text:
    The People of the State of New York, Appellant, v. John De Courcy, Respondent.
    Argued May 23, 1960;
    decided July 8, 1960.

      Edward S. Silver, District Attorney (William I. Siegel, David Diamond and Raymond J. Scanlan of counsel), for appellant.
    I. The evidence before the Grand Jury established a prima facie case and warranted the order of the County Court which directed the filing of the information against respondent. (People v. Hakala, 270 App. Div. 612; People v. Davis, 5 A D 2d 841, 4 N Y 2d 1002; People v. Sugarman, 248 N. Y. 255; People v. Pesky,. 254 N. Y. 373; People v. Bearden, 290 N. Y. 478; People v. Boas, 92 N. Y. 560; People v. Sherlock, 166 N. Y. 180; People v. McCarthy, 250 N. Y. 358; People v. Wrieden, 299 N. Y. 425; People v. Spinello, 303 N. Y. 193.) II. The order of the County Court dismissing the information was appealable to the Appellate Division. The order of the Appellate Division dismissing the appeal is appealable to this court. (People v. Reed, 276 N. Y. 5; People v. Johnston, 187 N. Y. 319; People v. Levenstein, 309 N. Y. 433; People v. Nelson, 298 N. Y. 272; People v. Hammerstein, 150 App. Div. 212, 155 App. Div. 204, 211 N. Y. 552.)
    No appearance for respondent.
   Froessel, J.

The Grand Jury of Kings County, after hearing the testimony of three witnesses, directed the District Attorney to file an information in the Court of Special Sessions — “ pursuant to the provisions of Section 742 ” of the Code of Criminal Procedure — charging defendant with the “crime of Leaving Scene of Accident ” in violation of subdivision 5-a of section 70 of the Vehicle and Traffic Law. The County Court, which had impaneled the Grand Jury, approved its direction, .Judge Baeshay ordering that the information be filed. Accordingly, it was filed by the District Attorney on November 25, 1958, in the Court of Special Sessions.

In February, 1959 defendant’s counsel moved in the County Court not in the Court of Special Sessions — to inspect the Grand Jury minutes and for an order dismissing the information. Nearly four months later, in June, 1959, Judge Marasco, “after reading the Grand Jury Minutes ”, vacated the prior order of County Court Judge Baeshay and dismissed the information. The ground assigned for the determination was that “ Suspicion cannot take the place of evidence ”.

On appeal from Judge Marasco’s order to the Appellate Division, that court, although agreeing ‘ ‘ with appellant that the evidence presented before the Grand Jury was sufficient to warrant its direction that an information be filed against respondent ”, dismissed the appeal therein on the ground that ' ‘ there is no statute which authorizes an appeal from the order of the County Court vacating its previous order made pursuant to section 742 of the Code of Criminal Procedure and dismissing the information filed pursuant thereto ”. It added that “ jurisdiction to entertain the appeal” was, therefore, lacking.

It was settled by our decision in People v. Levenstein (309 N. Y. 433) that the “information” herein is treated as an “indictment” for the purposes of appealability under section 518 of the Code of Criminal Procedure. Hence the narrow question before us on this appeal is whether an order vacating a prior order directing the filing of an information, and dismissing the information, is appealable under section 518 of the Code of Criminal Procedure, the determinative statutory provision. That section, as amended by chapter 832 of the Laws of 1942, provides, in relevant part, that

‘ ‘ An appeal may be taken by the people as of right

‘ ' 3. From, an order of the court, made at any stage of the action, setting aside or dismissing the indictment on a ground other than the insufficiency of the evidence adduced at the trial ’ ’ (emphasis supplied).

In our opinion, the above-quoted subdivision 3 clearly empowered the Appellate Division to entertain the appeal from the County Court order. The legal effect of that order was to dismiss the information “on a ground other than the insufficiency of the evidence adduced at the trial ”. No trial was ever had here; hence the only exception contained in subdivision 3 is inapplicable to this case. That provision does not prescribe, nor on the basis of its plain language can it be reasonably argued, that its scope of operation is limited to dismissals effected by a particular procedural means. It is rather the ultimate result, namely, the effectuation of a dismissal importing finality, which is of paramount concern. Therefore, in the instant case, appellate review may not be precluded on the ground that the dismissal of the information also involved the vacatur of a prior order directing that the information be filed—leaving aside the question of one County Judge overruling another, and after the case was lodged in the Court of Special Sessions.

This interpretation of subdivision 3 of section 518, and our conclusion that appellate review was here authorized find strong support in the statutory history of section 518. Prior to its amendment in 1942, subdivision 3 of section 518 provided that an appeal by the People may be taken “ Upon an order of the court granting a motion made upon the minutes of the grand, jury dismissing an indictment” (emphasis supplied). The purpose of the 1942 amendment was to enlarge, rather than to limit, the People’s right of appeal (see Eighth Annual Report of N. Y. Judicial Council, 1942, pp. 62-63). The instant order of dismissal may be aptly characterized as a dismissal ‘ ‘ upon the minutes of the grand jury ”. It will be recalled that defendant herein had moved to inspect the Grand Jury minutes and for dismissal of the information; and the court made its order of dismissal “ after reading the Grand Jury Minutes ”. Since a right of appeal by the People from a dismissal upon the minutes of the Grand Jury was specifically permitted under the pre-amended subdivision 3 of section 518, a fortiori such right lies subsequent to the amendment which enlarged the scope of that provision.

The impelling cause for the 1942 amendment of section 518 was our decision in the case of People v. Peed (276 N. Y. 5) upon which the Appellate Division below relied in dismissing the appeal to that court. In the Reed case we quite reluctantly took a literal view of section 518, refusing to “ stretch a point and say ’ ’ that a motion to dismiss an indictment is the equivalent of a demurrer. Hence it was held that the order therein dismissing the indictment was not appealable. A ' remarkable situation ”, as described by Chief Judge Crane {id., at pp. 11-12), was indeed presented, and legislative correction was invited {id., at p. 14).

Subsequent to the Reed decision, the Judicial Council, alluding to the " remarkable situation ” described by Chief Judge Crane, urged the Legislature to adopt remedial legislation. It was maintained by the Judicial Council that “ A defendant ”, by virtue of the Reed decision, has been enabled “to preclude appellate review of an order in his favor by malting objections to the sufficiency of the indictment by a motion to dismiss ”, instead of by a demurrer; a “ grave injustice ’ ’ is thereby done to the People (see Eighth Annual Report of N. Y. Judicial Council, 1942, supra, at p. 63). In our opinion, the corrective legislation, which was designed to remedy the evil thus described, also prevents a Trial Judge from precluding appellate review by coupling his order dismissing the information with a vacatur of another County Judge’s prior order directing its filing.

A practice question as to our disposition of this appeal remains. While the Appellate Division dismissed the appeal to it for the reasons previously stated, it made clear by its opinion that the evidence presented before the Grand Jury was sufficient to warrant its direction that an information be filed against respondent. We have reviewed the testimony presented to the Grand Jury and are in accord with this finding. Inasmuch as the Appellate Division in its order referred to its opinion, its finding as to the sufficiency of the evidence may be deemed to have been embodied therein (Code Crim. Pro., § 543-a). Under these circumstances, it would be pointless to remit to them.

Accordingly, the order of the Appellate Division, and the order of the County Court vacating the prior order of that court and dismissing the information should be reversed, and the information reinstated.

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

Order reversed and the information reinstated.

       (L. 1927, ch. 337.) Subdivisions 1 and 2 of section 518 provided then, as they do now, for appeals from judgments for the defendant upon “ demurrer to the indictment ” and from an order of the court “ arresting ” judgment.


source: Caselaw Access Project

author: Froessel, J.

license: Public Domain

text:
    National Psychological Association for Psychoanalysis, Inc., et al., Appellants, v. University of the State of New York, Respondent.
    Argued June 6, 1960;
    decided July 8, 1960.

      Osmond K. Fraenkel and Lyman Stansky for appellants.
    I. The statute deprives plaintiffs of property without due process of law in violation of both State and Federal Constitutions. (Lincoln Union v. Northwestern Co., 335 U. S. 525; Steelworkers v. United States, 361 U. S. 39; Matter of Friedman v. Valentine, 177 Misc. 437, 266 App. Div. 561; Matter of Avon Western Corp. v. Woolley, 291 N. Y. 687; Matter of Magnani v. Harnett, 257 App. Div. 487, 282 N. Y. 619; Templar v. State Bd. of Examiners of Barbers, 131 Mich. 254; Brown v. University of State of N. Y., 242 App. Div. 85, 266 N. Y. 598; Matter of Cherry v. Board of Regents, 289 N. Y. 148; Packer Collegiate Inst. v. University of State of N. Y., 298 N. Y. 184; Matter of Dubin v. Board, of Regents, 1 N Y 2d 58; Matter of Barton Trucking Corp. v. O’Connell, 7 N Y 2d 299.) II. In any event, the issue of constitutionality cannot be determined without a trial. (Borden’s Co. v. Baldwin, 293 U. S. 194; England v. Louisiana State Bd. of Med. Examiners, 259 F. 2d 626, 263 F. 2d 661; Defiance Milk Prods. Co. v. Du Mond, 309 N. Y. 537.) III. Plaintiffs have standing to sue. (Matter of United Press Assns. v. Valente, 308 N. Y. 71; Matter of Oneida County Forest Preserve Council v. Wehle, 309 N. Y. 152; Pierce v. Society of Sisters, 268 U. S. 510; Columbia Broadcasting System v. United States, 316 U. S. 407; Anti-Fascist Committee v. McGrath, 341 U. S. 123.)

