On June 3, 1977, an order was entered pursuant to article 23-A of the General Business Law (§ 352 et seq., the Martin Act) which permanently enjoined defendant Seymour Vall from engaging in any capacity in any business relating to the purchase and sale of securities in this State. Vall now moves for an order dissolving or modifying that decree.
In April, 1973, Vall became employed as a salesman for a commodities brokerage firm known as Collins and Day. That firm ceased operations some time in June, 1973, with substantial losses to its clients. Thereafter an investigation was commenced by the Attorney-General. That investigation revealed that neither the firm, its principals nor
In support of this motion Vall advances two arguments, first that the Supreme Court, sitting in equity, has the inherent power to modify or vacate its decrees and any statutory provision to the contrary is void as an unconstitutional limitation on the jurisdiction of the court and second, that the certificate of relief from civil disabilities renders any automatic bar to the requested relief ineffectual.
The Martin Act governs all aspects of the purchase and sale of securities in this State and vests broad regulatory powers in the Attorney-General. Pursuant to section 353 of the General Business Law, the Attorney-General is authorized to apply for an injunction when he has evidence establishing that a person or firm is engaging in fraud or fraudulent practices, or when he shows that a person or firm has been convicted of any crime involving securities.
In a case subsequent to the 1963 amendment, the Court of Appeals acknowledged the right of the Legislature to establish rules governing applications for dissolution of Martin Act injunctions (People v Lexington Sixty-First Assoc., 38 N.Y.2d 588). However, the injunction at issue there was not predicated upon any underlying conviction in a criminal proceeding and the Court of Appeals did not
The general original jurisdiction of the Supreme Court in law and equity is derived from the Constitution (NY Const, art VI, § 7) and has been jealously guarded by the courts (Niagara Falls Power Co. v Halpin, 267 App Div 236, affd 292 N.Y. 705; Busch Jewelry Co. v United Retail Employees' Union, 281 N.Y. 150; People ex rel. Mayor of City of N. Y. v Nichols, 79 N.Y. 582; Decker v Canzoneri, 256 App Div 68). As the jurisdiction of the Supreme Court is granted by the Constitution any attempt by the Legislature to limit that jurisdiction must fail. However, it does not follow that any legislation which affects the jurisdiction of the court is necessarily void. The Constitution (NY Const, art VI, § 30) gives to the Legislature the "power to alter and regulate the jurisdiction and proceedings in law and in equity that it has heretofore exercised." Thus it has been held that the Constitution does not operate to prevent the Legislature from giving additional jurisdiction to other tribunals, or from changing the common law and creating new causes of action (People ex rel. Swift v Luce, 204 N.Y. 478; Matter of Stilwell, 139 N.Y. 337). Additionally the Constitution gives to the Legislature the unfettered power to regulate the rules of practice and procedure in the courts (Cohn v Borchard Affiliations, 25 N.Y.2d 237). A distinction must therefore be drawn between the power of the Legislature to create a new cause of action and a limitation on the jurisdiction of the Supreme Court. The jurisdiction of the Supreme Court is general and once a claim is made litigable, then pursuant to the Constitution the jurisdiction of the Supreme Court attaches (People ex rel. Swift v Luce, supra). However, in creating the new cause of action, the Legislature may specifically proscribe the jurisdiction of the Supreme Court (Thrasher v United States Liab. Ins. Co., 19 N.Y.2d 159; People v Darling, 50 A.D.2d 1038).
The regulation of the purchase and sale of securities pursuant to the Martin Act is a creation of the Legislature and the primary purpose of the statute is remedial in character (People v Lexington Sixty-First Assoc., supra; People v Federated Radio Corp., 244 N.Y. 33). As such it is the prerogative of the Legislature to establish the availability and applicability of the remedy and in so doing does
Nor can section 359-g be construed as an attempt to limit the equitable power of the Supreme Court to modify its decrees. As indicated by the Court of Appeals in Scanlon (supra), the court retains its inherent power to modify its decrees upon a finding that there has been a change in circumstances and that a continuation of the decree would be unjust, inequitable and oppressive (People v Scanlon, 11 NY2d, at p 462; Enterprise Window Cleaning Co. v Slowuta, 299 N.Y. 286; Dictograph Prods. v Empire State Hearing Aid Bur., 4 A.D.2d 508). To argue, as is done here, that exemplary conduct during the years after the entry of the injunction warrants a dissolution of the decree misses the point. Vall was indicted for and pleaded guilty to a misdemeanor in connection with the sale of securities. This conviction provides an independent basis for the entry of a permanent injunction (General Business Law, § 353, subd 2). Therefore unless movant were able to demonstrate that the criminal conviction had vanished, e.g., by reason of a pardon or subsequent reversal by an appellate court, he would not be able to invoke the equitable jurisdiction of the court.
Finally the reliance of Vall upon the certificate of relief from civil disabilities is misplaced. A similar argument was made to and rejected by the court on the prior motion for an injunction pendente lite (People v Honeckman, 87 Misc.2d 117, Baer, J.). The certificate does not operate as a pardon (Matter of Sugarman, 64 A.D.2d 166; Matter of Glucksman, 57 A.D.2d 205). Nor does it prevent any judicial, administrative or licensing body from relying upon
Accordingly, the motion of defendant Seymour Vall is denied.