author: Vab" Voobhis, J. Btjbke, J. (dissenting). Desmond, J. (dissenting).

text:
    The People of the State of New York, Respondent, v. Benjamin Oyola, Appellant.
    Argued April 14, 1959;
    decided July 8, 1959.

      Henry B. Rothblatt for appellant. I.
    The infant witness should not have been sworn and it was reversible error to do so. II, Treating her sworn testimony as an unsworn statement, it was not supported by other required evidence, and the motion to dismiss was improperly denied. (People v. Klein, 266 N. Y. 188.) III. On the whole case, the People failed to prove defendant’s guilt beyond a reasonable doubt. (People v. Colantone, 243 N. Y. 134; People v. Conrow, 200 N. Y. 356; People v. Sylvester, 178 App. Div. 923; People v. Slaughter, 278 N. Y. 479; People v. Derner, 288 N. Y. 599; People v. Churgin, 261 N. Y. 661.) IV. The reception of the testimony of defendant’s wife as to alleged admissions made by him to her, over objection and exception of defendant, constituted reversible error. (Poppe v. Poppe, 3 N Y 2d 312; People v. McCormack, 278 App. Div. 191; People v. Daghita, 299 N. Y. 194; Hawkins v. United States, 358 U. S. 74; People v. Marendi, 213 N. Y. 600; People v. Curtis, 217 N. Y. 304.)

      Daniel V. Sullivan, District Attorney (Irving Anolik of counsel), for respondent.
    I. Nancy Oyóla was properly sworn as a witness. Her understanding and appreciation of an oath was amply demonstrated by the elaborate voir dire, conducted before an oath was administered. II. The instant appeal presents solely questions of law for review in this court. The People submit that as a matter of law the evidence adduced at trial was sufficient to sustain a conviction. (People v. Lytton, 257 N. Y. 310; People v. Ledwon, 153 N. Y. 10; People v. McCarthy, 250 N. Y. 358; People v. Malkin, 250 N. Y. 185; People v. Pesky, 254 N. Y. 373; People v. Yui Kui Chu, 273 N. Y. 191.) III. The trial court properly permitted defendant’s wife to testify as to certain conversations with her husband occurring after they had been separated and subsequent to Oyóla’s arrest. Moreover, no valid objection was made by defendant to this testimony. (People v. McCormack, 278 App. Div. 191, 303 N. Y. 782; State v. Kollenborn, 304 S. W. 2d 855; Brown v. United States, 256 U. S. 335.)
   Vab" Voobhis, J.

Appellant has been convicted in the New York City Court of Special Sessions of causing the morals of a child under 16 years of age to become depraved in violation of subdivision 1 of section 483 of the Penal Law, and of assault in the third degree in violation of subdivision 1 of section- 244. Both of these misdemeanors are claimed to have been perpetrated on the daughter of appellant and his wife. Matrimonial differences had arisen which culminated in appellant’s removal from the home when his wife had him arrested following the alleged incident on which these criminal charges depend. The evidence against him consists of testimony by Nancy, their 10-year-old daughter, and an admission which his wife testified that he subsequently made to her on the telephone. We are satisfied that this conversation was erroneously admitted into evidence for reasons hereinafter stated.

The police were in the Oyóla home within four hours and Mrs. Oyóla was there within two hours of the earliest possible happening of this alleged sexual assault. The child testified to all the particulars of a completed act of intercourse upon her by her father, soon after she had retired for the night. She said that she had on her nightgown, and that he was clothed. In spite of the early arrival of both mother and the police, no evidence was offered by the People of any examination of the child’s body, nor the finding of any residual evidence of a seminal emission in or about the child’s sex organs, adjacent area nor on any other portion of her body, bedclothes or nightgown nor upon appellant’s clothing or anywhere else. Ho evidence was introduced of any cutaneous, structural or tissue injury or disturbance of this girl’s private parts, such as abrasions, lacerations, discoloration, redness, swelling or the like. Ho circumstantial evidence supports the child’s version of what occurred, all of which appellant has denied. In answer to questions from the Presiding Judge at Special Sessions, Haney said that her mother had rehearsed her story privately with her five times before the daughter told it to anyone else. Appellant had no previous criminal record. His good character was attested by his employer and another witness, and was recognized by Special Sessions when he was sentenced to an indefinite term in the Hew York City Penitentiary. Haney testified that he had done the same thing to her and to her playmate each on one prior occasion, but that this was the first time when she told her mother. This disclosure coincided in time with her mother’s lawyer’s instruction to Haney to remember that she would have to repeat the same testimony in a matrimonial action against her father.

The question is whether this evidence against appellant was sufficient to prove him guilty beyond a reasonable doubt. In People v. Ledwon (153 N. Y. 10) it was held that the burden being upon the People of establishing the guilt of the accused beyond a reasonable doubt, a mere scintilla or even some proof is not enough to create an issue of fact. In the exercise of their judicial function, courts have often held that in certain situations as matter of law the evidence must be more than usually clear and convincing. The degree of proof required may be affected by whether the testimony is contradicted by other evidence, whether it is consistent, credible or contains elements of suspicion. Moreover all evidence is to be weighed according to the proof which it was in the power of the party to have produced, as Lord Mansfield observed (2 Wigmore, Evidence, § 285, p. 163). Upon the record in this case including the omission of any circumstantial evidence lending credibility to the testimony of this child, we have concluded that appellant has not been proved guilty beyond a reasonable doubt.

Our attention has been directed to the circumstance that in the instance of this and certain other sexual offenses no statute specifically requires corroboration of the testimony of the complainant, like the statutes in the cases of abduction (Penal Law, § 71), adultery (id., § 103), compulsory prostitution (id., §§ 1091, 2460), compulsory marriage (id., § 1455), rape (id., §2013), and, until the crime was abolished, seduction under promise of marriage (id., § 2177). It is not altogether clear on what principle the Legislature adopted separate statutes in regard to these crimes. If appellant had been indicted under section 483-a of the Penal Law (carnal abuse of a child) he would have been charged with a felony punishable on conviction by imprisonment for not more than 10 years. That is exactly the same punishment prescribed for rape in the second degree (Penal Law, § 2010), yet in the latter instance there is a statute expressly requiring corroboration of the testimony of the complainant (§ 2013) whereas in case of the former there is no such statute. The absence of legislation requiring other evidence to support the testimony of the complainant extending to every material fact essential to constitute the crime, as in ease of rape (People v. Downs, 236 N. Y. 306; People v. Page, 162 N. Y. 272, 274), does not signify that courts fail to scrutinize with special care the same type of testimony in view of the ease with which crimes of this nature are charged and the difficulty of disproving them, and in view of the instinctive horror with which they are regarded by mankind (People v. Friedman, 139 App. Div. 795; People v. Donohue, 114 App. Div. 830).

Attention is called to the provision in section 392 of the Code of Criminal Procedure that when in criminal proceedings a child under 12 years of age does not in the opinion of the court or magistrate understand the nature of an oath, the unsworn statement of the child may be received “ But no person shall be held or convicted of an offense upon such testimony unsupported by other evidence.” Corroboration would have been required of every material fact essential to constitute the crime if Nancy Oyóla had not been sworn (People v. Meeks, 283 N. Y. 694; People v. Dutton, 305 N. Y. 632). In a series of decisions, however, where the infant complainant was sworn, this court has reversed convictions on charges of this nature and dismissed the indictments or informations as not proved beyond a reasonable doubt on the records before the court, which depended upon the testimony of the complaining Avitness alone (People v. Churgin, 261 N. Y. 661 [9 years old]; People v. Slaughter, 278 N. Y. 479 [15 years old]; People v. Derner, 288 N. Y. 599 [10 years old and 12 years old]; People v. Rosen, 293 N. Y. 683 [8 years old]; People v. Meyers, 309 N. Y. 837 [9 years old]). A child under 12 years of age is presumed to be incompetent to be sworn as a -witness in a criminal trial, and this presumption must be overcome by proper preliminary examination (People v. Klein, 266 N. Y. 188). Olshansky v. Prensky (185 App. Div. 469) indicates the nature of such preliminary examination. The records of the preliminary examinations in the cases cited lead to the conclusion that the application of this test is necessarily superficial and inconclusive in most instances. Some children were sworn who were younger than in other cases where unsworn statements were taken. The difficulty in applying the test of the understanding of an oath is illustrated by the preliminary examination of the 10-year-old girl upon whose testimony appellant’s fate depends, in which she repeated five times to the Presiding Judge of Special Sessions that she had never told a lie, but added, on reconsideration, that she had lied about 20 times during the previous year. She stated that she believed that, although one may sin by lying, nobody can do anything to you if you do lie. Can it be, in cases of this nature, that the need to have some verification of the testimony of the child depends altogether upon such collateral factors as whether, for example, this child had said in her preliminary examination that she had told 30 lies instead of 20 lies during the year before, or to whom she told the lies, or when she stopped lying? Mention of this is not frivolous, since this is the kind of thing in preliminary examinations of children under section 392 of the Code of Criminal Procedure which would determine the guilt or innocence of defendants unless the courts required some objective earmarks of truth even in eases where the child Avitness has been sworn. Where the -witness has been sworn, it may not be necessary to have supporting evidence of every material fact essential to constitute the crime, but the courts are not automatons of the Legislature to such a degree as to make patchwork of the law by being obliged to require full corroboration in instances where the trial court has taken the unsworn statement of the witness, but at the same time being compelled to dispense with all objective verification where an oath has been administered. To draw this sharp distinction would be as unreal today as the older law preventing atheists from testifying in court on the basis that they do not appreciate the nature of an oath (Jackson ex dem. Tuttle v. Gridley, 18 Johns. 98, 104). This can hardly have been intended by the Legislature. Whether a child eight years old is sworn as in People v. Rosen (supra) or a child of nine years has an unsworn statement taken as in People v. Dutton (supra) is largely fortuitous. Causing the criminal liability of a defendant to depend entirely upon this collateral and largely accidental circumstance would have almost as little to do with deliberative justice as trial by ordeal where, under a practice now happily extinct, the guilt or innocence of a defendant was determined by whether his hand was burned when he thrust it into boiling water or fire.

