In re Edge Ho Holding Corp.

• Citation: 256 N.Y. 374,176 N.E. 537
• Parties: In re EDGE HO HOLDING CORPORATION et al. In re ITTLEMAN. In re HIGGINS.
• Decision Date: 02 June 1931
• Court: New York Court of Appeals

256 N.Y. 374

176 N.E. 537

In re EDGE HO HOLDING CORPORATION et al. In re ITTLEMAN. In re HIGGINS.

Court of Appeals of New York.

June 2, 1931.

In the matter of the application of the Edge Ho Holding Corporation and another for an order vacating a subpoena duces tecum, issued by James A. Higgins, as Commissioner of Accounts of the City of New York. From an order of the Appellate Division (231 App. Div. 595, 248 N. Y. S. 42), reversing an order of the Special Term, which denied the application, the Commissioner appeals.

Reversed, and order of the Special Term affirmed.

Appeal from Supreme Court, Appellate Division, Second Department.

Arthur J. W. Hilly, Corp. Counsel, of New York City (Leonard M. Wallstein, William E. C. Mayer, J. Joseph Lilly, and Ralph M. Frink, all of New York City, of counsel), for appellant.

Charles S. Noyes, of New York City, and William S. Pettit, of Far Rockaway, for respondents.

CARDOZO, C. J.

The Commissioner of Accounts of the city of New York is empowered by the city charter to ‘make such special examinations of the accounts and methods of the departments and offices of the city and of the counties of New York, Richmond, Queens, Kings and Bronx, as the mayor may from time to time direct, and such other examinations as the said commissioner may deem for the best interests of the city, and report to the mayor and the board of aldermen the results thereof. For the purpose of ascertaining facts in connection with these examinations he shall have full power to compel the attendance of witnesses, to administer oaths and to examine such persons as he may deem necessary.’ Charter of City of New York, § 119 (Laws 1901, c. 466, amended by Laws 1916, c. 517, § 1).

In October, 1930, a special assistant corporation counsel was appointed to conduct an investigation into the system of condemnation of real property for city purposes. At the same time the mayor gave instructions to the Commissioner of Accounts to co-operate with the special assistant so appointed, Mr. Leonard M. Wallstein, and to preside at any hearings appropriate to that end.

The commissioner, in discharge of the duty thus laid upon him by the mayor, issued a subpoena directed to the Edge Ho Holding Corporation, its president and its secretary, requiring them to appear for examination and to bring with them ‘all contracts, memoranda, records and other documents' relating to a sale of real property made by the corporation subpoenaed to another corporation in August, 1925. Upon the service of the subpoena, the witnesses applied to the Supreme Court for an order to vacate the process. The moving affidavit, made by their attorney, stated upon information and belief that the documents subpoenaed were not desired in good faith for the purpose of inquiry into the methods of any department of the city government and were not pertinent thereto. They were sought, it was said, in aid of objections then pending undetermined to an award in the Rockaway Public Beach condemnation proceeding, which had gone forward to the stage of a tentative decree (Charter of City of New York, § 1001 [added by Laws 1915, c. 606]). The attorney for the witnesses is also the attorney for the claimant, the owner of the award. The special assistant, Mr. Wallstein, representing the city in the general inquiry as to the methods of condemnation, represents it also in its opposition to the tentative decree. The land described in the subpoenaed documents is part of the land condemned, and the sale is one of the links in the claimant's chain of title. In response to the application to set aside the subpoena the Commissioner of Accounts submitted an answer asserting the good faith of the inquiry and the importance of the information for the attainment of the end in view. The application to vacate was denied by the Supreme Court at Special Term. It was granted by the Appellate Division in a reversal upon the law and the facts. The order being final. (Matter of Depue, 185 N. Y. 60, 66,77 N. E. 798), the case is here.

We think an inquiry as to the price paid to former owners for land condemned within a period of time not unreasonably remote is fairly related to an inquiry into the efficiency of the methods by which condemnation proceedings are conducted in the offices of the city government responsible therefor. In such proceedings as in lawsuits generally the courts must rest their determination on the evidence exhibited by counsel. They are helpless, except in rate instances, to speak the word of truth if the facts are not uncovered for them. It results that the efficiency of any system of awards for land condemned depends in no small measure upon the diligence and skill with which the case has been prepared. The inquisitor in the pending investigation has in mind to show that awards have been swollen in excess of the market values, and that this has been done without scrutiny of the cost and without attempt to prove it by witnesses easily available. We cannot say with fairness that such evidence is unrelated to an inquiry into the efficiency of official methods. It is directed to one of the things that an inquisitor, charged with a duty to investigate the existing system of condemnation, would not unnaturally wish to know. He would wish to know whether material information had been withheld or accessible witnesses ignored, whether preparation for trial had been painstaking and thorough or indifferent and lax. If indifference or laxity appeared to be serious or general, the conclusion might be drawn that there was something wrong in the methods of the office where these deficiencies prevailed. The deficiencies might point to the need of administrative reforms, or, if these should...