      Louis J. Lefkowitz, Attorney-General (Samuel A. Hirshowitz, Paxton Blair and Philip Watson of counsel), for respondent.
    I. The statute represents a proper exercise of the police power and complies with constitutional requirements invoked by appellants. (Lincoln Bldg. Associates v. Barr, 1 N Y 2d 413; Thompson v. Wallin, 301 N. Y. 476, 342 U. S. 801; Bohling v. Corsi, 306 N. Y. 815, 348 U. S. 802; Railway Express Agency v. Virginia, 358 U. S. 929; Szold v. Outlet Embroidery Supply Co., 274 N. Y. 271, 303 U. S. 623; Farrington v. Pinckney, 1 N Y 2d 74; Bintz v. Mid-City Park Corp., 223 App. Div. 533; Nebbia v. New York, 291 U. S. 502; Lapchak v. Baker, 298 N. Y. 89; Matter of City of Utica v. Water Pollution Control Bd., 5 N Y 2d 164; Bradwell v. Illinois, 16 Wall. [83 U. S.] 130;
      Dent v. West Virginia, 129 U. S. 114; Brearley School v. Ward, 201 N. Y. 358; People v. Griswold, 213 N. Y. 92; Matter of Marburg v. Cole, 286 N. Y. 202; Packer Collegiate Inst. v. University of State of N. Y., 298 N. Y. 184; Matter of People [International Workers Order], 305 N. Y. 258; Matter of Union Ins. Agency v. Holz, 1 A D 2d 945, 1 N Y 2d 644, 353 U. S. 932; Matter of Ross v. Macduff, 309 N. Y. 56; Matter of Bell v. Board of Regents, 295 N. Y. 101; Matter of Dougherty v. State Harness Racing Comm., 309 N. Y. 992, 1 N Y 2d 827; Linehan v. Waterfront Comm, of N. Y. Harbor, 116 F. Supp. 683, 347 U. S. 439, 347 U. S. 994; Yakus v. United States, 321 U. S. 414; Matter of Zorach v. Clauson, 303 N. Y. 161, 343 U. S. 306; Matter of Selian v. Kelly, 3 A D 2d 669; Beauharnais v. Illinois, 343 U. S., 250.) II. No justiciable controversy was raised by appellants. In any event, the case has become moot. (Matter of Bergerman v. Gerosa, 3 N Y 2d 855; Matter of Guardian Life Ins. Co. v. Chapman, 302 N. Y. 226; Graybar Elec. Co. v. New Amsterdam Cas. Co., 292 N. Y. 246; Engel v. O’Malley, 219 U. S. 128; Matter of Diocese of Rochester v. Planning Bd. of Town of Brighton, 1 N Y 2d 508; Musco v. United Sur. Co., 196 N. Y. 459; Buck v. Kuykendall, 267 U. S. 307; Booth Fisheries v. Industrial Comm., 271 U. S, 208; People ex rel. Lasher v. City of New York, 198 N. Y. 439; Schieffelin v. Komfort, 212 N. Y. 520; People ex rel. Durham Realty Corp. v. La Fetra, 230 N. Y. 429; Hoffman v. O’Brien, 88 F. Supp. 490, 339 U. S. 955; Tennessee Power Co. v. Tennessee Val. Auth., 306 U. S. 118; Matter of De Peyster, 210 N. Y. 216; Matter of White, 118 App. Div. 869; Murtha v. Monaghan, 4 N Y 2d 897; Matter of Fink v. Cole, 302 N. Y. 216; Matter of United Press Assns. v. Valente, 308 N. Y. 71; Dog Owners Assn. of New York State v. Hilleboe, 307 N. Y. 734; Bode v. Barrett, 344 U. S. 583; Buhl v. University of State of N. Y., 268 App. Div. 530; Finlay Straus, Inc., v. University of State of N. Y., 270 App. Div. 1060.)

      John H. Mariano for New York State Psychological Association, Inc., amicus curiæ.

    I. The challenged statute remains a valid expression of legislative purpose and intent regardless of any absence of definitions. II. There has been no invalid delegation of legislative authority to respondent, the University of the State of New York, since the transfer and execution of administrative details is itself based on an unambiguous expression of legislative intent. (Farrington v. Pinckney, 1 N Y 2d 74; People ex rel. Durham Realty Corp. v. La Fetra, 230 N. Y. 429; Matter of Fay, 291 N. Y. 198; Bohling v. Corsi, 204 Misc. 778, 306 N. Y. 815, 348 U. S. 802; Matter of City of Utica v. Water Pollution Control Bd., 5 N Y 2d 164; Packer Collegiate Inst. v. University of State of N. Y., 298 N. Y. 184; Hampton & Co. v. United States, 276 U. S. 394; American Power Co. v. S. E. C., 329 U. S. 90.) III. The statute represents a reasonable exercise of the Legislature’s duty to protect the public health and welfare under concededly existing police powers. (People v. Schweinler Press, 214 N. Y. 395.) IV. The statute represents a reasonable means directed at reaching after existing evils such as fraud, incompetence and ignorance. (Nebbia v. New York, 291 U. S. 502.) V. The disputed certification statute does not deprive anyone of any personal or property rights. (Bowles v. Willingham, 321 U. S. 503; California Auto. Assn. v. Maloney, 341 U. S. 105; Day-Brite Light. v. Missouri, 342 U. S. 421.)
   Froessel, J.

The constitutionality of article 153 (§§ 7601-7614) of the Education Law (L. 1956, ch. 737), which deals with the certification of psychologists, was unsuccessfully challenged by plaintiff membership corporation, dedicated to the advancement of psychoanalysis (herein called NPAP), and four of its members, each of whom has since been certified under the statute. Since the question involved is of important public interest and one likely to arise again, we deem it appropriate to entertain the appeal on the merits (Matter of United Press Assns. v. Valente, 308 N. Y. 71, 76).

Drafted by State agencies and interested professional groups, and widely approved by the psychological fraternity (see Governor’s Message, Public Papers of Governor Iiarriman, 1956, pp. 416-417; Memoranda of Education Department, N. Y. Legis. Ann., 1956, pp. 214-215, and Mental Hygiene Department, McKinney’s 1956 Session Laws, pp. 1928-1929), article 153 is a certification rather than a licensing law, i.e., it does not prohibit anyone from rendering psychological services, but proscribes the professional use by noncertificants of the title psychologist ” and its derivatives, for remuneration. Section 7602 prohibits noncertified individuals from representing themselves as psychologists, and section 7601 defines a person who “ represents himself to be a ‘ psychologist ’” as one who “ holds himself out to the public by any title or description of services incorporating the words ' psychological ’, ' psychologist ’ or ' psychology ’, and under such title or description offers to render or renders services to individuals, corporations, or the public for remuneration.” (Emphasis supplied.)

Section 7605 empowers the Department of Education to issue “a certificate as psychologist ” to a citizen (or one who has declared his intention), of good moral character, at least 21 years of age, who pays a $40 fee, ' ' passes a satisfactory examination in psychology ’ ’, has ' ' received the doctoral degree based on a program of studies whose content was primarily psychological from an educational institution having a graduate program registered by the department, or its substantial equivalent in both subject matter and extent of training ” (emphasis supplied), and has had " at least two years of satisfactory supervised experience in rendering psychological services ’ ’. For a specified period, the board is empowered to waive examination for those meeting prescribed standards of academic achievement and professional experience.

The statute further provides for biennial registration of certified psychologists (§ 7606); nondisclosure of privileged communications (§ 7611); and revocation or suspension of certificates, after notice and hearing before the Commissioner of Education, with the right of judicial review by way of an article 78 proceeding of the suspension, revocation," or refusing to issue or renew a certificate ” (§ 7607). Employees of governmental agencies and chartered educational institutions are exempt from the operation of the statute (§ 7609); the practice of medicine is not authorized (§ 7610); and violation of the statute is made a misdemeanor (§ 7608).

Article 153 was designed to accomplish a two-fold purpose. On the one hand, it " recognizes and gives status to the profession of psychology” (Governor’s Message, supra) by “giving qualified psychologists official recognition” (Memo., Mental Hygiene Dept., supra), and by placing the “ confidential relations and communications ” between a registered psychologist and his client “ on the same basis as those provided by law between attorney and client ” (§ 7611). In this aspect, its sponsors felt that the statute would encourage bona fide psyehologists with university training and professionally supervised experience to offer their needed professional services to the public in increasing numbers.

On the other hand, it was “ apparent to all who are concerned with the field of public health that the public [was] entitled to protection in the form of state supervision ” over the increasingly important field of psychology (Memo., Education Dept., supra). By prohibiting the use of the word “psychologist” and its variants in connection with the rendition of professional services for pay, it was felt that the statute would ‘ ‘ make it possible to eliminate unqualified persons who are presently able to hold themselves out to the public as psychologists ' ’ (Memo,, Education Dept,, supra), and help to protect the public against charlatans and quacks who, despite inadequate training and professional experience, guarantee easy solutions to psychological problems.

Aside from the presumption of constitutionality which must be accorded a legislative enactment (Lincoln Bldg, Associates v. Barr, 1 N Y 2d 413, 415), it cannot be gainsaid that the statute is reasonably related to the public health and welfare, and thus constitutes a proper exercise of the State’s police power under the due process clause of the State and Federal Constitutions. Through the medium of official certification of qualifications, it helps the public to identify those who have appropriate training and background in the profession of psychology. At the same time, it affords protection against the incompetent practitioner by providing a yardstick by which the public can judge the competence of persons offering psychological services.

We have upheld the certification as opposed to the complete licensing approach in the fields of accountancy (Berkowitz v. Wilson, 307 N. Y. 851) , and plumbing (People ex rel, Nechamcus v. Warden of City Prison, 144 N. Y. 529), and, as stated in the latter case (pp, 538-539), “ if the act is a step in the direction of something which will enure to the public health and comfort, that it does not go as far as it might, is not a reason for invalidating it”. Since “we may not, of course, substitute our judgment for that of the Legislature as to the wisdom or expediency of the legislation ” (Thompson v. Wallin [and two companion cases], 301 N. Y. 476, 488, affd. 342 U. S. 485, 801, 951), the strong convictions expressed by plaintiffs against the soundness and efficacy of the statute have no bearing on its constitutionality (see Beauharnais v. Illinois, 343 U. S. 250, 262; People v. Schweinler Press, 214 N. Y. 395, 406-407, appeal dismissed 242 U. S. 618).

The constitutional arguments pressed on this appeal revolve around the fact that the statute does not contain a formal definition of “psychologist” or its proscribed derivatives. Plaintiffs contend that the absence of such a definition renders the statute violative of due process in two respects: (1) it arbitrarily restricts the carrying on of a lawful occupation in that it prohibits a noncertified psychologist from truthfully describing his professional services, and (2) the statute’s qualifying standards are meaningless without a definition to which they can attach, and hence the statute unlawfully delegates legislative power without accompanying standards to guide the exercise of administrative discretion.

The omission of a formal definition of “ psychology ” or its variants was no legislative oversight. Attempts to draft a definition that would sufficiently delineate the nature and scope of psychology had failed (Memos., Mental Hygiene and Education Depts., supra), and, as noted by Special Term, “ the law was enacted in a form that was acceptable to interested groups and that requires no interpretation of that term for its enforcement ”. The standards of fitness established by the Legislature imbue the title “psychologist” with meaningful content, and a person with a bona fide claim to that title will meet those qualifications and be accorded official recognition, as were the individual plaintiffs herein. To “ assure adequate representation of the diverse fields of psychology ” on the State Board of Examiners, the Legislature specifically provided that “ the board shall at all times, except for vacancies, have two members representing the training institutions in psychology, three members who engage in rendering service in psychology and two members who devote a majority of their time to rendering service in psychology” (§ 7603). The membership of the Advisory Council established by the Legislature to “ aid in the formulation of policy ’ ’ was likewise apportioned among professional practitioners and representatives of the professional training centers ’ ’ to insure that it would be ‘ ‘ broadly representative of psychology ” (§ 7604).