It is said that the acts charged against this appellant are usually performed in secret, out of the view of corroborating witnesses. That does not signify that some circumstantial evidence cannot be obtained lending veracity to the complainant’s narrative where the charge is true. Moreover, the same criticism would be applicable to the other sexual offenses to which reference has been made where specific statutes require corroborative evidence. Our liberties are based upon the idea that it is better for some of the guilty to go free than for any who are innocent to be convicted. In the extensive discussion of this subject by Professor Wigmore, to which the dissenting opinion in People v. Porcaro (6 N Y 2d 248, 253) refers, it is recognized that the general rule is to require corroboration of charges of all offenses against the chastity of women (Vol. Ill, p. 467; Vol. VII, p. 342 et seq.). His recommendation of changes in the law relate to the extension of existing rules to require in addition the psychiatric examination of complaining witnesses. It is noteworthy that a recommendation of such examinations was contained in the 1937-1938 Report of the American Bar Association’s Committee on the Improvement of the Law of Evidence (3 Wigmore, Evidence, p. 466), and that out of the fullness of his experience Professor Wigmore distrusted testimony by complainants in these cases advising the retention of whatever rules of corroboration exist under statute or case law, and reminded the bench and bar that errant young girls and women are given to “ contriving false charges of sexual offenses by men” (p. 459) concerning which he observed (p. 460) that “It is time that the Courts awakened to the sinister possibilities of injustice that lurk in believing such a witness without careful psychiatric scrutiny.” Psychiatric scrutiny goes beyond anything at issue on this appeal. The subject is mentioned only on account of the attention which has been given to it in the dissenting opinion in People v. Porcaro (supra), decided herewith.

The alleged admission against interest which appellant’s wife testified that he made to her consisted in a telephone call to her about two weeks after she had brought about his arrest, during which interval they had been separated. She testified that he said over the telephone “ that it was true what he done ” and that £ £ he was sorry for what he did to his daughter, and then I told him that I couldn’t forgive him for what he had done to her ” and “ that he violated his rights as a father, and then he told me about this other woman that he had. ’ ’ If this statement, which appellant denied having made, could amount to an admission of a sexual assault upon his daughter, which is not altogether clear, we consider that the objection to its introduction into evidence should have been sustained on the ground that it was a confidential communication between husband and wife induced by the marriage relation. It is true that they had been living separately for a short time after appellant’s arrest, but the circumstances indicate that (if spoken at all) this statement was part of an attempted reconciliation between husband and wife (People v. Daghita, 299 N. Y. 194,198-199; Warner v. Press Pub. Co., 132 N. Y. 181,185-186; Parkhurst v. Berdell, 110 N. Y. 386, 393). The presumption of confidentiality has not been rebutted as was held in Poppe v. Poppe (3 N Y 2d 312). The Appellate Division held that this conversation was erroneously admitted.

The conviction appealed from should be reversed upon the ground that appellant has not been proved guilty of the offenses charged beyond a reasonable doubt.

Btjbke, J. (dissenting).

The Appellate Division, while finding that the reception of an admission was error, unanimously affirmed a judgment of conviction of the Court of Special Sessions, stating in a short memorandum that “ The record amply establishes the guilt of the defendant We agree with this latter conclusion.

Defendant was found guilty of impairing the morals of his 10-year-old daughter. The facts and principles of law involved here are similar to those in People v. Porcaro (6 N Y 2d 248, decided herewith) wherein we treat the sufficiency and weight of the uncorroborated sworn testimony of children under 12 in criminal cases of this nature.

Here, in addition to the child’s sworn testimony, we believe that the testimony of the mother of the child and wife of the defendant regarding his alleged admission that ‘ he was sorry for what he did to his daughter ’ ’ was properly received by the Court of Special Sessions. Whether the testimony of the wife was credible was a question for the trier of the facts. This admission, however, was not privileged.

Whether or not this witness was competent to testify to this statement presented a mixed question of law and fact (cf. Poppe v. Poppe, 3 N Y 2d 312). Here, the majority of the Special Sessions Judges found as a fact that the “ presumption of confidentiality had been rebutted ’ ’ and that the admission was not prompted by any loyalty or trust engendered by the marital relationship.

Section 2445 of the Penal Law only prohibits the disclosure of confidential communications (People v. Daghita, 299 N. Y. 194; People v. McCormack, 278 App. Div. 191, aifd. 303 N. Y. 782). Not all inter-spouse communications are confidential but only those which would not otherwise have been communicated except that the party relies on the confidence and intimacy of the marital relationship (People v. Daghita, 299 N. Y. 194, supra).

Confidence and a marriage relationship are a sine qua non for without them there can be no privilege. A mere separation from bed and board may not destroy the relationship but there must be more than the simple fact that the parties are husband and wife.

In this respect the requirements of section 2445 of the Penal Law and section 349 of the Civil Practice Act are identical. Section 349 provides that “ A husband or wife shall not be compelled, or without the consent of the other if living, allowed to disclose a confidential communication made by one to the other during marriage.” (Emphasis added.)

Recognizing that not all statements between husband and wife, if made in privacy, are within this prohibition, we stated in Poppe v. Poppe (3 N Y 2d 312, 315, supra), that the statute was “Designed to protect and strengthen the marital bond, it encompasses only those statements that are 1 confidential,’ that are induced by the marital relation and prompted by the affection, confidence and loyalty engendered by such relationship. Whether, therefore, a particular communication is to be excluded from evidence on the ground that it is confidential necessarily involves a preliminary question of fact for decision by the trial judge, and it matters not that the ultimate issue for determination by the trier of the facts (here, cruelty) is essentially the same as the issue which determines admissibility [citing cases]. * * * It is, however, perfectly clear that the statute was never designed to forbid inquiry into the personal wrongs committed by one spouse against the other, or that it was ever intended to label confidential a communication aimed at destroying the marital relation ”.

The injury to this child has been held to be an injury to the wife and the marital relation. Some courts believe that necessity dictates if not requires that no privilege attach under these circumstances (State v. Kollenborn, 304 S. W. 2d 855 [Mo. Sup. Ct.]; 8 Wigmore, Evidence, § 2239, p. 258). “ Any rule that impedes the discovery of truth in a court of law impedes as well the doing of justice.” (Hawkins v. United States, 358 U. S. 74, 81 [concurring opinion].)

However, it is unnecessary now to go this far for we find that the circumstances surrounding the admission were sufficient in themselves, as Special Sessions found, to rebut any presumption of confidence or that the statement was elicited or uttered by reason of loyalty, affection or family devotion. The defendant admitted the crime at a time when he was separated from his wife and family. The defendant husband and his wife had quarreled over alleged extramarital relations indulged in by the defendant. His child had lodged serious accusations against him resulting in his arrest at the instance of his wife. WTiere the family relationship has been seriously impaired and the marital status has so deteriorated the reasons and basis for the privilege vanish (Hawkins v. United States, 358 U. S. 74, 77, supra; Poppe v. Poppe, 3 N Y 2d 312, supra). Defense attorney’s characterization of the alleged conversation as an attempted reconciliation is self-serving and was rejected by Special Sessions as contrary to the facts. Such a communication could hardly be presumed to be confidential, when made to the person who had caused his arrest.

Moreover, in evaluating the character of the admission, we must examine the statement with due deference to the circumstances under which it was made, and in the light of the severed marital relationship. In this regard, the husband’s statement strikes us as an acknowledgment which could be made by any remorseful sex offender to any mother who had been wronged rather than a plea of a penitent husband confiding to his wife the story of his wrongdoing.

The judgment should be affirmed.

Desmond, J. (dissenting).

I agree with Judge Burke for affirmance.

Two questions of law are before us: first, whether the telephone conversation between husband and wife was admissible in evidence; and, second, if that conversation was not admissible, whether the other uncorroborated testimony of the infant complainant was a sufficient basis for conviction. As to the first of those questions, the two courts below differed. In my opinion, there was in this record and on these facts justification for the holding of Special Sessions that this particular husband-wife conversation did not constitute a confidential communication induced by the matrimonial relationship (see People v. McCormack, 278 App. Div. 191, affd. 303 N. Y. 782).

But in any case (now we reach the second question of law) the evidence here, with or without the telephoned admission by defendant, may not be held to be as matter of law insufficient for a conviction. There is not and never has been a rule of law in this State requiring corroboration of the sworn testimony of the infant complainants in these cases, and to my mind such a rule would be very much against the public interest. The Legislature which makes and announces public policy has by appropriate statutes demanded corroboration in other kinds of criminal cases and (not applicable here) of unsworn testimony of some infants (Penal Law, §§ 71, 103, 1091, 1455, 2013, 2460; Code Prim. Pro., § 392). But there is no statutory requirement of corroboration in prosecutions under section 483 of the Penal Law. Unless and until such a requirement is imposed by statute we, whatever may be our individual attitudes, have no right to supply one. That leaves in this case questions of fact only and those we are forbidden to review (N. Y. Const., art. VI, § 7).

The judgment should be affirmed.

Chief Judge Conway and Judge Fboessel concur with Judge Van Voobhis, and Judge Fuld concurs in his separate concurring opinion in People v. Porcaro (6 N Y 2d 248, 252), decided herewith; Judge Bubke dissents in an opinion in which Judge Dye concurs and in which Judge Desmond concurs in a separate opinion.

Judgments reversed and information dismissed.


source: Caselaw Access Project

author: Feobssbl, J.

license: Public Domain

text:
    William J. Levitt et al., Appellants, v. Incorporated Village of Sands Point et al., Respondents.
    Argued February 24, 1959;
    decided July 8, 1959.

      Ward R. Burns for appellants.
    I. Plaintiffs are not required to exhaust their administrative remedies before instituting plenary action. (Incorporated Vil. of Upper Brookville v. Faraco, 282 App. Div. 943, 307 N. Y. 642; People v. Calvar Corp., 286 N. Y. 419; Matter of Brous v. Smith, 304 N. Y. 164; Florentine v. Town of Darien, 142 Conn. 41; Matter of Otto v. Steinhilber, 282 N. Y. 71; Ulmer Park Realty Co. v. City of New York, 267 App. Div. 291; Dowsey v. Village of Kensington, 257 N. Y. 221; Municipal Gas Co. of Albany v. Public Serv. Comm., 225 N. Y. 89; Village of Saratoga Springs v. Saratoga Gas Co., 191 N. Y. 123.) II. The amendment of April 27, 1954 is unconstitutional with respect to plaintiffs’ property in that it imposes an unreasonable dimensional restriction under all the facts and circumstances. (Village of Euclid v. Ambler Realty Co., 272 U. S. 365; Standard Oil Co. v. Marysville, 279 U. S. 582; Zahn v. Board of Public Works, 274 U. S. 325; Town of Islip v. Summers Coal & Lbr. Co., 257 N. Y. 167; Matter of Wulfsohn v. Burden, 241 N. Y. 288; Matter of Fox Meadow Estates v. Culley, 233 App. Div. 250, 261 N. Y. 506; Arverne Bay Constr. Co. v. Thatcher, 278 N. Y. 222; Vernon Park Realty v. City of Mount Vernon, 307 N. Y. 493; Dowsey v. Village of Kensington, 257 N. Y. 221; Baddour v. City of Long Beach, 279 N. Y. 167; People ex rel. St. Albans-Springfield Corp. v. Connell, 257 N. Y. 73; Dilliard v. Village of North Hills, 276 App. Div. 969.)

