author: Wachtler, J.

text:
    Rochester City School District, Respondent, v Rochester Teachers Association, Appellant.
    Argued February 14, 1977;
    decided April 7, 1977

      Bernard F. Ashe and Gerard John DeWolf, Albany, for appellant.

      Adam D. Kaufman, Rochester, for respondent.
   Wachtler, J.

In a proceeding to vacate an arbitration award the petitioner, Rochester City School District, claims that the arbitrator appointed pursuant to a collective bargaining agreement "exceeded his power” (CPLR 7511, subd [b], par 1, cl [iii]) in the course of resolving a dispute over sabbatical leaves. Special Term vacated the award and denied a cross motion to confirm it. The Appellate Division affirmed and we granted leave to appeal upon the motion of the respondent, Rochester Teachers Association.

The parties entered into a collective bargaining agreement for the school years beginning July 1, 1971 and ending June 30, 1973. Section 34.5 of the agreement provides that "Regularly appointed teachers who have served for five (5) years may upon the recommendation of the Superintendent and with the approval of the Board, be granted leave of absence for study or travel upon” certain conditions. The agreement also established a four "stage” procedure for the resolution of any grievance which is defined as "a claim based upon an event or condition which affects the conditions or circumstances under which a teacher works, allegedly caused by misinterpretation or inequitable application of established policy or the terms of this agreement.” The first three stages involve meetings with the teacher’s immediate supervisor, the superintendent of schools and the board of education. The fourth stage provides for binding arbitration. The agreement states "if the teacher and/or Association are not satisfied with the decision at Stage 3, and the Association determines that the grievance is meritorious, it may submit the grievance to arbitration. * * * The decision of the arbitrator shall be final and binding upon all parties.”

During the 1972-1973 school year 36 teachers applied for sabbatical leave. In each case the teacher received a form letter which states "Your application has been considered, but as an economy measure, among other reasons, the Superintendent of Schools is not recommending to the Board of Education your request for a sabbatical leave for the 1973-74 school year.” On April 19, 1973 the Teachers Association filed a group grievance claiming that the action of the district and the board of education violated section 34.5 of the collective bargaining agreement. The association was unsuccessful during the initial stages of the grievance procedure. At the third stage the association was informed in writing that "it is the determination of the Board of Education that the language in the current collective bargaining agreement regarding the granting of sabbatical leaves is permissive and does not confer any contractual right to sabbatical leaves upon the employees. Under the current language, the Superintendent may or may not recommend the granting of sabbatical leaves. Because of the severe financial situation facing the City School District, the Superintendent has determined not to grant any sabbatical leave requests for the 1973-74 school year and we concur with the determination.” (Emphasis in original.)

The association then demanded arbitration and the following questions were submitted by the parties:

"1. Did the Rochester City School District violate Section 34.5 of the collective bargaining agreement between the parties in denying all sabbatical leaves for the 1973-74 school year?

"2. If such a violation is found, what remedies in the judgment of the arbitration shall be provided?”

After conducting hearings the arbitrator found that the grievance had been sustained. The use of the term "may” he stated, "indicates discretion”, but has been variously interpreted depending upon the intention of the parties. He recognized that in one case, an article 78 proceeding involving an identical provision and a similar controversy, the court had held the clause to be permissive (see Matter of Deedy v Board of Educ., 41 AD2d 965, mot for lv to app den 33 NY2d 515). However, he did not feel bound by that ruling in an arbitration forum and, in any event, in his view it did not resolve the question as to what these parties intended the contractual language to mean under the circumstances of this case.

This particular provision, he noted, had first been adopted by these parties in a 1965 collective bargaining agreement and since that time "even when the District had been in the throes of financial crisis, sabbatical leaves were consistently and uniformly granted under the terms of the provision.” In fact the school district had actively broadcast the advantages of its leave policy in teacher recruitment literature and had, in the 1971 agreement granted the teachers’ demands for additional benefits by relaxing the conditions and increasing by 10% the amount of compensation paid to teachers on leave. Thus, looking to the past practice followed by the parties, to find intent, the arbitrator concluded that it was contemplated that the school district would be bound to grant some sabbaticals despite financial difficulties. He directed that the school district grant sabbaticals to those eligible teachers who applied for leave in the 1973-1974 school year "to a total of no more than 1% of the total teachers employed”.

The school district then commenced this proceeding to vacate the award claiming that the arbitrator "exceeded his power” (CPLR 7511, subd [b], par 1, cl [iii]). The petition alleges that under the collective bargaining agreement the granting of sabbatical leave is discretionary and that in holding to the contrary the arbitrator ignored (1) "the express contractual language” and (2) the decision in Deedy (supra), "a ruling on the specific issue before him”. Thus, it concludes, the arbitrator exceeded his power by modifying or altering the agreement in violation of the arbitration clause which states "The arbitrator shall have no power or authority to make any decision which * * * adds to, deletes from, or in any way changes, alters or modifies the terms of the Agreement.”

Special Term recognized that an arbitrator’s award cannot be set aside for "mere error” of law. But it concluded that here the arbitrator had in fact exceeded his powers because he disregarded an express contractual provision (Matter of Granite Worsted Mills [Aaronson Cowen, Ltd.], 25 NY2d 451). Specifically it held that the leave provision involved a "discretionary procedure” and when "the arbitrator construed this provision as a mandatory requirement on the part of the employer, he changed a provision of a negotiated contract which he had no power to do.” The Appellate Division later affirmed, without opinion.

Once a party has participated in arbitration his ability to have the courts vacate or modify the award is limited by statute (CPLR 7511, subd [b], par 1; see, also, CPLR 7511, subd [c]). An award of course may be vacated on the ground that the arbitrator "exceeded his power” (CPLR 7511, subd [b], par 1, cl [iii]). But when the arbitrator has been authorized to resolve disputes regarding the interpretation of the contract, we have held that his determination will only be set aside on this ground if it is "completely irrational” (Matter of National Cash Register Co. [Wilson], 8 NY2d 377, 383), "or where the document expressly limits or is construed to limit the powers of the arbitrators, hence, narrowing the scope of arbitration (Matter of Granite Worsted Mills [Cowen] 25 N Y 2d 451, supra, at pp. 456-457)” (Lentine v Fundaro, 29 NY2d 382, 385).

Although the courts will not disturb an arbitrator’s award because of his failure to interpret documents literally or in accordance with substantive principles of law or rules of evidence (see, e.g., Matter of National Cash Register Co. [Wilson], 8 NY2d 377, 383, supra) his power to fashion a remedy is not unlimited. If the arbitrator’s award is "completely irrational” it may be considered misconduct on his part or it may be said that he exceeded his power. The relief which he fashions is circumscribed by the bounds of the relationship between the parties.

In the final analysis "Arbitrators may do justice” and the award may well reflect the spirit rather than the letter of the agreement (Lentine v Fundaro, supra, at p 386). Thus courts may not set aside an award because they feel that the arbitrator’s interpretation disregards the apparent, or even the plain, meaning of the words or resulted from a misapplication of settled legal principles. In other words a court may not vacate an award because the arbitrator has exceeded the power the court would have, or would have had if the parties had chosen to litigate, rather than arbitrate the dispute. Those who have chosen arbitration as their forum should recognize that arbitration procedures and awards often differ from what may be expected in courts of law.

The courts’ power to intervene is even more restricted when the arbitrator’s interpretation of the agreement resolves the question submitted, and not merely one aspect of the dispute. Here of course the arbitrator’s determination of the meaning of the sabbatical leave provision was not a purely incidental aspect of the award. It resolved the primary question submitted and if he did not have the authority to decide that question there was nothing for him to arbitrate. A party who has participated in arbitration cannot later seek to vacate the award on the ground that the controversy was not arbitrable (Matter of National Cash Register Co. [Wilson] supra, at p 382). By statute that question must be raised before arbitration, and if it is not it is deemed to be waived (CPLR 7503). Obviously a party may not avoid this restriction by later arguing that the award should be vacated on the ground that the arbitrator "exceeded his power” by construing the agreement when it was clear on its face and required no interpretation. In other words CPLR 7511 (subd [b], par 1, cl [iii]) is limited in scope. A party may claim that the arbitrator exceeded his authority in some respect, but he may not argue that the arbitrator lacked the power to resolve the question submitted. Significantly this argument could not have prevailed even if it had been raised in a timely fashion, in view of the fact that the arbitrator had been granted broad power to resolve any "claim * * * [of] misinterpretation or inequitable application of * * * the terms of this agreement” (see, e.g., Matter of Nationwide Gen. Ins. Co. v Investor’s Ins. Co. of Amer., 37 NY2d 91).