That the Legislature assigned to respondent the task of implementing the statute—by recognizing accredited psychology courses in the graduate currículums of chartered institutions, by determining the scope of the qualifying examination, by fixing the substantial equivalent” of a doctoral degree, and by deciding what constitutes ‘ satisfactory supervised experience ” — does not constitute an invalid delegation of legislative power (Matter of Marburg v. Cole, 286 N. Y. 202, 211-212; Matter of City of Utica v. Water Pollution Control Bd., 5 N Y 2d 164). The statute prescribes clearly discernible standards to govern the exercise of the power of certification, and it was ‘ proper and fitting for the Legislature to assign broad functions to the Board, particularly when it was contemplated and understood that its members were to bring to their work a familiarity with conditions which the individual legislators could not be expected to possess.” (Matter of City of Utica v. Water Pollution Control Bd., supra, p. 170.) f While plaintiffs maintain, • on the one hand, that there is as / yet “ no unified concept of what psychology is ”, nor a “ gen-I erally accepted' definition of psychology, psychologists or psyÍ chological services ”, they nonetheless contend, on the other s hand, that the constitutional infirmity in the statute lies in its ’ failure to define those very terms. They recognize that the ^ profession of psychology is affected with a public interest, and ' hence subject to regulation under the police power. Yet the end result of their argument is that the Legislature may not constitutionally regulate psychologists, since the title and the field are incapable of precise definition, and a statute without such definition is invalid.

- The short answer to this thoroughly untenable argument is that section 7605, in practical effect, defines a psychologist as an individual who meets prescribed standards of fitness, and since the statute merely proscribes the use of specific words to describe the rendition of services, without making it criminal for noncertificants to render such services, no further definition of that term is constitutionally required or necessary (see Pitts v. State Bd. of Examiners of Psychologists, 222 Md. 224, 227). The statute is easily complied with by the non-use of particular words, and hence it completely “ satisfies the requirement that a criminal statute must be sufficiently definite, ‘ clear and positive ’ to give ‘ unequivocal warning ’ to citizens of the rule which is to be obeyed ” (People v. Firth, 3 N T 2d 472, 474).

Plaintiffs’ real quarrel with the statute is not that it lacks a formal definition of “psychologist”, but that the definition adopted—byway of qualifying standards — does not meet with their approval. NPAP conducts a training program for members in training, and respondent has refused to accept that program as satisfying the academic requirements of the statute, contrary to NPAP’s expectation at the time it supported the statute. The major portion of plaintiffs’ affidavits, as well as their complaint, is devoted to the merits of NPAP’s training program, and why it should qualify as a “ substantial equivalent ” of “ the specialized advanced courses in psychological theory and professional skills in a typical graduate psychology program given by degree-granting institutions leading to a degree of Doctor of Philosophy in psychology ’ ’. However, a disagreement with the judgment of the Legislature as to the proper standards of fitness for persons wishing to be certified in their craft cannot rise to the level of a constitutional argument by couching that disagreement in the language of due process or equal protection of the laws. If certification is denied to one of NPAP’s members, and he can establish that respondent’s refusal to accept his training as a “ substantial equivalent” of formal university training was an arbitrary abuse of administrative discretion, then he may obtain the necessary relief in the courts by way of an article 78 proceeding (§ 7607, subd. 3; see Matter of Marburg v. Cole, supra).

As to plaintiffs’ contention that “ the issue of constitutionality cannot be determined without a trial ”—which is inconsistent with their motion for summary judgment — the issues of fact which assertedly exist all go to the wisdom and efficacy of the statute, and have no bearing on its constitutionality.

The judgment should be affirmed, with costs.

Chief Judge Desmond and Judges Dye, Fuld, Burke and Foster concur with Judge Froessel ; Judge Van Voorhis concurs on the assumption that this statute affects the use of the title “ psychologist ” only in conjunction with services rendered to individuals in the solution of personal problems or treatment of illness.

Judgment affirmed.

      ,. See note, 51 Col. L. Rev. (1951) 474, which points np “the selling- power of the term ‘psychologist’ and its variants” and the importance, in terms of practical protection to the public, of proscribing “the professional use by noncertifiqants of the very terms which have apparently captured the popular imagination” (pp. 484-485).

      . See, also, former article 56 of the Education Law (§§ 1475,1476, added by L. 1927, eh. 85, and derived from former §§ 77, 77-a of the General Business Law), which, as noted in Roth v. Hoster Realty Co. (119 Misc. 686), was “directed solely against the assumption of the title architect or registered architect” (emphasis supplied), and did “not forbid the practice of the profession or occupation generally.”


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

text:
    William Diemer, Appellant, v. Gilberte Diemer, Respondent.
    Argued March 29, 1960;
    decided July 8, 1960.

      Leonard M. Leiman for appellant.
    I. The courts below erred in denying plaintiff a separation. (Stone v. Stone, 301 N. Y. 766; Mirizio v. Mirizio, 242 N. Y. 74; Jacobsen v. Jacobsen, 205 Misc. 584; Berman v. Berman, 277 App. Div. 560.) II. Custody of the child should have been awarded to plaintiff. (Bunim v. Bunim, 298 N. Y. 391; Weinberger v. Van Hessen, 260 N. Y. 294; Martin v. Martin, 308 N. Y. 136. )

      Anthony F. LoFrisco and William D. Sullivan for respondent.
    I. The findings of fact made by the trial court are dispositive of this appeal in relation to the cause of action pleaded. (Metropolitan Life Ins. Co. v. Union Trust Co., 294 N. Y. 254; Matter of Joroco Silk Corp. v. Nova, 265 App. Div. 1061; Hamer v. Flatto, 170 Misc. 560; Weaver v. Weaver, 74 App. Div. 591, 178 N. Y. 621; Pearson v. Pearson, 230 N. Y. 141; Flagg v. Nichols, 307 N. Y. 96; Matter of Helen Whiting, Inc. [Trojan Textile Corp.], 307 N. Y. 360; Garvin v. Garvin, 306 N, Y. 118; Barnet v. Cannizzaro, 3 A D 2d 745; Donohue v. Donohue, 180 App. Div. 561; Umbach v. Umbach, 183 App. Div. 495.) II. The question of abandonment urged by plaintiff is not properly before the court on this appeal. (Williams v. Williams, 130 N. Y. 193; Flagg v. Nichols, 307 N. Y. 96.) III. Assuming that the issue of abandonment was properly before the trial court, plaintiff nevertheless failed to make out a prima facie case; but even assuming that plaintiff did make out a prima facie case on this issue, the trial court did not make sufficient findings of fact to permit this court to grant a separation. (Risk v. Risk, 202 App. Div. 299, 236 N. Y. 661; Mirizio v. Mirizio, 242 N. Y. 74; Jacobsen v. Jacobsen, 205 Misc. 584.) IV. Plaintiff’s contention that he is entitled to the custody of the child is frivolous in view of the findings of fact made by the trial court, the admissions made by plaintiff and the trial court’s exercise of discretion in favor of defendant. (Wilson v. Coulter, 29 App. Div. 85; Bunim v. Bunim, 298 N. Y. 391; People ex rel. Djurovic v. Djurovic, 205 Misc. 216; Martin v. Martin, 308 N. Y. 136.)
   Fuld, J.

The question on this appeal is whether a wife’s repudiation of the validity of her marriage and her refusal to have sexual relations with her husband unless he submits to a remarriage in a church of her religious faith entitle the husband to a decree of separation.

Mr. and Mrs. Diemer were married in 1947. He was a Protestant, 41 years of age, she a Roman Catholic, a year younger. Having anticipated problems in accommodating their religious differences, they discussed this issue and reached an agreement concerning it. Although other aspects of their agreement were in dispute at the trial, it seems clear that Mr. Diemer’s doubts about the success of their marriage had been allayed by the assurance of his bride-to-be that her ‘ ‘ main ambition ’ ’ was to be with him ‘ ‘ in all things, for all times ’ ’ and by her agreement that his faith would be her faith and his church, her church. It was in fulfillment of their agreement that the Diemers were married in the Church of the Garden, a church of Protestant persuasion, and a year and a half later Mrs. Diemer was admitted as a member of her husband’s church.

In 1950, after three years of marriage, a daughter was born to the Diemers. Although it would not be accurate to say that marital discord was born with the infant, the unfortunate fact is that her baptism and subsequent religious training proved sources of contention, at first latent, but soon overt and bitter. The religious conflict which revolved about the child reached a climax and took a new form in 1954, shortly after Mrs. Diemer suffered an accident which induced in her a fear of death. She consulted a priest and, following her talks with him, issued an ultimatum to her husband. She told him that in the eyes of her Church she was not considered married to him and that, since this was so, she would not have any further sexual relations with him unless he submitted to a second ceremony in the Roman Catholic Church. In the six or seven months which followed, Mr. Diemer continued to live with his wife and made constant attempts to change her mind, but she persisted in her refusal to have sexual relations with him.

In October, 1954, realizing that his wife’s decision was final and unalterable, he left home and instituted this suit. Alleging, in substance, the facts as they are set out above, Mr. Diemer characterized his wife’s conduct as cruel and inhuman treatment ”, said that this conduct caused him suffering and seriously impaired his physical and mental well-being and sought relief in the form of a separation and custody of their child. Mrs. Diemer counterclaimed for separation, support and custody, but neither in her answer nor at the trial did she deny the essentials of her husband’s story. In fact, on both occasions she reaffirmed that she did not consider herself married and unequivocally declared that she would not have any sexual relations with her husband until they were remarried before a Roman Catholic priest.

The trial court denied both husband and wife a separation and awarded custody of the child to the wife. On - appeal by the husband—his wife sought no review—a divided Appellate Division affirmed the judgment. It was the view of both courts that the proof did not establish ‘ ‘ cruel and inhuman treatment ’ ’ on the part of the wife, apparently for two reasons: first, that the wife had not “ willfully and deliberately intended to inflict mental or physical suffering” upon the husband and, second, that he had not actually suffered any damage to his health. Although we are of the opinion that the criteria thus applied were too restrictive and that the essentials of cruelty were made out in this case (cf. Sherman v. Sherman, 7 N Y 2d 1032; Hofmann v. Hofmann, 232 N. Y. 215, 218), we prefer to place our decision of reversal and our award of a separation to the husband on the ground that the facts alleged and proved unquestionably establish the husband’s right to a separation on the ground of abandonment (Civ. Prac. Act, § 1161, subd. 3).