      Jackson A. Dykman, J. Oakey McKnight and Ralph W. Crolly for respondents.
    I. The ordinance is constitutional and bears a reasonable relation to the health, safety, morals and general welfare of the community. (Rodgers v. Village of Tarrytown,
      302 N. Y. 115; Shepard v. Village of Skaneateles, 300 N. Y. 115; Wiggins v. Town of Somers, 4 N Y 2d 215; Matter of Fox Meadow Estates v. Culley, 233 App. Div. 250, 261 N. Y. 506; Village of Euclid v. Ambler Realty Co., 272 U. S. 365; Simon v. Town of Needham, 311 Mass. 560; Franklin v. Village of Floral Park, 269 App. Div. 695, 294 N. Y. 862; Hyde v. Incorporated Vil. of Baxter Estates, 2 A D 2d 889, 3 N Y 2d 873; New York Trap Rock Corp. v. Town of Clarkstown, 1 A D 2d 890, 3 NY 2d 844.) II. In order to reverse the judgment of the Appellate Division this court must also reverse the finding of the Official Referee affirmed by the Appellate Division that “ [o]n all the proof it may not be held that the amendment restricts plaintiffs ’ property to a use for which it is not reasonably adapted ”. (Arverne Bay Gonstr. Co. v. Thatcher, 278 N. Y. 222; Kraft v. Village of Hastings-on-Hudson, 258 App. Div. 1060, 285 N. Y. 639; Franklin v. Incorporated Vil. of Floral Park, 269 App. Div. 695, 294 N. Y. 862; Dilliard v. Village of North Hills, 195 Misc. 875, 276 App. Div. 969; Franmor Realty Corp. v. Village of Old Westbury, 280 App. Div. 945, 304 N. Y. 843.) III. Zoning to be effective must not be static. IV. The dimensional restriction is valid. V. Plaintiffs were required to exhaust their administrative remedy provided by the ordinance. (People v. Calvar Corp., 286 N. Y. 419; New York Trap Rock Corp. v. Town of Clarkstown, 1 A D 2d 890, 3 N Y 2d 844; Incorporated Vil. of Upper Brookville v. Faraco, 282 App. Div. 943, 307 N. Y. 642; Matter of Great Neck Community School v. Dick, 3 A D 2d 664; Baddour v. City of Long Beach, 279 N. Y. 167; Matter of Otto v. Steinhilber, 282 N. Y. 71; Vernon Park Realty v. City of Mount Vernon, 307 N. Y. 493; Gignoux v. Village of Kings Point, 199 Misc. 485.)

      Philip Huntington for Incorporated Village of Lattingtown and others, amici curiae, in support of respondents’ position.
    I. The ordinance is constitutional and bears a reasonable relation to the health, safety and general welfare of the Village of Sands Point. (Fischer v. Bedminster Twp., 11 N. J. 194; Franmor Realty Corp. v. Village of Old Westbury, 280 App. Div. 945; Dilliard v. Village of North Hills, 276 App. Div. 969; Shepard v. Village of Skaneateles, 300 N. Y. 115; New York Trap Rock Corp. v. Town of Clarkstown, 1 A D 2d 890, 3 N Y 2d 844; Flora Realty & Investment Co. v. City of Ladue, 362 Mo. 1025, 344 U. S. 802.) II. The ordinance as amended does not restrict plaintiffs’ property to a use for which it is not reasonably adapted. (Arverne Bay Constr. Co. v. Thatcher, 278 N. Y. 222; Franklin v. Incorporated Vil. of Floral Park, 269 App. Div. 695, 294 N. Y. 862; Kraft v. Village of Hastings-on-Hudson, 258 App. Div. 1060, 285 N. Y. 639; Baddour v. City of Long Beach, 279 N. Y. 167.) III. The Official Referee erred in holding that there are other and different tests of validity to be applied to amendments to zoning ordinances from those applied to original enactments. (Rodgers v. Village of Tarrytown, 302 N. Y. 115; Shepard v. Village of Skaneateles, 300 N. Y. 115; Penataquit Assn. v. Furman, 283 App. Div. 875; Franmor Realty Corp. v. Village of Old Westbury, 280 App. Div. 945, 304 N. Y. 843; Gignoux v. Village of Kings Point, 199 Misc. 485.) IV. The court has no power to order municipal officials to perform any legislative acts; and has no power in this action for a declaratory judgment to order municipal officials to issue a permit, under the provisions of the zoning ordinance of defendant village. (Boord v. Wallander, 195 Misc. 557; Boord v. O’Brien, 277 App. Div. 253, 302 N. Y. 890; People v. Friedman, 302 N. Y. 75; Matter of Leone v. Brewer, 259 N. Y. 386.)
   Feobssbl, J.

The enactment of a two-acre minimum lot area requirement is, in an appropriate case, a legitimate exercise of the police power (Village Law, § 89, subd. 30; §§ 175, .177; Dilliard v. Village of North Hills, 276 App. Div., 969; Flora Realty & Investment Co. v. City of Ladue, 362 Mo. 1025, appeal dismissed 344 U. S. 802; Senior v. Zoning Comm. of Town of New Canaan, 146 Conn. 531, decided April Term, 1959; Fischer v. Township of Bedminster, 11 N. J. 194; see Franmor Realty Corp. v. Village of Old Westbury, 280 App. Div. 945, motion for leave to appeal dismissed 304 N. Y. 843; Elbert v. Village of North Hills, 262 App. Div. 856). The evidence in this record as to the character and location of the Village of Sands Point, with its isolated geographical position in a fringe area on the northern tip of a peninsula, and of the Residence “ A ” District therein, consisting of rolling and partly wooded land in an attractive rural residential community, supports the ■finding of the Appellate Division on the factual issue of the reasonableness of the zoning ordinance.

Even if the validity of the regulation were “ fairly debatable ”, as plaintiffs’ expert at the trial conceded it was, the legislative judgment must be allowed to control ” (Village of Euclid v. Ambler Realty Co., 272 U. S. 365, 388). The presumption of validity is not changed by the fact that an amendment to a zoning ordinance is here involved (Rodgers v. Village of Tarrytown, 302 N. Y. 115, 121-123; Shepard v. Village of Skaneateles, 300 N. Y. 115,117-118).

Considering the zoning ordinance in its particular application to plaintiffs’ property, we agree with the finding of the learned Referee, affirmed by the Appellate Division, that the ordinance does not preclude the use of plaintiffs’ property for any purpose for which it is reasonably adapted (Arverne Bay Constr. Co. v. Thatcher, 278 N. Y. 222, 226). Mere lessening of profits as here, or even economic loss to an affected property owner, does not render a zoning ordinance confiscatory and thus unconstitutional in its application (Matter of Wulfsohn v. Burden, 241 N. Y. 288, 302).

We disagree, however, with the opinion of the Appellate Division insofar as it held that plaintiffs were precluded from raising the issue of confiscation by their failure to apply for a variance under the provisions of the ordinance. The theory of this action is that plaintiffs are entitled as a matter of right to a judgment declaring the unconstitutionality of the ordinance ; they do not ask for the relaxation of an assumedly valid regulation (Vernon Park Realty v. City of Mount Vernon, 307 N. Y. 493, 501; Dowsey v. Village of Kensington, 257 N. Y. 221, 231). Indeed, an application for a variance here, in effect to rezone 127 acres, would be futile (see Matter of Hess v. Zoning Bd. of Appeals of Vil. of Sands Point, 17 Misc 2d 22, involving an application for a variance as to 40 acres in this same village), since the Zoning Board of Appeals has no power to remake the zoning map under the guise of granting a variance (Matter of Levy v. Board of Standards & Appeals, 267 N. Y. 347, 352-354 ; Dowsey v. Village of Kensington, supra, pp. 227-228).

The judgment should be affirmed, with costs.

Chief Judge Conway and Judges Desmond, Dye, Ftjld, Van Voobhis and Btjbke concur.

Judgment affirmed.


author: Froessel, J.

text:
    The People of the State of New York, Respondent, v. Edward J. Kiernan, Appellant.
    Argued May 28, 1959;
    decided July 8, 1959.

      C. Joseph Hallinan, Jr., for appellant.
    I. The statement extracted from Kiernan and its subsequent use against him at his trial was in violation of due process of law guaranteed by the Fourteenth Amendment to the United States Constitution. (United States ex rel. Wade v. Jackson, 256 F. 2d 7.) II. A coerced confession vitiates the judgment of conviction. (Stein v. New York, 346 U. S. 156; Payne, v. Arkansas, 356 U. S. 560.) III. Appellant, in the interest of justice, ought to receive a new trial with his alleged confession excluded. (People v. Bonino, 1 N Y 2d 752.)

      Joseph F. Gagliardi, District Attorney (Douglas L. McGuire of counsel), for respondent.
    I. Whether appellant’s confession was voluntary was a question for the jury. (People v. Doran, 246 N. Y. 409; People v. Elmore, 277 N. Y. 397; People v. Mummiani, 258 N. Y. 394; People v. Richards, 263 App. Div. 586.) II. There is almost a complete dearth of testimony in the record that an untruthful or false confession was “ extracted ” from him. (United States ex rel. Wade v. Jackson, 256 F. 2d 7; Stein v. New York, 346 U. S. 156; People v. Bonino, 1 N Y 2d 752.)
   Froessel, J.

About 18 years ago, on June 27,1941, defendant and three others were convicted of murder in the first degree for the killing of a Sing Sing Prison guard in the course of an escape. Defendant Kiernan and one Wade were sentenced to life imprisonment, pursuant to a jury recommendation of mercy. Two other defendants, Riordan and McGrale, were sentenced to death and paid the extreme penalty.

The convictions of these other defendants were affirmed (Wade, 265 App. Div. 867, affd. 291 N. Y. 574, cert, denied 320 U. S. 789, rehearing denied 320 U. S. 815; Riordan and McGale, 288 N. Y. 544). Kiernan filed a timely notice of appeal but did nothing further until Wade in 1958 secured his release by way of a writ of habeas corpus from the United States Court of Appeals, Second Circuit (256 F. 2d 7, cert, denied 357 U. S. 908), on the ground that Wade’s confession was involuntary as a matter of law, and thus its use was in violation of due process of law guaranteed by the Fourteenth Amendment. Kiernan now presses his appeal and his sole claim is ‘ ‘ that the statement ‘ extracted ’ from him was a coerced confession and its subsequent use as evidence against him at his trial was a denial of due process under the Fourteenth Amendment to the United States Constitution”, and that “In the interest of justice, [he] ought to receive a new trial with his alleged confession excluded ’ ’.

Although the United States Court of Appeals, Second Circuit, has held that the writ of habeas corpus must issue to his codefendant Wade, our reading of the record leads us to conclude that the statement given by the defendant Kiernan was not, as a matter of law, the product of coercion. When the so-called “ undisputed facts ” and “ inadequate explanations ”, from which the Federal court concluded that Wade’s statements were coerced, are examined and analyzed in the light of all the evidence in the record affecting Kiernan, they are by no means so conclusive as to mandate a trial court to reject Kiernan’s confession without submission to a jury. Kiernan, unlike Wade, did not take the stand and testify as to the manner in which he was treated between the time of his arrest and the time his statement was taken (cf. People v. Bonino, 1 N Y 2d 752). We do not regard the evidence as to the circumstances surrounding his confession sufficient to hold that his confession was involuntary as a matter of law, and the use thereof as evidence a denial of due process under the Fourteenth Amendment to the Constitution of the United States.

