Scott, J.
The petitioners are the owners of $35,000 of coupon bonds issued by the late village of Richmond Hill, in the county of Queens, one of the municipalities which has now become incorporated into the city of Hew York. Ho question is made on this motion as to their validity. They were issued prior to January 1, 1898 (the date of consolidation), and were on that day, as is assumed, valid outstanding obligations of said village. The applicants have demanded of the comptroller that he accept a surrender of these bonds, and in place thereof issue to them registered stock of the city of Hew York in the manner and form that said bonds would have been if originally issued as registered bonds. The comptroller has refused to comply with this demand, but offers to pursue the same course respecting these bonds which he pursues respecting other similar bonds, which is to receive them, and cut off the coupons, then to register the bonds, and indorse thereon the fact of such registration, and return or reissue them to the owners. This course is not satisfactory to the applicants, who insist that they are entitled to surrender their bonds for cancellation, and to receive in return not the same bonds with a certificate of registration indorsed thereon, but original corporate stock of ihe city of Hew York of like tenor as to amount, rate of interest and time of payment as the bonds so surrendered and canceled. The city of Hew York, as at present constituted, was formed by the consolidation of a great number of large and small municipalities, [329]*329each one of which had issued bonds, which, at the date upon which consolidation became effective, were outstanding obligations. The section of the charter of Greater New York (chap. 378, Laws 1897), under which this application is made, reads as follows: “ Section 172. All stocks and bonds heretofore lawfully issued by any of the municipal or public corporations or parts thereof, which have heretofore been annexed to or consolidated with the corporation known as the mayor, aldermen and commonalty of the city of New York, or which by this act are made part of the corporation of The City of New York as hereby constituted, including the counties of Kings and Richmond, for the payment of the principal and interest of which The City of New York is liable, may be registered and must be recorded by the owners thereof in the comptroller’s office in said city, and shall be transferable at the pleasure of the holder, either in person or by attorney, only upon the books of the corporation in said office, and subject to such reasonable rules and regulations as the comptroller may prescribe; such registry and transfer to be indorsed thereon by the comptroller. Whenever such stocks or bonds have been issued in coupon form, and whenever hereafter corporate stock of The City of New York may be so issued, it shall be the privilege of the holders thereof at any time, subject to such rules and regulations to convert the same into registered stock or bonds, and the comptroller is hereby authorized to issue registered stock or bonds therefor in the manner and form in which the same would have been conditioned if originally issued in registered form. The interest on all such stock and bonds, when so registered shall, as the same becomes due and payable, be paid in like manner as upon other registered stocks and bonds of The City of New York; and whenever any such stocks or bonds have coupons attached, the comptroller shall, upon registration thereof, have authority to detach all coupons therefrom, and shall thereupon indorse the fact of such registration, with a reference to this section.” It is apparent that this section was designed to provide for two sets of conditions which might arise in the future. First, the owners of coupon bonds or stock which “have been issued,” i. e., issued prior to January 1, 1897, might wish to have them converted into registered stock or bonds. And, secondly, the owners of corporate stock of the city of New York “which may be hereafter,” i. e., after January 1, 1897, so issued, might wish to have them so converted, and it is obvious that the legislature has attempted to provide for both of these cases in a single section. In the main, the section is a re[330]*330enactment of section 138 of the Consolidation Act, which in turn was a re-enactment of section 1 of chapter 199 of the Laws of 1880, which was an act providing for the registration of the bonds of the towns of Horrisania and West Farms, which had been issued before these towns had been annexed to the mayor, aldermen and commonalty of the city of Hew York. It has never been contended that under this statute the holder of West Farms and Horrisania bonds had the right to surrender them, and insist upon the issue of original city stock. The applicants insist, however, that the provision inserted in the act of 1897, that the comptroller shall “ issue ” registered stock or bonds in place of the coupon stock or bonds, which words were not contained in the act of 1880, confers a new right upon the holders of coupon bonds. It would be a narrow construction of the section which would give to this single provision the controlling effect which is sought to be attached to it. As has been said, the section provides for two possible contingencies, and such effect should be given to it as will meet both cases. In the case of the conversion of corporate stock issued after January 1, 1897, the comptroller might, without affecting the relations between the city and its creditors, cancel the coupon stock and issue new'registered stock. To cancel stock or bonds issued prior to January 1, 1897, and issue new corporate