Our discussion necessarily centers on an analysis of Mirizio v. Mirizio (242 N. Y. 74). The parties, married in a civil ceremony, had agreed that ‘ they would not live together or consummate the marriage until performance of a religious ceremony ” in the Catholic Church (242 N. Y., at p. 76). Mrs. Mirizio refused to consummate their marriage because her husband declined to go through with the promised ceremony and, as a result, they never lived together. The wife thereupon sued for a separation based on abandonment, and the husband defended on the ground that his act of not supporting her was justified by her refusal to live with him and discharge her marital obligations. After thorough consideration of the underlying issues of law and policy, this court held that the wife’s conduct amounted to “ legal misconduct ” and was “ a defense to her [separation] action ” (242 N. Y., at p. 82).

The reasoning and policy considerations which led to our decision in the Mirisio case dictate the conclusion here. Marriage, of course, involves something far more fundamental than mere physical propinquity and, as a consequence, abandonment is not limited to mere “ technical physical separation”. (Heermance v. James, 47 Barb. 120, 126.) The essence of desertion or abandonment, this court said in Mirisio, is a refusal onjffie part of one spouse to fulfill ‘ ‘ basic obligations springing -from the marriage contract” (242 N. Y. 74, 81, supra). Obviously, not every denial of a marital right will be sufficient to support a charge of abandonment. The criterion is how fundamentally the denial strikes at the civil institution of marriage. Where primary rights and duties are involved, where the denial goes to one of the foundations of the marriage, it is the policy of our law to allow a separation from bed and board.

That a refusal to have marital sexual relations undermines the essential structure of marriage is a proposition basic to this court’s decision in the Mirisio case and as obvious as it is authoritative. Sexual relations between man and woman are given a socially and legally sanctioned status only when they take place in marriage and, in turn, marriage is itself distinguished from all other social relationships by the role sexual intercourse between the parties plays in it. This being so, it may not be doubted that a total and irrevocable negation of what is lawful in marriage and unlawful in every other relationship, of what unmistakably and uniquely characterizes marriage and no other relationship, constitutes abandonment in the eyes of the law. (See, e.g., Hayes v. Hayes, 144 Cal. 625, 627 [by statute]; Johnson v. Johnson, 22 Col. 20, 23, 24; Evans v. Evans, 247 Ky. 1, 7; Benton v. Benton, 197 Md. 373, 379; Brown v. Brown, 78 N. H. 337, 338; Weckstein v. Weckstein, 136 N. J. Eq. 113, 114; Darkenwald v. Darkenwald, 66 N. W. 2d 57, 62 [N. D., by statute]; Baker v. Baker, 99 Ore. 213, 215; but see, contra, Southwick v. Southwick, 97 Mass. 327, 329; Fritz v. Fritz, 138 Ill. 436, 439; Dudley v. Dudley, 225 N. C. 83, 86; Segelbaum v. Segelbaum, 39 Minn. 258, 260; Schoessow v. Schoessow, 83 Wis. 553, 554.)

It is clear, therefore, that the plaintiff now before us is entitled to a separation on the ground of abandonment unless his wife had good legal cause to refuse to have sexual intercourse with him. And, as to that, it is equally clear that she had neither cause nor justification. Although it appears that she acted without malice and was activated by deep-felt and conscientious religious convictions, her motives were not sufficient in law to excuse the abandonment of her marital status. If, as a result of religious scruples, she considers her marriage invalid or non-existent and, on that account, neglects the fulfillment of a primary marital obligation, in fairness and in law her husband must likewise have the power to free himself of its obligations. While our law is not to be unnecessarily construed in a manner which would be hostile to religion in family life or to any other of those principles of moral, ethical and considerate conduct which ought to govern the marriage relationship ”, we may not forget that this State, “as a matter of long-continued policy, * * * has fixed the status of the marriage contract as a civil contract ”, governed by civil, not religious, law. (Mirizio v. Mirizio, 242 N. Y. 74, 83, supra.) It follows as a consequence of the civil nature of the marriage contract that a wife who disavows her marriage and repudiates a fundamental marital function out of deep-felt religious conviction has abandoned her husband just as effectively as one who has done so for base and illegitimate motives.

It is our conclusion, therefore, that on the evidence adduced the plaintiff is entitled to a separation on the ground of abandonment. However, the defendant contends — and the contention finds favor with our dissenting brethren—that the husband may not prevail on the ground of abandonment because in his complaint he characterized his wife’s conduct as cruelty, without also calling it abandonment. The argument does not impress us for the complaint indisputably alleges, and, indeed, the defendant admitted both in her answer and in her testimony, all of the facts necessary to support a cause of action for separation based on abandonment. (Civ. Prac. Act, § 241; Rules Civ. Prac., rule 280; see, also, Samios v. Samios, 285 App. Div. 1020.) The mere circumstance that the plaintiff did not in his complaint denominate his wife’s conduct as “ abandonment ”, as well as “ cruel and inhuman treatment”, does not change the legal force and effect of the factual allegations. The cause of action is for separation and such a cause is undeniably alleged no matter what the pleader called it. Surely, we have advanced far beyond that hypertechnical period when form was all-important and a pleader had to attach the correct label to his complaint, at the risk of having it dismissed. It is enough now that a pleader state the facts making out a cause of action, and it matters not whether he gives a name to the cause of action at all or even that he gives it a wrong name. If this be true of the cause of action itself, it is certainly true of the ground underlying it.

Before bringing this opinion to a close, we look briefly to the plaintiff’s further requests that his wife be restrained from violating an alleged prenuptial agreement to bring their daughter up as a Protestant and that he be awarded her custody. As to the first of these, it is enough to note that the trial court found that no such prenuptial agreement was made and that there was sufficient evidence to support the finding. As to custody, an affirmance is required because, on the record before us, the primary reason offered by the father to support his claim was the asserted prenuptial agreement as to the child’s religious' training. If there is any other basis for effecting a change of custody—the child’s interest and well-being are, of course, paramount — the plaintiff is free at any time to make an application to the court at Special Term for the necessary modification or amendment of the judgment (Civ. Prac. Act, § 1170).

The judgment appealed from should be modified by directing entry of a decree of separation in favor of the plaintiff and, except as so modified, affirmed, without costs.

Chief Judge Desmond (dissenting).

The question stated in the opening paragraph of the majority opinion cannot be answered on this record unless we are to forget all about pleadings and issues. This separation action was brought, tried, dismissed and the dismissal affirmed in the Appellate Division on the sole ground of cruelty. Now our court is modifying the judgment below and directing entry of a judgment of separation (not even a retrial or a permission to replead) on the new ground of abandonment although abandonment was not pleaded, tried or in any manner passed upon in either court below.

The objection, we are told, is hypertechnical. Let us see. “ ' Pleadings and a distinct issue are essential to every system of jurisprudence, and there can be no orderly administration of justice without them. If a party can allege one cause of action and then recover upon another, his complaint would serve no useful purpose ’ ” (Cohen v. City Co. of New York, 283 N. Y. 112, 117). “It is fundamental that in civil actions the plaintiff must recover upon the facts stated in his complaint, or not at all. In case a complaint proceeds on a definite, clear and certain theory, it will not support or permit another theory because it contains isolated or subsidiary statements consistent therewith. A party must recover not only according to his proofs but according to his pleadings ” (Walrath v. Hanover Fire Ins. Co., 216 N. Y. 220, 225). Where, when or why those settled rules disappeared from our system I do not know. For no reason at all we are making a precipitous retreat from the good old rule that the parties to a private lawsuit fix the theory of suit and that no appellate court can present the losing side with a new theory. I have not been backward in advocating modernized and speeded-up procedures but I can find no reason for this abrupt departure from the rules that courts and lawyers have always lived by.

It should not be necessary to demonstrate that in matrimonial law abandonment is a definite concept, different from cruelty, and that it must be pleaded and proved as such. Abandonment is ‘' a voluntary separation of one party from the other without justification, with the intention of not returning ” (Williams v. Williams, 130 N. Y. 193, 197; Bohmert v. Bohmert, 241 N. Y. 446, 451). Nothing like that was proven or decided in the present case. The entirely different charge of cruelty was urged on the courts below and that charge was dismissed. For our court to introduce and decide a new issue, whatever its merits, is unprecedented and unlawful (see Civ. Prac. Act, § 242; Flagg v. Nichols, 307 N. Y. 96, 99).

The judgment should be affirmed, with costs.

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

Judgment modified in accordance with the opinion herein and, as so modified, affirmed, without costs.


author: Chief Judge Desmond.

text:
    In the Matter of Louis I. Kaplan, as Commissioner of Investigation of the City of New York, Respondent. Julius Blumenfeld, Appellant.
    Argued June 9, 1960;
    decided July 8, 1960.

      Monroe J. Winsten for appellant.
    I. The information sought is not material. (Federal Trade Comm. v. American Tobacco Co., 264 U. S. 298; Haffenberg v. Wendling, 271 App. Div. 1057.) II, The lack of a subpoena is a fatal omission which in and of itself requires a reversal. (Matter of Shapiro [Sears], 1 Misc 2d 579; Matter of Spector v. Allen, 281 N. Y. 251; Persky v. Bank of America Nat. Assn., 261 N. Y. 212; Beekman v. Frost, 18 Johns. 544.) III. In granting the order appealed from there was an abuse of discretion. (La Monte v. Smith, 10 A D 2d 678; Haffenberg v. Wendling, 271 App. Div. 1057.) IV. The information sought is immune from disclosure by reason of the privilege which attaches to the attorney-client relationship. (Matter of Shawmut Mining Co., 94 App. Div. 156; Neugass v. Terminal Cab Corp., 139 Misc. 699; Hollien v. Kaye, 194 Misc. 821; Castiglione v. State of New York, 8 Misc 2d 932.)