The arbitrator, then, had the power to interpret the sabbatical leave provision and the only question is whether his interpretation is "completely irrational” (Matter of National Cash Register Co. [Wilson] supra, p 383; Lentine v Fundaro, supra). Obviously it was not irrational for him to conclude that the parties’ conduct in the past, under similar agreements, demonstrated their intent or expectations. There was, as noted, uncontradicted proof that despite financial difficulties the school district had consistently and publicly granted sabbatical leaves. Thus it was not unreasonable to find that by renewing the agreement the parties intended to continue the practice followed in the past.

We recognize that school districts and boards of education traditionally, and perhaps properly, retain the absolute discretion to grant or deny applications for leave. The power in fact is expressly granted by statute (Education Law, § 1709, subd 16; § 2554). Surrender of the power, or part of it, to the courts or arbitrators in collective bargaining agreements may later prove to be inconvenient or may even disrupt the normal functioning of the school district in some respects. There is no doubt that this is the school districts’ responsibility, but it would have been more appropriate if they had recognized this responsibility by asserting their rights at the bargaining table. As it stands, they chose to negotiate the point and agreed to exercise their discretion in a certain manner, or so the arbitrator could find.

The order of the Appellate Division should be reversed, without costs; the petitioner-respondent’s motion to vacate the arbitration award should be denied and the appellant’s cross motion to confirm the award should be granted. The court has denied costs because of the excessive length of appellant’s brief (see, e.g., Slater v Gallman, 38 NY2d 1; see, also, Ball v State of New York, 41 NY2d 617).

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

Order reversed, etc.

       This portion of the award reads as follows:
      "(a) All persons who had applied for sabbatical leave for the 1973-74 school year and upon a denial thereof elected and were granted a leave of absence without pay, shall be placed on sabbatical leave under Article 34.5 for the 1973-74 school year, retroactive to September 1, 1973.
      "(b) The Board shall choose, in accordance with Article 34.5, those eligible for sabbatics from the applicants for 1973-74 leave, to a total of no more than 1% of the total teachers employed including those contained in the above sub-division (a), and such persons shall be entitled to sabbatical leave for the 1974-75 school year, without prejudice to the rights and obligations the parties have under the terms of their contract in connection with application for sabbatical leave for the 1974-75 school year.”


source: Caselaw Access Project

author: Jasen, J.

license: Public Domain

text:
    The People of the State of New York, Respondent, v Herbert Von Werne, Appellant.
    Argued February 14, 1977;
    decided April 7, 1977

      Spiros A. Tsimbinos, Kew Gardens, for appellant.

      Nicholas Ferraro, District Attorney (George Freed of counsel), Kew Gardens, for respondent.
   Jasen, J.

Appellant Herbert Von Werne was convicted, after a jury trial, on two counts each of criminal possession of stolen property in the second degree, illegal possession of a vehicle identification number plate and the unauthorized use of a vehicle. The Appellate Division, with one Justice dissenting, affirmed the judgment of conviction, without opinion. (50 AD2d 909.) We conclude that the order of the Appellate Division should be reversed and a new trial ordered. The trial court erred by permitting a police officer to testify that the defendant had exercised his constitutional right to remain silent in the face of police interrogation. Further, the court improperly instructed the jury on the use of circumstantial evidence to prove intent.

According to the evidence presented by the People at the trial, on March 15, 1973, New York City Police Officer Donald Gleason observed a brown 1970 Cadillac automobile parked across the street from a Queens County auto body shop. Officer Gleason, who had received special training in the detection of stolen automobiles, walked over to the car and glanced through the windshield at the vehicle identification number (VIN) plate. He noticed that the plate was attached to the dashboard with "pop” rivets, rather than with rosette rivets customarily employed by the manufacturer. His suspicions aroused, the officer checked the number on the vehicle’s license plate with the Department of Motor Vehicles. The State officials advised him that the license plate "did not go to that car at all”. Gleason attempted to contact the registered owner, but was informed that this individual had never lived at the address listed on the registration. Armed with this knowledge, Officer Gleason arranged to have the vehicle brought to the precinct house for further investigation. After the car had been towed in, the officer had an opportunity to locate a second VIN plate that had been secreted in the automobile body by the manufacturer. He discovered that this second number did not match the number of the dashboard plate. Rather, this hidden number had been assigned to a vehicle that had been reported stolen on July 8, 1971, by its owner, Herman Sundelson. Sundelson was able to identify the car as the one that had been stolen from him. Further investigation revealed that the number on the dashboard VIN plate was assigned to a vehicle registered in the name of defendant’s father.

When defendant contacted the police and demanded the return of the car, Officer Gleason went to defendant’s residence, administered the standard preinterrogation warnings, and took his statement. The defendant told the officer that he was the owner of the car. Although he was unable to produce a bill of sale, defendant claimed that his father had paid $4,000 for the vehicle which, at the time of purchase, did not contain an engine or transmission. Later, the father had allegedly transferred the car to the son. Defendant admitted that, by occupation, he was a "body and fender” man and that he had worked on the car. Finally, when asked the identity of those who helped him install the engine and transmission, defendant responded, "I don’t wish to answer any more questions without my lawyer present.” The interrogation ceased and Officer Gleason left the premises.

Several days later, on March 21, 1973, Officer Gleason was on patrol in the vicinity of defendant’s residence. Passing a green 1970 Cadillac parked on the street, he again glanced through the windshield at the VIN number. As before, the VIN plate on the dashboard had been affixed with nonregulation "pop” rivets. Investigation revealed that the vehicle that had been assigned the VIN number found on the dashboard had been purchased as "junk” by the defendant from Saw Mill Auto Parts on November 10, 1972. The license plates found on the vehicle had been issued to defendant’s wife. The number on the secret VIN plate did not match the number found on the dashboard. Once again, the hidden number corresponded to a number assigned to a car that had been stolen. Stathis Marulis had reported the theft of his sister’s car on October 1, 1971, and the vehicle found outside defendant’s residence was identified as that belonging to her. This, basically, was the People’s case.

The defense asserted that both Cadillacs had been obtained through legitimate purchases. Indeed, the evidence established that either the defendant or his father had purchased vehicles which had been assigned the VIN plates found on the dashboards of the two vehicles observed by Officer Gleason. However, such proof was consistent also with the prosecution’s theory that defendant had simply placed the body of each stolen vehicle onto the frame of a legitimately acquired car and switched the VIN plate from dashboard to dashboard. Thus, for each vehicle, the VIN plates on both dashboard and frame would correspond. However, the hidden VIN plate on the body would be a telltale sign of tampering.

With this résumé of the facts, we turn to an analysis of the issues presented on appeal. The principal witness for the prosecution was, of course, Officer Gleason. After describing the circumstances that led him to investigate the matter, he testified to the interrogation of the defendant that he had conducted. On direct examination, over objection, the trial court permitted the officer to state that, though the defendant had initially answered his questions, defendant "wouldn’t talk any longer, he refused to talk to me”. Defendant’s objection was overruled and his motion for a mistrial was denied. In this manner, the jury was informed that the defendant had stood on his constitutional protection against self-incrimination. We hold that the receipt of this testimony was clear error. While the facts may not have mandated the court to grant the defendant’s motion for a mistrial, the court’s failure on application of defendant’s counsel to cure the error by striking the testimony from the record or by giving curative instructions to the jury is a fatal defect.

It has long been the law in this State that the silence of a defendant, after arrest, cannot be used against him. (E.g., People v Rothschild, 35 NY2d 355, 359; People v Al-Kanani, 26 NY2d 473, 478; People v Rutigliano, 261 NY 103; see, also, United States v Hale, 422 US 171.) True, this defendant was not under formal arrest when interrogated in his own residence by the police officer. Yet the absence of a formal arrest is not dispositive here. A defendant in a criminal case has the right, granted by both the Federal and State Constitutions, to refuse to incriminate himself. (US Const, 5th, 14th Arndts; NY Const, art I, § 6.) The point of the cases is that a defendant’s exercise of his constitutional right may not be used against him by the prosecution. (Griffin v California, 380 US 609, 615.) The only apparent purpose of informing the jury that the defendant had elected to remain silent during police interrogation is to permit them to infer consciousness of guilt. The use of such proof for this, its only purpose, is not permissible. (People v Al-Kanani, supra.)

