Teeval Co. v. Stern

93 N.E.2d 884, 301 N.Y. 346
CourtNew York Court of Appeals
DecidedJuly 11, 1950
DocketNo. 1; No. 2
StatusPublished
Cited by63 cases

This text of 93 N.E.2d 884 (Teeval Co. v. Stern) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Teeval Co. v. Stern, 93 N.E.2d 884, 301 N.Y. 346 (N.Y. 1950).

Opinion

Loughran, Ch. J.

In these six cases questions are raised as to the constitutional validity of two statutes.' One is the New York State rent control statute which became effective May 1, 1950 (L. 1950, ch. 250). The other is the so-called Sharkey Law (Local Laws, 1949, No. 73 of City of New York; Administrative Code of City of New York, § 1741-7.0) which was validated by the State Legislature (L. 1950, ch. 1) after this court had held it to be unconstitutional. (F. T. B. Realty Corp. v. Goodman, 300 N. Y. 140.)

[357]*357We take up first the case of Teeval Co., Inc., v. Stern, an action that was commenced in the Municipal Court of the City of New York by service of a summons dated May 1, 1950. The material facts follow.

Plaintiff, a domestic corporation, owns No. 1125 Park Avenue, a residential property in the city of New York. On September 15, 1948, the parties entered into an agreement whereby the plaintiff leased to the defendant an apartment in No. 1125 Park Avenue at a monthly rent of $268.34 for a term that ended on September 30, 1949. Upon the expiration of that lease, the defendant stayed on as a statutory tenant.

In 1943, the plaintiff landlord had registered No. 1125 Park Avenue with the Federal Office of Price Administration pursuant to the Federal Emergency Price Control Act of 1942 (U. S. Code, tit. 50, Appendix, § 901 et seq.), a statute which made the then existing rents the maximum that landlords could charge for housing accommodations. Federal rent control was continued by subsequent housing and rent acts. The 1949 act re-enacted a provision which had authorized the Federal Housing Expediter to make such adjustments of maximum rents as should be necessary “ to remove hardships or to correct other inequities ’ \ The 1949 act also provided: “ In making and recommending individual and general adjustments to remove hardships or to correct other inequities, the Housing Expediter and the local boards shall observe the principle of maintaining maximum rents for controlled housing accommodations, so far as is practicable, at levels which will yield to landlords a fair net operating income from such housing accommodations.” (Housing and Bent Act of 1947, § 204, subd. [b], par. [1], as amd.; U. S. Code, tit. 50, Appendix, § 1894, subd. [b], par. [1].)

Pursuant to the powers so conferred, the Federal housing regulations applicable to the city of New York were amended so as to enable a landlord to obtain leave to increase the rent when his ‘ net operating income ’ ’ from a building was less than a fair net operating income ”. The amended regulations were in part as follows:

The net operating income from a building shall be considered to be less than a fair net operating income if such net operating income is less than 25 percent of the annual income in the case of a building containing less than five dwelling units, or [358]*358is less than 20 percent in the case of a building containing five or more dwelling units.
“ * * * The adjustment * * * shall be in such amount as is necessary to bring the net operating income from the building (expressed as a percentage of annual income) to the median net operating income of landlords generally. This median is 30 percent of annual income in the case of buildings containing less than five dwelling units, and 25 percent in the case of buildings containing five or more dwelling units. * * *
“ ‘ Annual operating expenses ’ means all real estate taxes and other unavoidable operating costs necessary to the operation and maintenance of the building, plus depreciation but excluding mortgage interest and amortization * * *.
“ ‘ Depreciation ’ means the amount shown for the building in the latest required Federal income tax return, but in no event more than 21 percent of the annual income for a building containing less than 5 dwelling units or 16 percent of the annual income for a building containing 5 or more dwelling units.” (Rent Regulations under the Housing and Rent Act of 1947, § 825.5 subd. [a], par. [18], as amd.)

The above-amended regulations were promulgated by the Federal Housing Expediter on May 3, 1949, and were made retroactive to April 1st of that year. On May 17, 1949, the plaintiff landlord filed a petition with the Office of the Housing Expediter for a “ fair net operating income ” rent increase.

Upon a certificate of the Housing Expediter stating his determination in respect of the plaintiff landlord’s total annual income, total operating expenses and annual net operating income, the plaintiff landlord was granted an annual rent increase of $31,496.20 which was apportioned among- its tenants. Accordingly, on September 27, 1949, notice was given to the defendant tenant that at the expiration of his lease on September 30, 1949, the monthly rent theretofore paid by him would be raised from $268.34 to $300.26, an increase of $31.92 each month.

