In re Board of Street Opening & Improvement , 35 A.D. 406 ( 1898 )

Barrett, J.:

The sole question raised relates to the amount of interest which the city is required to pay. Section 992 of the Consolidation Act (Laws of 1882, chap. 410), as amended by chapter 660 of the Laws of 1893, provides: “ All" damages awarded by the commissioners of estimate and assessment, with interest thereon from the date when title to the lands shall have vested in the mayor, aldermen and commonalty of the city of New York, as provided in this chapter, and all costs or expenses which may be taxed, shall be paid by the mayor, aldermen and commonalty of the city of New York to the respective persons and bodies politic or corporate mentioned or referred to in said report, or in whose favor such costs or expenses shall be taxed.” This section is further amended by chapter 449 of the Laws of 1895, but the language quoted remains the same. This is the general provision relating to condemnation proceedings. Section 958 contains special provisions relating to property in the twenty-third and twenty-fourth wards, one of which is that all damages shall become due and payable immediately upon the confirmation of the report of the commissioners, instead of within four months thereafter as in the case of other property. It contains nothing, however, on the subject of interest, and the general provision on this subject, must control, as all such provisions, where not inconsistent with those specially affecting land in these wards, are expressly made applicable thereto.

The language quoted from section 992 seems, on its face, entirely clear. The city must pay interest “ from the date when title to the lands shall have vested,” etc. The date when interest is to cease is not expressly stated, but the plain implication is that it is to continue until the payment of the award. It is, however, argued for the city that this provision is meant merely to afford compensation to the property owner during the period that he is deprived of the money due him ; that during this period interest is awarded as compensation for the detention; that as soon as the debt becomes actually collectible the owner may demand it, and, if the demand be refused, institute proceedings to compel its payment, together with interest as damages for its further detention, and that, if he fails to adopt this course, interest ceases to run at the moment he is in a position thus to protect himself. To adopt this view would be to depart from the plain wording of an act upon a doubtful and gratuitous inference. The statute is based upon the reasonable view that the property owner has a right to his money on the day when title vests in the city, although for a time he may be kept out of it. Recognizing this right, it provides that' interest shall be paid to him until the city’s obligation is fulfilled. It makes no distinction between the period during which the city may retain the money and the period when the owner is entitled to demand it. As soon as the award becomes due it makes the city, not a bailee of the property owners’ money, entitled to hold it until demand, but a debtor, bound to seek out and pay its creditor. And this provision is just. The owner does not intrust his money to the city, to be held until demanded. The city owes him the money throughout, but is allowed, for its own convenience, to retain it during a brief period, upon condition of paying interest. (See Matter of Board, of Street Opening, 21 App. Div. 357, 359, 360.) When this period expires it at once becomes an actual debtor, with all an ordinary debtor’s obligations. From that time on the intendment in favor of the continuous interest liability is, as it seems to me, strengthened by this legal status.

It is pointed out by the appellant that, under section 992 as it stood before the amendment of 1893, the city was liable for interest only upon the expiration of the time when it was permitted to retain the award, and then only after a demand and refusal. That fact, and the decisions made in view of it (see Barnes v. Mayor, 27 Hun, 236), seems quite immaterial. It simply indicates that there has been a complete change in the legislative purpose •— in the interest of fair dealing.

Stress too is laid by the city upon the provisions which give the property owner his right to proceed for the collection of the award. There is some confusion in this respect in the act of 1893. It first provides that, after application made, the owner may sue in an action at law t.o recover the amount of the award, “ with lawful interest from and after the said application therefor.” Later, in the same section, it is provided that no action shall be brought, but that “ the court in which said proceedings have been had, upon the application of any such person or persons, in case of the failure of the comptroller of said city to pay the same within thirty days after demand therefor, shall require and direct the comptroller to pay said awards, costs and expenses,” etc. The former provision was stricken out and the latter retained by the act of 1895. We think it clear that there is nothing in any of these provisions contrary to the interpretation we have given to that part of the statute relating to interest. Certainly there is nothing inconsistent with that interpretation in the provision affording a remedy by application to the court. Nor ivas there even in the provision permitting an action to be brought, and. a recovery of interest “ from and after the said application.” That provision was immediately followed by another directing the city to pay interest on all awards from the date of the vesting of title. The two provisions simply supplemented each other. Together they covered the whole period from the time when the city takes the land.

