New York Law Review

Tag: 1969

  • People v. Damon, 24 N.Y.2d 256 (1969): Prosecutorial Misconduct and Tainted Identification Procedures

    People v. Damon, 24 N.Y.2d 256 (1969)

    A criminal conviction will be reversed when prosecutorial misconduct during summation creates a risk of prejudice, and when pre-trial identification procedures are so suggestive as to taint subsequent in-court identifications.

    Summary

    Richard Damon was convicted on multiple charges, including carnal abuse and burglary. The prosecution’s summation contained inflammatory remarks and improper attacks on the defense counsel. Additionally, the initial lineup procedure was unduly suggestive. The New York Court of Appeals reversed the conviction, holding that the prosecutorial misconduct risked prejudice and that the tainted lineup procedure potentially influenced the in-court identifications. The Court emphasized the need for a fair trial and the careful handling of identification evidence.

    Facts

    Two incidents occurred in Depew, New York: a man broke into a home and molested a nine-year-old girl on October 13, 1965, and a man attempted to enter a home where a fourteen-year-old girl was alone on October 16, 1965. In both instances, the perpetrator was seen leaving in a white Cadillac convertible. Damon, a 39-year-old bartender who drove a white Cadillac convertible, became a suspect. Three days after the second crime, Lieutenant Maccarone brought Damon to the police station. The two victims identified Damon in an informal lineup and a formal lineup. The younger girl’s father also identified Damon. Damon’s defense was mistaken identity, presenting alibi witnesses who placed him at work around the time of the second crime, and evidence making it impossible for him to have committed the first crime.

    Procedural History

    Damon was convicted of carnal abuse, assault, and burglary based on two indictments. He appealed, arguing prosecutorial misconduct and improper identification procedures. The appellate court considered these arguments and the totality of the circumstances of the trial.

    Issue(s)

    1. Whether the prosecutor’s summation was so inflammatory and prejudicial as to warrant a new trial.

    2. Whether the lineup procedures used in this case violated the defendant’s due process rights.

    3. Whether the trial court erred in directing the defense to supply the prosecution with prior statements of defense witnesses.

    Holding

    1. Yes, because the prosecutor’s improper comments and attacks on defense counsel during summation created a risk of prejudice to the jury.

    2. Yes, because the informal lineup was unduly suggestive, potentially tainting the subsequent formal lineup and in-court identifications.

    3. No, because the defendant is not being compelled to produce self-incriminating statements. The statements were those of witnesses offered by the defendant.

    Court’s Reasoning

    The Court found that the prosecutor’s summation included improper references to the heinous nature of the crimes, possible deviate behavior, and attacks on defense counsel. Even though objections were not made to all statements, sufficient protest was recorded to preserve the issue for review. The Court reasoned that in a case of this nature, which tends to arouse emotions, it could not be certain that the summation did not prejudice the jury. Referencing People v. Adams, 21 N.Y.2d 397, 401-402 and People v. Mleczko, 298 N.Y. 153, 163, the court emphasized the need to avoid any sense of insecurity regarding potential prejudice.

    Regarding the lineup procedures, the Court determined that the initial informal lineup, where the victims viewed Damon through a mirror while he stood at the complaint desk, was “clearly improper, constituting little more than a showup” (citing People v. Brown, 20 N.Y.2d 238). Because of this, the subsequent formal lineup was deemed suspect. The Court directed that a hearing should be held outside the presence of the jury to determine whether the in-court identifications were tainted by the suggestive circumstances surrounding the informal lineup, and the People must demonstrate by clear and convincing evidence that the in-court identification was not the product of suggestive circumstances surrounding the ‘informal’ lineup.

    Regarding discovery, the Court stated, “We have recognized the defendant’s right to obtain and inspect statements of prosecution witnesses for possible use in cross-examining them (see People v. Rosario, 9 Y 2d 286). There is neither reason nor justification for not allowing the Peoplg to procure from the defendant statements taken from his witnesses for the same purpose of cross-examining them.”

  • People v. Schwartzman, 24 N.Y.2d 241 (1969): Scope of Cross-Examination on Prior Bad Acts

    People v. Schwartzman, 24 N.Y.2d 241 (1969)

    A criminal defendant who testifies may be cross-examined about prior immoral, vicious, or criminal acts relevant to their credibility, and extrinsic evidence may be used to contradict the defendant’s answers if that evidence is independently admissible on an issue other than credibility.