stock might, however, very seriously affect the relations between the city and the bondholder. Section 169 of the Greater Hew York charter provides that all bonds or corporate stock issued by the city of Hew York after January 1, 1897, shall be exempt from all taxation except for state purposes. Ho such general exemption attaches to the bonds issued prior to January 1, 1897, by the numerous municipalities, which, on that date, became merged into the city of Hew York. Just how many of such bonds are outstanding does not appear by the motion papers, but it is a matter of common knowledge that there are a very large number of them, and it was stated in the argument that they amounted to some millions of dollars. Whatever the amount, nothing but the plainest language would justify the improbable conclusion that the legislature intended, as a result of consolidation, to confer upon the holders of these bonds the gift of perpetual exemption from local taxation, an advantage which was not in contemplation when the bonds were issued. It is also to be considered that the Greater Hew York charter imposes upon the city of Hew York only the obligation to pay those bonds of the constituent municipalities [331]*331which had been lawfully issued. If such bonds are surrendered and canceled, and new corporate stock be issued in exchange therefor, the city would be deprived of any opportunity to contest the-validity of such bonds if reason for doing so should hereafter be discovered. Of course the probability of such a discovery is slight, but it cannot be said to be nonexistent. It is stated in the moving papers that an investigation into the validity of these particular bonds has been made under direction of the corporation counsel, and that he has advised the comptroller that from such investigation it appears that the bonds are valid.
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Scott, J.
The petitioners are the owners of $35,000 of coupon bonds issued by the late village of Richmond Hill, in the county of Queens, one of the municipalities which has now become incorporated into the city of Hew York. Ho question is made on this motion as to their validity. They were issued prior to January 1, 1898 (the date of consolidation), and were on that day, as is assumed, valid outstanding obligations of said village. The applicants have demanded of the comptroller that he accept a surrender of these bonds, and in place thereof issue to them registered stock of the city of Hew York in the manner and form that said bonds would have been if originally issued as registered bonds. The comptroller has refused to comply with this demand, but offers to pursue the same course respecting these bonds which he pursues respecting other similar bonds, which is to receive them, and cut off the coupons, then to register the bonds, and indorse thereon the fact of such registration, and return or reissue them to the owners. This course is not satisfactory to the applicants, who insist that they are entitled to surrender their bonds for cancellation, and to receive in return not the same bonds with a certificate of registration indorsed thereon, but original corporate stock of ihe city of Hew York of like tenor as to amount, rate of interest and time of payment as the bonds so surrendered and canceled. The city of Hew York, as at present constituted, was formed by the consolidation of a great number of large and small municipalities, [329]*329each one of which had issued bonds, which, at the date upon which consolidation became effective, were outstanding obligations. The section of the charter of Greater New York (chap. 378, Laws 1897), under which this application is made, reads as follows: “ Section 172. All stocks and bonds heretofore lawfully issued by any of the municipal or public corporations or parts thereof, which have heretofore been annexed to or consolidated with the corporation known as the mayor, aldermen and commonalty of the city of New York, or which by this act are made part of the corporation of The City of New York as hereby constituted, including the counties of Kings and Richmond, for the payment of the principal and interest of which The City of New York is liable, may be registered and must be recorded by the owners thereof in the comptroller’s office in said city, and shall be transferable at the pleasure of the holder, either in person or by attorney, only upon the books of the corporation in said office, and subject to such reasonable rules and regulations as the comptroller may prescribe; such registry and transfer to be indorsed thereon by the comptroller. Whenever such stocks or bonds have been issued in coupon form, and whenever hereafter corporate stock of The City of New York may be so issued, it shall be the privilege of the holders thereof at any time, subject to such rules and regulations to convert the same into registered stock or bonds, and the comptroller is hereby authorized to issue registered stock or bonds therefor in the manner and form in which the same would have been conditioned if originally issued in registered form. The interest on all such stock and bonds, when so registered shall, as the same becomes due and payable, be paid in like manner as upon other registered stocks and bonds of The City of New York; and whenever any such stocks or bonds have coupons attached, the comptroller shall, upon registration thereof, have authority to detach all coupons therefrom, and shall thereupon indorse the fact of such registration, with a reference to this section.” It is apparent that this section was designed to provide for two sets of conditions which might arise in the future. First, the owners