The admission of Officer Gleason’s testimony that the defendant had refused to answer further questions without his lawyer present was, therefore, error. In fact, the trial court compounded the error when, in marshaling the evidence, it reminded the jury that the defendant had declined to answer further questions. Under the facts and circumstances of this case, we cannot say that the error was harmless. Officer Gleason adverted to defendant’s exercise of his right to remain silent no less than three times during his' testimony. The prejudice was not dispelled by the court’s instruction that the jury should draw no inference from defendant’s failure to testify at the trial. This charge related to a different aspect of the self-incrimination protection. While the jury was informed that no inference could be drawn from defendant’s failure to testify at the trial, the court did not instruct the jury to draw no inference from defendant’s declination to answer further police inquiries. Instead, the court specifically referred, without any cautionary words, to the defendant’s exercise of his constitutional right. Given the persistence of the error in this record and the less than overwhelming proof of scienter, a matter which remains to be addressed, we believe that there is a reasonable possibility that this constitutional error may have contributed to the conviction and, hence, was not harmless beyond a reasonable doubt. (People v Crimmins, 36 NY2d 230, 237; Chapman v California, 386 US 18.) There should be a new trial.

We also believe that there was error in the court’s refusal to charge the jury, as requested, with respect to the legal effect of circumstantial evidence, particularly as such evidence was used to establish defendant’s scienter. To ensure that the error will not manifest itself at the second trial, we find it necessary to articulate our. views at some length. In order to make out the three crimes with which the defendant was charged, the prosecution is required to prove that the defendant knowingly possessed stolen property (Penal Law, § 165.45), knowingly exercised control of a vehicle without the consent of the owner (unauthorized use of a vehicle) (Penal Law, § 165.05) and knowingly possessed a vehicle with a VIN plate not affixed by the manufacturer (Penal Law, § 170.70, subd [3]). A central issue at the trial was whether the defendant possessed the requisite knowledge of illegality.

On the possession of stolen property charges, the court instructed the jury that "if it appears from the evidence that the defendant either knew the property had been stolen or that the defendant received the property under such circumstances that a reasonable man of ordinary observation would have known that [this] was stolen property or if all the facts and circumstances surrounding the receipt of the car would require a reasonable man to make inquiry; and that the defendant failed to follow up the inquiry for fear that he would learn the truth and know the goods were stolen, you may find that the defendant had knowledge that the property was stolen.” This was the court’s only explanation of law with respect to proof of knowledge. The court’s language tracks the statutory presumption of knowledge which attaches when a person "in the business of buying, selling or otherwise dealing in property” possesses stolen property without making a reasonable inquiry that the person from whom he obtained it had a legal right to its possession. (Penal Law, § 165.55, subd 2.) There was no warrant to apply the presumption to this case. True, the defendant was a "body and fender” man. However, the only conclusion which flows from this admitted occupation is that the defendant was employed as a repairer of automobile bodies and fenders. There was no proof that the defendant was in the business of buying, selling or otherwise dealing in automobiles or automobile parts. There was proof that the defendant repaired cars; there was no proof at all that he sold them, bought them or dealt in them. (See People v Gilmore, 36 NY2d 898.) The presumption is inapplicable to this case and the charge, which in any event did not express to the jury the legal effect of presumptions, was erroneous.

The proper charge would have been to instruct the jury that defendant’s knowledge of the illegality could be proved by circumstantial evidence. There was ample direct evidence from which the jury could have found that all the other elements of the crimes, save guilty knowledge, were present. "Knowledge, of course, may be shown circumstantially by conduct or directly by admission, or indirectly by contradictory statements from which guilt may be inferred”. (People v Reisman, 29 NY2d 278, 285, cert den 405 US 1041; see People v Ozarowski, 38 NY2d 481, 489.) While the jury should have been charged that knowledge could be proven circumstantially, the jury should also have been cautioned that the element of knowledge as any other element must be proven beyond a reasonable doubt. (CPL 70.20, 300.10, subd 2; People v Bonifacio, 190 NY 150, 153-154.) Where proof of the entire case depends upon circumstantial evidence, the standard is even more stringent. "The oft-stated rule with respect to convictions based exclusively upon circumstantial evidence is that for guilt to be proven beyond a reasonable doubt the hypothesis of guilt should flow naturally from the facts proved, and be consistent with them; and the facts proved must exclude 'to a moral certainty’ every reasonable hypothesis of innocence.” (E.g., People v Benzinger, 36 NY2d 29, 32; People v Lagana, 36 NY2d 71, 73.) However, this later standard has no application where the circumstantial evidence relates to proof of only one element. (People v Sabella, 35 NY2d 158, 168; People v Bonifacio, supra.) In this case, there was no direct proof of defendant’s knowledge. In fact, the defense contended that defendant thought the cars had been legitimately acquired from automobile dealers. Requisite knowledge could be inferred circumstantially from the evidence produced by the People. But such inference could only be drawn by a jury properly charged on the law which controls the use of circumstantial evidence to prove an element of the. offense.

In sum, the admission into evidence of the defendant’s election to exercise his constitutional right against self incrimination is an error which, quite by itself, requires reversal and a new trial. In addition, there is a fundamental error in the court’s charge which also would require reversal and which should be rectified at the new trial.

Accordingly, the order of the Appellate Division should be reversed and a new trial ordered.

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

Order reversed, etc.


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

text:
    In the Matter of Randolph Cowan, Respondent, v Roy M. Kern et al., Constituting the Zoning Board of Appeals of the Town of Smithtown, Appellants.
    Submitted February 8, 1977;
    decided April 5, 1977

      Dudley L. Lehman, Smithtown, for appellants.

      Sidney N. Gitelman, East Northport, for respondent.
   Jasen, J.

The sole issue presented on this appeal is whether the Zoning Board of Appeals abused its discretion, as a matter of law, in denying petitioner’s application for a zoning variance.

In January 1970, petitioner Randolph Cowan purchased, at a tax sale, a substandard parcel of land in the Ronkonkoma Heights section of the Town of Smithtown. The parcel consists of three separate building lots and has a total land area of 7,500 square feet. The property is located in an "R-10” residential zone which authorizes the construction of single-family residences on minimum plots of 10,000 square feet. The land was originally divided into building lots by a map filed in 1911 and the . 10,000 square feet requirement was first imposed in 1949. In order to construct a residence on the Cowan property, a variance must be obtained to cover the total area deficiency, as well as deficiencies in the sizes of the proposed front and rear yards.

In January 1974, Cypress Homes, Inc., a builder and the prospective purchaser under a contract of sale, applied for the necessary variance, asserting that the Cowan parcel was the same size as other improved parcels on the same street. The Zoning Board of Appeals denied the application on February 26, 1974 and the contract of sale was rescinded.

The landowner, Cowan, then sought to obtain a building permit for the property, but the request was denied on the ground that a variance had not been obtained. Thus, on May 24, 1974, Cowan applied directly to the board for the necessary variance. His application was based on much the same contention as had been asserted in the earlier application by the builder: the fact that others had built on similarly sized properties and that a residence on his property would be in conformity with the character of the neighborhood. It was also claimed that denial of the variance would inflict "severe” economic hardship on the landowner.

On June 25, 1974, the board conducted a hearing on the Cowan application. The landowner submitted proof that, of the 17 parcels on his block, nine parcels either met or exceeded the zoning requirements and that eight others did not. With respect to the eight substandard properties, two (the Cowan property and one other) had not yet been improved. Two substandard parcels had been improved after the board had granted requisite area variances. No evidence was introduced by petitioner to explain whether the remaining four improved but substandard properties were nonconforming uses constructed prior to the 1949 zoning ordinance or had been the subject of prior grants of variance or, finally, were constructed in plain violation of the zoning ordinance. The landowner did produce an analysis of the entire neighborhood, including several nearby blocks, which indicated that approximately 67% of the distinct parcels and approximately 77% of all the individual building lots in the area conformed to the zoning requirement. The applicant’s expert appraiser testified that the value of the real property, with the variance, would be approximately $7,500. Without the variance, the landowner would be able to sell the nonbuildable plot to the owner of an adjoining parcel for approximately $1,000. The landowner did not report the price he paid for the property at the tax sale.