The judgment of conviction should be affirmed.

Chief Judge Conway and Judges Desmond, Dye, Fttld, Van Voobhis and Burke concur.

Judgment affirmed.


author: Fboessel, J.

text:
    In the Matter of Basin Street, Incorporated, Respondent. Isador Lubin, as Industrial Commissioner, Appellant.
    Argued April 14, 1959;
    decided July 8, 1959.

      Louis J. Lefhowitz, Attorney-General (Paxton Blair, Samuel Stern and Harold F. Lee of counsel), for appellant.
    I. The language of rider B to the standard form of contract did not change the employer-employee relation of the parties, nor diminish the control of the employer over the musicians. (Matter of Savoy Ballroom Corp. [Lubin], 286 App. Div. 684; Bartels v. Birmingham, 332 U. S. 126; Matter of Hotels Statler Co. v. Corsi, 279 App. Div. 814, 304 N. Y. 987; Matter of Morton, 284 N. Y. 167; Matter of Chiodo, 2 A D 2d 925; Matter of Bush Term. Co., 93 F. 2d 661; Higgins v. Smith, 308 U. S. 473.) II. The effective administration of article 18 of the Labor Law requires that the Industrial Commissioner be allowed to rely on the relation of the parties as revealed by the contract itself. (Matter of Fayerweather, 143 N. Y. 114; Bull v. United States, 295 U. S. 247; Matter of Wilson Sullivan Co., 289 N. Y. 110; Unemployment Ins. Compensation Comm. v. National Life Ins. Co., 219 N. C. 576; Matter of Cassetta, 282 App. Div. 793, 306 N. Y. 982.) III. Public policy requires that the duty of contributing to the Unemployment Insurance Fund rests on the night club rather than on the leader of the orchestra. (Matter of Roseland Amusement Co. [Corsi], 295 N. Y. 913; Matter of Camgros, 290 1ST. Y. 838.)
    No appearance for respondent.

      Emanuel L. Gordon for American Federation of Musicians of the United States and Canada, amicus curies.

    I. One for whom services are rendered is an employer if he has the right to control the manner in which the services are rendered. (Matter of Morton, 284 N. Y. 167.) II. A contract, conferring upon an establishment the right to control services rendered for it, is conclusive on the employer issue. (Simons v. Fried, 302 N. Y. 323; Wilson Sullivan Co. v. International Paper Makers Realty Co., 307 N. Y. 20; Hutchison v. Ross, 262 N. Y. 381; Metzger v. Ætna Ins. Co., 227 N. Y. 411; Mencher v. Weiss, 306 N. Y. 1; Matter of Level Export Corp. [Wolz, Aiken & Co.], 305 N. Y. 82; Pimpinello v. Swift & Co., 253 N. Y. 159; Bethlehem Steel Co. v. Turner Constr. Co., 2 N Y 2d 456.) III. Nothing in rider B negates the right to control conferred upon Basin Street, Inc. (Matter of Cassetta, 282 App. Div. 793; Matter of Savoy Ballroom Corp. [Lubin], 286 App. Div. 684.) IV. The long-standing New York rule should not be abandoned to conform to a Federal rule which is no longer in effect. (Matter of Savoy Ballroom Corp. [Lubin], 286 App. Div. 684; Bartels v. Birmingham, 332 U. S. 125; Board v. Hearst Pubs., 322 U. S. 111; United States v. Silk, 331 U. S. 704.)
   Fboessel, J.

The issue before us is whether there is substantial evidence in the record to support the determination of the Unemployment Insurance Appeal Board (hereinafter called the Board) that union musicians who performed in a night club operated by Basin Street, Inc. (hereinafter called the operator) were not employees of the establishment which hired them. The Industrial Commissioner determined they were employees of the operator, and assessed it accordingly for unemployment insurance contributions, based upon the earnings of said musicians, but the Board, relying upon Matter of Savoy Ballroom Corp (Lubin) (286 App. Div. 684), eliminated the assessment. Although it participated in the hearing before a referee by its counsel and an accountant, the operator did not appear before the Board, nor did it argue before or file a brief with the Appellate Division or this court.

It is settled law that the identity of the employer must be ascertained on the facts of the individual case, and that no written agreement may preclude an examination into the actual relationship of the parties (Matter of Morton, 284 N. Y. 167, 175; Matter of Electrolux Corp., 288 N. Y. 440, 444). In the instant case, however, neither the Commissioner nor the operator introduced any evidence of the extent to which either the band leader or the operator exercised supervision, direction and control over the musicians. The only evidence in the record is the “Form B ” contract of the American Federation of Musicians, with “ Eider B ” attached.

The contract, in the clearest terms, constituted the operator the employer of all the musicians, including the leader, and gave it “ complete control of the services which the employees will render under the specifications of this contract ” (see Matter of Hotels Statler Co. [Corsi], 279 App. Div. 814, motion for leave to appeal denied 304 N. Y. 987; Matter of Cassetta, 282 App. Div. 793, motion for leave to appeal denied 306 N. Y. 982). In addition, it constituted the band leader the agent of the operator for purposes of distributing the payroll and replacing musicians. 1 ‘ Eider B ’ ’ read, in pertinent part, as follows: “ Notwithstanding any other provisions contained in this contract, it is agreed that the leader shall make the withholdings and pay the taxes and contributions payable by an employer with reference to the employment of the musicians other than himself. In the event that at any time liability for any such payments or withholdings shall be imposed on the purchaser of the music, the leader agrees to transfer any and all tax accounts to the name and credit of the purchaser of the music. It is further agreed that the price stated upon the face of the contract includes an amount equal to 7% over and above the required Union scale, which sum shall be paid to the leader to cover employer’s costs.”

In our opinion, the rider in no way affected the relationship between the parties, as outlined in the main contract. By agreeing that the band leader would make the withholdings and pay the taxes due on the salaries of the musicians, the parties simply continued the agency established in the main contract for the convenience of the principal. The phrase “ Notwithstanding any other provisions contained in this contract ” did not “ override ” anything in the main contract. On the contrary, we read it as an attempt to shift to the band leader the responsibility for paying the taxes “notwithstanding” the fact that the operator, as the true employer, was to have ‘1 complete control of the services ” of the musicians. Nor can the designation of the operator as “purchaser of the music”, rather than as “employer”, be said to qualify the contractual relationship between the parties.

In short, if the contract as a whole, by virtue of the operative provisions creating rights and imposing duties and obligations, stamps “A” (here the operator) as “employer”, a simple recital that “B ” (here the band leader) is to be responsible for unemployment insurance contributions cannot change the operative facts or alter the legal conclusions that flow therefrom (Matter of Cassetta, supra).

In Matter of Savoy Ballroom Corp. (Lubin) (supra) the proof showed that the provision of the main contract reserving complete control to the operator “was only a fiction to begin with, designed to make the purchaser of the music the employer for tax purposes but never really intended to vest the right of control in him. The evidence in this record is overwhelmingly clear that the operator did not in fact have any right to control the manner of performance of the services under the contract.” (286 App. Div. 691; emphasis supplied; see, also, Bartels v. Birmingham, 332 U. S. 126, 128.) As noted, there is no evidence in the record before us as to the actual practices of the parties and who, in fact, exercised supervision over the musicians. In the absence of evidence so indicating, we cannot assume that the contractual provision vesting complete control in the operator, as employer, was a fiction.

Since the only evidence in the record unequivocally stamps the operator as the employer of all the musicians, there is no evidence to support the Board’s finding to the contrary. Eider B ”, as noted, merely constituted the leader the agent of the employer for tax payment purposes. The fact that the operator, pursuant to the 7%-above-contract-price provision, may have turned over the money to its agent cannot immunize it from liability to the State. It simply paid the wrong party and assumed the risk of its agent’s negligence or malfeasance. Parties are not free to agree as to who should be liable for the taxes where there is an employer-employee relationship and the law imposes the obligation on the employer.

The order appealed from should be reversed and the determination of the Industrial Commissioner imposing liability for unemployment contributions on respondent reinstated and confirmed, without costs.

Chief Judge Conway and Judges Desmond, Dye, Ftjld and Bubke concur with Judge Fboessel ; Judge Van" Voobhis dissents and votes to affirm.

Order reversed, without costs, and matter remitted to the Unemployment Insurance Appeal Board for further proceedings in accordance with the opinion herein.


text:
    In the Matter of Soll C. Roehner, Appellant, against Gracie Manor, Inc., Respondent.
    Argued May 19, 1959;
    decided July 8, 1959.

      Daniel Jacobs and Samuel Hof man for appellant.
    I. The Appellate Division erred in holding that the sale of the sole corporate asset was within the regular' course of the business of the corporation in the circumstances of this case. The sale by a corporation of the only asset it has ever owned or operated is outside of the regular course of its business when the very motive and sole inducing cause of such sale was the decision by the stockholders to effect the dissolution of the corporation and the liquidation of its affairs. (Eisen v. Post, 3 N Y 2d 518; Matter of Timmis, 200 N. Y. 177; Matter of Miglietta [2660 Broadway Corp.], 287 N. Y. 246; Strauss v. Midtown Enterprises, 5 Misc 2d 823, 270 App. Div. 837, 295 N. Y. 993; Matter of Leventall, 241 App. Div. 277.) II. Since the sale of the sole corporate asset was not made in the regular course of the corporate business, appellant is entitled to have the value of Ms stock interest appraised and paid where, as in the case at bar, the majority stockholders have consummated such sale without compliance with the requisite procedure prescribed by sections 20 and 45 of the Stock Corporation Law. The appraisal remedy provided by section 20 is particularly vital to the minority stockholder where, as here, the majority stockholders refuse, in violation of their agreement, to dissolve the corporation and to liquidate its affairs. (Starrett Corp. v. Fifth Ave. & Twenty-Ninth St. Corp., 1 F. Supp. 868; Gottfried v. Gottfried Baking Co., 1 A D 2d 994, 2 A D 2d 664; Matter of Drosnes, 187 App. Div. 425; Ambler v. Smith, 237 App. Div. 226.) III. The irregular and illegal action of the majority stockholders in disregarding the clear mandate of sections 20 and 45 affords appellant an election of remedies. Appellant may adopt the sale and seek an appraisal of his stock interest. He is not relegated to an action to rescind and set aside the sale. In any event, respondent is estopped from insisting upon adherence to the letter of the statute that it has itself flouted. (Beloff v. Consolidated Edison Co. of N. 7., 300 N. Y. 11; Anderson v. International Minerals & Chem. Corp., 295 N. Y. 343; Kavanaugh v. Kavanaugh Knitting Co., 226 N. Y. 185; Warnecke v. Forty Wall St. Bldg., 8 Misc 2d 317; Bown v. Ramsdell, 227 App. Div. 224; Matter of Hurd [Broadway & 58th St., Corp.], 5 Misc 2d 443.) IV. Appellant’s conduct does not estop him from asserting his clear right to an appraisal of his stock interest.