Nor is there any force in the argument that the demand here specified, being a condition precedent to suit, must also be a condition precedent to the recovery of interest. This, again, is pure assumption. The statute does not say so, but plainly indicates, if it does not expressly state, the exact contrary. The office of the demand is obvious. It calls the attention of the city to the existence of the obligation and gives it an opportunity to pay it, and thus save the expense of a proceeding to collect it.

It is finally urged that at least no interest is recoverable where, as here, the award was to unknown owners. It will be observed, however, that section 992 affords no ground for such a contention. The city is directed to pay the award, with interest, “ to the respective persons * * * mentioned or referred to in said report.” All owners are put upon the same footing; and the broad, general words “ mentioned ” and “ referred to,” instead of the more specific word “ named,” indicate affirmatively that the case of an award to unknown owners was meant to be included. It was, doubtless, considered, however, that injustice might result to the city in such a case if it were bound to find the owners and pay or tender the money to them. Accordingly we find the remedy in section 993. That section provides that where the owner is unknown, or under a disability, or absent from the city of New York, the city may “ pay the sum or sums mentioned in the said report payable, or that would becoming to such owners, proprietors, parties and persons respectively, into the said Supreme Court, to be secured, disposed of and improved as the said court shall direct, and such payment shall be as valid and effectual in all respects as if made to the said owners, proprietors, ¡parties and persons respectively, themselves, according to their just rights, as if they had been known and had all been present, of full age, discovert and compos mentis.” This payment, being a substitute for payment to the owner, stopped the running of interest and afforded complete protection to the city. The legislative intention is very clear that the city shall adopt this course, or remain liable for interest.

This provision of section 993 is not repealed or affected by the amendments to section 992 of 1893 and 1895. This latter section, as thus amended, provides for the payment of all such awards from the fund for street and park opening. It is only when the amount of the awards exceeds the balance remaining in such fund that the comptroller is authorized to raise by the issue and sale of revenue bonds such amounts as shall be necessary to pay the awards. The court is authorized, upon the application of the property owner, to compel the comptroller thus to raise the money and therewith to pay him. An exception is then engrafted upon this particular privilege in the case of claimants of an award made to unknown owners. In their case the court may direct the comptroller to retain the amount raised or to pay it into court. Here again the city may stop the running of interest. Where it is not necessary to issue revenue bonds, section 993 covers the case entirely. Where it is.necessary to issue such bonds the amendment applies. In the one case the city must bring the money into court; in the other it is left to the court to say whether it shall do so or simply set it apart and retain it. Upon performing its duty under either section it ceases to be a debtor. Thereafter the money simply awaits judicial action to be turned over to the true owner.

The general rule here enunciated was clearly applied in Matter of Board of Street Opening (supra). There, as here, the property affected was in the twenty-third ward. The report of the commissioners was confirmed June 18, 1896, and there not being, as here, any resolution fixing a different time, the title vested then. The appellant made demand for the money on July 29, 1896, and upon refusal made a formal petition for payment. The order refused him interest, but on appeal this court modified it so as to award interest from June eighteenth, the date when title vested. The case was first considered upon the theory that the act of 1893 applied, and upon this theory it was held that the right to interest -was clear. The court, per Rumsey, J., said: “ By the amendment of 1893 it was expressly provided that the damages awarded, and interest thereon from the date when, the title to the lands should vest in the city of Eew York, should he paid by the city.” The contention of the city was expressly disallowed and interest granted, not from the date of the demand, but from the date when title vested, which was over a month earlier.

Our conclusion is that the owner here is entitled to interest from the date when title vested in the city down to the date when the amount of the award is paid into court.

In the case of Secmgarella <& Brigcmdo, lately decided, without an opinion, the attention of the court was not called to the peculiar phraseology of the statute under which the proceedings were taken.

The order should be affirmed, with costs.

Van Brunt, P. J., Bumsey, Ingraham and McLaughlin, JJ., concurred.

Order affirmed, with costs.