Suttforb Realty Corp. v. Board of Education

In a proceed ing pursuant to CPLR article 78, inter alia, to review certain resolutions adopted by the respondent board of education on June 26, 1974, which resolutions canceled certain leases of real property between the board and petitioners, petitioners appeal (1) from a judgment of the Supreme Court, Kings County, dated April 21, 1975, which granted respondents’ cross motion to dismiss the petition, without prejudice to the right of petitioners to commence an action for the reasonable value of the use and occupancy of the subject premises, and (2) as limited by their brief, from so much of a further order of the same court, entered July 22, 1975, as, upon reargument, adhered to the original determination. Appeal from the judgment dismissed as academic, without costs or disbursements. The judgment was superseded by the order made on reargument. Order affirmed insofar as appealed from, without costs or disbursements. The leases are void under section 1106 (subd [1], par a) of the Charter of the City of New York, which prohibits city employees from entering into "business dealings” with the city, as that term is defined by section 1106 (subd [2], par a) of the charter. Section 1106 (subd [3], par e), which confers a general right upon city officers and employees to invest in the private sector as long as there is no conflict with official duties, does not remove the absolute prohibition against "business dealings” with the city. Petitioners are unaided by the fact that they disclosed their status and that the leases went into effect (see 10 McQuillin, Municipal Corporations [1966 Rev vol], § 29.10; see, also, Matter of Haslett v Minetti, 274 App Div 519, mot for lv to app den 299 NY 798). Since the leases were illegal from their inception, petitioners could not have acquired any rights under them by reliance or otherwise. We reject the argument that transactions in violation of section 1106 (subd [1], par a) of the charter are enforceable unless voided by the Comptroller (see Seaman v City of New York, 172 App Div 740). Latham, Acting P. J., Margett, Rabin, Titone and Hawkins, JJ., concur.