    Summary

    Schwartzman, president of Safety Circuit Corporation, was convicted of grand larceny for falsely representing an account receivable as unencumbered. On appeal, he argued improper cross-examination concerning 22 alleged instances of prior misconduct. The Court of Appeals affirmed the conviction, holding that the cross-examination was within the trial court’s discretion because the prior acts related to obtaining money by false pretenses and were relevant to Schwartzman’s credibility. The court also addressed the use of documentary evidence to impeach Schwartzman’s testimony, finding it permissible because the evidence was independently admissible to prove intent to defraud, an essential element of the crime.

    Facts

    Roslyn Gladstone purchased an account receivable from Safety Circuit Corporation, represented by Schwartzman as unencumbered. In reality, Schwartzman had previously assigned the same receivable to Lester Balagur. Gladstone was unable to collect on the receivable. At trial, Schwartzman admitted to the double assignment, claiming Gladstone’s husband, acting as her agent, knew of the prior assignment. Mr. Gladstone denied this knowledge. The prosecution cross-examined Schwartzman extensively about 22 alleged instances of prior misconduct involving worthless checks, mortgaging property he didn’t own, and similar fraudulent activities.

    Procedural History

    Schwartzman was convicted of grand larceny in the first degree in a jury trial and sentenced to 2 1/2 to 5 years imprisonment. The Appellate Division unanimously affirmed the conviction. Schwartzman appealed to the New York Court of Appeals, arguing he was denied a fair trial due to improper cross-examination regarding other criminal acts.

    Issue(s)

    1. Whether the prosecutor’s cross-examination of the defendant regarding prior immoral, vicious, or criminal acts was an abuse of discretion?

    2. Whether the use of documentary evidence during the cross-examination of the defendant was an impermissible use of extrinsic evidence on collateral matters?

    Holding

    1. No, because the nature and extent of cross-examination is subject to the sound discretion of the Trial Judge and the acts inquired into had a bearing on his credibility as a witness.

    2. No, because an exception to the rule against extrinsic evidence on collateral matters exists where the evidence is relevant to an issue in the case other than credibility, or if independently admissible to impeach the witness.

    Court’s Reasoning

    The court reasoned that a defendant who testifies can be cross-examined about immoral, vicious, or criminal acts relevant to their credibility. Such offenses need not be similar to the charged crime, and the number of questions is not improper if asked in good faith with some factual basis. The court cited People v. Sorge, stating that a negative response does not preclude further inquiry to elicit a change in testimony.

    The court addressed the use of documentary evidence, reaffirming the rule that a cross-examiner cannot contradict a witness’s answers on collateral matters with extrinsic evidence solely to impeach credibility. However, an exception exists if the evidence is relevant to an issue other than credibility or independently admissible for impeachment. The court cited People v. Sorge, noting that the collateral evidence rule aims to prevent confusion and unfair surprise. Here, the court found the documentary evidence regarding the chattel mortgage was independently admissible to show intent to defraud, an essential element of grand larceny.

    The court cited People v. Molineux for the proposition that evidence of other crimes is admissible to establish motive or intention. Because Schwartzman admitted the transaction, his intent was the only fact in dispute, and evidence of similar misrepresentations was crucial. Quoting Wigmore, the court emphasized that “the essence of this probative effect is the likeness of the instance.”

    The court found one error: the prosecutor asked about a check charge for which Schwartzman had been acquitted. However, the court found the prosecutor acted in good faith, unaware of the acquittal, and the error was harmless given the other evidence. The court also declined to review a comment on the right to appeal, as no objection was made at trial.

  • People v. Dales, 24 N.Y.2d 241 (1969): Admissibility of Uncharged Crimes to Prove Intent

    People v. Dales, 24 N.Y.2d 241 (1969)

    Evidence of uncharged crimes is inadmissible if its only purpose is to suggest the defendant has a criminal disposition, but such evidence can be admitted if it is directly probative of an element of the charged crime, such as intent, provided its probative value outweighs the risk of prejudice to the defendant.

    Summary

    Dales was convicted as a youthful offender based on assault and weapons charges. The prosecution introduced evidence of prior uncharged assaults against the victim to demonstrate Dales’ intent. The New York Court of Appeals reversed the conviction, holding that the admission of the uncharged assaults was prejudicial error because the intent to cause physical injury was readily inferable from the charged act of stabbing the victim, and therefore the uncharged assaults served only to demonstrate Dales’ criminal propensity.