Several persons appeared at the hearing in opposition to the variance application. The neighboring landowners testified that if Cowan were to build on his property, there would be less than the 100-foot distance between Cowan’s cesspool and their water wells, as required by the ordinance. This testimony was rebutted to some extent by a letter from the Suffolk County Department of Health to the effect that the Cowan cesspool could be located the necessary distance away from the neighboring wells and that any shortage in the distance between Cowan’s well and the neighbors’ cesspools could be compensated for by digging the Cowan well deeper. Unrebutted, however, was the testimony of one neighbor that all of the houses on substandard plots, save the two for which variances had been granted, had been constructed prior to the adoption of the 1949 area requirement. Hence, it was established that four of the six improved but substandard parcels were nonconforming uses.

On September 16, 1974, after the board had failed to pass upon his application, Cowan commenced an article 78 proceeding to compel the board to grant him a variance. At a regular meeting six days later, the board voted to deny the application. The board found that the character of the neighborhood was substantially in accordance with the zoning requirements and that the applicant had failed to establish unnecessary hardship or practical difficulty. It was noted that "the applicant did not testify before the board as to what the loss of value in the premises would have been to him, since it was not revealed what the purchase price of the subject parcel was at the time applicant purchased same. Therefore, the board would also find that the testimony of applicant’s expert witness is incomplete and affords very little upon which this board can determine the loss in value to said applicant.”

Special Term awarded judgment to the board and dismissed the article 78 proceeding. The court ruled that "where, as here, a substandard parcel of property is purchased at a tax sale, the purchaser thereof cannot later claim that a denial of a variance for that property results in a severe economic hardship. The Court further finds that petitioner has failed to demonstrate that the character of the neighborhood is substandard.” Petitioner moved for renewal of the article 78 proceeding and for a hearing on the ground that the board had discriminated against him. The court granted the request for a hearing. The petitioner submitted proof that, on November 11, 1971, the board had granted area, front yard and rear yard variances to the owners of two parcels immediately adjoining petitioner’s. No other proof was put forward; instead, counsel for petitioner engaged in a lengthy oral argument. The court denied the motion for renewal on the ground that the petitioner had failed to establish his claim of discrimination. The Appellate Division, with one Justice dissenting, reversed the judgment of Special Term and directed that the board grant petitioner a variance. (51 AD2d 569.)

On appeal, petitioner presents two separate arguments in support of his claim for the variance. First, it is argued that the board, by granting variances to others similarly situated while denying relief to the petitioner, discriminated against him and, thereby, abused its authority. A second and distinct contention is that the petitioner had submitted ample proof that the application of the zoning ordinance to his property would result in economic hardship entitling him to a variance. We conclude that the record does not reveal either discrimination or abuse of discretion. We would, therefore, reverse the order of the Appellate Division and reinstate the judgment of Special Term.

As to the claim of discrimination, the law is well settled that the mere fact that one property owner is denied a variance while others similarly situated are granted variances does not, in itself, suffice to establish that the difference in result is due either to impermissible discrimination or to arbitrary action. The controlling principles were stated by Judge Lehman, with his usual eloquence, long ago. "The mere fact that consents were granted to owners of premises somewhat similarly situated does not in itself show that consent was arbitrarily refused to this applicant. The question is not whether someone else has been favored. The question is whether the petitioner has been illegally oppressed. Exercise of discretion in favor of one confers no right upon another to demand the same decision. Unlimited discretion vested in an administrative board by ordinance is not narrowed through its exercise. * * * The [board] may refuse to duplicate previous error; it may change its views as to what is for the best interests of the [town]; it may give weight to slight differences which are not easily discernible. There are, of course, extreme cases where analogy is so complete, where grant of consent under similar circumstances has been so frequent, both before and after refusal in one instance, that inference arises that the refusal is the result of unfair discrimination and oppression. Especially is this true where strong reason is made out for granting the consent. In such case, perhaps, the courts may call upon the dispensing power to rebut such inference.” (Matter of Larkin Co. v Schwab, 242 NY 330, 336-337; accord Matter of Crossroads Recreation v Broz, 4 NY2d 39, 46-47.)

Here, petitioner has shown only that two variance applications were granted to adjoining landowners in 1971. Although the board of health indicated that it was technically feasible to lay out water and sewage facilities in a manner that would not create an unsanitary condition, the zoning board was certainly free to conclude that, after three years from the last residential construction, the area had become too congested to permit further substandard development. The board could consider the existence of several nonconforming uses in the same immediate vicinity, uses that, constitutionally, the board was powerless to change. That the board had granted two variances in the past did not strap it to grant variances to all comers in the future automatically and without due regard for changed conditions that might require a different result. Having granted two variances in the past, the board could properly decide that additional variances would impose too great a burden and strain on the existing community. More importantly, the board, after three years’ reflection, could find that previous awards had been a mistake that should not be again repeated. Certainly, the board was not bound to perpetuate earlier error.

Three additional factors are important. Only two variances were awarded in the past and these applications were decided at the same time. The evidence showed that the neighborhood, generally, was in conformity with the ordinance and the other exceptions on this particular block were not due to variance awards, but were created prior to the adoption of the present zoning requirement. Thus, this is certainly not the extreme case where the board had consistently granted variances and issued building permits to all in the neighborhood save a few selected out for discriminatory treatment. (See Matter of Ozolins v Horn, 26 AD2d 555.) Secondly, the timing of the two variance grants indicates that the awards were made on an individual basis viewed in the light of conditions then prevailing in the community. Phrased another way, there is no history of a consistently liberal board policy that was suddenly and dramatically changed to the disadvantage of this petitioner. Thirdly, the board denied a variance to a builder who sought to construct a residence on the same parcel. This indicates that the board had changed its policy on variances even before this petitioner applied for one. Thus, denial of his application was consistent with the board’s policy with respect to this neighborhood.

Turning to the second ground pressed by the petitioner— that the board abused its discretion in denying the variance— we find that the evidence substantiates the board’s conclusion that the petitioner had failed to establish that the denial of the variance would result in the infliction of either significant economic hardship or practical difficulty. Before the zoning authority is required to explain why the public health and welfare requires adherence to the zoning standard, the petitioner must first come forward with proof of significant economic injury. (Matter of National Merritt v Weist, 41 NY2d 438, 442, 445; see Conley v Town of Brookhaven Zoning Bd. of Appeals, 40 NY2d 309.) The petitioner’s only proof on the question of financial hardship was to the effect that if the variance was granted the real property for building purposes would be worth approximately $7,500, whereas the real property was worth only approximately $1,000 without the variance. However, in calculating whether financial hardship would be inflicted by adherence to the zoning standard, the inquiry should properly focus upon the value of the parcel as presently zoned, rather than upon the value that the parcel would have if the variance were granted. (Matter of Douglaston Civic Assn. v Galvin, 36 NY2d 1, 9.) Concededly, the parcel, without the variance, has an economic value of at least $1,000. In the absence of proof as to what the petitioner paid for the property at the tax sale, there is no predicate which would support a finding of economic hardship in requiring the petitioner to adhere to the zoning ordinance. Thus, the petitioner failed to prove that the property "will not yield a reasonable return if the area standard restrictions are imposed.” (Matter of National Merritt v Weist, supra, at p 442.)

Moreover, the manner in which petitioner acquired the property, by purchase at a tax sale, indicates that any hardship was willingly assumed. In view of the tax sale purchase, the petitioner, is certainly "chargeable with knowledge of the interdictions of the zoning ordinance which limited * * * development.” (Matter of National Merritt v Weist, supra, at p 444.) Hence, economic loss, if there be any, was self-inflicted and self-created. While no proof of the purchase price has been adduced, it is reasonable to assume that the price obtained by the County of Nassau at the sale reflected the value of the property as restricted by the ordinance. Hence, the granting of the variance would, like as not, result in a windfall to petitioner well above the minimal price paid at the tax sale. While the fact that any financial hardship was self-imposed does not prevent the board from granting the variance in a proper exercise of its discretion (Conley v Town of Brookhaven Zoning Bd. of Appeals, 40 NY2d 309, 315, supra), the existence of a self-created hardship does not entitle the landowner to demand a variance. (Matter of National Merritt v Weist, supra, at p 442.)

