases, much less an instance where any "debt” has actually accrued by reason of the entry of a judgment. Upon the authority of Salzman v Impellitteri (305 NY 414, 420) it is urged that there is a question of reviewability. Given the public importance of the issue raised, we address the merits and, in doing so, we affirm the holding of Special Term.

In any analysis of State spending at least two classifications of debt must be envisioned and categorized. For example, a purchase order for office supplies, future salary obligations, travel expenses or obligations arising out of the State’s waiver of immunity under section 8 of the Court of Claims Act create debts. These debts are paid out of current appropriations in the State’s general fund replenished by the collection of taxes. Not even plaintiff argues that such debts, contingent or fixed, necessary for the ongoing business of State government are subject to section 11 of article VII of the State Constitution.

Then there are debts created by long-term borrowing and bond obligations. Such propositions are regularly submitted to referenda. These are examples of the debts with which section 11 is concerned. This is made clear from the history underlying article VII as very recently explained by the court in Wein v State of New York (39 NY2d 136, 142-144). It is not necessary again to recapitulate that history except to note that the danger sought to be met by constitutional restrictions was the over-burdening of future generations by the incurring of long-term debt for capital improvements. The danger was first recognized by the practice of subsidizing canal and railroad construction only to have the transportation companies unable later to pay their debts. Consequently, the State took the loss and this prompted the safeguards incorporated in article VII (p 143).

Plaintiff argues, apparently, that a statutory obligation to indemnify State officers and employees for losses sustained as the result of liability arising out of their employment activities amounts to the second kind of debt mentioned. The main components or ingredients for such a debt, however, are lacking. There is simply no borrowing for a long term which will burden future generations. There is, in fact, no indication that there would be any borrowing at all, or that there ever has been any borrowing for purposes of fulfilling indemnity statutes already on the books. There is nothing in anything plaintiff claims and argues, or in our own research, that indicates that indemnity payments would not be a contingent cost of doing State business payable routinely out of the general fund, should the obligation arise. Consequently there is simply no basis whatsoever for the assertion that this indemnification is a debt within the meaning of article VII.

Although the dissent acknowledges that "the indemnification provision is not, by itself, a creation of debt by the State” (p 309), it is argued that indemnification of these officers for financial loss arising out of any claim for alleged negligence or breach of fiduciary duty by reason of investment in the enumerated public benefit corporations constitutes a loan of the State’s credit to the public corporations. Section 8 of article VII of the Constitution prohibits, inter alia, a loan of the State’s credit to any public corporation. The issue addressed by the dissent is whether the indemnification provision creates, in effect, a loan of the State’s credit to the public corporations involved.

Simply stated, and as succinctly alleged in paragraph "3” of his complaint, plaintiff raises only section 11 of article VII of the Constitution, and he then adds that the Legislature, by its action has created an illegal debt of the State. This case comes to us in the nature of a motion for summary judgment and, as such, we may address only the issues articulated by the pleadings and affidavits. The record controls (6 Carmody-Wait 2d, NY Prac, § 39.13) and in this case the papers are devoid of any constitutional challenge based upon section 8 of article VII. It is important that we not entertain or pass upon constitutional questions neither raised nor considered below (Schillawski v State of New York, 9 NY2d 235, 240; E. J. Eddy, Inc. v Fidelity & Deposit Co. of Md, 265 NY 276, 282; Cohen and Karger, Powers of the New York Court of Appeals, §§ 55, 169; 11 Carmody-Wait 2d, NY Prac, § 71.114; see, also, Telaro v Telaro, 25 NY2d 433, 439). However, in view of the dissenters’ sole reliance on section 8 of article VII we deem comment to be appropriate.

The section 8 prohibition against lending the State’s credit "was prompted largely by the extensive and highly speculative subsidizing in the first half of the nineteenth century of private railroad and canal companies by the State’s long-term debt obligations” (Wein v State of New York, 39 NY2d 136, 142- 143, supra). That provision seeks to prevent the State from loaning its credit to a public corporation with the concomitant possibility that the State might ultimately pay the corporation’s obligations (Wein v State of New York, supra, pp 143- 144). Subsidy by loan of credit was the evil sought to be eradicated. Indemnification of officials for breach of fiduciary duty is no such monster. The indemnification provision does not create an obligation, contingent or otherwise, running to the creditors of the public corporations but rather the obligation, if any arises, runs to those persons having an interest in the Insurance Fund. Indeed, if one of the public corporations falters, the indemnification does not automatically create a present debt. An obligation would arise only if investment in the public corporation is found, by a court, to be a breach of fiduciary duty but the Legislature has declared that such investments "are reasonable, prudent, proper and legal” (Workmen’s Compensation Law, § 87-a, subd 2). Indemnification of State officials is not even colorably a loan to a public corporation.

