In re the General Assignment for the Benefit of Creditors of Larry Jay, Inc.

Peck, P. J.

(dissenting). There may be good reason why the law should be what the penetrating opinion of the majority conceives it to be. This could easily be accomplished by appropriate amendment to the statute (Debtor and Creditor Law, § 22). I am unable to agree, however, that the employees of the contractors can be considered “ employees ” of the assignor under the present wording of the statute.

Not only am I unable to give that legal construction to the word “ employees ” as used in the statute, but it seems to me that such a construction would run contrary to the actual employer-employee relationship which existed in this case, which the contract between the parties recognized and in reference to which they contracted. To a limited extent of a period of one week and two days, on certain conditions, the assignor was made answerable for default of the contractors in paying wages payable by the contractors. This is clear recognition of the fact that the workmen of the contractors were their employees and not the assignor’s employees.

*395The language of the statute, assimilating contributions for welfare benefits to “wages ”, as a matter of definition for the purposes of the statute, will not serve as a bootstrap to lift the contractors’ employees into the category of the assignor’s employees. While it may be said in statutory terms that the assignor obligated itself to pay a portion of the 11 wages ’ ’ of the workers in the contractors’ shops, the actuality in terms of the contract between the parties, under which the present claim is prosecuted, is that the contributions to be made by the assignor to the welfare fund were not to be deemed “wages ”. It is to be noted also that when section 22 of the Debtor and Creditor Law was amended in 1952 to include a variety of fringe benefits in the definition of “wages ” for the purposes of the statute, no change was made in the definition of an “ employer ’ ’ or “ employees ”. It is the embrace of the terms “ employer ” and “ employees ” which is the crux of this case rather than the embrace of the concept of “ wages ”.

There are many aspects and incidents of the employer-employee relationship. None existed here. The particular extraordinary engagement made by the assignor to make contributions to the welfare fund for the benefit of the contractors’ employees will not support a conclusion or characterization that the assignor was the employer in the absence of all the usual tests, aspects and incidents of the employer-employee relationship. Cases in which an employee of one person has been considered ad hoc the employee of another person do not advance the argument of claimant here (Standard Oil Co. v. Anderson, 212 U. S. 215; Miller v. North Hudson Contr. Co., 166 App. Div. 348; Green v. McMullen, Snare & Triest, 177 App. Div. 771). There is no ad hoc feature in this case. The claim is and must be that the contractors’ employees were the assignor’s employees inherently and constantly. In my view, that cannot be said in this case either as a matter of fact or law.

We must be mindful of the fact that the statute involved in this case is of much broader coverage than the garment industry with its peculiar manufacturer-jobber-contractor relationship. It is industry-wide in its application. There are many industries where subcontractors are dependent in different ways and in various degrees upon contractors. But it has not been suggested until now that such dependence makes the employees of the subcontractor the employees of the contractor. Section 22 of the Debtor and Creditor Law dates back in its origin to 1877. No change has been made in the pertinent wording-affecting the definition of “ employees”. While changing conditions may bear on the existence of an employer-employee rela*396tionship, the test by current concepts remains the same, namely who in “ common understanding ” are included in the designation (Matter of Kimberly, 37 App. Div. 106,110). In common understanding by any ordinary test the employees of the contractors here are not employees of the assignor.

I fear that the majority’s enlarged interpretation of the word “ employees ” in this statute will open to confusion and contention what has been clear and certain. The interpretation influenced by the circumstances of one industry and perhaps one union in that industry can have untold disturbing consequences. If a change is to be made in the definition or interpretation of employees ” in this statute, it seems to me that it should be made on the basis of legislative consideration and determination. The recent decision of the United States Court of Appeals for the Second Circuit in Local 140 Security Fund v. Hack (242 F. 2d 375), while not exactly in point, indicates the reason for limiting preferences as between creditors to those specified by statute and why the preferences should not be extended by judicial interpretation.

Subdivision 7 of section 560 of the Labor Law is referred to in the majority opinion. But its significance lies, I believe, not in indicating any enlarged legislative concept of the employer-employee relationship, but rather in revealing that when the Legislature wishes to impose or extend statutory liabilities in this area beyond the conventional employer-employee relationship, it proceeds consciously and deliberately by appropriate statutory change. The Legislature has not seen fit in all its consideration, reconsideration and amendment of section 22 of the Debtor and Creditor Law to make the change made by the court in this case. I do not think that the change should be made in this way or that the historic and constant wording of the statute will support it. Therefore, I dissent and vote to affirm.

Rabin and Frank, JJ., concur with Botein, J.; Peck, P. J., dissents and votes to affirm in opinion, in which Breitel, J., concurs.

Order modified by allowing the claim of the joint fund as a preferred claim to the extent of $978.03 and, as so modified affirmed, with $20 costs and disbursements to the appellant. Settle order on notice.