      Charles H. Tenney, Corporation Counsel (Beatrice Shainswit and Seymour B. Quel of counsel), for respondent.
    I. The lower-courts properly held that appellant was required to disclose the name of his alleged informant; both the majority and the minority of the Appellate Division agreed that no attorney-client privilege existed on these facts. (People ex rel. Vogelstein v. Warden of County Jail of County of N. Y., 150 Misc. 714, 242 App. Div. 611; Mauch v. Commissioner of Internal Revenue, 113 F. 2d 555; United States v. Pape, 144 F. 2d 778, 323 U. S. 752; Behrens v. Hironimus, 170 F. 2d 627; Tomlinson v. United States, 93 F. 2d 652, 303 U. S. 646; United States v.
      Lee, 107 F. 702; Mutual Life Ins. Co. of N. Y. v. Tailored Women, 194 Misc. 192, 275 App. Div. 759; Matter of Malcom, 129 App. Div. 226; Matter of Shawmut Mining Co., 94 App. Div. 156; Neugass v. Terminal Cab Corp., 139 Misc. 699; People ex rel. Mooney v. Sheriff of N. Y. County, 269 N. Y. 291; Rosenberg v. Carroll, 99 F. Supp. 629; Garland v. Torre, 259 F. 2d 545, 358 U. S. 910; People v. Decina, 2 N Y 2d 133; Baumann v. Steingester, 213 N. Y. 328; Matter of Creekmore, 1 N Y 2d 284; Rosseau v. Bleau, 131 N. Y. 177.) II. Since in any event appellant’s informant was not Ms client and, since the information was not communicated in connection with any professional representation, no attorney-client privilege could be claimed. (Hickman v. Taylor, 329 U. S. 495; Matter of King v. Ashley, 179 N. Y. 281; Rediker v. Warfield, 11 F. R. D. 125; Magida v. Continental Can Co., 12 F. R. D. 74.) III. The order of Special Term, directing appellant to answer the questions asked by respondent, was wholly valid, the questions were proper and material to a vital public investigation, and Special Term was fully empowered to aid respondent by reqMring answers, particularly in view of the fact that appellant is an officer of the court. (Matter of Dairymen’s League Coop. Assn. v. Murtagh, 274 App. Div. 591, 299 N. Y. 634; Matter of Blitzer v. Bromberger, 269 App. Div. 832, 295 N. Y. 596; People ex rel. Valenti v. McCloskey, 6 N Y 2d 390; Matter of Commission of Investigation of State of N. Y. v. Lombardozzi, 7 A D 2d 48, 5 N Y 2d 1026; Matter of Delehanty [Sullivan], 202 Misc. 33, 280 App. Div. 542, 304 N. Y. 725; Matter of Cohen, 7 N Y 2d 488; People ex rel. Karlin v. Culkin, 248 N. Y. 465; McKnew v. Superior Court, 23 Cal. 2d 58; United States v. Stirone, 168 F. Supp. 490, 262 F. 2d 571; Matter of Barbara, 7 A D 2d 340; Matter of Alexander v. New York State Comm. to Investigate Harness Racing, 306 N. Y. 421.)
   Chief Judge Desmond.

By the order appealed from appellant, a lawyer, has been committed to jail (Civ. Prac. Act, § 406) until he shall tell respondent New York City Commissioner of Investigation the name of the client who gave appellant certain information wMch the latter turned over to the Commissioner. The facts are tersely stated in the Special Term opinion: “It appears that respondent is an attorney and represents United Fruit Buyers Association, Inc. The latter is an organization of merchants who buy fruit at a daily auction held in the neighborhood of Pier 38. It seems that the members had difficulty finding parking space for their automobiles and respondent made several attempts with many city departments to try to make arrangements for them. In the course of this effort one of the members of the association called respondent’s attention to the fact that large trailer trucks were parked for long periods illegally in the neighborhood for the purpose of transferring their products to smaller trucks and this could not he done without the connivance of some municipal authority. • In the course of his efforts respondent gave this information to various commissioners of city departments. Petitioner is conducting an investigation of certain waterfront conditions. In the course of it he learned about respondent’s statement. * ■* * In response to questions respondent revealed that the information about the trailer trucks came to him from a member of the association. This member agreed to go to a city official to find out whether anything could be done, and reported back to respondent that the trailer trucks had the support of two powerful politicians who had shared in the large return that resulted from the illegal parking and that nothing could be done. Further than that respondent knew nothing of the incident. Petitioner asked the name of the member and respondent refused to give it.” We have deleted the opinion’s concededly mistaken statement that the Commissioner “ subpoenaed ” appellant. More about this hereafter.

After reciting the facts, Special Term rejected appellant’s argument that he was entitled to withhold the name because of the attorney-client privilege (Civ. Prac. Act, § 353). The court wrote: “Until there is a client, there is no attorney-client relationship. So in order to establish it, the name must be revealed. It follows that the privilege does not extend to the identity of the client (People ex rel. Vogelstein v. Warden of County Jail, 150 Misc. 714, 717, affd. 242 App. Div. 611).” It appears, however, from the whole record and as found by Special Term itself in the opinion above quoted that the lawyer-client relation clearly did exist in this situation. The law question, then, is whether an attorney confidentially retained by a client to pass certain information to a public investigating body is to land in jail because he is willing to disclose the information but not Ms client’s identity. Imposition of a sanction so Draconian and so destructive of the ancient rules as to lawyer-client privilege calls for close security. We do not think it can be held valid.

Justice Shientag’s brilliant and comprehensive opinion in Vogelstein’s ease (People ex rel. Vogelstein v. Warden of County Jail, 150 Misc. 714, affd. 242 App. Div. 611) is cited as a holding that the privilege never extends to concealment of the client’s name. But the law and the sweep of that opimon are not that broad. The court in Vogelstein pointed out, as do all the authorities, not only that the fact of retention of counsel is ordinarily not confidential or privileged but that divulgenee of the alleged client’s identity is often necessary in order to determine whether the basic fact of attorney-client status really exists, so as to bring into play section 353 of the Civil Practice Act. Many decisions are cited in the Vogelstein opinion (and elsewhere, see Fisch, New York Evidence, § 521) to show that the great weight of authority in England and in this country is that the client’s identity does not come within the scope of the privilege. But there is a distinct cleavage of opinion in this State (see cases both ways cited by Fisch) and many exceptions, some of them for situations where giving out the client’s name would serve no necessary purpose but on the contrary would make public the very fact as to which the client desired and was entitled to secrecy. Usually, it is not the client’s name but the client’s communication to his lawyer which is held to be sacred, and so, ordinarily, there is no need to conceal the name to preserve the confidence. But here the client’s communication had already been divulged to the Commissioner and it was the client’s name that deserved and needed protection (see Elliott v. United States, 23 D. C. App. 456; United States v. Lee, 107 F. 702) for fear of reprisals, etc. Since there was no reason to doubt that the informant was a client of appellant, it was unnecessary to investigate that relationship. Since the client’s communication to appellant was made in the aid of a public purpose to expose wrongdoing and not, as in the Vogelstein case, to conceal wrongdoing, the seal of secrecy should cover the client’s name, so long as Ms information was made available to the public authorities. The contrary holding serves no right end, contravenes the ancient policy expressed in section 353, and embarrasses and penalizes a lawyer for taking a course consistent with his professional and civil responsibilities.

The general rule is, or seems to be, that there should be disclosure of the name if the question of identity arises during the course of a litigation (see 1 Thornton, Attorneys, § 124, and see Wigmore’s remark in § 2313 of the 5th edition of his work on Evidence [Vol. 8, p. 608] that “ Every litigant is in justice entitled to know the identity of his opponent”). Other cases (like Vogelstein, supra) remove the veil from the client’s name when the attorney’s assertion of the privilege is a cover for co-operation in wrongdoing. But these are exceptions to the rule of confidentiality and since ‘ ‘ much ought to depend on the circumstances of each case” (8 Wigmore, op. cit., § 2313, p. 609) the present fact picture is surely a strong one for sticking to the rule, rather than making another exception.

We should reverse on the ground indicated, and thus decide a law question of general public importance. There is, additionally, a narrower reason for the same result. Section 406 of the Civil Practice Act, pursuant to which this commitment was ordered, requires in terms that the witness must have been served with a subpoena to warrant requiring him to attend. No subpoena or warrant was ever served on appellant, who appeared (as is now conceded) before the Commissioner on the latter’s invitation. Respondent argues that appellant’s voluntary appearance was the equivalent of, or a waiver of, service of a subpoena. For some purposes that would be true. But section 406 is a most drastic statute mandating incarceration of indefinite length for refusals to answer questions (see People ex rel. Valenti v. McCloskey, 6 N Y 2d 390; Matter of Commissioner of Investigation v. Lombardozzi, 5 N Y 2d 1026). Such statutes are always strictly construed. ■ In Matter of Spector v. Allen (281 N. Y. 251), this court reversed a contempt conviction for lack of a proper subpoena duces tecum where a witness had been served with such a subpoena listing certain documents and orally directed by the Grand Jury foreman to bring in another paper, which order he disobeyed. Our language in Matter of Spector v. Allen (supra, p. 260) is applicable here: “To protect the liberty of the individual from possible abuse of power, punishment for contempt is hedged about with restrictions and subject to regulations imposed by the Legislature. Disobedience only of mandates of the court given in accordance with law are subject to such punishment.” It appears that in the present case this lack of a subpoena was not raised by appellant in the courts below but, being jurisdictional and conclusive, it may be acted on by us especially since the omission was not one which could have been supplied if attention had been called to it below (see Persky v. Bank of America Nat. Assn., 261 N. Y. 212; Cohen and Karger, Powers of the New York Court of Appeals, § 161).

At the Appellate Division, two of the Justices dissented on quite a different ground. They thought that materiality of the questions was negatived by the lapse of two and a half years from the time appellant first gave his information to the Commissioner until the time of this questioning. However, that dissent was on a question of fact. We could not hold on this record that the questions were as matter of law immaterial.

The order should be reversed and the proceeding dismissed, with costs in all courts.

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

Order reversed, etc.


author: Chief Judge Desmond..

text:
    In the Matter of the Second Additional Grand Jury of the County of Kings, Empanelled for the March 1958 Term, as Extended, Respondent. William F. Cioffi et al., Appellants.
    Argued June 8, 1960;
    decided July 8, 1960.