      Jacob Mishler for respondent.
    I. The sale was made in the regular course of business. (Eisen v. Post, 3 N Y 2d 518; Matter of Timmis, 200 N. Y. 177; Matter of Miglietta [2660 Broadway Corp.], 287 N. Y. 246.) II. The petition is insufficient in law. (Matter of Marcus [Macy & Co.], 297 N. Y. 38; Matter of Kinney [Bush Term Bldgs. Co.], 306 N. Y. 207.) III. Appellant is a consenting stockholder.
   Froessel, J.

We agree with the Appellate Division that ordinarily the sale by a real estate corporation of its sole asset is not outside the regular course of business so as to require stockholder consent (Stock Corporation Law, § 20; Eisen v. Post, 3 N Y 2d 518). The reason for this principle ceases to apply, however, where as is here alleged such sale is pursuant to a prior plan of corporate dissolution. Eisen v. Post (supra) did not hold to the contrary, since the majority opinion there was predicated upon the presumptive continuation of the corporation in business.

While normally petitioner would be entitled to a trial as to the existence of such a plan of dissolution, in this case his own allegations of fact—which we must deem true — defeat such a right. The provision in section 20 of the Stock Corporation Law for the protection of minority stockholders was a recognition of the injustice “ of requiring them to abandon, change or limit their business ” (Matter of Timmis, 200 N. Y. 177, 181). Petitioner here was not “ required ” to do anything. He concededly agreed to a sale of the corporate assets pursuant to the plan of dissolution, and now objects to the particular sale only because such plan was not carried out. Section 20 was clearly not intended to benefit a person in such a situation. Whatever rights he may have to enforce any agreement to dissolve or his claim that the property was sold for less t.lmn its actual value or whatever rights he may have in any other respect as a minority stockholder may not be asserted in the present proceeding.

The order should be affirmed, with costs.

Chief Judge Coxway and Judges Desmoxd, Dye, Fuld, Vax Voorhis and Burke concur.

Order affirmed.


author: Feoessel, J. Desmond, J. (dissenting).

text:
    In the Matter of Warren Ackerman et al., Respondents, against Robert C. Weaver, as State Rent Administrator, et al., Appellants. In the Matter of Realty Management, Inc., Appellant, against Robert C. Weaver, as State Rent Administrator, Respondent, and Warren Ackerman et al., Intervenors-Respondents.
    Argued May 14, 1959;
    decided July 8, 1959.

      Jacob B. Ward and Nathan Keller for Robert C. Weaver, appellant in the first above-entitled proceeding.
    I. The commission’s grant of rent adjustments in the case at bar conformed with the purpose and intent of the act and regulations. (Matter of Cozzi v. McGoldrick, 307 N. Y. 748, 283 App. Div. 702; Matter of Florell Equities v. Weaver, 2 A D 2d 542, 2 N Y 2d 982; Matter of De Varco v. McGoldrick, 281 App. Div. 955.) II. Calculation of allowable net annual return on sale price valuation base was neither arbitrary nor capricious. (Matter of Kaufmann v. Abrams, 286 App. Div. 998.) III. The commission properly held applicant eligible for the relief afforded by the 6% net annual return provision. IV. The Administrator’s determination that the rent adjustment granted must be effective as of the Local Rent Administrator’s erroneous denial of landlord’s application was entirely proper and in accord with settled case law. (Levy v. 1165 Park Ave. Corp., 305 N. Y. 607; Matter of Neulist v. Weaver, 2 A D 2d 530, 2 N Y 2d 889; Matter of Linsky v. Weaver, 2 A D 2d 837.)

      Orrin G. Judd, Robert 8. Fougner, Eugene J. Morris and Christopher J. Taylor for Realty Management, Inc., appellant in both proceedings.
    I. The landlord of property is entitled to a 6% return on the valuation as determined by a bona fide sale, whether the landlord be a lessee or an owner. (Matter of Wile v. McGoldrick, 286 App. Div. 826; Matter of Florell Equities v. Weaver, 2 N Y 2d 982; Wasservogel v. Meyerowitz, 300 N. Y. 125; Matter of De Varco v. McGoldrick, 281 App. Div. 955; Matter of Mara v. McGoldrick, 307 N. Y. 856; Matter of Kaufmann v. Abrams, 286 App. Div. 998; Matter of 340 East 57th St. Corp. v. Weaver, 3 Misc 2d 356, 2 A D 2d 678, 2 N Y 2d 799; Matter of Palley v. Temporary State Housing Rent Comm., 1 A D 2d 877; Gilligan v. Tishman Realty & Constr. Co., 306 N. Y. 974.) II. The commission erred in refusing to allow management costs at owner-management rates. III. There is no merit to respondents’ contention that the landlord failed to maintain essential services. (Matter of Kerbs v. State Rent Administrator, 7 A D 2d 839.)

      Lewis M. Isaacs, Jr., and Murray Schwarts for respondents in the first above-entitled proceeding and for intervenorsrespondents in the second above-entitled proceeding.
    I. The Appellate Division properly held that a lessee “as circumstanced here ” may not procure a rent increase based on sale price paid for the fee by another long after the lease was made. (Matter of Kaplan v. McGoldrick, 198 Misc. 440; Matter of De Varco v. Temporary State Rent Comm., 281 App. Div. 955; Matter of Abrams v. McGoldrick, 282 App. Div. 192; Matter of Davis v. McGoldrick, 3 Misc 2d 830; Matter of Monk v. Finkelstein, 194 Misc. 241, 275 App. Div. 905, 302 N. Y. 575; Matter of First Terrace Gardens v. McGoldrick, 1 N Y 2d 1; Matter of Cupo v. McGoldrick, 278 App. Div. 108.) II. Even if a lessee were entitled to rely on sale price, sale price here, because of the special circumstances existing at the time, did not reflect the value of the property and should not be used as a basis for calculating rents. (Matter of Arnold, 114 App. Div. 244; People ex rel. Stewart v. Feitner, 95 App. Div. 481; People ex rel. Four Park Ave. Corp. v. Lilly, 267 App. Div. 102; Matter of Empire State Bldg. Corp. v. Boyland, 1 Misc 2d 518, 1 A D 2d 770; People ex rel. Phipps Estate v. Mills, 277 App. Div. 1105.) III. If the Administrator erred in finding that lessee could not net $75,000 in six months, then his finding that the property returned only $93,000 was necessarily erroneous too. IV. Even if an increase in rents were allowable it should not have been ordered effective to a date earlier than the one on which the Administrator found essential services to have been restored. (Matter of Macan Estates v. McGoldrick, 281 App. Div. 810, 305 N. Y. 876; Levy v. 1165 Park Ave. Corp., 305 N. Y. 607; Matter of Neulist v. Weaver, 2 N Y 2d 889; Matter of Linsky v. Weaver, 2 A D 2d 837.) V. An application for a rent increase filed “blind” by an agent for an undisclosed principal three times identified differently is in any case defective and should have been denied forthwith. VI. There was no error in refusing to include the excess management fees and legal expenses requested by Realty.

      Jacob B. Ward and Nathan Heller for respondent in the second above-entitled proceeding.
    I. Appellant is not before this court pursuant to any of the provisions of section 588 of the Civil Practice Act. Its appeal as of right should not lie. II. The Administrator properly limited the management expense allowance to the costs actually incurred by the lessee-operator of the property.
   Feoessel, J.

We disagree with the Appellate Division that the appellant as agent for the landlord may not obtain a rent increase on the ground that the rental income from the property yields a net annual return of less than 6% of the valuation of the property (State Residential Rent Law [L. 1946, ch. 274, as amd.], § 4, subd. 4, par. [a], cl. [1]; State Rent and Eviction Regulations, § 33, subd. 5). The fact that the property is being operated under a lease by which the owner derives from its lessee greater than a 6% return is not material.

It is undisputed that the property itself — to which the statute refers — is earning less than such percentage. The statute contemplates that tenants will be required to pay a reasonable rent. It does not intend them to benefit from an advantageous arrangement which the owner makes with a lessee (Matter of Wile v. McGoldrick, 286 App. Div. 826, motion for leave to appeal denied 309 N. Y. 1033). We find no statutory requirement that an applicant for a rent increase must have invested capital in the property, nor do we think there is any warrant for reading such a requirement into the statute.

Placing the statute in its proper perspective, it is clear that the Rent Administrator properly used the bona fide sale price as a basis for valuation, notwithstanding that the lessee was not a party to such sale. In mandating the use of bona fide sale price, the Legislature was not concerned with questions of investment, but simply recognized that such price provided “ a more accurate reflection of value” (L. 1957, ch. 755; N. Y. Legis. Annual, 1957, p. 264). Nor does the existence of the cancelable lease here constitute a “ special circumstance ” under the statute which would require the Rent Administrator to disregard the sale price.

With regard to the question of essential services, the Rent Administrator determined in accordance with the applicable statute (State Residential Rent Law, § 4, subd. 4, par. [d]) that the landlord was maintaining essential services “as of the date of the issuance of the order adjusting the maximum rent ”, and granted an increase effective as of the date of the local administrator’s erroneous order (Matter of Neulist v. Weaver, 2 N Y 2d 889). While he no doubt has discretion to deny retroactivity in a case where services were seriously deficient, this was not such a case, as his findings indicate.

In the landlord’s proceeding, the court, on its own motion, dismisses the landlord’s appeal upon the ground that it may not be taken as of right. We treat its application, however, as a motion for leave to appeal, as requested by the landlord, and, as so treated, deny the motion.

The order appealed from in the tenants’ proceeding should be reversed, without costs, and the order of Special Term reinstated. The appeal by the landlord as of right in its proceeding should be dismissed. Treating the landlord’s application as a motion for leave to appeal, the motion should be denied, without costs. (See 6 N Y 2d 707, 885.)

Desmond, J. (dissenting).

I dissent and vote to affirm. The amendment here construed (State Residential Rent Law [L. 1946, ch. 274, as amd.], § 4, subd. 4, par. [a]) had — and could have—no purpose except to provide to the property owner a net 6% return on the fair value of his ownership interest. This property, however, is being operated under a whole-building lease which concededly gives the owner more than that 6% return. Thus, the whole purpose of the statute has already been satisfied. Any increase of the rents paid by the apartment tenants to the lessee of the building will give the latter a windfall, based on a purely literal construction of the words of the statute — an application which is at war with the legislative purpose.

Chief Judge Conway and Judges Van Voobhis and Bubke concur with Judge Fboessel; Judge Desmond dissents in an opinion in which Judge Dye concurs; Judge Fuld taking no part.

