Murray v. La Guardia

• Decision Date: 02 December 1943
• Parties: MURRAY et al. v. LA GUARDIA, Mayor, et al.
• Court: New York Court of Appeals Court of Appeals

291 N.Y. 320

52 N.E.2d 884

MURRAY et al.

v.LA GUARDIA, Mayor, et al.

Court of Appeals of New York.

Dec. 2, 1943.

Appeal from Supreme Court, Appellate Division, First Department.

Proceeding in the matter of the application of Mary V. Murray and others for an order pursuant to Civil Practice Act, s 1283 et seq., enjoining Fiorella H. La Guardia, as Mayor of the City of New York, and others, from proceeding further with a plan to clear and rehabilitate an area in the Borough of Manhattan, City of New York, pursuant to the provisions of the Redevelopment Companies Law, McK. Unconsol. Laws, s 3401 et seq. From an order of the Appellate Division of the Supreme Court, 266 App.Div. 912, 42 N.Y.S.2d 612, which affirmed by divided court an order of the Supreme Court at Special Term, New York County, Schreiber, J., 180 Misc. 760, 43 N.Y.S.2d 408, denying petitioners' motion and dismissing the petition on the merits, the petitioners appeal.

Affirmed.

LEHMAN, C. J., and RIPPEY, J., dissenting. Menahem Stim and Michael J. Mahoney, Jr., both of New York City, and Murray W. Greif, of Brooklyn, for appellants.

Henry Epstein, Edward Weinfeld, and Shirley Adelson, all of New York City, for Citizens' Housing Council of New York, Inc., et al., amici curiae.

Samuel Seabury and Frederic G. Dunham, both of New York City, for Metropolitan Life Insurance Co. et al., respondents.

Ignatius M. Wilkinson, Corp. Consel, of New York City (Jermiah M. Evarts and William S. Lebwohl, both of New York City, of counsel), for City of New York et al., respondents.

LEWIS, Judge.

This appeal presents for decision a challenge to the constitutionality of the Redevelopment Companies Law. L.1942, c. 845, as amended by L.1943, c. 234, McK. Unconsol. Laws, s 3401 et seq.

That challenge is by the petitioners who resist action by the defendants in furtherance of a redevelopment project promoted by the city of New York and to be financed by funds furnished by Metropolitan Life Insurance Company as a means to effect the clearance and rehabilitation of an area found by the New York City Planning Commission to be substandard and insanitary.

The project itself calls for the acquisition and clearance of eighteen city blocks and the erection within that area of thirty-five thirteen-story buildings which will contain more than eighty-eight hundred apartments and will house twenty-four thousand persons. The site of the project is the area bounded by East 14th Street, First Avenue, East 20th Street, East River Drive and Avenue C in the borough of Manhattan.

To accomplish that undertaking it is proposed that a contract and plan, formulated under provisions of the Redevelopment Companies Law, will be entered into by the city with the defendants Stuyvesant Town Corporation and Metropolitan Life Insurance Company to which it will be convenient to refer as ‘Stuyvesant’ and ‘Metropolitan’ respectively. From the proposed contract it appears that Metropolitan has caused Stuyvesant to be organized as a redevelopment corporation; that Metropolitan is the owner of all the capital stock of Stuyvesant; that it will furnish all funds required to complete the redevelopment project and will guaranteeperformance by Stuyvesant of the latter's obligation to complete the work of clearance and reconstruction according to the plan therefor.

The petitioners, who own real property within the eighteen city blocks which it is proposed to clear and redevelop, seek by this proceeding to enjoin further action by the defendants designed to accomplish that project. At Special Term the petitioners' motion for injunctive relief was denied and the petition was dismissed on the merits. At the Appellate Division the order of Special Term was affirmed, two justices dissenting. The petitioners appeal to this court as of right.

