Dwyer v. Lindsay

Steuer, J. We believe the dismissal of the petition to be improper and to necessitate a reversal of the order and vacating of the judgment entered thereon. Petitioner was, prior to the proceeding mentioned below, the owner of the premises located at 2120 Seventh Avenue. The property is assessed at $145,000 and defendant cannot dispute that it is worth substantially in excess of that sum. Petitioner defaulted in the payment of taxes in the approximate sum of $26,000, and on March 8,1965, the city foreclosed on its tax lien. Thereafter petitioner applied pursuant to section D17-25.0 of the Administrative Code of the City of New York for the city to release its interest in the property. His application was in proper form and he deposited the full amount of the delinquent taxes with interest and all proper charges, amounting to $50,467.06. The Corporation Counsel and the Department of Real Estate advised the Board of Estimate that the deposit was correct and the papers in order, and submitted to it the question of release of the property to the petitioner. [364] The matter came up for hearing before the board on April 14,1966. The application was opposed by a parents association and a community planning board. The grounds of opposition were that part of the premises was rented to a saloon and that its presence was inimical to the pupils of Public School 154, which is contiguous to the property. It was urged on the board that the city should retain the property and oust the objectionable tenant. No other ground was advanced. The board voted to deny the application. The instant proceeding, under article 78 of the CPLR, seeks to compel the board to grant the petition. The applicable statute governing redemption of properties taken in in rem foreclosure proceedings is section D17-25.0. The first paragraph is pertinent to the question here presented. Confining the language to what is essential to decision here also serves to clarify the meaning. It would then read: ‘ ‘ The board of estimate, in its discretion, may * * * release all of the * * * interest of the city in any lands * * * acquired * * * by * * * action in rem * * * to any person * * * vested with the title thereto, provided, however, that no * * * release may be made of any such lands * * * which the board has assigned to any agency of the city ”. No assignment to any agency of the city was made. A brief legislative history may shed some light on the proper interpretation of the statute. Prior to 1956 the situation in regard to properties where taxes were in default was as follows: The owner could at any time prior to foreclosure redeem his property by paying the outstanding taxes plus interest and statutory charges. The procedure was purely ministerial. After foreclosure the former owner’s rights were completely cut off and there was no procedure by which the property could be reclaimed. In that year an owner who had lost his property through foreclosure of the tax lien challenged the constitutionality of the statute (New York City v. Nelson, 309 N. Y. 94). The Court of Appeals upheld the statute but had occasion to remark that it made for hard cases. The court suggested that the Legislature should liberalize the right of redemption (pp. 96-97). On this suggestion the present statute was enacted. The determination of the Court of Appeals was upheld by the Supreme Court (352 U. S. 103). That court also concurred in the description of the then controlling statute as harsh and noted that the present statute relieved the inequity of its predecessor (p. 111). It is the position of the respondents that the Legislature ameliorated the situation by giving the Board of Estimate at its whim or pleasure the right to relieve a delinquent owner from the consequences of foreclosure. We cannot subscribe to the piopo [365] sition that the board enjoys an unrestricted and unreviewable discretion in this respect. It could hardly be maintained that the members of the board could, if they so chose, reward political friends or punish political enemies if someone in either category sought to redeem his property. If the discretion does not go to this extent, there must be some limit to it. We submit that the limit is found in the statute itself, and we refer to the exception where the city has assigned the property to some agency of the city. In other words, if the city has a use for the property, it can deny redemption, and in making that determination its discretion is untrammelled. Respondents would extend that discretion to where the board acts for a good purpose. Concededly, the city could not have accomplished its purpose, i.e., ousting the tenant deemed to be undesirable, by legal means without confiscating the fee. No one would claim that the city could assert that this was a purpose for which it could condemn the realty. So it is actually doing by indirection what it could not do directly, and in the process working a forfeiture of the kind that the statute was enacted to relieve against. The order should be reversed and the petition reinstated.