Order reversed, without costs, and matter remitted to Special Term for further proceedings in accordance with the opinion herein.


author: Chief Judge Conway.

text:
    The People of the State of New York, Respondent, v. Roland Chester Pitts, Appellant.
    Argued May 28, 1959;
    decided July 8, 1959.

      Howard V. Burke for appellant.
    I. The denial by the Appellate Division of defendant’s various motions for assignment of counsel deprived defendant of his right to appellate review and was erroneous. (People v. Kalan, 2 N Y 2d 278; Johnson v. United States, 352 U. S. 565; Ellis v. United States, 356 U. S. 674.) II. The order dismissing defendant’s appeal should be reversed, because it amounts to a denial of his constitutional rights and as such is an error of law. (People v. Pride, 3 N Y 2d 545; Griffin v. Illinois, 351 U. S. 12.)

      Frank D. O’Connor, District Attorney (Benj. J. Jacobson of counsel), for respondent.
    I. The cases of Griffin v. Illinois (351 U. S. 12) and Eskridge v. Washington Prison Bd. (357 U. S. 214) do not unconditionally require that a convicted indigent defendant be permitted to appeal on the original record and to have counsel assigned to represent him in order to satisfy the right of equal protection of the laws guaranteed by the Fourteenth Amendment. (People v. Pride, 3 N Y 2d 545; People v. Kalan, 2 N Y 2d 278.) II. An order of the Appellate Division dismissing an appeal for failure to perfect it is probably an appealable order. (People v. O’Rafferty, 291 N. Y. 801; People v. Carroll, 292 N. Y. 590.) III. The order of the Appellate Division should be affirmed or the appeal should be dismissed.
   Chief Judge Conway.

Defendant-appellant Pitts, convicted in 1957 of manslaughter in the first degree, appealed to the Appellate Division, Second Department. Thereafter, from June, 1957 to September, 1958, he made in the Appellate Division, pro se, four separate motions, which included, inter alia, motions for leave to appeal in forma pauperis and for assignment of counsel. Throughout the entire period during which these various motions were made by Pitts there was no record available to him nor was there a record before the Appellate Division. Each of the motions was opposed by the District Attorney upon the ground that there was no showing of merit to the appeal. All four were denied by the Appellate Division. Finally, on September 29, 1958, on the call of the calendar and upon an oral motion to dismiss the appeal by the District Attorney, the Appellate Division dismissed the appeal, “no record or brief having been filed, and there being no appearance for the appellant ”.

The defendant then applied to an Associate Judge of this court for leave to appeal from the order of the Appellate Division dismissing his appeal to that court. The application was granted. Subsequently, the People moved to dismiss the appeal claiming that we lacked jurisdiction. We denied the motion with leave to renew it on the argument of the appeal.

The People have now renewed the motion and we have concluded that it must be denied. That the order before us dismissing defendant’s appeal for failure to prosecute is a final determination and affects a substantial right of the defendant is not open to dispute (Code Crim. Pro., § 519, subd. 5; People v. Pride, 3 N Y 2d 545; see, also, Cohen and Karger, Powers of the New York Court of Appeals, p. 720). It may not be argued that defendant’s appeal should be dismissed upon the ground that the Appellate Division’s order of dismissal was discretionary in nature inasmuch as there was nothing before the Appellate Division which could raise a question of discretion. The only issue before that court was the indigence of Pitts, which he averred and which the respondent did not controvert. Moreover, in view of the change in constitutional law brought about by the cases of Griffin v. Illinois (351 U. S. 12) and People v. Pride (3 N Y 2d 545, supra), it is clear that the nature of an Appellate Division order such as the present one is no longer a deterrent to our review of it. Accordingly, we turn to the merits of the appeal.

Defendant urges this court to reverse the order of the Appellate Division dismissing his appeal and to direct that court to assign counsel to enable him to adequately pursue his appeal there. His contention is that, under the circumstances of his case, the denial by the Appellate Division of his various motions for assignment of counsel deprived him of his right to an appellate review and that the dismissal of his appeal amounted to a denial of his constitutional rights. We agree.

In the case of Griffin v. Illinois (351 U. S. 12, supra,) the Supreme Court of the United States decided that a State denies a constitutional right guaranteed by the Fourteenth Amendment to the United States Constitution if it allows all convicted persons to have appellate review except those who cannot afford to pay for the records of their trial. In short, the Supreme Court held: “ Destitute defendants must be afforded as adequate appellate review as defendants who have money enough to buy transcripts.” (Griffin v. Illinois, supra, p. 19.)

In our State, under section 456 of the Code of Criminal Procedure, upon a defendant’s conviction for a crime, the Clerk of the court in which the conviction takes place shall, within two days after notice of appeal has been served upon him, notify the stenographer that an appeal has been taken. Thereupon the stenographer shall within 10 days of such notice deliver to the Clerk of the court a copy of the stenographic minutes of the trial which shall be filed by the Clerk in his office. The expense of the copy is a county charge. In the present case the minutes of the trial testimony were not filed in the office of the Clerk of Queens County until well after defendant’s appeal had been dismissed by the Appellate Division. Clearly, section 456 was never complied with in this case.

As we have said, a State, once having granted the right to take an appeal, may not without doing violence to the constitutional rights of an indigent defendant, require of him, as a condition precedent to the taking of such appeal, the payment of fees in order to obtain a record of the trial minutes (Griffin v. Illinois, 351 U. S. 12, supra; People v. Pride, 3 N Y 2d 545, supra). The rationale behind that rule is that such a condition amounts to a discrimination based on financial condition alone and as such amounts to a denial of equal protection and due process of law to those financially unable to pay for a copy of the trial minutes.

In order to insure adequate appellate review, without abridging the constitutional rights of penniless defendants, it is not required in every case that the convicted person be assigned counsel for his appeal. Such persons receive the protection guaranteed to them by the Constitution, both State and Federal, when a copy of the trial minutes are made available to them and to the court to which they take their appeal (People v. Breslin, 4 N Y 2d 73).

In the case of an indigent defendant, physically unable to inspect the minutes of the trial on file in the County Clerk’s office — as where he is incarcerated at the time he seeks to appeal — and who urges errors as occurring at the trial, assignment of counsel for his appeal is required to insure that he be afforded adequate appellate review within the meaning of the equal protection and due process clauses of the Constitution (People v. Kalan, 2 N Y 2d 278). That is for the reason that there is no statutory or constitutional provision by which we may make available to the destitute a copy of the trial minutes free of charge. Section 302 of the Judiciary Law allows the District Attorney, the Attorney-Greneral, or the Trial Judge to obtain a stenographic copy of the minutes of the trial at county expense. But the same statute requires the payment of fees by a defendant before a copy may be furnished to him. However, as we have seen, supra, a stenographic copy of the trial minutes must be filed free of charge in the County Clerk’s office shortly after a defendant files his notice of appeal (Code Grim Pro., § 456). So, in a situation where a destitute defendant is physically unable to inspect the record on file in the County Clerk’s office, the assignment of counsel on his appeal is required in order to make certain that that task is performed for him.

In our judgment, the present case falls within the purview of our holding in the Kalan case (supra).

Here, as in the Kalan case, we have an indigent defendant, alleging errors which took place at the trial, but who is physically unable to inspect the trial minutes due to the fact that he is in jail. The fact of his indigence was, again as in the Kalan case, not controverted and, so, must be deemed to have been proven. Moreover, at the time Pitts made his motions in the Appellate Division, not only were the minutes of the trial not before that court, they were not, as required by section 456 of the Code of Criminal Procedure, as yet on file in the office of the County Clerk. In addition, in the present case, defendant was convicted of a homicide — manslaughter in the first degree and sentenced to 12% to 25 years, whereas Kalan was convicted of a crime against property—grand larceny and sentenced to 5 to 10 years. Finally, the record now before us consists of two volumes of typewritten minutes totaling in all 750 pages. The considerable size of the record along with the far more serious nature of the crime involved, with its concomitant longer jail sentence, are additional reasons, over and above those set forth in the Kalan case, for requiring that Pitts be assigned counsel to conduct his appeal.

The order of the Appellate Division should be reversed and the appeal remitted to that court for further proceedings in accordance with this opinion.

Judges Desmond, Dye, Ftjld, Fboessel, Van Voorhis and Burke concur.

Order reversed, etc.


author: Fuld, J.

text:
    In the Matter of the Arbitration between Terminal Auxiliar Maritima, S. A., Respondent, and Winkler Credit Corporation, Appellant, et al., Defendant,
    Argued May 11, 1959;
    decided July 8, 1959.

      Jacob Freed Adelman and Elliott J. Solomon for appellant.
    I. There is no arbitrable controversy between any of the parties to this proceeding. (Alpert v. Admiration Knitwear Co., 304 N. Y. 1; Matter of General Elec. Co. [United Elec. Radio & Mach. Workers of America, C. I. O.], 300 N. Y. 262; Matter of Young v. Crescent Development Co., 240 N. Y. 244; Matter of Wenger & Co. v. Propper Silk Hosiery Mills, 239 N. Y. 199; Matter of Marchant v. Mead-Morrision Mfg. Co., 226 App. Div. 397.) II. Terminal has waived and abandoned its right to arbitration under the charter contract. (Alsens A. P. C. Works v. Degnon Contr. Co., 222 N. Y. 34; Smith v. Molleson, 148 N. Y. 241; Rutherford Nat. Bank v. Manniello, 240 App. Div. 506, 266 N. Y. 568; Haroco Co. v. National Surety Corp., 283 App. Div. 921; Matter of Lipman [Haeuser Shellac Co.], 289 N. Y. 76; Gracie v. Freeland, 1 N. Y. 228; State v. Davis, 20 Nev. 220; Miller v. Wolf, 63 Iowa 233; Thompson v. Thompson Stone Co., 81 Ind. App. 442; Oklahoma Pub. Co. v. Parsons & Whittemore, 255 App. Div. 589.) III. There is no dispute between Terminal Auxiliar Marítima, S. A., and Ocean Trading Corporation. (Acetate Box Corp. v. Johnsen, 193 Misc. 54; Griffey v. New York Cent. Ins. Co., 100 N. Y. 417; Matter of Fleischer [Borus], 278 App. Div. 703; Matter of International Assn. of Machinists [Cutler-Hammer], 271 App. Div. 917, 297 N. Y. 519; Matter of Friedland, 1 A D 2d 129; Newburger v. Lubell, 257 N. Y. 383.) IV. The requirement in the order that one arbitrator be appointed for both Winkler and Ocean is improper.