    Facts

    Dales was charged with assaulting his pregnant girlfriend, Belinda, after breaking into her apartment. Belinda testified that Dales beat her on a rooftop after a party and later broke into her apartment, attempted to strangle her, and stabbed her. Over defense counsel’s objections, Belinda also testified about several prior uncharged assaults, including threats with a knife, a prior strangulation attempt, and an incident where Dales allegedly threw their child to the floor. Dales denied all the assaults.

    Procedural History

    Dales was indicted on burglary, assault, and weapons charges, but was granted youthful offender status. He was adjudicated a youthful offender in the trial court and sentenced to an indefinite reformatory term. The Appellate Division affirmed. Dissenting justices argued that the uncharged assaults were improperly admitted. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the trial court erred in admitting testimony of prior uncharged assaults against the victim to prove the defendant’s intent in the charged crime.

    Holding

    No, because the act of stabbing the victim allowed for the easy inference of intent to cause physical harm; the admission of uncharged prior assaults introduced solely for intent was unduly prejudicial. The judgment was reversed and a new trial granted.

    Court’s Reasoning

    The Court of Appeals reasoned that while evidence of uncharged crimes is generally inadmissible to show criminal propensity, it may be admissible if directly probative of the crime charged, such as to prove intent. The court emphasized that the admissibility of such evidence hinges on balancing probative value against the risk of prejudice to the defendant. Evidence of prior acts to prove intent is more likely to be admitted when the acts constituting the charged crime are equivocal. Here, the act of stabbing itself strongly suggested intent to cause physical injury. The court found that Dales’ defense was that he did not commit the act, not that he lacked intent. Because intent could be easily inferred from the charged act, the evidence of prior assaults served only to demonstrate Dales’ criminal propensity, creating undue prejudice. Quoting from prior precedent, the court stated, “adjudication as a youthful offender must rest upon a finding that the defendant committed the criminal acts charged against him in the indictment or information”. The court concluded that the error in admitting the evidence was not harmless because the case hinged on Belinda’s credibility versus Dales’, and the evidence of prior assaults likely influenced the jury’s perception of Dales’ character, thereby prejudicing the outcome. The Court stated, “Before an error can be held to be harmless, the court must decide that it was harmless beyond a reasonable doubt.”

  • People v. Brown, 24 N.Y.2d 168 (1969): Admissibility of Confession in Bench Trials

    People v. Brown, 24 N.Y.2d 168 (1969)

    The rule in Jackson v. Denno, requiring a separate hearing on the voluntariness of a confession, does not apply to bench trials because judges, unlike juries, can objectively determine voluntariness even after hearing other evidence in the case.

    Summary

    Brown was convicted of manslaughter in a non-jury trial. He later sought coram nobis relief, arguing his confession was coerced and that Jackson v. Denno entitled him to a post-conviction hearing on voluntariness. The New York Court of Appeals held that Jackson v. Denno, which requires a separate determination of a confession’s voluntariness, does not extend to non-jury trials. The Court reasoned that judges, due to their legal training and experience, are capable of objectively assessing voluntariness even after being exposed to other evidence, unlike juries whom the Supreme Court viewed with distrust.

    Facts

    On February 20, 1963, Brown was indicted for second-degree manslaughter. Following a non-jury trial, he was convicted and sentenced to 2 1/2 to 5 years in state prison. Brown did not initially appeal. Later, Brown filed for a writ of error coram nobis, claiming a coerced confession was used against him at trial, and that he deserved a “Huntley” hearing under Jackson v. Denno.

    Procedural History

    The trial court denied Brown’s application without a hearing, stating that Jackson v. Denno does not apply to non-jury trials. The Appellate Division affirmed this decision without opinion. The case then went to the New York Court of Appeals.

    Issue(s)

    Whether the rule established in Jackson v. Denno, requiring a hearing to determine the voluntariness of a confession, applies when the defendant is tried in a non-jury trial (bench trial) before a judge?

    Holding

    No, because a judge, unlike a jury, is capable of objectively determining the voluntariness of a confession even after hearing other evidence related to the defendant’s guilt.