One further comment is necessary. The dissent places its primary reliance on the standard of review articulated in Matter of Fulling v Palumbo (21 NY2d 30, 33). Since 1967 when Fulling was decided, we have had numerous occasions to both clarify and modify much of its admittedly broad language. (E.g., Matter of National Merritt v Weist, supra, at p 442; Conley v Town of Brookhaven Zoning Bd. of Appeals, supra; Matter of Overhill Bldg. Co. v Delany, 28 NY2d 449, 455; Matter of 113 Hillside Ave. Corp. v Zaino, 27 NY2d 258, 261-262.) The present dispute simply involves a challenge to the rationality of an administrative decision. The petitioner does not challenge the constitutionality of the zoning ordinance as applied to his property. In this circumstance, it would be inappropriate to apply constitutional criteria (see, e.g., Matter of Grimpel Assoc. v Cohalan, 41 NY2d 431; McGowan v Cohalan, 41 NY2d 434) in lieu of the traditional standard applicable to the judicial review of all kinds of administrative determinations. Even the Fulling case recognized the limited nature of the judicial scrutiny of local zoning decisions. Notwithstanding the broader sweep of the opinion, the ultimate issue was stated to be whether "the Zoning Board of Appeals abused its discretion, as a matter of law”. (21 NY2d, at p 32.) The dicta to which the dissent averts is not now, if it ever was, representative of the state of the law. In fact, the cases which followed Fulling quite consistently adhered to the traditional standard. (E.g., Matter of 113 Hillside Ave. Corp. v Zaino, 27 NY2d 258, 261-262, supra; Matter of Overhill Bldg. Co. v Delany, 28 NY2d 449, 454, 455, supra; see Matter of National Merritt v Weist, 41 NY2d 438, 442-443, supra.) We have recently reiterated the rule.

"The oft-stated standard by which a request for an area variance is to be measured is whether strict compliance with the zoning ordinance will result in practical difficulties. (E.g., Matter of Wilcox v Zoning Bd. of Appeals of City of Yonkers, supra; Matter of Village of Bronxville v Francis, 1 AD2d 236, 238, affd 1 NY2d 839; 2 Anderson, New York Zoning Law and Practice [2d ed], §§ 18.32, 18.33, 18.40.) The local zoning boards have discretion in considering applications for variances and the judicial function is a limited one. The courts may set aside a zoning board determination only where the record reveals illegality, arbitrariness or abuse of discretion. (Matter of Fulling v Palumbo, 21 NY2d 30, 32; Matter of Lemir Realty Corp. v Larkin, 11 NY2d 20, 24.) Phrased another way, the determination of the responsible officials in the affected community will be sustained if it has a rational basis and is supported by substantial evidence in the record. (Matter of Wilcox v Zoning Bd. of Appeals of City of Yonkers, 17 NY2d 249, 255, supra.)” (Conley v Town of Brookhaven Zoning Bd. of Appeals, 40 NY2d 309, 314, supra.)

The crux of the matter is that the responsibility for making zoning decisions has been committed primarily to quasi-legislative, quasi-administrative boards composed of representatives from the local community. Local officials, generally, possess the familiarity with local conditions necessary to make the often sensitive planning decisions which affect the development of their community. Absent arbitrariness, it is for locally selected and locally responsible officials to determine where the public interest in zoning lies. (McGowan v Cohalan, 41 NY2d 434, 438, supra.) Judicial review of local zoning decisions is limited; not only in our court but in all courts. Where there is a rational basis for the local decision, that decision should be sustained. It matters not whether, in close cases, a court would have, or should have, decided the matter differently. The judicial responsibility is to review zoning decisions but not, absent proof of arbitrary and unreasonable action, to make them. Nothing in Matter of Fulling v Palumbo (21 NY2d 30, supra) is to the contrary. Here, the record does not indicate that the zoning board acted in a manner that was in any way arbitrary, unreasonable, irrational or indicative of bad faith. Its decision, therefore, should not have been disturbed.

Accordingly, the order of the Appellate Division should be reversed and the judgment of Special Term reinstated.

Gabrielli, J. (dissenting).

I respectfully dissent and vote to affirm the order of the Appellate Division. In this case the petitioner seeks an area variance as distinguished from a use variance, and just recently this court stressed the importance of this distinction "since, in the usual case, a use variance will have a greater impact on the community than an area variance which does not involve a use prohibited by the ordinance” (Matter of National Merritt v Weist, 41 NY2d 438, 441). An area variance does not alter the basic character and nature of the community in the manner that a use variance does and, therefore, the courts have rationalized and properly held that different standards of burden of proof are applicable (Matter of National Merritt v Weist, supra). "The difference in the level of proof is explained by the fact that, generally, an area variance will release a landowner from the duty to follow the strict letter of the zoning ordinance so that the land may be put to a permitted use. On the other hand, a use variance, if granted, will result in the use of land in a manner inconsistent with the basic character of the neighborhood” (Conley v Town of Brookhaven Zoning Bd. of Appeals, 40 NY2d 309, 313-314).

The petitioner has the burden of proving that the imposition and application of an area standard will create significant economic injury (Matter of Fulling v Palumbo, 21 NY2d 30) and once that proof is adduced "the burden of going forward with proof that the restriction is reasonably related to a legitimate exercise of the zoning power is upon the municipality” (Matter of National Merritt v Weist, supra, at p 443). The proof of significant economic injury is met by demonstrating that the property will not yield a reasonable return, but there is no requirement that in an area variance case the petitioner must prove what he paid for the property. In Matter of Fulling v Palumbo (supra) the proof demonstrated that Fulling had been offered $11,000 for his property by his two neighbors but with an area variance he could obtain double that amount. This was deemed sufficient to satisfy his burden of proving significant economic loss. In the case before us Cowan demonstrated that without the variance his neighbor owning contiguous land, and who had objected to the grant of the variance in this case, would purchase the property for $1,000 but with the variance the value would rise to $7,500. This, too, should be deemed sufficient to sustain the burden of proof. The fact that Cowan purchased the property at a tax sale and failed to reveal the price paid is not determinative here. To demonstrate, if Cowan had paid in excess of $1,000 for the property, clearly the denial of the area variance would result in economic hardship because it would result in an actual financial loss. Likewise, if he paid less than $1,000, a situation analoguous to the facts in Fulling, he has still demonstrated economic hardship because literal enforcement of the ordinance will cost him 86% of the value of his land (see 2 Anderson, New York Zoning Law and Practice, § 18.40). Serious financial injury need not be equated to actual financial loss; a significant differential in value may amount to a hardship even if the owner paid nothing for the property.

The majority, citing Matter of Douglaston Civic Assn. v Galvin (36 NY2d 1, 9), holds that in determining financial hardship, inquiry should focus on the value of the property as presently zoned, "rather than upon the value that the parcel would have if the variance were granted” (p 597). Matter of Douglaston Civic Assn, involves a use variance. The standard of proof in a use variance case must necessarily be more stringent than in an area variance case because the character of the community is affected. On the other hand, proof of economic injury, in the context of an area variance, need not be as restrictive since the over-all impact of relief is less burdensome on the community. The quantum of evidence necessary to satisfy the burden of proof must be balanced with the public interest affected (see Matter of National Merritt v Weist, supra). Where the petitioner shows that the value of the property under the existing area restriction does not yield a reasonable return as compared to the value of the property with an area variance, the burden of proof of economic injury has been met. Economic injury does not, of course, end the matter. If there is a legitimate purpose for the ordinance and it is reasonably related to the public health, financial loss will be inadequate to justify granting the variance (Matter of Overhill Bldg. Co. v Delany, 28 NY2d 449). In this case, however, the board introduced insufficient "evidence”, and indeed the record is sparse, if not totally lacking in evidence that denying the variance would benefit the public health and welfare.

The fact that the financial hardship may be self-imposed does not prevent the board from granting the variance (Conley v Town of Brookhaven Zoning Bd. of Appeals, supra) but is one factor which may be weighed with the evidence before it. The decision of the board is silent on the issue of self-created hardship but even if it had been considered, in view of the severity of the economic loss, it would be insufficient to mandate denial of the variance.

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

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

Order reversed, with costs, and the judgment of Supreme Court, Suffolk County, reinstated.

       The Appellate Division’s statement to the effect that a claim of discrimination is made out simply if "Tweedledee is granted, and Tweedledum is denied” (51 AD2d, at p 570), is in plain conflict with established principles and cannot be sustained.

      . The ordinance requires an area of 10,000 square feet. Petitioner, desiring to erect a one-family residence, requested an area reduction by reducing the front yard setback from 40 feet to 37 feet and a backyard setback from 50 feet to 38 feet.

      . It is of consuming interest to note that this objecting neighbor had but recently been granted a similar area variance. Obviously, the ordinance was calculated to maintain the essential character of the neighborhood, which was residential, and there was no evidence that a grant of the variance would defeat this purpose; and, in fact, the proof established that a new house on this lot would improve the neighborhood.


author: Gabrielli, J.

text:
    DFI Communications, Inc., Respondent, v Sanford Greenberg, Appellant.
    Argued February 17, 1977;
    decided April 5, 1977

      Anthony L. Tersigni, George Berlstein and Susan S. Belkin, New York City, for appellant.