For a long period of years both State and municipal governments have recognized an ever increasing social and economic loss due to conditions in those blighted urban areas where slums exist. It is a fact within common knowledge that conditions prevailing in slum areas affect the health, safety and welfare of the public, causing indirectly a heavy capital loss and a diminishing return of tax revenues. We took notice of the existence of those conditions and their demoralizing effect when it was said in behalf of this court by Crouch, J.: ‘The public evils, social and economic of such conditions, are unquestioned and unquestionable.’ New York City Housing Authority v. Muller, 270 N.Y. 333, 339, 1 N.E.2d 153, 154, 105 A.L.R. 905. Those conditions, when later brought to the attention of the Constitutional Convention of 1938, prompted an intensive study of the problem involved. The product of that study was the new article XVIII of the State Constitution which was proposed by the Convention of 1938 and in that year adopted by the People. For our present purposes it is enough to quote only the following portions of Article XVIII:

‘s 1. Housing for persons of low income; slum clearance. Subject to the provisions of this article, the legislature may provide in such manner, by such means and upon such terms and conditions as it may prescribe for low rent housing for perons of low income as defined by law, or for the clearance, replanning, reconstruction and rehabilitation of substandard and insanitary areas, or for both such purposes, and for recreational and other facilities incidental or appurtenant thereto.

‘s 2. (Idem; powers of legislature in aid of.) For and in aid of such purposes, notwithstanding any provision in any other article of this constitution, but subject to the limitations contained in this article, the legislature may: * * * authorize and provide for loans by the state and authorize loans by any city, town or village to or in aid of corporations regulated by law as to rents, profits, dividends and disposition of their property or franchises and engaged in providing housing facilities; * * * grant or authorize tax exemptions in whole or in part except that no such exemption may be granted or authorized for a period of more than sixty years; * * * grant the power of eminent domain to any city, town or village, to any public corporation and to any corporation regulated by law as to rents, profits dividends and disposition of its property or franchises and engaged in providing housing facilities.’

The broad powers given to the Legislature by those new provisions of the Constitution quoted above are the bases for the enactment of the Redevelopment Companies Law, the unconstitutionality of which is now asserted by the petitioners.

In the present case we are concerned with only one of the two separate grants of power stated in section 1 of article XVIII that single grant of power being to ‘provide in such manner, by such means and upon such terms and conditions as it (the Legislature) may prescribe * * * for the clearance, replanning, reconstruction and rehabilitation of substandard and insanitary areas * * * and for recreational and other facilities incidental or appurtenant thereto.’ (Emphasis supplied.)

Insofar as is material to our present inquiry the statute after declaring in section 2 the legislative policy and purposes which prompted its enactment authorizes (s 4) the incorporation of ‘redevelopment companies', the corporate purposes of which are stated to be to acquire one or more areas and to construct, own and operate projects according to a ‘plan,’ which is defined (s 3, subd. 5) as an ‘* * * undertaking for the clearance, replanning and reconstruction or rehabilitation of a substandard or insanitary area or areas and for recreational and other facilities incidental or appurtenant thereto to effectuate the purposes of article eighteen of the constitution * * *.’ The statute also provides (s 25) that a redevelopment company may be organized and financed by an insurance company which in turn may ‘own and control, the stock or the income debenture certificates or both of any redevelopment company * * *.’ When a plan for a redevelopment project is proposed, and after preliminary approval thereof by the chief fiscal officer of the municipality as to conformity with the provisions and purposes of the Act, section 15 requires that the plan be submitted to the municipal planning commission for its approval as to certain designated features. Upon a statement of action taken thereupon by the planning commission, which may make any one of several recommendations as prescribed in the Act, the plan, with a proposed form of contract between the municipality, the redevelopment company and any insurance company owning all the stock and debentures of the redevelopment company, shall be submitted to the local legislative body for its approval. The statute requires that such approval shall show conformity with the provisions and purposes of the Act and, among other matters, the extent of tax exemption to be granted to the redevelopment company, ‘the amount and nature of property to be condemned for the redevelopment company by the municipality’ and the terms and conditions of payment therefor by the redevelopment company. Where, as in the present case, the redevelopment company is financed by an insurance company, the contract and plan must be approved by the Superintendent of Insurance. s 15, s 3, subd. 10. If the planning commission shall have issued a certificate of unqualified approval of the plan, and if the Superintendent of Insurance has formerly indicated his approval, the approval thereof by the local legislative body may be by resolution adopted by a majority of the whole number of votes...