      David F. Price for appellants.
    I. Section 2447 of the Penal Law cannot constitutionally be applied to prospective defendants or targets of á Grand Jury investigation. (People v. Ferola, 215 N. Y. 285; People v. Gillette, 126 App. Div. 665; People v. Bermel, 71 Misc. 356; People v. De Feo, 308 N. Y. 595; People v. Steuding, 6 N Y 2d 214; People ex rel. Lewisohn v. O’Brien, 176 N. Y. 253; People v. Sharp, 107 N. Y. 427; People ex rel. Coyle v. Truesdell, 259 App. Div. 282; People v. Breslin, 306 N. Y. 294; People v. Ryan, 7 A D 2d 198, 6 N Y 2d 975; People v. Freistadt, 6 A D 2d 1053; Matter of Spector v. Allen, 281 N. Y. 251.) II. Appellants were targets of the investigation and prospective defendants. (People v. De Feo, 308 N. Y. 595 ; People v. Rauch, 140 Misc. 691; People v. Bermel, 71 Misc. 356; People v. Reiss, 255 App. Div. 509, 280 N. Y. 539; Matter of Doyle, 257 N. Y. 244.) III. A witness cannot be compelled to testify after asserting his privilege against self incrimination before a Grand Jury investigating, among other things, crimes for which no immunity can be granted. (People ex rel. Lewisohn v. O’Brien, 176 N. Y. 253.) IV. Appellants were not afforded procedural safeguards sufficient to insure that «they would not be misled into giving evidence that could later be used against them in a prosecution for a crime for which no immunity could be inferred. (People v. De Feo, 308 N. Y. 595.) V. A prospective defendant or target of an investigation cannot be compelled to testify before a Grand Jury investigating, among other things, crimes for which no immunity can be granted. (People v. Steuding, 6 N Y 2d 214; People v. De Feo, 308 N. Y. 595 ; People v. Ferola, 215 N. Y. 285; People v. Gillette, 126 App. Div. 665; Quinn v. United States, 349 U. S. 155.) VI. Appellants were never granted complete immunity nor were they informed that complete immunity had been granted; hence their refusal to testify provided no basis for criminal contempt.

      Edward S. Silver, District Attorney (Aaron E. Koota and William Sonenshine of counsel), for respondent.
    I. The direction by the Grand Jury to answer the questions propounded, if complied with, would have given complete immunity to appellants, co-extensive with their privilege against self incrimination. Therefore, appellants had no legal alternative but to answer the questions propounded or be adjudged in contempt of court. (People v. De Feo, 308 N. Y. 595; People ex rel. Coyle v. Truesdell, 259 App. Div. 282; People v. Breslin, 306 N. Y. 294; People v. Riley, 129 Misc. 373; People v. Nationwide News Serv., 172 Misc. 857; People v. Brayer, 6 A D 2d 437.) II. Immunity, once granted, is not diminished in scope by the fact that the witness was a prospective defendant or the target of the inquiry. (People v. Breslin, 306 N. Y. 294.) III. No constitutional right is violated where a Grand Jury subpoenas a prospective defendant for the purpose of conferring immunity upon him. (People v. Steuding, 6 N Y 2d 214; People ex rel. Hummel v. Davy, 105 App. Div. 598,184 N. Y. 30.) IV. The immunity granted extends to any crime disclosed by the witness pursuant to the interrogation, including crimes for which no immunity statute is in effect. (People v. Riley, 129 Misc. 373; People v. Nationwide News Serv., 172 Misc. 857; Matter of Doyle, 257 N. Y. 244.) V. Appellants were fully aware that their testimony would result in immunity as provided by law. (People v. Brayer, 6 A D 2d 437; Brown v. Walker, 161 U. S. 591; People ex rel. Lewisohn v. O’Brien, 176 N. Y. 253.)
   Chief Judge Desmond..

In this contempt proceeding (Judiciary Law, § 750, subd. A, par. 5) appellants, who are attorneys, appeal from a unanimous order of the Appellate Division, Second Department, which affirmed an order of the Kings County Court finding them guilty of criminal contempt for refusal to answer questions before a Kings County Grand Jury.

This Kings County Grand Jury was inquiring into alleged crimes of unlawful solicitation of legal business in Kings County and inquiring as to the existence in Kings County of any criminal conspiracy among attorneys and others, in violation of article 24 of the Penal Law. Each appellant was subpoenaed before the Grand Jury and each was separately sworn. Neither filed a waiver of immunity but each was told, after being sworn, that the Grand Jury was prepared to grant immunity to each of them pursuant to law. To each one of them, at the Grand Jury hearing, the District Attorney made a statement. The District Attorney told each that the Grand Jury was investigating these crimes particularly in the negligence field, and that it wished to find out whether any lawyers had committed the crime of conspiracy or other crimes in connection with ambulance chasing, solicitation of cases, etc. The District Attorney then told each of these appellants that the Grand Jury was investigating a certain law firm and wished to question these witnesses concerning their relations with the firm and their knowledge of its activities. The District Attorney further told each of them in the presence of the Grand Jury that he was not interested in either of them as an individual, that neither was a prospective defendant or a target of investigation but that each was simply being called as a witness by the Grand Jury in an investigation into activities of the law firm named. At the same time he told them that the Grand Jury was prepared to grant them immunity pursuant to law. The brief for appellants tells us, although it is not in the record, that each of these appellants is an attorney engaged primarily in negligence practice in Kings County and that the Grand Jury had actually been questioning witnesses concerning the activities of appellants as well as of the law firm under investigation with which, according to this brief, they were both associated. Be that as it may, each was asked whether he was ever employed by that named law firm and each refused to answer that question or any other question. Each appellant when so questioned stated that he was refusing to testify on the ground that he was a prospective defendant and thus could not, pursuant to the Constitution, be questioned, that to compel him. to testify would violate his constitutional rights and that his refusal to testify was on the further ground that the Grand Jury could not grant him immunity sufficiently broad to protect him against prosecution of all violations of the laws of New York. By that latter statement each defendant apparently meant that not all the crimes which the Grand Jury might be investigating were such that as to them the Grand Jury was empowered by statute to grant immunity and compel testimony.

After each appellant had thus refused to answer he was asked to leave the Grand Jury room and in his absence the District Attorney requested the chairman of the Grand Jury to direct him to answer, then each appellant returned, was directed to testify, refused on the same grounds as before and was excused. In other words, each defendant refused to answer any question at all. He was thereafter adjudged guilty of criminal contempt.

We see no legal basis for the position taken by appellants. When appellants were called to testify each had, of course, the right to raise the constitutional privilege. The Grand Jury then had to choose whether to let them exercise that privilege or to grant them immunity. Under section 584 of the Penal Law it had express statutory power to confer immunity since the investigation related to conspiracy. Following the procedure outlined by section 2447 of the Penal Law in such instances, the Grand Jury proceeded to offer these men immunity. Had either appellant then answered he would have obtained complete and total immunity against any prosecution as to matters disclosed by his testimony except, of course, for perjury or contempt (People v. De Feo, 308 N. Y. 595, 604; see People v. Breslin, 306 N. Y. 294, 296, and People ex rel. Coyle v. Truesdell, 259 App. Div. 282, cited with approval in People v. Breslin). All this was confirmed by our very recent decision in People v. Riela (7 N Y 2d 571 [April 21, I960]). In People v. Riela we said (pp. 575-576) that “ a reading of section 2447 makes it manifest that the Grand Jury had unquestioned power to confer immunity upon Riela and direct him to answer under pain of prosecution for contempt.” As the Appellate Division pointed out in its opinion here, the resulting statutory immunity means that any incriminating matters disclosed may not be resubmitted to another Grand Jury or otherwise received or considered against the immunized witness or prospective defendant upon any criminal prosecution in this State for any crime disclosed or revealed by the testimony of said immunized witness or prospective defendant.” As we said in People v. Breslin {supra, p. 297): “It follows, therefore, that defendant was not entitled to remain silent, even if, as he urges, he believed himself one of the targets of the investigation rather than a mere witness. ’ ’ These cases make it clear that the immunity thus granted covers crimes disclosed by the testimony but as to which there is no specific immunity statute.

Matter of Doyle (257 N. Y. 244), relied on by appellants, dealt with a situation where under the then existing statutes complete immunity could not be granted.

People v. Steuding (6NY 2d 214) does not help appellants. The Steuding holding was that the calling and examining before a Grand Jury of a prospective defendant or one who is a target violates his constitutionally conferred privilege against self incrimination notwithstanding his failure to claim or assert the privilege. In other words this was the familiar People v. Gillette (126 App. Div. 665) situation. In the Steuding case a prospective defendant was accorded the full constitutional immunity regardless of the failure to follow section 2447 procedures. Steuding held that section 2447 could not constitutionally be interpreted to mean that a prospective defendant subpoenaed before a Grand Jury loses his constitutional immunity by failing to invoke it. That has nothing to do with the present case. These defendants did invoke the privilege. Then under section 2447 the Grand Jury tendered them immunity but they still continued to refuse to answer. They now argue that they were never informed that they were being granted complete immunity. Actually, it is undisputed and found in the record that before they were adjudged in contempt the County Judge not only informed them that they were being given complete immunity but gave them an opportunity to purge themselves of the contempt by going back before the Grand Jury and testifying. The affirmance by the Appellate Division of this contempt adjudication constitutes an affirmance of the finding made by the County Judge that they had knowledge that they were being tendered complete immunity.

In another point of their brief, appellants say that they could not be compelled to testify under these circumstances because the Grand Jury was investigating crimes (such as solicitation of law business) which are not among the crimes as to which the Penal Law authorizes an express grant of immunity. The answer to that is that under the authorities above cited appellants would have gotten complete immunity as to any and all crimes to which their testimony related. The same answer runs to the contention that they were not sufficiently protected since they might be misled into giving evidence as to crimes for which the Penal Law does not expressly authorize the conferring of immunity.

The order should be affirmed.

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

Order affirmed.


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

text:
    In the Matter of the Claim of John Martin, Respondent, against C. A. Productions Company et al., Appellants. Workmen’s Compensation Board, Respondent.
    Argued. May 26, 1960;
    decided July 8, 1960.