      Michael E. Schoeman, New York City, for respondent.
   Gabrielli, J.

This case poses the novel question whether minutes of a meeting of a corporate board of directors signed by an officer, the secretary of the corporation, which recite that the board has agreed to modify a corporate contract and which also set forth in detail the terms of the modification, may be deemed to satisfy the requirements of section 15-301 of the General Obligations Law.

The parties entered into a subscription agreement for the purchase of stock, as well as an employment agreement, on February 13, 1969. At the same time, irrevocable proxy and shareholders’ agreements were executed, but these are not relevant to this appeal. The subscription agreement obligated the defendant Greenberg to purchase 124,000 shares of plaintiffs stock at $3 per share for an aggregate purchase price of $372,000. The purchase price was to be paid in several annual installments, with an initial payment of $99,000 covering 33.000 shares to be made upon the execution of the agreement. Two installments of $99,000 each covering a total of 66.000 shares were to be paid on February 13, 1970 and February 13, 1971 respectively; and a final installment of $75,000 representing 25,000 shares was to be paid on February 13, 1972. The employment agreement provided that the defendant would be employed by plaintiff for five years as its executive vice-president at an annual salary of $40,000 and gave defendant an option to continue his employment for an additional five-year period.

The subscription agreement contained a clause stating that "[t]his agreement may not be changed or terminated orally”; similarly, the employment agreement provided that ”[t]his agreement may not be changed, rescinded or altered or amended except by an agreement had in writing and signed by both of us.” The initial installment on the subscription agreement was paid and the defendant assumed the position of executive vice-president and continued to perform his duties until May 25, 1971 when he suffered a heart attack.

In 1970, the defendant, asserting a financial inability to meet the second installment obligation, obtained from plaintiff a change in the payment terms of the subscription agreement and tendered $50,000 of the $99,000 due which was accepted by the plaintiff. In 1971, when the third installment was due, the defendant once again alleged an inability to meet his obligation. It is this and the remaining installments which are the subject of this appeal. Defendant Greenberg contends that at its April 30, 1971 meeting, plaintiff’s board of directors agreed to accept his proposal that he would borrow $50,000 to purchase an additional 16,667 shares in satisfaction of his entire remaining obligations under the stock subscription agreement on the condition that he would either accept a reduction in salary or assume the duties of the corporation’s controller. Defendant thus claims that the original subscription agreement was modified, and sought at trial to introduce into evidence the minutes of the meeting of the board of directors which contain the terms of the modfication agreement and an acknowledgment of the board’s approval thereof. Specifically, the minutes state in pertinent part:

"A discussion then ensued concerning the subscription obligation of Mr. Greenberg, pursuant to which he had purchased 49,667 shares of the company’s common stock and an additional obligation to purchase 74,333 shares at $3 per share. Mr. Greenberg stated that he was unable to fulfill the balance of the subscription obligation which was due on February 13, 1970 (and was extended to February 13, 1971), pursuant to which he was obligated to pay an additional $49,000, was unable to meet the obligation due on February 13, 1971, and anticipated that he would be unable to meet the future obligations. He further stated that he could not effectively function as the company’s Executive Vice-President with the obligation overhanging.

"Mr. Greenberg proposed to borrow $50,000 in order to liquidate the obligation, said $50,000 to be used to purchase an additional 16,667 shares of the company’s common stock. Mr. Raskin thereupon left the meeting for a prior appointment and after additional discussion, the meeting was recessed so that the board members could discuss the proposal outside Mr. Greenberg’s presence. Mr. Greenberg thereupon reentered the meeting and the meeting resumed.

"The board, Mr. Greenberg abstaining, thereupon agreed to accept Mr. Greenberg’s proposal on condition that Mr. Green-berg either accept a reduction in his compensation to $25,000 per annum until such time as the company’s operations are profitable or take over the duties presently performed by the Company’s Controller. Mr. Greenberg advised the Board that he would accept one or another of the conditions and would decide which to accept by May 1st.”

There then followed a recital of the board’s reasons for deciding to approve the defendant’s proposal which "The chairman directed that the secretary record in the minutes”. It appears that the corporation had an immediate cash flow problem which would be alleviated by the influx of $50,000 to be provided by Greenberg and by a reduction in his salary or the alternative assumption of the controller’s duties. According to the minutes, the directors were also of the opinion that Greenberg was a valuable asset to the company and they believe that it was essential that he continue to serve as executive vice-president. The minutes were signed, as required, by the corporation’s secretary, Mr. Labaton, an attorney.

Greenberg subsequently tendered the $50,000 as agreed to at the board of directors’ meeting but the tender was rejected by DFI’s president. The corporation then commenced this action against the defendant for breach of the stock subscription agreement and the defendant, in addition to his counterclaims based on breach of the employment agreement by DFI, sought to interpose the claimed modification as a defense. The Trial Judge held that the minutes did not satisfy the requirements of section 15-301 of the General Obligations Law, applicable to the modification of contracts containing a provision that they may not be orally altered. The Judge thus ruled that the minutes were inadmissible as a matter of law and directed a verdict in plaintiffs favor on its cause of action. Greenberg’s counterclaims were submitted to the jury which returned a verdict in his favor in the amount of $32,000, and judgment was then entered against the defendant in the amount of $232,574.48 to be offset by the $32,000 awarded to the defendant on his counterclaim. The judgment was affirmed by the Appellate Division.

Section 15-301 of the General Obligations Law provides that, "1. A written agreement or other written instrument which contains a provision to the effect that it cannot be changed orally, cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement of the change is sought or by his agent.”

The Appellate Division relying on Bakhshandeh v American Cyanamid Co. (8 AD2d 35, affd 8 NY2d 981), held that the minutes were inadmissible because they "constitute at most a written memorandum” and not the agreement required by the statute. We disagree.. It is true that section 15-301 differs from the general Statute of Frauds contained in section 5-701 of the General Obligations Law in that a "note” or "memorandum” of an agreement is insufficient to satisfy the requirements of the former statute. Here, however, the modification agreement is formally acknowledged in the recorded minutes of the plaintiff corporation’s board of directors’ meeting and its terms are clearly and precisely set forth; and, of significant importance, the minutes are signed by the corporation’s secretary whose duty it is to keep and sign the minutes. This case is thus distinguishable from Bakhshandeh v American Cyan-amid Co. (supra, p 37) where the court found that the writing "at best was an unsigned memorandum of the terms of a discussion indicating an intention to change the original agreement”, and thus concluded that "the statute is not satisfied by a written memorandum of an oral agreement”. The case before us is not one presenting an abbreviated or incomplete expression of the parties’ agreement embodied in a "note” or "memorandum” sufficient for compliance with the general Statute of Frauds but inadequate for purposes of the "writing” requirement of section 15-301 of the General Obligations Law. The complete amendatory agreement between the parties is contained in the signed minutes as well as the board’s reasons for its adoption. To hold that the claimed modification was not "in writing” in this case would be a hypertechnical, overly formalistic and erroneous interpretation of the statutory requirement.

The purpose of subdivision 1 of section 15-301 of the General Obligations Law, which was intended in part to compensate for the demise of the seal (Semerad, Practice Commentary, McKinney’s Cons Law of NY, Book 23A, General Obligations Law, § 15-301, p 588), was to assure the authenticity of an amendatory agreement; thus, the statute requires the dignity of a formal writing to insure the validity and genuineness of a contractual modification. The duly recorded minutes of a meeting of the board of directors, signed by the corporate secretary, measure up to the level of dignity and authenticity required by the statute. Subdivision (a) of section 624 of the Business Corporation Law requires a corporation to keep minutes of the proceedings of its board of directors. Generally, such minutes are prima facie evidence of action taken by the corporation (Rudd v Robinson, 126 NY 113, 117; 9 Fletcher Cyclopedia Corporations [Perm ed], § 4633, pp 615-616; 18 Am Jur 2d, Corporations, § 177, p 706; 18 CJS, Corporations, § 191, subd e, pp 612-613). While not directly applicable here, it is interesting to note that subdivision (g) of section 624 of the Business Corporation Law provides that records such as minutes of a board of directors’ meeting "shall be prima facie evidence of the facts therein stated in favor of the plaintiff in any action or special proceeding against such corporation”. The defendant Greenberg was present at the meeting to propose the modification which was then, according to the minutes, duly accepted by the board of directors and signed by its corporate officers, as required. Moreover, the preparation and drafting of those minutes were in control of the plaintiff DFI, the party to be charged. Thus, section 15-301 should not be read to require an amendatory writing prepared and executed in precisely the same manner as the original agreement. In requiring that a writing must be "signed by the party against whom enforcement of the change is sought or by his agent” the statute by its terms does not contemplate, in the circumstances here presented, an additional formal agreement signed by both parties.

