In re Continental Guaranty Corp.

212 A.D. 236, 208 N.Y.S. 705, 1925 N.Y. App. Div. LEXIS 9446
Appellate Division of the Supreme Court of the State of New York·Decided March 13, 1925·No. Appeal No. 1·Published·Cited by 5 cases

Opinion

Dowling, J.:

Appellant’s assignor, Baumer Films, Inc., in March, 1922, entered into an agreement with the Transit Commission whereby it was to produce and furnish to the Commission a negative and three positive prints of a motion picture film entitled “ Standing Room Only,” such film to consist of four 1,000-foot reels, for which it was to receive the sum of $8,000. The picture was taken and the films produced in accordance with the agreement and delivered to and accepted by the Commission, which duly audited the bill sent to it by the Baumer Films, Inc., and transmitted such bill to the defendant comptroller for audit and payment pursuant to law, who refused and neglected so to do. The picture was shown as early as May 5, 1922, and as late as December 13, 1922. There is in evidence a fist offered by defendants showing that the picture had been exhibited in 476 theatres in New York city on various dates from September 4 to November 22, 1922. The contract made by the Commission with the American City Bureau Film Service for the exhibition of the picture in the 250 theatres under the control of the Theatre Owners’ Chamber of Commerce and located in New York city was made on August twenty-third, and provided that the showing should begin at once and terminate with the week beginning October 8, 1922. This agreement superseded an earlier one dated July 5,1922. Owing to the limited number of prints available, the contract was not completed when in December further showings [238]*238of the film were suspended, because the comptroller refused to pay any bills therefor.

The appellant herein, as assignee of the Baumer Films, Inc., applied for and was granted a peremptory mandamus order directing the respondents to audit and pay to the petitioner its claim for. $8,000. Upon appeal taken by the city officials to this court, so much of the order as granted the motion for a peremptory order was reversed, and an alternative order of mandamus was directed to be issued. (207 App. Div. 261.) The majority opinion of the court upheld the right of the city comptroller to make an audit of the bill; and in conclusion Mr. Justice Martin said (at p. 268):

Where it appears that there is a real controversy, a peremptory order should be denied. Such a course is found to protect those charged with disbursing the public funds and at the same time bring about a just result.
While the comptroller may not thwart the efforts of the Transit Commission in its endeavor to properly function, at the same time the Commission may not compel the comptroller to pay claims which have been improperly incurred or which are in payment for work done under a contract which was not for a public purpose and chargeable to the city.
Under the circumstances the claimant should have been given an alternative order, or relegated to an action at law, in order that the legality of the claim may be determined before the funds of the city are disbursed therefor.
The order should be reversed, with ten dollars'costs and disbursements, and the motion for a peremptory mandamus order denied, with fifty dollars costs, and an order entered permitting an alternative order to issue.”

The comptroller’s answer to the .petition had stated in substance that the contract between the Baumer Films, Inc., and the Transit Commission was in excess of the powers of the Commission and not entered into to further a municipal or public purpose, but was in furtherance of a scheme to influence public opinion in favor of the candidate for Governor for whom votes were to be cast at the impending election in 1922, and at whose hands the Transit Commissioners held their offices, and to promote the success at said election of the political party in pursuance of whose policy in relation to transit matters in New York city the Commissioners would be permitted to continue in office, and to defeat the policy of the political party whose success at election would be likely to' cause them to be deprived of their offices.

The alternative order having been granted, the issue thus raised went to trial. The effort of the defendants was to show that the [239]*239Transit Commission was not actuated by a proper purpose in ordering and exhibiting the film, and that its action was not taken to further a public purpose properly chargeable to the city of New York, but that it was solely actuated by political considerations, and that the film was designed to aid one political party in the approaching State elections at the expense of the other. In the effort to show this, the platforms of the Republican and Democratic parties adopted at their respective conventions held in September, 1922, were offered and received in evidence, the former commending the Transit Commission and its actions and defending its creation, the latter pledging the party to a repeal of the statutes creating divided responsibility in the supervision of public utilities and the delegation of sole power to municipalities to control public utilities operating wholly within their Unfits. These platforms were adopted in the last days of September, while the contract for the making of the films was made in March and those for their exhibition were made in July and August.

The film was exhibited to the jury by actual projection upon a screen in the courtroom. It has also been exhibited for view by the members of this court. It is described in a way in the opinion of the learned trial court upon the decision of the motion to set aside the verdict herein. As epitomized by the appellant herein, the film consists of two main divisions, the first denominated “ The Problem,” and the second “ Its Solution.” Briefly summarized, it shows a history of transit in New York city from the original horse-car days, through the construction of cable cars, electric surface cars, elevated cars and subways, in connection with, and with reference to, the growth of the city and the movement of population therein; it then portrays, by means of actual picture reproduction (the first of its kind ever made) the existing conditions of transit at various hours of the day in various parts of the city, including Grand Central Station, Canal street, Brooklyn bridge, Times square, Wall street and Borough Hall, and analyzes the reasons for the existing congestion and legislatively-declared emergency; it then shows the various items of transportation costs and the apportionment of the fare paid by passengers among those items in detail; and, finally, shows the proposed plan of the Transit Commission, the body duly authorized by the Legislature for that purpose, for the amelioration and remediation of the existing conditions. The proposed transit plans are set forth in a series of maps which appellant claims have been executed on the film with unusual clarity and accuracy and are quite understandable. At least the jury so found them. For the purpose of making the film suitable for public presentation, it contains two allegorical char[240]*240acters, one of them “ Father Knickerbocker,” and another who represents the average user of transit facilities, and who is called Mr. S. Trapp Hanger.” As testified to by Commissioner Harkness, and as found by the jury, the purpose of the Commission in including these allegorical characters was to make the film suitable for public presentation.

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In re Continental Guaranty Corp., 212 A.D. 236, 208 N.Y.S. 705, 1925 N.Y. App. Div. LEXIS 9446 (N.Y. Ct. App. 1925).

212 A.D. 236 (In re Continental Guaranty Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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