    Court’s Reasoning

    The Court distinguished Jackson v. Denno, emphasizing that the Supreme Court’s concern in that case stemmed from the inability of juries to fairly assess the voluntariness of a confession without being influenced by its content and implications for guilt. The Court of Appeals reasoned that judges, by virtue of their legal training, experience, and judicial discipline, possess the capacity to distinguish between the issue of voluntariness and other evidence bearing on guilt or innocence. The court noted that to extend Jackson v. Denno to bench trials would represent an unwarranted distrust of judges, implying they are incapable of objectivity. The court cited People v. Huntley, noting hearings on voluntariness should be held where possible before the same judge who presided at the trial proper. The court stated: “Errors which loom large to a judge, learned in the law and trained to administer justice in strict accordance with the law, may be scarcely visible to the lay juror.” The court further observed that judges routinely make evidentiary rulings (e.g., on the admissibility of contraband) that require them to disregard inadmissible evidence despite having been exposed to it. The Court concluded, “there is a critical difference between a jury and nonjury trial and, therefore, hold that the rationale of Jackson is inapplicable in the latter situation.”

  • People v. Pelow, 24 N.Y.2d 161 (1969): Admissibility of Statements Obtained After a Sham Arrest

    People v. Pelow, 24 N.Y.2d 161 (1969)

    Statements obtained from a defendant after being subjected to a sham arrest, typically for vagrancy, are inadmissible as evidence.

    Summary

    James Pelow and Esther Bozeman were convicted of burglary-related charges. Pelow’s conviction stemmed from evidence including a hardware store clerk’s identification of him as the purchaser of tools used in the burglary. Bozeman’s conviction hinged on her statement, obtained after a sham vagrancy arrest, admitting she was with Pelow when he bought the tools. The court held that Bozeman’s statement was inadmissible because it was obtained following a sham arrest. However, the court affirmed Pelow’s conviction, finding that the error in admitting Bozeman’s statement was harmless due to the overwhelming independent evidence of his guilt.

    Facts

    Following a burglary at Buffalo Automatic, Inc., police discovered tools possibly used in the crime. An officer traced the tools back to a hardware store where the clerk, Walter Neubauer, identified the tools and recalled the license plate of the purchasers’ vehicle. The license plate led the police to Esther Bozeman, a friend of James Pelow, a suspected burglar. Sergeant Quinn, suspecting Pelow, arrested him on an outstanding assault charge. Bozeman, present at the time of Pelow’s arrest, was taken into custody and booked on a vagrancy charge, despite having over $500 on her. Simultaneously, police, with permission, searched the apartment of Pelow’s sister, finding coins identified as proceeds from the burglary.

    Procedural History

    Pelow and Bozeman were tried jointly. Pelow was convicted of grand larceny, burglary, and possession of burglar’s tools. Bozeman was convicted of grand larceny. The Appellate Division affirmed both convictions. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the coins found in Mrs. Kelly’s apartment were illegally seized, requiring their suppression as evidence.
    2. Whether the station house identification of Pelow by the witness was unnecessarily suggestive and constituted a denial of due process.
    3. Whether Esther Bozeman’s statement that she was with Pelow when he purchased the tools should have been admitted as evidence against her.
    4. Whether the court erred in not redacting the reference in Bozeman’s statement to defendant Pelow, prejudicing Pelow’s right to confrontation.

    Holding

    1. No, because the trial court found that the search was conducted with consent, precluding the defendants from challenging the legality of the seizure.
    2. No, because the identification procedure was not so unnecessarily suggestive as to amount to a denial of due process.
    3. Yes, because the statement was obtained after she was subjected to a sham arrest on a vagrancy charge.
    4. No, because the error in admitting the unredacted statement was harmless in light of the overwhelming independent evidence of Pelow’s guilt.

    Court’s Reasoning

    The Court of Appeals addressed each of the appellants’ contentions. First, because the judge at the suppression hearing concluded that the officers searched Mrs. Kelly’s apartment with consent of her sister (a factual finding), this precluded the defendants’ argument that the coins were illegally seized. Second, the court found the station house identification was proper; “the fact that he took over 15 minutes to make his identification illustrates the fairness of the procedure.” Third, the court relied on *People v. Jackson*, stating “statements taken from a defendant after he [or she] has been subjected to a sham arraignment, usually for vagrancy, are inadmissible.” As Bozeman’s arrest was a sham, her statement that she was with Pelow was inadmissible. However, the court stated that because “Walter Neubauer, the clerk at the hardware store, testified that the defendant Below and another man had bought these tools from him…[and] his story was buttressed by his prior identification of the defendant…neither justice, common sense nor prior judicial decisions warrant a new trial” for Pelow. The court cited *Bruton v. United States*, stating ” ‘A defendant is entitled to a fair trial but not a perfect one.’ ” The error was harmless and did not mandate a new trial for Pelow. Judge Burke delivered the opinion.