      Edwin D. Kyle and William F. Hanson for appellants.
    I. Claimant here has already successfully prosecuted a claim for damages for the same injury against C. A. Productions Company and a partner therein in the Supreme Court. His action was on the claim that his injury was suffered while he was an invited guest at the party and not present as an employee. The compromise and settlement of the damages claim bars the subsequent prosecution of this claim against the same party for compensation for the same injury on the inconsistent claim that the injury arose out of and in the course of the employment. (Matter of Russell v. 231 Lexington Ave. Corp., 266 N. Y. 391; Fiorese v. Rose, 6 A D 2d 824; Roberts v. Gagnon, 1 A D 2d 297; Naso v. Lafata, 4 N Y 2d 585; Meaney v. Keating, 200 Misc. 308, 279 App. Div. 1030, 305 N. Y. 660.) II. There was neither reservation of compensation rights nor illegal waiver in the court settlement. (Juba v. General Bldrs. Supply Corp., 7 N Y 2d 48; Matter of Russell v. 231 Lexington Ave. Corp., 266 N. Y. 391; Williams v. Hartshorn, 296 N. Y. 49.) III. The board lacked power to determine that the Supreme Court did not have jurisdiction of the damage action. (Condon v. Associated Hosp. Serv., 287 N. Y. 411; Revona Realty Corp. v. Wasserman, 4 A D 2d 444, 5 N Y 2d. 931; Henderson v. Henderson, 247 N. Y. 428; Consumer’s Lbr. Co. v. Lincoln, 225 App. Div. 484; Matter of Cristiano v. Ninfa’s Restaurant, 285 App. Div. 560.) IV. Martin, as a successful plaintiff, was barred from prosecuting his claim for compensation. (Matter of Ryan v. Sheffield Farms Co., 256 App. Div. 867; Matter of Amo v. Empsall-Clark Co., 9 A D 2d 852; Matter of Meachem v. New York Cent. R. R. Co., 7 A D 2d 253; Legault v. Brown, 283 App. Div. 303.) V. This case is not one of fruitless pursuit of a remedy in the courts. (Smith v. Kirkpatrick, 305 N. Y. 66; Matter of Tate v. Estate of Dickens, 276 App. Div. 94; Matter of Bellini v. Great American Ind. Co., 299 N. Y. 399; Matter of Ianni v. United States Gypsum Co., 264 App. Div. 934; Matter of Stout v. Prudential Ins. Co., 251 App. Div. 504; Matter of West v. Wood, 266 App. Div. 705.) VI. Claimant is estopped by his position successfully taken in the action. (Williams v. Hartshorn, 296 N. Y. 49; Triple Cities Constr. Co. v. Maryland Cas. Co., 4 N Y 2d 443; White v. La Due & Fitch, 303 N. Y. 122; Houghton v. Thomas, 220 App. Div. 415, 248 N. Y. 523; Sengstack v. Sengstack, 7 Misc 2d 1012, 4 A D 2d 1035, 4 NY 2d 502.)

      Louis J. Lefkowitz, Attorney-General (Gilbert M. Landy, Paxton Blair and Roy Wiedersum of counsel), for respondent.
    The compromise and settlement of the common-law action against the employer and others instituted in the Supreme Court, Queens County, does not bar claimant from proceeding on his workmen’s compensation claim which had been closed by the Workmen’s Compensation Board, at his request, pending the outcome of the common-law action. (Matter of Russell v. 231 Lexington Ave. Corp., 266 N. Y. 391; Juba v. General Bldrs. Supply Corp., 7 N Y 2d 48; Matter of Schmidt v. Wolf Contr. Co., 269 App. Div. 201, 295 N. Y. 748; Matter of Petrie, 215 N. Y. 335; Matter of Ryan v. Sheffield Farms Co., 256 App. Div. 867; Matter of Amo v. Empsall-Clark Co., 9 A D 2d 852; Matter of Meachem v. New York Cent. R. R. Co., 7 A D 2d 253; Hirsch v. Workmen’s Compensation Bd. of State of N. Y., 1 A D 2d 873, 3 N Y 2d 747; Matter of Clow v. Keith’s Fordham Theatre, 221 App. Div. 826, 247 N. Y. 583; Matter of Beekman v. Brodie, 249 N. Y. 175; Matter of West v. Wood, 266 App. Div. 705; Matter of Stout v. Prudential Ins. Co., 251 App. Div. 504, 276 N. Y. 578; Matter of Ianni v. United States Gypsum Co., 264 App. Div. 934; Matter of Tate v. Estate of Dickens, 276 App. Div. 94; Schenck v. State Line Tel. Co., 238 N. Y. 308.)
   Burke, J.

The sole issue to 'be determined is whether the prior successful prosecution and settlement of a claim in an action at law against the employer is a bar to a subsequent compensation claim against the same employer, for the same injury, now found to have been acquired during the course of employment.

Claimant was employed by C. A. Productions Company, a partnership, as a dancer in the musical show “ Where’s Charley ’ ’. At the close of the final performance he attended a cast party by invitation of Bay Bolger (star of the show) and his wife, Gwen Bickard (a partner in the employer company). There was evidence that these closing night parties were frequent and customary and claimant himself felt that it was part of his job and that it was “ good business ” and he was “ expected to be there ”, At the party, which was held on the theatre premises, claimant was assaulted and struck in the face by an intoxicated visitor.

A claim for compensation was initially filed on September 18, 1950. A notice of controversy, alleging that the accident did not arise out of and in the course of employment, was thereafter filed by claimant’s employer. Claimant subsequently commenced a personal injury action in the Supreme Court, Queens County, against Bay Bolger, Gwen Bickard, O. A. Productions Company, his assailant, and the owner of the theatre.

On February 21, 1951, at the request of claimant’s attorney, the compensation case was closed pending the outcome of 3rd party action ’ ’. The personal injury action was subsequently settled for $7,500. Of this amount appellant carrier paid $2,500 on behalf of its insured, C. A. Productions Company, and the balance of $5,000 was paid by another carrier on behalf of its insured, Gwen Bickard.

Subsequent to this settlement the compensation proceeding was reopened on claimant’s application. The board panel affirmed the Beferee’s award, and found that the accident arose out of and in the course of employment and that claimant is not estopped from bringing compensation proceedings. The only question reviewed by the full board was ‘ ‘ whether claimant having instituted an action against the employer and others and having recovered, should now be permitted to proceed with his compensation claim.” The Appellate Division has affirmed the board’s finding that “ claimant is not precluded from proceeding with his claim ”.

On this appeal appellants contend that since there has been a successful personal injury settlement the claimant should be barred from instituting a compensation proceeding. They rely on Matter of Russell v. 231 Lexington Ave. Corp. (266 N. Y. 391). The Russell case compels a reversal.

In our view, since the rule of Russell has been recognized and followed (Matter of Ryan v. Sheffield Farms, 256 App. Div. 867 [deficiency award to widow made subsequent to settlement of action was thereafter rescinded on authority of Russell case]), and has not met with the apparent disapproval of the Legislature, it does not seem appropriate to consider a reversal of the policy announced in that ease.

In Russell the deceased employee died from injuries arising out of and in the course of her employment as an elevator operator in a building owned by 231 Lexington Avenue Corporation. “ [T]here was some doubt as to whether the deceased was in the employ of Hopkins [the superintendant], or of 231 Lexington Avenue Corporation.” (266 N. Y. 391, 394, supra; matter in brackets supplied.) Decedent’s administrator brought an action at law against Lexington and Nelson, a third party. This action was settled before trial by payment of $5,000 by Lexington and $750 by the third party. Decedent’s mother and father shared equally in the proceeds, but the mother, being dependent, instituted a compensation proceeding in order to recover the deficiency between this amount and the amount she would have been entitled to under the Workmen’s Compensation Law. The board, as here, ignored the settlement, and made an award. This court reversed the award and dismissed the claim, stating that “ [t]he action at law brought against 231 Lexington Avenue Corporation could be maintained only if the defendant was not the employer, and a judgment in the action in favor of the plaintiff would have constituted an adjudication that the defendant’s affirmative defense that it was the employer and was covered by insurance was without substance. The settlement of the action, though not a formal adjudication of the issues, constitutes a bargain between the parties that the claim against the defendant should be satisfied by payment of the sum of $5,000.” (266 N. Y. 391*, 395-396; emphasis supplied.)

It is to be noted that the Russell case is in substance almost factually identical to the case at bar except that in the former it was the employer-employee relationship which was doubtful, while in the latter it is the occurrence of an industrial accident. Both factors are, of course, jurisdictionally vital to the maintenance of a workmen’s compensation proceeding, and the absence of either would relegate a claimant to an action at law.

It is our opinion, therefore, that the claimant cannot have the benefit of both remedies. A party should not be permitted to experiment with an action at law for the purpose of ascertaining how much he can get, and then, if dissatisfied, repudiate the recovery and seek to claim the benefits of workmen’s compensation. Although section 32 of the Workmen’s Compensation Law (prohibiting compromise and waiver) is intended to protect a claimant from his own improvidence and folly, it was certainly not intended to permit harassing and inconsistent actions resulting in unnecessary and prolonged litigation and possibly multiple recoveries. If we were to allow claimants to so proceed, via this legally calculated scheme, we would certainly discourage settlement and encourage vexatious litigation. This, of course, is also binding on those claimants who first seek and recover in compensation proceedings, and then attempt an additional recovery, on an inconsistent theory, in an action at law (Legault v. Brown, 283 App. Div. 303 [complaint now stating that injury not accidental was dismissed]).

The cases relied on by the respondent are quite distinguishable. They merely recognize the well-settled principle that there is no binding election when an employee pursues a remedy which is unavailable. (See, e.g., Matter of Tate v. Estate of Dickens, 276 App. Div. 94, 98-99; Matter of West v. Wood, 266 App. Div. 705.) Neither is the board divested of jurisdiction where a claimant has voluntarily discontinued his action against the employer (Matter of Bellini v. Great Amer. Ind. Co., 299 N. Y. 399), nor where the action at law against the employer is still pending (Matter of Amorando v. D’Antonio, 285 App. Div. 916; Ianni v. United States Gypsum Co., 264 App. Div. 934).

In the case at bar there has been much more than a mere pending action or unavailable remedy. The claimant has here successfully terminated, by settlement, his action at law. ‘ ‘ By reason of the successful position thus taken by him in the prior action, defendant ‘ comes within the rule that a claim made or position taken in a former action or judicial proceeding will estop the party from making any inconsistent claim or taking a conflicting position in a subsequent action or judicial proceeding to the prejudice of the adverse party ’ [case cited] ” (Sengstack v. Sengstack, 7 Misc 2d 1012, 1019, affd. 4 A D 2d 1035, affd. 4 N Y 2d 502; Houghton v. Thomas, 220 App. Div. 415, 423, affd. 248 N. Y. 523).

Accordingly, the order of the Appellate Division should be reversed and the claim dismissed.

Chief Judge Desmond (dissenting).

Although claimant was (as properly found by the board) injured in the course of his employment, this court now holds that he has debarred himself from claiming workmen’s compensation because he accepted money in settlement of a suit against Ms employer. Such a result is in direct opposition to the fundamental policy of the act which forbids waiver, compromise or release of an employee’s rights to workmen’s compensation benefits (Workmen’s Compensation Law, §§ 31, 32, 33; Matter of Cretella v. New York Dock Co., 289 N. Y. 254). The board and the Appellate Division, in allowing to the employer a credit against the award in the amount of the settlement, did full justice to the parties and complied with the letter and the policy of the act.

There is no authority for a reversal here. Matter of Russell v. 231 Lexington Ave. Corp. (266 N. Y. 391) is not in point, and for two reasons. First, it covered a situation where the identity of the employer was in real doubt. Second, it was decided at a time when section 29 of the act (unlike the present form of that section) provided for a binding election not to take workmen’s compensation but to sue a “ third party ”.

