City of New York v. Windsor Madison Corp.

• Decision Date: 07 October 1958
• Citation: 179 N.Y.S.2d 734,14 Misc.2d 674
• Parties: CITY OF NEW YORK, Plaintiff, v. WINDSOR MADISON CORP., Irving Cohen and Al Strassberg, Defendants.
• Court: New York Supreme Court

Page 734

179 N.Y.S.2d 734

14 Misc.2d 674

CITY OF NEW YORK, Plaintiff, v. WINDSOR MADISON CORP., Irving Cohen and Al Strassberg, Defendants.

Supreme Court, Special and Trial Term, New York County, Part VII.

Oct. 7, 1958.

Charles H. Tenney, Corporation Counsel, New York City, for plaintiff.

Leon London, New York City, for defendants.

HENRY CLAY GREENBERG, Justice.

The plaintiff, The City of New York, instituted this action to restrain permanently the defendants from selling or offering to sell to the public goods and merchandise by advertising or otherwise in such manner as to reasonably convey to the public that upon the disposal of the stock on hand the business would close absolutely and finally.

Service of process was effectuated upon the corporate defendant, and not upon the individual defendants.

The record discloses that the corporate defendant (hereinafter called 'defendant'), conducted a retail men's haberdashery on Madison Avenue, New York City. The defendant had operated this business for approximately 22 years. During November, 1957, defendant applied to the Department of Licenses of the City of New York for an authorization, i. e., a license, to conduct for a 30-day period a so-called 'forced out of business or final sale'. The application was rejected after a departmental investigation and hearing upon the matter.

An article 78 proceeding was thereafter commenced by defendant, as petitioner, to review this determination on the ground that the statute, article 28, chapter 32, Administrative Code of the City of New York, pursuant to which the License Commission had function, was unconstitutional in that it deprived petitioner of property without due process and interfered with its right of free speech and, moreover, that the denial of the application was arbitrary. It appears that the commissioner rejected the application because petitioner had in 1954 received a similar license based upon like reasons, conducted a sale and then, though technically it terminated the business, in reality it merely changed the business name of the store and then reopened.

The court, in denying the article 78 proceeding, stated 'Plaintiff [defendant herein] is not deprived of any property, nor is any property right interfered with. It is not being restricted in the sale of its goods nor is it being limited in respect to the prices it may charge. The only restriction is on calling its sales a closing out sale or giving it some similar designation. * * * It is well recognized that the police power extends to the regulation of advertising that may mislead the public.' Windsor Madison Corp. v. O'Connell, 9 Misc.2d 1087, at page 1088, 172 N.Y.S.2d 198, at page 199.

That proceeding was followed by an application by this defendant for a declaratory judgment that article 28, chapter 32, of the Administrative Code, was unconstitutional. The complaint therein was dismissed. Plaintiff alleges that the defendant, notwithstanding the aforementioned decisions, persisted in its flagrant violation and obvious disregard of the pertinent statute by publishing in the metropolitan newspapers and by...