  • People v. Stanley, 24 N.Y.2d 146 (1969): Admissibility of Confessions After Warrant Issuance But Before Arraignment

    People v. Stanley, 24 N.Y.2d 146 (1969)

    The issuance of an arrest warrant does not automatically preclude police inquiry of the accused before arraignment; absent coercion or deprivation of rights, a confession obtained during this period is admissible.

    Summary

    Stanley was arrested on a warrant for sodomy and impairing a child’s morals. He confessed to the police after his arrest but before arraignment. In a coram nobis proceeding, Stanley argued his confession was inadmissible because it was obtained without counsel present and without him being advised of his rights. The court held that the confession was admissible, clarifying that the issuance of an arrest warrant does not create the same restrictions on police questioning as exist after arraignment. The court emphasized the importance of not discouraging warrant applications and the need to balance individual rights with effective law enforcement.

    Facts

    Defendant Stanley was arrested in January 1963 based on an arrest warrant. He was charged with sodomy in the second degree and impairing the morals of a child. After his arrest, but before being brought before a court for arraignment, the police questioned Stanley. During this interrogation, Stanley made a confession to the crimes he was charged with.

    Procedural History

    Stanley was convicted in 1963 and sentenced to prison. In 1966, Stanley filed a coram nobis proceeding challenging his conviction, arguing that his confession was inadmissible. The trial court denied the coram nobis petition, finding the confession voluntary. The Appellate Division affirmed this decision. Stanley then appealed to the New York Court of Appeals.

    Issue(s)

    Whether the issuance of an arrest warrant automatically prohibits police from questioning the accused before arraignment, rendering any confession obtained during that period inadmissible.

    Holding

    No, because treating the issuance of an arrest warrant as a formal commencement of a criminal action that precludes police inquiry without counsel would create an unnecessary distinction between arrests made with a warrant and those made on probable cause without a warrant, potentially discouraging the beneficial practice of obtaining warrants.

    Court’s Reasoning

    The court reasoned that while the issuance of a warrant does commence a criminal proceeding, it doesn’t automatically equate to the restrictions placed on police questioning after arraignment, where counsel is present. The court distinguished this situation from cases where defendants were questioned after indictment or after counsel had appeared for them, emphasizing that an information used to obtain a warrant is not the same as a formal charging document. The court stated, “If the issuance of an ordinary warrant of arrest by a Magistrate on complaint is to be treated for all purposes as such a formal commencement of the criminal action as to preclude any inquiry by police unless there is a lawyer present (as after an arraignment in court), it would draw an unnecessarily complicated difference between an arrest on warrant and an arrest on probable cause without warrant.” The court also highlighted that both warrant and warrantless arrests serve the same purpose: bringing the accused before a magistrate. Therefore, creating overly technical distinctions could discourage warrant applications, which provide a beneficial layer of judicial oversight. While acknowledging the importance of advising suspects of their rights, particularly in light of future Miranda requirements, the court concluded that a rigid rule prohibiting pre-arraignment questioning after a warrant has been issued would unduly hamper investigations. The court noted, “A rigid rule shutting off police inquiry to the accused arrested on warrant until counsel was present would unnecessarily hamper proper investigation and would throw out of true focus the minor differences between the two kinds of arrests.”

  • Castaways Motel v. Schuyler, 24 N.Y.2d 120 (1969): Determining When a Government Decision is Final for Statute of Limitations Purposes

    Castaways Motel v. Schuyler, 24 N.Y.2d 120 (1969)

    For purposes of triggering the statute of limitations in an Article 78 proceeding, a government determination is not considered final and binding until the agency makes it explicitly clear that a particular requirement is a prerequisite for approval.

    Summary

    Castaways Motel applied for a land grant under the Niagara River. The New York State Power Authority conditioned its approval on Castaways signing a release of future claims. Castaways challenged this condition, arguing it was unlawful. The court addressed whether the Power Authority was a necessary party and whether the proceeding was timely commenced. The Court of Appeals held that the Power Authority was not a necessary party and that the proceeding was timely because the agency’s demand for a release was not initially presented as a non-negotiable condition. The Court emphasized that ambiguous communications from a public body should be construed against it to allow cases to be heard on their merits.