As noted, the statute requires that the writing be signed by the party to be charged or his agent. This requirement may be satisfied where an officer, here the secretary of the corporation, whose duty it is to record them, has duly subscribed the minutes. Cases construing the same requirement in the general Statute of Frauds have held that the signing of the minutes of a board of directors’ meeting by the corporate secretary was a sufficient signing to satisfy the statute (People’s Trust Co. v Consumers’ Ice & Coal Co., 283 Pa 76, 82; see, also, Argus Co. v Mayor, etc., of City of Albany, 55 NY 495, 504, involving the signing of a municipal corporation’s common council minutes by its clerk). Plaintiff contends that the secretary’s signing of the minutes is ineffective because of a claimed conflict of interest on his part. The issue whether the minutes were properly signed by Labaton as DFI’s agent may be litigated at trial. At that time, DFI may also raise any other objections it may have with respect to the validity of the minutes, such as the legality of the board’s action in voting to accept the defendant’s proposal. On this appeal, we merely hold that as a matter of law it may not be concluded that the minutes do not satisfy the requirement of subdivision 1 of section 15-301 of the General Obligations Law; and, of course, if it be found that the minutes were duly signed, we would conclude that they should have been considered sufficient under that section.

The defendant also contends that the trial court erred in its charge to the jury with respect to his counterclaim based on a claimed breach of the employment agreement by DFI. We find this contention to be without merit. The jury returned a verdict of $32,000 on his counterclaim which defendant concedes is almost precisely the amount DFI owed under a provision in the employment agreement requiring stipulated salary payments in the event of disability; and it apparently rejected his claim that DFI wrongfully refused to permit him to resume his employment following his disability. Hence, a new trial is not necessary with respect to defendant’s counterclaims, and the Appellate Division determination with respect thereto is affirmed.

Accordingly, the order of the Appellate Division should be modified, with costs to defendant, to the extent of reversing so much of the order of the Appellate Division as affirmed the award of damages to plaintiff and granting a new trial on plaintiffs complaint, and, as so modified, the order should be affirmed.

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

Order modified, with costs to defendant, and a new trial granted on plaintiffs complaint in accordance with the opinion herein and, as so modified, affirmed.

       It is asserted that the secretary, Mr. Labaton, was not acting as the corporation’s agent because a partner in his law firm was representing the defendant Greenberg at the time of the board of directors’ meeting. The record indicates that Mr. Labaton informed the Trial Judge that this possible conflict of interest was revealed to both parties prior to the board of directors’ meeting at which the modification of the subscription agreement was approved, and no objection was raised.


text:
    The People of the State of New York, Respondent, v Anthony Loewel, Appellant.
    Submitted February 7, 1977;
    decided April 7, 1977

      Paul J. Cambria, Jr., Herald Price Fahringer and Barbara J. Davies, Buffalo, for appellant.

      Paul M. King, District Attorney (John T. Ward, Jr., of counsel), Mayville, for respondent.
   Gabrielli, J.

The issue presented is whether the search of defendant’s person and the consequent seizure of a loaded firearm were justified as incident to a valid arrest on another charge. Upon this appeal, we are concerned only with the conviction resulting from the seizure of the weapon.

The defendant maintains that the weapon seized, following his arrest for criminal possession of stolen property, should have been suppressed because, as he claims, the arrest was not based on probable cause. The suppression hearing court found that the police acted with probable cause and the defendant thereupon pleaded guilty to the crime of attempted criminal possession of a weapon in the third degree. The defendant also pleaded guilty, under a separate indictment, to the crime of attempted possession of stolen property which charge was based upon the seizure of stolen coins in the basement of a house owned by the defendant, pursuant to a warrant authorizing a search "for * * * coins * * * removed from the premises of Ralph Jones”. The weapon charge arose from a search incident to the defendant’s arrest on another charge of possession of stolen property, stemming from seizure of stolen coins at a tire shop in the precincts of and at which the defendant was found. The Appellate Division invalidated the search warrant and ordered the suppression of the stolen coins seized in the search of defendant’s basement but affirmed the conviction for attempted criminal possession of a weapon.

A large and valuable coin collection was purloined from the home of one Ralph C. Jones in the fall of 1973. While the police had recovered part of the stolen collection from a house owned by the defendant, the greater part of the collection was still missing in October, 1974. At that time one Albert Traniello offered to sell a coin collection for $80,000 to an undercover Federal agent who was one of a group of law enforcement officers investigating the theft of the Jones coin collection. Traniello told the agent that the coins had been stolen by a "good friend, and an excellent burglar, who had previously been arrested by a police agency.” The agent was then taken by Traniello to the latter’s place of business, the A & A Tire Shop in Jamestown, New York. While the two were negotiating the terms of the sale, State and Federal agents were outside maintaining surveillance of the premises. The undercover agent left the building, and utilizing a prearranged signal, alerted the backup team that coins from the Jones collection were on the premises. The leader of the team, Senior Investigator Munch, accompanied by Investigator Fiegl, followed their fellow agent into the building. As they approached the entrance, the investigators spotted the defendant lolling around in front of the workshop area about 30 feet from the office door. Munch was aware that the defendant had been linked to the burglary of the Jones collection and had been arrested in connection therewith.

The coins had been shown to the undercover agent in a small room behind the office of the tire shop; and when Munch and Fiegl entered this room they observed that the coins were mounted in cardboard containers imprinted with the name "Ralph C Jones.” The undercover agent had already placed Traniello under arrest and Munch directed Fiegl to place the defendant under arrest. Fiegl proceeded to do so by identifying himself and informing the defendant that he was under arrest, at which time the latter sought to escape but two other police officers came to Fiegl’s assistance and the defendant was apprehended. A loaded revolver, the weapon involved in the present case, was discovered in the pocket of his jacket.

Both courts below found that defendant’s arrest was based on probable cause that he had committed the crime of possession of stolen property. In light of this factual determination, which finds ample support in the record (see People v Alexander, 37 NY2d 202, 204), the search incident to the defendant’s arrest was lawful. Several months earlier police investigative efforts, culminating in the defendant’s arrest, had identified him as the perpetrator of the burglary of the very same coin collection which, at the time of the instant arrest, was in the process of being "fenced” in a tire shop while the defendant was on the premises. The police could reasonably conclude that it was not pure coincidence that the defendant, from whose basement a portion of the coin collection had been recovered, was present in the immediate area where an $80,-000 sale of the remainder of the coin collection was being transacted. The facts within the knowledge of the police officer who directed defendant’s arrest were " 'sufficient in themselves to warrant a man of reasonable caution in the belief that’ an offense has been or is being committed” (Brinegar v United States, 338 US 160, 175-176, quoting from Carroll v United States, 267 US 132, 162; see, also, People v Valentine, 17 NY2d 128; CPL 140.10, subd 1, par [b]).

The defendant also asserts on this appeal that the invalidity of the search warrant authorizing the prior search of his house "tainted” the subsequent arrest for the weapon charge. Because the issue was not preserved we do not face the question whether, had the issue been preserved, information obtained under an illegal search warrant, though inaccessible in a criminal proceeding for the first crime, may nonetheless provide probable cause with respect to subsequent separable criminal activity (cf. People v Clark, 41 NY2d 612).

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

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

Order affirmed.


text:
    The People of the State of New York, Respondent, v Dwight Clark, Appellant.
    Argued February 11, 1977;
    decided April 7, 1977

      Michael J. O’Bus, James J. McDonough, Matthew Muraskin and Eugene Murphy, Mineola, for appellant.

      Denis Dillon, District Attorney (Martin I. Saperstein, William C. Donnino and W. Russell Corker of counsel), Mineola, for respondent.
   Gabrielli, J.

On the evening of September 30, 1974 three masked bandits entered the home of Manuel Abate, threatened him and his children, and robbed him of a valuable old coin collection, a diamond ring, and an amount of cash. One of the three men wore a bandanna which, during the course of the robbery, slid down exposing his face. The evidence disclosed that during the three-minute period when Abate was emptying his safe, he had more than ample opportunity to view the robber, whom he later identified as Dwight Clark, the defendant.