      Albert D. Jordan and Barry H. Singer for respondent.
    I. Winkler’s claims for dead freight and/or damages for Terminal’s alleged breach of the charter agreement must be settled by arbitration because the charter agreement, to which the claims are necessarily referable, so provides, (Matter of

      Hosiery Mfrs. Corp. v. Goldston, 238 N. Y. 22; Hamilton v. McPherson, 28 N. Y. 72; United States Nav. Co. v. Black Diamond Lines, 124 F. 2d 508; Matter of Baker [Board of Educ.], 309 N. Y. 551; Matter of Lipman [Haeuser Shellac Co.], 289 N. Y. 76; Matter of Hellenic Lines [Terminal Auxiliar Maritima, S. A.], 3 A D 2d 821, 3 N Y 2d 705; Matter of Young v. Crescent Development Co., 240 N. Y. 244; Matter of Marchant v. Mead-Morrision Mfg. Co., 226 App. Div. 397, 252 N. Y. 284; Alpert v. Admiration Knitwear Co., 304 N. Y. 1; Matter of General Elec. Co. [United Elec. Radio & Mach. Workers of America, C. I. O.], 300 N. Y. 262.) II. Terminal has neither waived nor abandoned its right to arbitration. (Matter of Haupt v. Rose, 265 N. Y. 108; Matter of Hosiery Mfrs. Corp. v. Goldston, 238 N. Y. 22; Short v. National Sport Fashions, 264 App. Div. 284; Stinerville & Bloomington Stone Co. v. White, 25 Misc. 314.) III. The participation of Ocean is indispensable to the effectiveness of the arbitration directed. (Newburger v. Lubell, 257 N. Y. 383; Cohen v. Elliman & Co., 279 App. Div. 161.)
   Fuld, J.

On November 14,1957, Terminal Auxiliar Marítima, as charterer, chartered a vessel from respondent Ocean Trading Corporation under a voyage charter agreement for the carriage of a cargo of sugar from Cuba to Europe. The agreement provided that11 Any dispute that may arise under this Charter [is] to be settled by arbitration, each party appointing an Arbitrator, and should they be unable to agree, the decision of an Umpire selected by them to be final.” Shortly thereafter, Terminal entered into an agreement with Gralban Lobo Trading Company whereby Gralban, as subcharterer, chartered the vessel from Terminal under the same terms as those of Terminal’s agreement with Ocean. In January, 1958, Ocean assigned its earnings from the agreement to Winkler Credit Corporation to satisfy its debt to the latter, and the present dispute is between Winkler and Terminal. Ocean continued to make the charter arrangements, however, and in March, 1958 entered into a time charter of the S. S. Gape Nelson for the transportation of the sugar with the owners of that vessel, Ralli Brothers, Ltd. The vessel began loading at the first of the two Cuban loading ports.

According to Terminal, Ocean failed to pay Ralli, and, after the cargo was half loaded, the master of the vessel, acting on the owners’ instructions, refused to deliver bills of lading to Terminal unless Terminal undertook to perform Ocean’s duties under the time charter. When, after repeated requests by Terminal, Ocean failed to act, Terminal, in order to avoid further losses, made arrangements directly with Ralli for the affreightment with respect to which it had obligated itself to Galban, and the sugar was transported, pursuant to this alternate charter agreement, to Rotterdam. On the other hand, according to Ocean and Winkler, it was Terminal which breached the agreement. Desirous of obtaining the benefit of lowered freight rates, they say, Terminal conspired with Ralli to have the latter claim a default by Ocean in payment and then contract directly with Terminal for the transportation of the cargo at the lower rates.

At all events, after the carriage was completed, Winkler brought suit against Terminal in the Supreme Court, New York County, for Terminal’s alleged breach of its charter agreement with Ocean. Being unable to attach any property of Terminal, a Cuban corporation, in this jurisdiction, Winkler instituted two actions against Galban, one in New York and one in Rotterdam, on the theory that Galban, as shipper, had failed to pay the freight due under Ocean’s voyage charter with Terminal. Winkler succeeded in attaching property of Galban in each jurisdiction, and Galban called upon Terminal to hold it harmless in a dispute in which it was not involved.

Terminal thereupon commenced negotiations with Winkler and, as a result, the parties entered into a stipulation pursuant to which Terminal agreed voluntarily to submit to the in personam jurisdiction of the New York court by putting in “ A full and general appearance ’ ’ in Winkler’s suit against it and to post a bond in the amount of $75,000 on behalf of itself and Galban to secure Winkler’s claims, if any, against them. Winkler, in turn, promised to withdraw its New York and Rotterdam attachments. These arrangements were agreed to, 1 ‘ without prejudice ’ ’ to any rights and remedies available to the parties.

It was shortly after entering into this stipulation and effecting the withdrawal of the attachments that Terminal instituted the present proceeding in which it sought an order directing arbitration and staying the actions brought by Winkler against it and Galban in New York. Winkler opposed arbitration on the ground, first, that there was no arbitrable controversy and, second, that Terminal had waived its right to arbitrate by entering into the stipulation. The court at Special Term decided in Terminal’s favor and the Appellate Division unanimously affirmed.

In support of its claim that there is no arbitrable controversy, Winkler contends, in effect, that Terminal’s substitute arrangements for the performance of the charter agreement amounted to a “ termination ” and “ cancellation ” of such charter agreement. That being so, argues Winkler, there was a 1 ‘ termination ” of all its rights under the charter, including Terminal’s right to arbitration.

It is settled that under a broad provision for arbitration, such as we have here, arbitration may be had as to all issues arising subsequent to the making of the contract. (See, e.g., Matter of Potoker [Brooklyn Eagle], 2 N Y 2d 553; Matter of Lipman [Haeuser Shellac Co.], 289 N. Y. 76; Matter of Hellenic Lines [Terminal Auxiliar Maritima, S. A.], 3 A D 2d 821, motion for leave to appeal denied 3 N Y 2d 705.) The so-called “ termination ” or “ cancellation,” relied upon by Winkler to defeat the arbitral process, was nothing more or less than a “ termination ” of a contract for an alleged breach or nonperformance of its terms. That does not put an end to the right to arbitrate claims accruing prior thereto, for, if it did, an arbitration clause could rarely, if ever, be carried out. In point of fact, the appellant does not regard the contract as having been “ cancelled ” in any real sense, since it is actually suing for its breach in the action now stayed. If the contract had been so “cancelled,” then neither party would have a claim under it, and Winkler’s lawsuit would be ripe for dismissal.

Although the court could not compel arbitration if an issue exists as to whether the contract ever came into existence, section 1450 of the Civil Practice Act, we have declared, “ seems to imply that all acts of the parties subsequent to the making of the contract which raise issues of fact or law, lie exclusively within the jurisdiction of the arbitrators. It is to be noted that * * * the statute only requires the contract to have been made and does not require that it shall continue to be in existence.” (Matter of Lipman [Haeuser Shellac Co.], 289 N. Y. 76, 80, supra.)

In the present case, the dispute between Terminal and Ocean had its origin in the charter agreement, and the controversy primarily concerns their rights and obligations under it. It was the breach by Ocean, or by Terminal, as the case may be, which gave rise to the dispute now sought to be arbitrated, and it is just such disputes with which the arbitration provision was designed to deal. In short, the dispute having arisen “ subsequent to the making of the contract,” the controversy is an arbitrable one within the intendment of the charter provision. (Cf., e.g., Matter of Hellenic Lines [Terminal Auxiliar Maritima, S. A.], 3 A D 2d 821, motion for leave to appeal denied 3 N Y 2d 705, supra.) Alpert v. Admiration Knitwear Co. (304 N Y 2d 1), upon which "Winkler relies, is not in point, for there the court found that no bona fide dispute existed; in other words, there was no “ failure to comply ” with the contract within the meaning of section 1450.

As noted above, in order that Gtalban might be relieved of the attachments obtained by Winkler against its property in New York and Rotterdam, Terminal stipulated to submit itself to the “jurisdiction” of the Supreme Court by filing a “full and general appearance ” in Winkler’s suit against it and to give Winkler further assurance of recovery by posting a $75,000 bond as security for any “ judgment ” which Winkler might obtain. Winkler urges that this stipulation to submit to the jurisdiction of the court necessarily implies an agreement on Terminal’s part to permit the suit to continue and not to seek arbitration. In addition, Winkler contends that Terminal’s bond, given to secure any ‘1 judgment ’ ’ obtained against it, does not cover an arbitration award and, consequently, Terminal, in seeking arbitration, is violating a vital term of the stipulation.

Although a party may by conduct waive his right to arbitration (see, e.g., Matter of Zimmerman v. Cohen, 236 N. Y. 15; cf. Matter of Haupt v. Rose, 265 N. Y. 108; Matter of Hosiery Mfrs. Corp. v. Goldston, 238 N. Y. 22), it is doubtful that the mere entering of a general appearance by a defendant and the posting of a bond to secure the payment of any judgment which might be recovered would constitute such a waiver — particularly when the serving of an answer and the making of a motion to dismiss a complaint does not. (See, e.g., Matter of Haupt v. Rose, 265 N. Y. 108, supra; Short v. National Sport Fashions, 264 App. Div. 284.) We need not, though, decide that question, for the stipulation herein clearly evinces the parties’ intention that no such right was to be waived. It obviously relates only to Terminal’s submission of its person to the court’s jurisdiction and not to the relinquishment of any other right or remedy. The stipulation not only declares, twice, that it is “ without prejudice to the substantive and procedural rights, remedies, or defenses available to the parties ’ ’, but it also recites that its provisions ‘ pertain * * * only to the matter of the jurisdiction of this Court and to the posting of security.” (Italics supplied.) If Winkler had desired to eliminate the right to arbitration from the “rights” thus explicitly reserved, it would have been a simple matter to insert such a provision. The stipulation was drawn by counsel for both parties, and it is difficult to believe that such an important provision would have been omitted if Winkler had actually intended it to be included.

We might well conclude at this point, for, as demonstrated, there is an arbitrable dispute and there was no waiver by Terminal of its right to arbitrate it.

However, we add.these additional words to answer Winkler’s claim that a waiver must have been intended because the bond which Terminal furnished was of value only if the action at law continued. More particularly, it is said, the bond covered payment only of a judgment in that action and not of an arbitral award and, consequently, the argument proceeds, it is unreasonable to suppose that Winkler would have given up valuable attachments for a bond which would become worthless upon institution of an arbitration proceeding. The short answer is that the surety which wrote the bond, the Seaboard Surety Company, has, by letter, delivered to Terminal for transmittal to Winkler, solemnly and ‘ ‘ irrevocably ’ ’ assured the parties involved that its bond “is intended and deemed to secure Winkler Credit Corporation for the payment of any final and confirmed award, together with costs and expenses as may be awarded thereon or allowed by law, which may be recovered against Terminal or Gfalban Lobo or both in any arbitration or arbitrations to which the claims stated in the above mentioned litigations may be referred.” In view of this, there can be no possible doubt that the bond furnished by Terminal is to be read to cover any arbitral award in Winkler’s favor. And, indeed, counsel for Terminal agreed upon the argument before us that such was the meaning and effect to be given the bond.

As to Winkler’s further point, it is enough to observe that, under the circumstances of this case, we find Special Term’s order unexceptionable insofar as it directs Ocean, as well as Winkler, to proceed to arbitration and requires those parties to appoint a single arbitrator.

The order appealed from should be affirmed, with costs.