The defendant tenant has refused to make payment of the increased rent and each month has paid only the original rent of $268.34. Having accepted these smaller rent payments “ without prejudice ” to its asserted right to collect the increased amounts, the plaintiff landlord demands in this action (1) payment of $31.92 for each of the months of October, [359]*359November and December, 1949, and January, February, March and April, 1950; and (2) payment of $300.26 as the rent alleged to be due and unpaid for the month of May, 1950. The increased rent is greater than that which was payable on March 1, 1949. As we shall see in a moment, the collection in the city of New York of any rent higher than the rent payable on that date is prohibited by the terms of the validated Sharkey Law for the period ending April 30, 1950, and for the period beginning May 1, 1950, by the terms of the State rent control statute.

The Sharkey Law was enacted by the City Council of the City of New York. It became effective October 7,1949. Thereby rents in the city of New York were frozen at the rates that were payable on March 1, 1949, and collection of any greater rent by demand, action or summary proceeding was forbidden unless the temporary city housing rent commission had certified a higher rent to be just and reasonable. On December 29,1949, this court held the Sharkey Law to be an unconstitutional violation of the Home Rule Amendment of the State Constitution (F. T. B. Realty Corp. v. Goodman, 300 N. Y. 140, supra). On January 10, 1950, the State Legislature undertook by chapter 1 of the Laws of 1950 to validate the Sharkey Law as of October 7, 1949, the date of the enactment of that local law by the City Council of the City of New York. Then in March, 1950, the State Legislature passed and sent to the Governor three rent control bills, one of which was signed by him on March 29, 1950, and is the State rent control statute here in question. The other two bills were vetoed by the Governor.

The State rent control statute (1) terminated as of May 1, 1950, Federal rent control in this State; (2) froze at the March 1, 1949, levels residential rents in the city of New York that had theretofore been controlled either by the Federal acts or by the Sharkey Law; and (3) froze as of March 1, 1950, residential rents that elsewhere in the State had theretofore been controlled by the Federal acts.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Dawson v. Higgins
197 A.D.2d 127 (Appellate Division of the Supreme Court of New York, 1994)
Manocherian v. Lenox Hill Hospital
196 A.D.2d 728 (Appellate Division of the Supreme Court of New York, 1993)
Berry Estates, Inc. v. New York
812 F.2d 67 (Second Circuit, 1987)
Lopez v. Mirabel
127 A.D.2d 771 (Appellate Division of the Supreme Court of New York, 1987)
People ex rel. Office of Rent Administration, Division of Housing & Community Renewal v. Berry Estates , Inc.
87 A.D.2d 161 (Appellate Division of the Supreme Court of New York, 1982)
Anderson v. Regan
425 N.E.2d 792 (New York Court of Appeals, 1981)
La Guardia v. Cavanaugh
423 N.E.2d 9 (New York Court of Appeals, 1981)
Bess v. Toia
66 A.D.2d 844 (Appellate Division of the Supreme Court of New York, 1978)
Mayer v. City Rent Agency
385 N.E.2d 605 (New York Court of Appeals, 1978)
In re County of Suffolk
56 A.D.2d 301 (Appellate Division of the Supreme Court of New York, 1977)
Tonwal Realties, Inc. v. Beame
406 F. Supp. 363 (S.D. New York, 1976)
Hutton Park Gardens v. Town Council
350 A.2d 1 (Supreme Court of New Jersey, 1975)
Hutton Pk. Gardens v. West Orange Town Council
350 A.2d 1 (Supreme Court of New Jersey, 1975)
Helmsley v. Borough of Fort Lee
362 F. Supp. 581 (D. New Jersey, 1973)
Inganamort v. Borough of Fort Lee
303 A.2d 298 (Supreme Court of New Jersey, 1973)
Meyers v. New York State Division of Housing & Community Renewal
36 A.D.2d 166 (Appellate Division of the Supreme Court of New York, 1971)
Marshal House, Inc. v. Rent Control Board of Brookline
266 N.E.2d 876 (Massachusetts Supreme Judicial Court, 1971)
Shiles v. News Syndicate Co.
261 N.E.2d 251 (New York Court of Appeals, 1970)

Cite This Page — Counsel Stack

Bluebook (online)
93 N.E.2d 884, 301 N.Y. 346, Counsel Stack Legal Research, https://law.counselstack.com/opinion/teeval-co-v-stern-ny-1950.