The dissenters assume that because the State may incur an obligation to make good on any losses suffered by the fund as a result of default, a loan of credit to the public corporation has arisen. But it is the fund and its beneficiaries who gain by the State’s responsibilities. The fact that the State may make good losses to the fund, in the event of default, is small solace to the public benefit corporations or their creditors. If the public corporations default, they will wallow in their own tragedy, without the benefit of State credit vis-á-vis the indemnification provision. The fact that the measure of State liability to the fund or its officers may relate to the amount of default is not determinative. The measure of damages does not define the obligation and in this case the obligation is purely one of indemnification of State officials. The indemnification does not run afoul of section 8 of article VII.

The authorities presented by plaintiff which deal with the question of "debt”, including Levy v McClellan (196 NY 178) in its relevant context, involve borrowing or capital expenditures. The other authorities cited have no relevance to the narrow "debt” question set forth in his complaint and dealt with below.

The judgment of Special Term should be affirmed, without costs.

Jones, J. (concurring)

I agree that the judgment of Special Term should be affirmed, and I am in accord with the reasons stated by the majority for rejecting appellant’s contention that section 87-c (subd 5, par a) of the Workmen’s Compensation Law (L 1975, ch 893) is unconstitutional under section 11 of article VII of our State Constitution. Because it has never been raised or addressed by the parties or considered by the court below, I would not reach the question whether chapter 893 of the Laws of 1975 (as amd by L 1976, chs 6, 32) is unconstitutional under section 8 of article VII.

Chief Judge Breitel, (dissenting)

This appeal involves another of the fiscal gimmicks used during the State and municipal financial stringency in 1975. Like some of the other devices used at that time, this one too falls afoul of constitutional limitations (see Sgaglione v Levitt, 37 NY2d 507; Flushing Nat. Bank v Municipal Assistance Corp. for City of N. Y, 40 NY2d 731).

Section 87-c of the Workmen’s Compensation Law, as enacted by chapter 893 of the Laws of 1975 and amended by chapters 6 and 32 of the Laws of 1976, assures State officers of indemnification, by the State, against "financial loss and expense arising out of or in connection with any claim, demand, suit, action, proceeding or judgment for alleged negligence, gross negligence, waste or breach of fiduciary duty” resulting from the statutory mandate of investment by the State Insurance Fund in new issue bonds of specified public corporations (subd 5, par a). This provision creates an impermissible "loan” of the State’s credit to those corporations (NY Const, art VII, § 8).

The State Insurance Fund accumulates assets from three separate sources: premiums for workmen’s compensation insurance, for disability insurance, and for medical and hospital malpractice insurance (Workmen’s Compensation Law, §76). The fund is applied to pay claimants’ benefits, and to pay dividends out of excess premiums to insureds.

The State Insurance Fund is, in effect, a trust fund for the benefit of claimants and the insureds, managed by a commission and empowered to invest surplus or reserve moneys, like private trust funds, in only those securities acceptable for investment by savings banks (Workmen’s Compensation Law, §§ 77, 87; Banking Law, § 235). The Commissioner of Taxation and Finance is the custodian of the fund (Workmen’s Compensation Law, § 85).

Prompted by the fiscal crisis of 1975, the Legislature added to the Workmen’s Compensation Law three provisions, facially similar, but critically different, purporting to compel "all state officers with responsibility for the custody or investment” of the fund to purchase new issue bonds of certain troubled public corporations and the City of Yonkers (Workmen’s Compensation Law, §§ 87-a, 87-b, 87-c). Section 87-a declared by legislative fiat that "obligations of the municipal assistance corporation for the city of New York are reasonable, prudent, proper and legal investments” for the fund, and directed the officials responsible to purchase MAC bonds according to a flexible schedule (subds 1, 2). The section also provided indemnification to these officials, from the fund itself, for "financial loss arising out of any claim, demand, suit, action or judgment for alleged negligence, waste or breach of fiduciary duty” by reason of investment of the fund money in MAC obligations (subd 3). Section 87-b, in nearly identical language, directed purchase of obligations of the City of Yonkers in the amount of $15 million.

Since indemnification is out of the fund itself, and the State is not obligated to indemnify the State officers out of State funds, there is no loan of the State’s credit.

At issue in this case, however, is the third provision, section 87-c, which directed the purchase by the fund, according to a schedule subject to amendment, of $283 million of obligations of one or more of four specified public benefit corporations (subd 1). These obligations, too, were declared to be "reasonable, prudent, proper and legal investments” (subd 3). The indemnification provision, however, is significantly different. It provides State officers not only with indemnification by the fund, but with indemnification by the fund and the State "jointly and severally” (subd 5, par a). It is this provision that transforms the device into an impermissible violation of the State Constitution.

Of course, the indemnification provision is not, by itself, a creation of debt by the State (see NY Const, art VII, § 11). Involved instead is an ill-disguised loan of the State’s credit to public corporations, a loan prohibited by the State Constitution (art VII, § 8, subd 1). The constitutional issue under article VII was properly raised and the issue is one of extreme public importance (Cohen and Karger, Powers of the New York Court of Appeals, §§ 55,169).

