Buffalo Elec. Co. v. State

• Citation: 14 N.Y.2d 453,253 N.Y.S.2d 537,201 N.E.2d 869
• Decision Date: 01 October 1964
• Docket Number: No. 32217,32217
• Parties: , 201 N.E.2d 869 BUFFALO ELECTRIC CO., Inc., Respondent, v. STATE of New York, Appellant. (Claim) Court of Appeals of New York
• Court: New York Court of Appeals

Page 537

253 N.Y.S.2d 537

14 N.Y.2d 453, 201 N.E.2d 869

BUFFALO ELECTRIC CO., Inc., Respondent, v. STATE of New York, Appellant.

(Claim No. 32217.) Court of Appeals of New York.

Oct. 1, 1964.

Louis J. Lefkowitz, Atty. Gen. (Harold J. Hughes, Jr., and Paxton Blair, Albany, of counsel), for appellant.

Warner F. Thompson, Lockport, and William E. Miller, Buffalo, for respondent.

BERGAN, Judge.

The constitutional validity is tested by this appeal of the new Civil Practice Law and Rules provision which, treating of appeals to the Court of Appeals as of right, enlarges the definition of the kind of decision of an Appellate Division which 'finally determines' an action or proceeding.

The Constitution (N.Y.Const., art. VI, § 3, subd. b, par. (1)) authorizes an appeal here as of right 'from a judgment or order entered upon the decision of an appellate division * * * which finally determines an action or special proceeding' and which reverses the decision of the court of original instance; or where there is a dissent; or where a constitutional question is involved.

The Civil Practice Law and Rules provision (§ 5601, subd. (d)) implementing the Constitution authorizes an appeal to the Court of Appeals as of right 'from a final judgment entered in a court of original instance or from a final determination of an administrative agency, or from an order of the appellate division which finally determines an appeal from such a judgment or determination' where the Appellate Division 'has made an order on a prior appeal in the action which necessarily affects the judgment or determination'. Such a 'prior order' of the Appellate Division must itself have been one of reversal, or have been with dissent, or have involved a constitutional question.

The provisions of the former Civil Practice Act (§ 588, subd. 2; § 590) covering the same subject were rather narrower in scope. The controlling section (590) provided, so far as material to the question before us, that an appeal could be taken to the Court of Appeals from 'a final judgment or order' entered in 'the court of original instance' after the Appellate Division 'has directed the entry of an interlocutory * * * order'. Both section 590 of the former Civil Practice Act and the present statute, but in a different article (art. 55, § 5501, subd. (b)), limit the scope of this type of appeal to a review of the prior determination of the Appellate Division.

The appeal now before us would thus not have come literally within the scope of section 590 of the former Civil Practice Act, and the case points up rather well the difference between the present and the former practice. There was a provision in the claimant's contract with the State that 'The acceptance by the Contractor of the last payment on this contract as hereinbefore provided, shall be and shall operate as a release to the State of New York * * * from all claim and liability * * * relating to or affecting the work'. There was no notation on the face of the check indicating that it was intended to be a payment in full of all claims. The indorsement by the claimant was with a reservation to proceed against the State.

After a trial in the Court of Claims that court dismissed the claim on the ground that by the acceptance of the final payment the claimant had waived and released further claim against the State for breach of contract (4 Misc.2d 172, 158 N.Y.S.2d 265). This judgment was reversed by the Appellate Division on the law and remitted to the Court of Claims for further proceedings in accordance with the opinion of the court (9 A.D.2d 372, 194 N.Y.S.2d 72).

On the second trial the Court of claims again dismissed the claim (27 Misc.2d 527, 212 N.Y.S.2d 269) and the Appellate Division again reversed, this time 'on the law and facts', and, holding the defense of release insufficient, remitted the claim to the Court of Claims 'to pass upon the merits of the claimant's claim for damages or additional costs' (17 A.D.2d 523, 236 N.Y.S.2d 581).

Upon this remission the Court of Claims once again tried the case, limiting itself to the question of whether there was a breach of contract, and, if there were, whether it entitled claimant to damages, and on these issues, finding for the claimant, it made an award of $54,334.48 and judgment was entered accordingly. From this final judgment of the Court of Claims the State appeals directly here and the notice of appeal specifies for review the two intermediate orders of the Appellate Division as well as 'each and every part' of the final judgment.