Following a trial by jury the defendant was convicted of robbery in the first degree and he seeks a reversal on the ground that a taped telephone conversation was introduced into evidence in violation of his right to counsel and that the conversation was introduced without the notice required by CPL 710.30. He further asserts that the affirmative defense to robbery in the first degree, i.e., that the pistol was not a loaded weapon, is unconstitutional (Penal Law, § 160.15, subd 4). The Appellate Division upheld the conviction, and we affirm.

The three armed men entered Abate’s home in Nassau County at about 9:00 p.m. and demanded that he turn over his coin collection, valued at $40,000, or they would shoot his children. One of these men escorted Abate to his safe and pointed a revolver at his head and commanded him to open the safe, which he did. He testified that he did not know whether the pistol was real or toy but he felt it against his head and knew it was made of steel. Then, as directed, Abate put this 2,000-piece coin collection in a pillowcase and gave it to the robbers. During this time he had an opportunity to look at the defendant 10 or 12 times.

In October, Abate viewed a police lineup and identified the defendant as the man whose bandanna slid off during the robbery. Subsequently, defendant was indicted for robbery and larceny in Nassau County and on December 13, 1974 he was arraigned with counsel present. In January, and while out on bail, the defendant left Nassau County and went to New York City where he attempted to sell the stolen coins. As cruel fate would have it, his first contact was not with the hoped-for "fence”, but rather with an undercover police officer, not involved in the Nassau County case, who was investigating the sale of stolen property in the city. Clark, thus unaware, met one Gervasi, an undercover officer of the New York City Police Department, and inquired whether he would be interested in any old coins which were currently in the possession of an associate. Gervasi’s partner, Sergeant Welsome, had accompanied him to the restaurant where the meeting took place but was not present during the discussions. After the brief conversation between Clark and Gervasi, the two police officers returned to headquarters where, later in the day, they received a telephone call regarding the coins from an unknown third person who was apparently the defendant’s associate. Eventually, this unknown person put the defendant on the telephone, and he indicated to Welsome that he had $20 gold pieces and also Mexican gold pieces for sale. While the officers attempted to connect tape recording equipment to the telephone, the defendant hung up. After making the necessary preparations, the officers returned the call and spoke again to the defendant concerning the coin collection. This second conversation was fully recorded on tape. Significantly, during this whole operation, neither of the officers had any knowledge whatsoever of the outstanding Nassau County indictment against Clark. Rather, they were independently investigating criminal activity in their own jurisdiction relating to the unlawful possession of stolen property. During the trial of the defendant the tape was introduced in evidence and played for the jury.

On this appeal the defendant claims that admission of his taped conversation with a police officer made after indictment and in the absence of counsel, violated his right to counsel as defined in Massiah v United States (377 US 201). In Massiah where investigating officers surreptitiously obtained incriminating statements from the defendant after his release on bail, the Supreme Court held that the defendant was denied the protections accorded by his right to counsel "when there was used against him at his trial evidence of his own incriminating words, which federal agents had deliberately elicited from him after he had been indicted and in the absence of his counsel” (supra, p 206). The rule is well entrenched' in New York that incriminating statements obtained from a defendant after a lawyer has entered the proceeding are inadmissible if procured by custodial interrogation in the absence of counsel or a waiver (People v Hobson, 39 NY2d 479; People v Paulin, 25 NY2d 445; People v Waterman 9 NY2d 561; People v Di Biasi, 7 NY2d 544). Indeed, this court has recently reaffirmed the safeguards extended by the right to counsel in holding that only in the presence of a lawyer may a defendant waive his right to counsel after a lawyer has entered the proceeding in connection with the charges under investigation (People v Hobson, supra); and the protections extended by this right cover investigations made by the Internal Affairs Division of the New York City Police Department in response to complaints by a defendant (People v Townes, 41 NY2d 97; People v Roberson, 41 NY2d 106).

But this rule is not an absolute. Representation by counsel in a proceeding unrelated to the investigation is insufficient to invoke the protections (People v Hetherington, 27 NY2d 242, 245; People v Taylor, 27 NY2d 327). And we have also held that a voluntary, spontaneous statement is outside the purview of the rule (People v Kaye, 25 NY2d 139). Nor, as in this case, does the presence of counsel immunize the defendant from normal, good faith, investigation which occurs after indictment and is unrelated thereto and directed toward other criminal activity (United States v Garcia, 377 F2d 321; United States v Edwards, 366 F2d 853, 872-873). Incriminating statements made to the police in a noncustodial separable setting are admissible despite the attachment of counsel if, as here, the statements are elicited in the course of a good faith police investigation.

The prohibition against custodial interrogation after a lawyer has entered the proceedings, absent the presence of counsel or a waiver, is aimed at protecting a defendant from deliberate effots by law enforcement officials to elicit incriminating statements in disregard of constitutional protections. However, where the police are engaged in no such deliberate attempt but are instead pursuing a good faith investigation, neither the need nor the purpose for the rule is furthered by its application. Thus, the taped telephone conversations were properly admitted into evidence.

The defendant asserts that the prosecution failed to give notice of intent to use statements made to a public servant pursuant to CPL 710.30 (see People v Briggs, 38 NY2d 319). At the trial Sergeant Welsome was asked to relate the substance of his telephone conversations with the defendant; and defense counsel’s objection thereto on the ground that defendant’s conversations with the police officer were hearsay, was properly overruled. Welsome then testified to several incriminating statements made by the defendant. At this point the prosecutor indicated his intent to offer into evidence the tape recording of one of the telephone conversations and defense counsel objected to the introduction of the tape on the ground that it was made in the absence of counsel, as discussed above. The objection was overruled and a short recess was called in order to allow defense counsel an opportunity to review a transcript of the tape. When Officer Welsome was recalled to the stand after the recess, the introduction of the tape was challenged only on the ground that defendant was enticed into making such statements but the objection was properly overruled and the recorded conversation was then received in evidence. Prior to Officer Gervasi being called to testify about conversations with the defendant, defense counsel, for the first time, objected to any further testimony concerning defendant’s statements on the ground that the notice pursuant to CPL 710.30 had not been given. Importantly, this objection was subsequently abandoned. Accordingly, the claim that the prosecution failed to give adequate notice was not properly preserved for appellate review (People v Ross, 21 NY2d 258; see, also, People v Rullo, 31 NY2d 894).

Finally, the defendant asserts that the affirmative defense to robbery in the first degree is unconstitutional. Subdivision 4 of section 160.15 of the Penal Law provides:

"A person is guilty of robbery in the first degree when he forcibly steals property and when, in the course of the commission of the crime or of immediate flight therefrom, he or another participant in the crime:

* * *
"4. Displays what appears to be a pistol, revolver, rifle, shotgun, machine gun or other firearm; except that in any prosecution under this subdivision, it is an affirmative defense that such pistol, revolver, rifle, shotgun, machine gun or other firearm was not a loaded weapon from which a shot, readily capable of producing death or other serious physical injury, could be discharged. Nothing contained in this subdivision shall constitute a defense to a prosecution for, or preclude a conviction of, robbery in the second degree, robbery in the third degree or any other crime.”

The defendant contends that this case is controlled by Mullaney v Wilbur (421 US 684), which held that the prosecution must prove beyond a reasonable doubt every element of an offense, and that placing on the defendant the burden of proving the affirmative defense that the act was committed in the heat óf passion violated due process. Initially we note that no exception was necessary to. preserve this issue for our review (People v Patterson, 39 NY2d 288). Going to the merits, however, the courts of this State have upheld this statute against constitutional challenge (People v Felder, 39 AD2d 373, affd 32 NY2d 747, app dsmd 414 US 948; People v McDonald, 50 AD2d 907, mot for lv to app den 39 NY2d 840; cf. People v Patterson, supra). We are here presented with insufficient reason to disturb these holdings.

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

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

Order affirmed.

      . CPL 710.30 provides in pertinent part: "Whenever the people intend to offer at a trial (a) evidence of a statement made by a defendant to a public servant, which statement if involuntarily made would render the evidence thereof suppressible upon motion pursuant to subdivision three of section 710.20 * * * they must serve upon the defendant a notice of such intention, specifying the evidence intended to be offered.”

      . Upon arraignment, the prosecutor served upon defendant a printed notice stating that "the People intend to offer at the trial of this indictment evidence of oral and/or written statements made to a public servant pertaining to the charge set forth in this indictment”. We do not, and indeed need not, pass upon the adequacy of this particular notice. We are informed that additional information is now being supplied with the notice.