    Facts

    Castaways, a motel operator, sought a land grant under the Niagara River to benefit from a neighboring yacht club’s breakwall project. The New York State Power Authority’s approval was required for the grant. The Authority initially indicated that the project would not interfere with its projects but then required Castaways to sign a covenant releasing the state and the Authority from any future claims. This condition was not initially disclosed, and Castaways only learned of it later in the application process. Castaways had already spent $50,000 on the project by this time.

    Procedural History

    Castaways filed an Article 78 proceeding to compel the Commissioner of General Services (Schuyler) to issue the land grant without the release condition. The Special Term dismissed the petition as untimely. The Appellate Division affirmed, agreeing that the condition was unlawful but holding that the Power Authority was a necessary party that could no longer be joined due to the statute of limitations. The Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the Power Authority was a necessary party to the Article 78 proceeding.

    2. Whether the Article 78 proceeding was timely commenced under CPLR 217.

    Holding

    1. No, because the Power Authority’s interest was not inequitably affected since it had no valid basis to withhold consent after determining the project would not interfere with its operations.

    2. Yes, because the agency did not clearly communicate that signing the release was a non-negotiable condition until the second letter.

    Court’s Reasoning

    The Court of Appeals reasoned that the Power Authority was not a necessary party because its rights would not be adversely affected by a determination in favor of Castaways. The court highlighted the policy of limiting indispensable parties to cases where a court’s determination will adversely affect the rights of non-parties. Given the Authority’s initial determination of non-interference, requiring it to consent to the grant without the release would not inequitably affect its interests.

    Regarding timeliness, the court held that the statute of limitations did not begin to run until the second letter, where it was explicitly stated that signing the release was a prerequisite for the grant. The court emphasized that the initial letter was ambiguous and spoke of the “covenant requested” rather than required. The court noted the legislative history of CPLR 217, which rejected a provision that would have triggered the statute of limitations upon an “implied” refusal, to avoid unfairness. The court stated: “In drafting the section which is now the law, every attempt was made to avoid putting a party or his counsel in a position of having to guess when a ‘final and binding’ determination had been made. The burden was put on the public body to make it clear what was or what was not its determination.” The court concluded that any ambiguity created by the public body should be resolved against it to allow a determination on the merits.

  • Consolidated Edison Co. v. State Tax Commission, 24 N.Y.2d 114 (1969): Defining Gross Earnings for Utility Franchise Tax

    Consolidated Edison Co. v. State Tax Commission, 24 N.Y.2d 114 (1969)

    Gross earnings, for purposes of a utility franchise tax, include receipts derived from the employment of capital to manufacture, distribute, and sell utility services, but do not include proceeds from the destruction or confiscation of capital assets.

    Summary

    Consolidated Edison (Con Ed) challenged the State Tax Commission’s assessment of franchise tax on receipts from property damage claims, insurance claims, and the sale of capital assets. The tax was based on the state’s definition of “gross earnings.” The Court of Appeals held that proceeds from property damage and insurance claims, as well as the sale of capital assets no longer used in business (real property, scrap, and used machinery), are not considered “gross earnings” derived from the “employment of capital” and are therefore not subject to the franchise tax. The Court emphasized that the legislature intended to tax the employment of capital, not the destruction or confiscation of it.

    Facts

    Con Ed received a notice of assessment from the Tax Commission for franchise tax allegedly due. Con Ed paid the assessed amount under protest and then applied for a refund. The assessment was based on cash Con Ed received from: (1) property damage and insurance claims, and (2) the sale of capital assets no longer used in its business, including real property, scrap, and used machinery. These transactions were treated as capital transactions, and none of the receipts were credited to Con Ed’s income account.

    Procedural History

    Con Ed applied for a refund of the tax paid under protest. The Tax Commission denied the refund. The Appellate Division affirmed the Tax Commission’s determination regarding the taxation of receipts from the sale of capital assets but reversed the determination regarding receipts from property damage and insurance claims. Con Ed appealed to the New York Court of Appeals.

    Issue(s)

    Whether cash reimbursements from property damage claims, insurance claims, and the sale of capital assets constitute “gross earnings” from the “employment of capital” as defined in Section 186 of the Tax Law, and are therefore subject to the state franchise tax?

    Holding

    No, because the legislature intended to tax the employment of capital to produce utility services, not the proceeds from the destruction or confiscation of capital assets.