The State limits itself in its brief and on argument, however, to a review of the prior orders of the Appellate Division, and although its notice of appeal is in terms addressed to the whole of the final judgment of the Court of Claims which includes the questions of breach of contract for which damages are claimed, and the damages themselves, appellant does not ask review of those questions nor would there be jurisdiction to review them. If the notice of appeal is otherwise sufficient to give jurisdiction, its excessive demands in this respect would not invalidate it.

It will at once be observed that the appeal meets literally the prescription of Civil Practice Law and Rules (§ 5601, subd. (d)). The two orders of the Appellate Division, each one a decision of reversal and each made 'on a prior appeal in the action', are such that they 'necessarily affect' the final judgment.

The defense of release, if decided correctly in the first place by the Court of Claims, would have resulted in a final judgment for the State. The elimination of that defense by the Appellate Division's decision vitally influenced the entry of the final judgment, which went the other way, for the claimant.

What is of greater procedural importance is that, if the prior orders of the Appellate Division are reversed, the final judgment for claimant will fall, for the claim would in turn be dismissed. It is readily to be noted of those orders that they 'necessarily affect' the final judgment.

Under the procedure prescribed by former section 590 it would almost certainly have been said that the prior orders of the Appellate Division were not 'interlocutory' orders in the sense in which that term was used historically, or even as it had been modified somewhat in modern practice (Guaranty Trust Co. of New York v. State of New York, 299 N.Y. 295, 86 N.E.2d 754). A defense which the Court of Claims had regarded as complete was there held insufficient by the Appellate Division, but the main issues in the litigation (a) whether there was a breach of contract by the State and (b) if there were, whether there was resulting damage to the claimant, were not decided by the Appellate Division.

Certainly the definitive conditions laid down by MILLER, J., in Cambridge Val. Nat. Bank v. Lynch, 76 N.Y. 514, 516, to make out an interlocutory judgment that it be 'an intermediate or incomplete judgment, where the rights of the parties are settled but something remains to be done', were not met here. Although the literal presence of an 'interlocutory' order was not always insisted upon, a course of procedure closely resembling it was required in which the litigation was essentially determined by the prior decision. A fairly good example of the kind of appeal that would be taken under the former practice is Albright v. Jefferson County Nat. Bank, 292 N.Y. 31, 38, 53 N.E.2d 753, 755, 151 A.L.R. 897.

The records of this court indicate that the appeal in Brown v. Manshul Realty Corp., 298 N.Y. 654, 82 N.E.2d 42, which involved a preliminary trial as to a release, was not dismissed only because the court treated the earlier decision of the Appellate Division as passing on a motion for a new trial, and without this the motion to dismiss would have been granted.

Although the decisions in this area are not always clear-cut, it is useful to examine as examples Matter of Battaglia v. Morton, 298 N.Y. 868, 84 N.E.2d 636; Kennedy v. Lownes, 229 N.Y. 563, 129 N.E. 915; Matter of New York Cent. R. R. Co. v. Limburg, 286 N.Y. 605, 35 N.E.2d 942; Mannaberg v. Culbertson, 291 N.Y. 728, 52 N.E.2d 604; Guaranty Trust Co. of New York v. State of New York (supra). See, also, Cohen and Karger, Powers of the New York Court of Appeals (rev. ed., §§ 72-74, pp. 313-326) who note that when the Appellate Division 'disposes of some of the issues in the case and directs further proceedings as to other issues' it is doubtful 'whether such a decision can be deemed an interlocutory determination within section 590, where the issues left open themselves are independently decisive of the substantive right of the parties' (p. 318).

It was the express purpose of the daftsmen of Civil Practice Law and Rules (§ 5601, subd. (d)) to broaden out the kinds of appeal which could be taken from final judgments and orders affected by earlier decisions of the Appellate Division and to eliminate the procedural uncertainties as well as the limitations implicit in the term 'interlocutory'.

The notes of the Advisory Committee on Practice and Procedure of the Temporary Commission on the Courts in its Second Preliminary Report (N.Y.Legis.Doc., 1958, No. 13, p. 105) dealing with the proposed new section state that 'It extends the scope of those statutes (Civ.Prac.Act, § 588, subd. 2; § 590) presently limited to interlocutory orders and orders denying a new trial, to include all non-final determinations of the Appellate Division that necessarily affect the final order or judgment.'

The report adds that 'No reason for the present limitation to interlocutory orders is perceived' and it notes (p. 107) that the decisive language of the new provision that appeals may be taken from final decisions where the prior order of the Appellate Division 'necessarily affects' the final decision is language with which the Court of Appeals 'is familiar' in dealing with section 580 of the former Civil Practice Act, now Civil...