of coupon bonds or stock which “have been issued,” i. e., issued prior to January 1, 1897, might wish to have them converted into registered stock or bonds. And, secondly, the owners of corporate stock of the city of New York “which may be hereafter,” i. e., after January 1, 1897, so issued, might wish to have them so converted, and it is obvious that the legislature has attempted to provide for both of these cases in a single section. In the main, the section is a re[330]*330enactment of section 138 of the Consolidation Act, which in turn was a re-enactment of section 1 of chapter 199 of the Laws of 1880, which was an act providing for the registration of the bonds of the towns of Horrisania and West Farms, which had been issued before these towns had been annexed to the mayor, aldermen and commonalty of the city of Hew York. It has never been contended that under this statute the holder of West Farms and Horrisania bonds had the right to surrender them, and insist upon the issue of original city stock. The applicants insist, however, that the provision inserted in the act of 1897, that the comptroller shall “ issue ” registered stock or bonds in place of the coupon stock or bonds, which words were not contained in the act of 1880, confers a new right upon the holders of coupon bonds. It would be a narrow construction of the section which would give to this single provision the controlling effect which is sought to be attached to it. As has been said, the section provides for two possible contingencies, and such effect should be given to it as will meet both cases. In the case of the conversion of corporate stock issued after January 1, 1897, the comptroller might, without affecting the relations between the city and its creditors, cancel the coupon stock and issue new'registered stock. To cancel stock or bonds issued prior to January 1, 1897, and issue new corporate stock might, however, very seriously affect the relations between the city and the bondholder. Section 169 of the Greater Hew York charter provides that all bonds or corporate stock issued by the city of Hew York after January 1, 1897, shall be exempt from all taxation except for state purposes. Ho such general exemption attaches to the bonds issued prior to January 1, 1897, by the numerous municipalities, which, on that date, became merged into the city of Hew York. Just how many of such bonds are outstanding does not appear by the motion papers, but it is a matter of common knowledge that there are a very large number of them, and it was stated in the argument that they amounted to some millions of dollars. Whatever the amount, nothing but the plainest language would justify the improbable conclusion that the legislature intended, as a result of consolidation, to confer upon the holders of these bonds the gift of perpetual exemption from local taxation, an advantage which was not in contemplation when the bonds were issued. It is also to be considered that the Greater Hew York charter imposes upon the city of Hew York only the obligation to pay those bonds of the constituent municipalities [331]*331which had been lawfully issued. If such bonds are surrendered and canceled, and new corporate stock be issued in exchange therefor, the city would be deprived of any opportunity to contest the-validity of such bonds if reason for doing so should hereafter be discovered. Of course the probability of such a discovery is slight, but it cannot be said to be nonexistent. It is stated in the moving papers that an investigation into the validity of these particular bonds has been made under direction of the corporation counsel, and that he has advised the comptroller that from such investigation it appears that the bonds are valid. I do not understand this-to have been a judicial investigation, and while it is sufficient to-justify the comptroller in recording the bonds and paying interest thereon, I know of no principle upon which it can be held to estop the city from setting up any legal defense, if, in the future, such a defense should be found to exist. It will be seen that the cancellation of these bonds and the issue of new corporate stock in their place would involve consequences which, it is not to be presumed, the legislature intended, and the letter of the section referred to does not demand such a construction. The privilege-accorded to the owners of such stock is to “ convert ” their coupon bonds into registered bonds. . There is not a single word in the section as to “ exchanging ” coupon for registered bonds, or as to- “ surrendering ” such bonds, or as to the duty of the comptroller to- “ cancel ” them. They may be “ converted,” and the method of their conversion is prescribed in the last clause of the section. The-comptroller is authorized to “ detach all coupons therefrom, and (he) shall thereupon indorse the fact of such registration with a reference to this section.” It is this act of cutting off the coupons- and indorsing the fact of registration upon the bonds which “ converts ” them from coupon to registered bonds, and, if it be necessary to give effect to every word in the section, it would do no-violence to the language to say that when he had thus transformed the bonds and redelivered them to the owner, he had “ issued ”' registered bonds for the coupon bonds which had been presented to him. The manifest intention of the section was not the exchange of one bond or security for another, but merely a change in the method of paying principal and interest on the same bond. Simply the transformation of the same bond from coupon to-registered form. The motion for a mandamus is denied, with $10 costs.
Motion denied, with $10 costs.