    Court’s Reasoning

    The Court focused on interpreting the legislative intent behind the 1907 amendment to Section 186 of the Tax Law, which defined “gross earnings” as “all receipts from the employment of capital without any deduction.” The Court explained that the amendment was enacted in response to a prior court decision, People ex rel. Brooklyn Union Gas Co. v. Morgan, which allowed utility companies to deduct the cost of raw materials from gross receipts when calculating the franchise tax. The legislature intended to eliminate this deduction, not to fundamentally alter the definition of “gross earnings.” The Court reasoned that Con Ed does not employ its capital for the purpose of having it damaged or destroyed, or to have it sold as scrap. “The proceeds from these transactions represent the amounts realized from the destruction or confiscation of capital, not the employment of it.” The Court also noted that the Tax Commission had not previously sought to tax these types of transactions in the 53 years since the amendment, which created a presumption against taxing them now. The court stated, “…such inaction should create a presumption in favor of the taxpayer which can only be rebutted by a clear manifestation of legislative intent to the contrary.” The court distinguished receipts representing the employment of capital to manufacture, distribute and sell utility services from receipts that represent amounts realized from the destruction or confiscation of capital.

  • Fleming v. Ponziani, 24 N.Y.2d 105 (1969): Burden of Proof for Release Validity Obtained Shortly After Injury

    Fleming v. Ponziani, 24 N.Y.2d 105 (1969)

    When a release is obtained from a patient in a hospital within 15 days of an injury, the party seeking to enforce the release bears the burden of proving that the releasor understood the legal effect of the document and intended it to cover all injuries within its scope.

    Summary

    Fleming, injured in a car accident, signed a general release two days later while hospitalized, releasing Chodorowski, the car owner, from liability. The New York Court of Appeals addressed whether the burden of proof regarding the validity of this release rested on Fleming, who sought to disavow it, or on Chodorowski, who asserted it as a defense. The court held that Chodorowski had the burden of proving the release’s validity, especially given its proximity to the injury and Fleming’s condition. The court also found that the jury should be instructed on the standard of conduct embodied in Section 270-b of the former Penal Law.

    Facts

    Fleming was severely injured in a car accident as a passenger in Chodorowski’s car. Two days post-accident, while Fleming was hospitalized with significant injuries (including lacerations, a possible concussion, and a skull fracture), Chodorowski visited him with a general release form prepared by his attorney. Fleming signed the release with minimal discussion, receiving only a dollar in consideration. The extent of Fleming’s injuries was not fully known at the time. Fleming subsequently sued Chodorowski for negligence; Chodorowski asserted the release as an affirmative defense.

    Procedural History

    Fleming sued Chodorowski and Ponziani (the driver). The defendants asserted the release as a defense. The trial court initially denied a motion for a directed verdict, finding a question of fact for the jury regarding the release’s validity. The jury found for the defendants, but the trial judge set aside the verdict and struck the affirmative defense. The Appellate Division reversed and ordered a new trial, citing improper jury instructions on the burden of proof and the relevance of Section 270-b of the Penal Law. The defendants appealed to the New York Court of Appeals, stipulating to judgment absolute.

    Issue(s)

    1. Whether a person who obtains a release from a patient in a hospital within 15 days of the injury has the burden of proving the plaintiff’s knowledge and understanding at the time of the release.

    2. Whether it is proper for the court to instruct the jury that the procurement of the release was in violation of Section 270-b of the former Penal Law.

    Holding

    1. Yes, because Section 270-b reflects the Legislature’s concern that injured persons in hospitals are vulnerable and may not fully understand the implications of signing a release soon after an accident.

    2. Yes, because Section 270-b expresses the community’s opinion on proper conduct when obtaining releases and is relevant to determining whether the defendant’s conduct was deceitful.