The loan of the State’s credit is, in language, indirect. Nothing explicit is said about a loan of the State’s credit. The State Insurance Fund is required to purchase certain bonds. Simultaneously, State officers are indemnified against liability arising from claims challenging investment of fund moneys in the specified securities, such investment to be made with moneys obtained by the sale of United States Government securities in its portfolio (Workmen’s Compensation Law, § 87-c, subd 2).

The indirection in language, however, deviously disguises the economic effect of the statutory provision. That effect would not be more direct if the State were to issue its own bonds in place of those issued by the corporations. First, the State, by statutory mandate, ensures that the bonds of these then shaky public corporations will be purchased. Then, the indemnification provision assures that if there be claims for negligence, waste, or breach of fiduciary duty by State officers, the State will assume their liability. In ultimate effect, the State has placed its guarantee, however indirect the manipulation, on the bonds of the public benefit corporations to be purchased by the State Insurance Fund. It has lent its credit into the future by way of guarantee, the very result prohibited by section 8 of article VII of the State Constitution.

Whether such claims or liabilities are likely to ensue is immaterial. What is material is that the State by its guarantee would extend its credit to "moral obligations” and thereby emburden future generations of taxpayers for future liabilities arising out of present public debts without compliance with constitutional requirements. Many have long looked askance at the proliferation of the State’s attachment of "moral obligation” to securities issued by separately created public corporations in order to avoid constitutional debt limitations and required referenda on the issuance of direct State debt obligations. This case presents a newer but only slightly different artifice.

The situation is quite different from that in Wein v City of New York (36 NY2d 610). In that case, as in an earlier case on which the court relied, there was no loan of the city’s credit, but rather what was characterized as an agreement to make a gift, not prohibited when made by a city to a public corporation (id., p 616; see NY Const, art VIII, § 1; Comereski v City of Elmira, 308 NY 248, 252). The city in no way, directly or indirectly, pledged its credit to a public corporation and no action would lie for failure of the city to appropriate money for the so-called "gift”. At least, so the court held.

By contrast, section 87-c explicitly provides that the State shall be liable to indemnify State officers against losses incurred through purchase of the corporate bonds. In two steps, the section adds to the limited financial security behind the bonds the credit of the State itself. First, by compelling State officers to buy the bonds, whether in truth sound investments or not, it exposes them to actions for negligence, waste, or breach of fiduciary duty. Second, by indemnifying the officers against such actions, it pledges the State’s credit, not only to reimburse the State officers, but, in effect, to make good on any losses suffered by the fund as a result of default by the public benefit corporations. Such losses would, by necessary implication, be measured in large part by the amounts in default, if any. This is, therefore, a loan of the State’s credit to a public corporation, and hence, should be declared unconstitutional. Nor is the infirmity measured by the likelihood of the guarantee ever being invoked. The State Constitution does not forbid only guarantees which may ripen into enforceability; it prohibits all guarantees of this sort.

The scheme challenged in this case was devised to meet a grave financial emergency. Of course, even emergencies do not justify suspension of constitutional limitations, expecially those designed to prevent or operate in emergencies (Flushing Nat. Bank v Municipal Assistance Corp. for City of N. Y, 40 NY2d 731, 739, 740, supra; Sgaglione v Levitt, 37 NY2d 507, 514, supra). That the State’s fiscal stringency and that of the public corporations has for the time being eased, at least to some degree, does not affect the result. The constitutional limitations are needed not for the days of governmental fiscal affluence, but for the days of distress often caused by a profligacy of the past to be suffered by generations which never enjoyed the profligacy now long gone.

The fiscal practices challenged in this case, if they should become precedent as they inevitably would, can only lead the State to future financial emergencies, and, perhaps, to disaster. The limitations of article VII were designed to avert just such temptations and such problems. Judicial yielding to such evasion of the constitutional protections is not acceptable constitutional law. For that matter it is not sound economics or good political philosophy, but that is not the judicial province.

Accordingly, I dissent and vote to reverse the order of Supreme Court and declare section 87-c of the Workmen’s Compensation Law invalid.

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

Judgment affirmed.

      . (See, e.g., Public Officers Law, § 17; General Municipal Law, §§ 50-a, 50-b, 50-c, 50-j, 50-1; Education Law, § 6308; Mental Hygiene Law, § 81.08; County Law, § 533; Public Health Law, § 14-a; Civil Rights Law, § 79-f; Corrections Law, § 24-a; Court of Claims Act, § 8-a; Executive Law, §§ 257-a, 501-a; Military Law, § 235-a; Workmen’s Compensation Law, § 19-c.)

      . Section 11 of article VII of the New York State Constitution provides that: "Except the debts specified in sections 9 and 10 of this article, no debt shall be hereafter contracted by or in behalf of the state, unless such debt shall be authorized by law, for some single work or purpose, to be distinctly specified therein. No such law shall take effect until it shall, at a general election, have been submitted to the people, and have received a majority of all the votes cast for and against it at such election nor shall it be submitted to be voted on within three months after its passage nor at any general election when any other law or any bill shall be submitted to be voted for or against.”