The order should be affirmed, with costs.

Judges Fuld, Froessel and Van Voorhis concur with Judge Burke ; Chief Judge Desmond dissents in an opinion in which Judge Dye concurs; Judge Foster taking no part.

Order reversed, the award of the Workmen’s Compensation Board annulled and the claim dismissed, without costs.


author: Burke, J.

text:
    American Broadcasting-Paramount Theatres, Inc., Respondent, v. Ben Frye et al., Appellants.
    Argued June 9, 1960;
    decided July 8, 1960.

      Edward M. Garlock for appellants.
    I. The corporate loans prohibited by section 59 of the Stock Corporation Law, and the resultant liability of officers and directors, cannot exceed the capital investment of the borrowing stockholder. (Storer v. Ripley, 12 Misc 2d 466; Wyle v. Gould, 22 Misc 2d 935; Waters v. Spalt, 22 Misc 2d 937.) II. Since the fifth clause modifies the first clause, the statute does not prohibit or create liability for loans made before the borrower has paid for his stock. III. The statute creates a single liability for the ratable benefit of all creditors, including defendant Costello; and plaintiff has no standing to sue at law thereunder for its exclusive benefit. (Hemsley & Co. v. Duncan Co., 98 Misc. 338, 178 App. Div. 882; National Bank of Auburn v. Dillingham, 147 N. Y. 603; Mathez v. Neidig, 72 N. Y. 100.)

      William D. Greene and Clarence Fried for respondent.
    I. Defendants’ contention that plaintiff does not have standing to sue is in reality an objection to nonjoinder of other possible plaintiffs. Such objection must be raised by motion and has been waived. (Flagg v. Nichols, 307 N. Y. 96; Maloney v. Hearst Hotels Corp., 274 N. Y. 106; Muck v. Hitchcock, 212 N. Y. 283; Milbank v. Jones, 127 N. Y. 370; Carruthers v. Waite Mining Co., 306 N. Y. 136; Jones v. Gabrielli, 6 A D 2d 542; Donzella v. New York State Thruway Auth., 7 A D 2d 771; Elwin v. Comeau, 8 Misc 2d 704, 5 A D 2d 748; Pagano v. Pagano, 207 Misc. 474, 2 A D 2d 756; Cash v. Diamond, 208 Misc. 712.) II. There is no evidence that there were other creditors of the corporation entitled to maintain this cause of action. III. Plaintiff as a creditor of the corporation while the illegal loans were outstanding is a real party in interest and is vested with the cause of action under section 59. (Continental Securities Co. v. Inter-borough R. T. Co., 118 Misc. 11, 200 App. Div. 794, 235 N. Y. 133; Willy v. Cameron, Michel & Co., 217 App. Div. 651; Stolz v. Ginsburg, 217 App. Div. 701, 245 N. Y. 519; Billings v. Trask, 30 Hun 314; Klages v. Cohen, 146 F. 2d 641; Wyle v. Gould, 22 Misc 2d 935; Waters v. Spalt, 22 Misc 2d 937.) IV. Section 59 creates a cause of action in favor of creditors of a corporation who became such while the prohibited loans were outstanding and such a creditor may bring the action in his own name and for his own benefit. (Bil-Jax v. Pine, 15 Misc 2d 434.) V. Section 59 of the Stock Corporation Law established an unconditional prohibition against loans of corporate funds to stockholders. (Murray v. Smith, 224 N. Y. 40; New York Credit Men’s Assn. v. Dingfelder, 287 N. Y. 531.)
   Burke, J.

Defendants appeal by permission of this court from a judgment of the Appellate Division unanimously affirming a judgment entered on a directed verdict in favor of the plaintiff in an action brought by the plaintiff as a creditor of Pathe Pictures, Inc. (formerly known as Studio Films, Inc.) to recover for loans improperly made by the defendants as officers and directors of Pathe to one of them in his capacity as a stockholder of Pathe.

The complaint is based upon section 59 of the Stock Corporation Law.

The answer interposed by defendants alleged two affirmative defenses. The second affirmative defense alleged that the plaintiff was not the real party in interest. In addition to the defense that plaintiff has no standing to sue, defendants urge us to read section 59 of the Stock Corporation Law as if it prohibited loans of corporate funds to a stockholder only when such loans result in a withdrawal of money paid in by him on his stock. They assert that the first clause of section 59 which prohibits corporate loans to any stockholder is modified by the final phrase “ to enable any stockholder to withdraw any part of the money paid in by him on his stock.”

We find that the phrase applies only to the prohibition immediately preceding it and does not modify the first clause of the statute. The opening clause of the statute establishes an unconditional prohibition against loans of corporate funds to stockholders (see, e.g., New York Credit Men’s Assn. v. Dingfelder, 287 N. Y. 531 [1942]; Waters v. Spalt, 22 Misc 2d 937 [Sup. Ct., New York County, 1948]; Kennedy v. Kennedy, 22 Misc 2d 924 [Sup. Ct., Westchester County, 1949]; Wyle v. Gould, 22 Misc 2d 935 [Sup. Ct., Bungs County, 1951]; Billings v. Trask, 30 Hun 314, 315-316 [Gen. Term, 1st Dept., 1883]; 4 White, Corporations [12th ed., 1948], p. 129; N. Y. Legis. Ann., 1959, p. 100; 1913 Atty. Gen., Vol II, 252-256). (See, also, Manufacturing Corporation Law of 1848 [L. 1848, ch. 40]; Building Corporation Law of 1853 [L. 1853, ch. 117]; Business Corporation Law of 1875 [L. 1875, eh. 611].) When the language of the statute is read literally and in the light of its legislative history, it is apparent that the interpretation of the wording of the statute advanced by the defendants has no validity.

The important question remains whether a plaintiff who was a creditor of the corporation while illegal loans were outstanding is a real party in interest and may bring an action in his own name.

Since the statute imposes the liability only in favor of certain creditors of the corporation, it has been held that neither the corporation (Billings v. Trash, supra-, Waters v. 8palt, supra) nor its trustee in bankruptcy or receiver in supplementary proceedings has a cause of action under the statute (Stolz v. Ginsburg, 217 App. Div. 701 [3d Dept., 1926], affd. 245 N. Y. 519; Klages v. Cohen, 146 F. 2d 641, 644 [C. C. A. 2d, 1945]). It is certain, however, that corporate creditors are authorized to proceed against the directors (Murray v. Smith, 224 N. Y. 40; New York Credit Men’s Assn. v. Dingfelder, supra). Defendants, nevertheless, contend that the wording of the statute creates a liability for the ratable benefit of all the creditors of the special class. Such a liability, they argue, can only be enforced in a class or representative action.

Reliance is placed upon the decision in National Bank of Auburn v. Dillingham (147 N. Y. 603, 610, 611 [1895]) where this court decided that a statute (former Stock Corporation Law, § 24) which prohibited the creation by a corporation of debt in excess of its paid-up capital and made the responsible directors liable to corporate creditors for the amount of any such excess debt imposed a liability which could only be enforced in a suit where all the creditors and the corporation itself were parties. But in regard to section 59 the authorities to date are to the contrary. Several cases have held that a single creditor, as one of the statutory class, may bring the action. (Waters v. Spalt, supra; Wyle v. Gould, supra; Union Dime Sav. Bank v. Restaurants & Patisseries Long champs, 272 App. Div. 761 [1st Dept., 1947].)

We do not think the Dillingham case (supra) is controlling. Its rationale does not compel a reversal here. That case dealt with an excess debt statute which was not penal in character. Such a statute seeks to cure impairments of the corporate financial worth caused by the accumulation of debts far in excess of capital by providing a fund for reimbursement of all creditors. Thus the statute was remedial in thrust. Every creditor was afforded the same protection since all were affected. The statute created no preference. But the legislative purpose of the two types of statutes are quite different. Section 59 of the Stock Corporation Law is clearly intended to be penal. Its purpose is to deter corporate officials from issuing corporate funds for private purposes. It allows only creditors whose obligations were incurred within a specific statutory period to bring an action. Recovery is limited to the amount of the improper loans.

Under the circumstances here, we could not, without materially detracting from the effectiveness of the remedy, decline to recognize plaintiff’s right to sue. Since creditors similarly situated may intervene or be joined as parties plaintiff, a single creditor should not be deprived of his standing to sue where an intervention or a joinder is not sought (Civ. Prac. Act, § 193-b). The defendants should not be heard to object if the other creditors failed to intervene because defendants had a right to move for a joinder, but neglected to exercise the right (Rules Civ. Prac., rule 102). The possible rights of unknown creditors who failed to intervene do not affect the capacity of this creditor to sue or its right to seek reimbursement. The defendants place great emphasis on the inequity of an exclusive recovery. The right of action, of course, is not exclusive, but the fact that the recovery may benefit the alert creditor exclusively is the result, not of the exercise of the right of action but the consequence of the inaction of the other creditors similarly situated. A possible recovery by a plaintiff of the full benefit of the statute to the exclusion of each of the other creditors similarly situated should not operate to defeat his right of action. Such a plaintiff creditor can benefit exclusively only because of the default of the other creditors similarly situated, or the neglect of the defendants to compel a joinder. The wording of the statute does not deny the plaintiff standing to bring an action. It would be inconsistent with the penal character of the statute to restrict the cause of action to a class. The statute was not designed to protect all creditors as a class. It intended to impose an obligation on unscrupulous officers and directors of a corporation to pay back improper loans. Therefore, the plaintiff need only show that it falls within the special class of creditors for whose benefit the cause of action was established to justify its claim that it is vested with a cause of action under section 59 of the Stock Corporation Law.

We conclude that the judgment below was correct. Accord- . ingly, the judgment of the Appellate Division should be affirmed, with costs.

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

Judgment affirmed.

       “ § 59. Liability of directors for loans to stockholders. No loan of moneys shall be made by any stock corporation, except a moneyed corporation, or by any officer thereof out of its funds to any stockholder therein, nor shall any such corporation or officer discount any note or other evidence of debt, or receive the same in payment of any instalment or any part thereof due or to become due on any stock in such corporation, or receive or discount any note, or other evidence of debt, to enable any stockholder to withdraw any pant of the money paid in by him on his stock. In case of the violation of any provision of this section, the officers or directors making such loan, or assenting thereto, or receiving or discounting such notes or other evidences of debt, shall, jointly and severally, be personally liable to the extent of such loan and interest, for all the debts of the corporation contracted before the repayment of the sum loaned, and to the full amount of the notes or other evidences of debt so received or discounted, with interest from the time such liability accrued ”.