    Court’s Reasoning

    The court emphasized that the purpose of Section 270-b of the former Penal Law (now Judiciary Law, § 480) is to prevent the exploitation of vulnerable patients in hospitals. The court reasoned that it is fair to require the defendant to prove all elements of a valid contract, including the plaintiff’s competence and understanding, when a release is executed in a hospital within 15 days of admittance. The court cited Murray v. Narwood, 192 N.Y. 172, for the proposition that the burden of proving a contract’s validity, including lack of duress or fraud, rests on the party seeking to enforce it. The court clarified that while there’s a presumption against fraud, this only establishes a prima facie case, shifting the burden of going forward to the adversary. Ultimately, the burden of persuasion remains on the party defending the action based on the release. The court noted that even a properly executed release can be void if the signer was unaware of its nature due to their physical condition or was induced to sign under false pretenses. The court emphasized that the jury should be instructed on the standard of conduct embodied in Section 270-b because it reflects the community’s view on proper behavior when obtaining releases from injured individuals. Even without specific intent to deceive, Chodorowski’s hasty actions and failure to disclose the release’s significance could be deemed deceitful. As the court articulated, the Appellate Division was correct to hold that the “defendant should bear the burden of persuading the jury that the plaintiff, when he signed the release, knew the legal effect of his act and intended the release to cover all injuries within its scope.” (29 A D 2d 881, 882.)

  • Anonymous v. Baker, 32 A.D.2d 138 (N.Y. App. Div. 1969): Compelling Testimony of Grand Jury Target

    32 A.D.2d 138 (N.Y. App. Div. 1969)

    A prospective defendant or target of a grand jury investigation can be compelled to appear before the grand jury, and the issuance of a subpoena for this purpose does not, by itself, violate the target’s Fifth Amendment rights.

    Summary

    Faculty members at SUNY Stony Brook, subjects of a grand jury investigation into campus drug use, sought to quash subpoenas compelling their appearance. They argued that as targets of the investigation, they couldn’t be forced to testify, citing Fifth Amendment concerns and academic freedom. The court held that being subpoenaed to appear before a grand jury does not violate a target’s Fifth Amendment rights. The court also found that academic freedom is not violated by requiring teachers to appear before a grand jury to discuss matters relevant to an investigation of misconduct. The order denying the motion to quash the subpoenas was affirmed.

    Facts

    Faculty members at the State University of New York at Stony Brook were subpoenaed to appear before a Suffolk County Grand Jury investigating potential drug abuse on campus. The District Attorney acknowledged the faculty members were targets of the investigation. The faculty members were expected to be asked questions about their own drug use with students, advocacy of illegal drug use to students, and discussions with administrators about such advocacy or use.

    Procedural History

    The faculty members initiated an action to quash the subpoenas. The application to quash was denied by the trial court. The Appellate Division affirmed the denial. The case then was appealed to the New York Court of Appeals based on constitutional questions.

    Issue(s)

    1. Whether prospective defendants or targets of a Grand Jury investigation may be compelled to attend a Grand Jury hearing without violating their Fifth Amendment rights?
    2. Whether compelling teachers to respond to a subpoena to appear before a grand jury violates their First Amendment right to academic freedom?

    Holding

    1. No, because the Fifth Amendment does not prevent a prospective defendant from being compelled to at least attend a grand jury investigation.
    2. No, because no constitutional right is violated by a subpoena requesting a teacher to appear before a Grand Jury inquiry and discuss matters relevant to an investigation of misconduct, which he may freely discuss in a classroom.

    Court’s Reasoning

    The court distinguished this case from prior New York cases (People v. Steuding and People v. Laino), which held that a prospective defendant could not be both called and examined before a grand jury without immunity from self-incrimination. Those cases were deemed inapplicable as the present case only involved the issuance of a subpoena, not compelled testimony.

    The court relied on Supreme Court decisions in Gardner v. Broderick and Sanitation Men v. Sanitation Comr., stating that they suggest a public employee who is a target of an investigation may be subpoenaed by a Grand Jury without automatically violating the employee’s Fifth Amendment rights. The court emphasized that those cases affirm the right of public employees to invoke their Fifth Amendment privilege against self-incrimination, but do not preclude being subpoenaed.

    Addressing the First Amendment argument, the court distinguished the case from Keyishian v. Board of Regents and Dombrowski v. Pfister, where state laws were found to be unconstitutional because they infringed upon First Amendment rights. The court noted that there were no statutes attempting to proscribe conduct in this case. The court reasoned that the teachers’ argument that they would be intimidated in their lectures by the potential threat of a grand jury appearance does not amount to a violation of constitutional rights. As the court stated, “no constitutional right is violated by a subpoena which requests a teacher to appear before a Grand Jury inquiry and discuss matters — relevant to an investigation of misconduct— which he may freely discuss in a classroom.”

    The court explicitly stated that mere discussion or advocacy of conduct that might itself be criminal is different from the actual solicitation of crime with the specific intent of having it committed. Only the latter may be constitutionally prohibited.