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

Order affirmed.


author: Dye, J.

text:
    George Bereswill, Respondent, v. Philip A. Yablon et al., Appellants, et al., Defendant.
    Argued February 26, 1959;
    decided July 8, 1959.

      Samuel Masía and Harry Zimmerman for appellants.
    I. The court below, having unanimously reversed the judgment in favor of plaintiff against defendant Samuel Fisher and having dismissed the complaint against him, erred as a matter of law in failing to reverse the judgment against Yablon and Esbar Realty Corporation for the reason that defendant Esbar Realty Corporation and Yablon, its officer and sole stockholder, were legally incapable of conspiring with each other against plaintiff. (Burns v. Hayes, 193 Misc. 491; People v. Sowma, 252 App. Div. 413; Keppleman v. Upston, 84 F. Supp. 478; Burgess Bros. Co. v. Stewart, 112 Misc. 347, 194 App. Div. 913; Reitmeister v. Reitmeister, 162 F. 2d 691; Cape Cod Food Prods. v. National Cranberry Assn., 119 F. Supp. 900; United States v. American Precision Prods. Corp., 115 F. Supp. 823; Schreiber v. Jacobs. 128 F. Supp. 44; Pinkerton v. United States, 151 F. 2d 499, 328 U. S. 640; Nelson Radio & Supply Co. v. Motorola, 200 F. 2d 911, 345 U. S. 925; Packaged Programs v. Westinghouse Broadcasting Co., 156 F. Supp. 76; Greyhound Corp. v. Commercial Cas. Ins. Co., 259 App. Div. 317; Moskowitz v. Feuer, 265 App. Div. 884, 291 N. Y. 568; Nathanson v. Brown & Williamson Tobacco Co., 189 Misc. 1024; Potter v. Minskoff, 2 A D 2d 513.) II. The decision of the trial court was not supported by credible evidence. Plaintiff was not the broker in the transaction. III. The seller never agreed to pay commissions. (Meltzer v. Flying Fame, 224 App. Div. 41; Haynes v. Fraser, 76 App. Div. 627.) IV. Yablon did not agree to purchase the property through plaintiff for $94,750 or at any other price and never asked for the return of part of the commissions. V. Yablon was legally entitled to retain Fisher as broker. (Harris v. Morton & Co., 101 Misc. 398; O’Hara v. Murray, 144 App. Div. 113; Wylie v. Marine Nat. Bank, 61 N. Y. 415; Teves v. Thieringer, 281 App. Div. 752.) VI. There is no evidence of a conspiracy. VII. Plaintiff failed to prove, as a condition precedent to an action for conspiracy against defendants, that as a result of the acts of defendants he was deprived of a cause of action against the seller based upon contract. Plaintiff did not have a claim for commissions based upon contract against the seller because he failed to prove that he was engaged as a real estate broker by the seller under an agreement to pay him any commission, that he brought the buyer and seller together on all of the essential terms satisfactory to both and was the procuring cause of the sale. (Ditmars v. Renz, 269 N. Y. 191; Benedict v. Pell, 70 App. Div. 40; Sibbald v. Bethlehem Iron Co., 83 N. Y. 378; Saum v. Capital Realty Development Corp., 268 N. Y. 335; Haase v. Schneider, 112 App. Div. 336; Matter of Altz, 274 App. Div. 894; Thompson & Co. v. New Madison Sq. Garden Corp., 225 App. Div. 521; House v. Hornburg, 267 App. Div. 557, 294 N. Y. 750; Meyer & Steffens v. Claflin Realty Corp., 255 App. Div. 565; Maxwell v. Hamilton Apts., 215 App. Div. 348.) VIII. One cannot conspire to breach his own contract obligations. (Labow v. Para-Ti Corp., 272 App. Div. 890; Miller v. Vanderlip, 285 N. Y. 116; Schulman v. Royal Ind. Bank, 280 App. Div. 401.) IX. No claim for legal damages against defendants is possible where plaintiff violated his fiduciary relationship to defendant Yablon and represented conflicting interests. (Wechsler v. Bowman, 285 N. Y. 284; Lamdin v. Broadway Surface Adv. Corp., 272 N. Y. 133; Elco Shoe Mfrs. v. Sisk, 260 N. Y. 100.)

      Martin Shulman and Arthur N. Seiff for respondent.
    I. There is no merit to appellants’ contention that the judgment should be reversed because the Appellate Division dismissed as to Fisher, the broker appellants used to deprive plaintiff of his commission. (Green v. Davies, 182 N. Y. 499; Cuker v. Crow Constr. Co., 6 A D 2d 415; Glaser v. Kaplan, 5 A D 2d 829; Leonard v. Gottlieb, 278 App. Div. 786, 303 N. Y. 1014; Werbelovsky v. Rosen, 260 App. Div. 222; Erbe v. Lincoln Rochester Trust Co., 1 Misc 2d 413; Ippisch v. Moricz-Smith, 1 Misc 2d 120; Kunz v. Silver, 198 Misc. 1032.) II. Appellants’ conduct renders them liable to plaintiff. (Keviczky v. Lorber, 290 N. Y. 297; Hornstein v. Podwitz, 254 N. Y. 443; Spitzer v. Sachar, 4 A D 2d 53; Potter v. Minskoff, 2 A D 2d 513; Muldoon v. Silvestre, 283 App. Div. 886; Cohen v. City Bank Farmers Trust Co., 276 App. Div. 195; Avallone v. Bernardi, 276 App. Div. 1094; Williams & Co. v. Tuttle & Co., 6 A D 2d 302.) III. Plaintiff faithfully performed his duties as a broker.
   Dye, J.

The plaintiff, a licensed real estate broker, brought this action in the City Court of Mount Vernon, Westchester County, N. Y., to recover a broker’s commission of which he, allegedly, had been deprived by reason of a conspiracy among the named defendants — Esbar Realty Corp. (hereinafter Esbar), Philip Yablon, its principal officer and sole stockholder, and Samuel Fisher, the broker who actually consummated the sale to Esbar.

Upon appeal from the judgment rendered in favor of the plaintiff against all the defendants, the Appellate Division modified by reversing so much thereof as was against the defendant Fisher, severed the action and dismissed the complaint as to him on the ground that the proof failed to establish that Fisher knew of plaintiff’s rights or conspired to violate them. The judgment, insofar as it was against the defendants Esbar and Yablon, was modified.

On this appeal, we treat the action as did both the trial court and the court below as being founded in conspiracy, although the respondent now urges that the gravamen of the complaint is that appellants, by théir acts, deprived the plaintiff of a real estate commission because the conspiracy mentioned in the complaint has reference merely to tie the acts of the defendants together.

The controversy had its genesis in the following circumstances : In July of 1953, the Glennon Realty Corp. (hereinafter Glennon) was the owner of premises located at the northeast corner of Prospect and Crary Avenues, Mount Vernon, N. Y., in which Yablon was a tenant. The latter, learning; "hat the premises had been or were about to be listed for sale, contacted a real estate • broker named Thill and asked him to look into the matter without revealing that he was interested. Thill communicated with Glennon and was thereafter employed under a nonexclusive listing to provide a purchaser at the usual rate of commission. Tablón considered the listing price too high. During these times the plaintiff, a brother-in-law of Thill, was attached to his office as a salesman. Later and on Decembér 3, 1953 the plaintiff received his license as a real estate broker and in the same month succeeded to Thill’s real estate business. Thereafter plaintiff made interim attempts to work out a deal between Glennon and Tablón. Finally in April, 1955 Glennon reduced the price to $90,000 net. Plaintiff, however, did not quote that price to Tablón but, instead, quoted a price of $94,750 which he said included his commission. Tablón, allegedly, was willing to pay the quoted price provided plaintiff refunded to him $2,750 from the amount he was to receive as commission (all of which Tablón categorically denied) which proposition plaintiff refused to accept. Negotiations between them broke off. At about the same time Tablón purchased the premises in the name of his wholly owned corporation Esbar (which had been incorporated for that purpose) for the sum of $92,000 through Fisher acting as broker, to whom the seller paid a commission of $500. There was no showing that Glennon knew that Fisher was acting for the same principal as the plaintiff, or that Fisher knew about the plaintiff’s prior efforts in Tablon’s behalf. The dismissal of the conspiracy charge against Fisher—which on the proof in this record was eminently proper—left only the vendee corporation Esbar and its sole stockholder Tablón as parties to the conspiracy. In such a situation a dismissal should also have included the latter since it is well established that a conspiracy depends upon a combination of two or more persons intentionally participating in the furtherance of a preconceived scheme or design (Pinkerton v. United States, 151 F. 2d 499, affd. 328 U. S. 640). While it is entirely possible for an individual and a corporation to conspire, it is basic that the persons and entities must be separate (Nelson Radio & Supply Co. v. Motorola, 200 F. 911, cert, denied 345 U. S. 925).

In the instant case, it is conceded that Esbar was formed for the sole purpose of taking title to the property from Glennon. To say such a relationship affords a basis for a conspiracy is much the same as saying an individual or a corporation can conspire with himself or itself. This cannot be done and a complaint so drawn is legally insufficient (Moskowits v. Feuer, 265 App. Div. 884, affd. 291 N. Y. 568; Greyhound Corp. v. Commercial Cas. Co., 259 App. Div. 317; Potter v. Minskoff, 2 A D 2d 513). Furthermore, it is a long-established doctrine that one does not have a cause of action against another contracting party for conspiracy to breach the agreement between them (Miller v. Vanderlip, 285 N. Y. 116).

On the other hand, if we accept the plaintiff’s revised theory that his deprivation of commission was not the result of conspiracy but rather because of the acts of the defendants Esbar and Yablon, he, nonetheless, may not recover. Nowhere has he shown that he succeeded in bringing the parties together on a mutually acceptable price, terms and conditions of sale. Until he did so, no commissions had been earned (Sibbald v. Bethlehem Iron Co., 83 N. Y. 378; Saum v. Capital Realty Development Corp., 268 N. Y. 335). The proof is that he never divulged to the buyer the net price and terms on which the seller was willing to sell, but took it upon himself to quote a higher and different price which included an arbitrary sum for alleged commissions. In so manipulating the price he made it impossible to bring the minds of the parties together on a common ground and thus, by his own conduct, prevented a sale of the property. In seeking to take advantage of Yablon’s desire and need for the property and the seller’s willingness to sell at a greatly reduced price he violated a fundamental of fiduciary relationship both as to the seller and buyer whose name he never revealed (Wechsler v. Bowman, 285 N. Y. 284; Lamdin v. Broadway Surface Adv. Corp., 272 N. Y. 133; Elco Shoe Mfrs. v. Sisk, 260 N. Y. 100).

The judgment should be reversed and the amended complaint dismissed, with costs in all courts.

Chief Judge Conway and Judges Desmond, Fttld, Fboessel and Van Voorhis concur with Judge Dye ; Judge Burke dissents and votes to affirm.

Judgment reversed, etc.