Town of Smithtown v. Moore

• Decision Date: 26 April 1962
• Citation: 228 N.Y.S.2d 657,183 N.E.2d 66,11 N.Y.2d 238
• Parties: , 183 N.E.2d 66 In the Matter of the TOWN OF SMITHTOWN, Appellant, v. Frank C. MOORE et al., Constituting the State Board of Equalization andAssessment of the State of New York, Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 657

228 N.Y.S.2d 657

11 N.Y.2d 238, 183 N.E.2d 66

In the Matter of the TOWN OF SMITHTOWN, Appellant, v. Frank C. MOORE et al., Constituting the State Board of Equalization andAssessment of the State of New York, Respondents.

Court of Appeals of New York.

April 26, 1962.

Eugene L. Wishod, Smithtown, for appellant.

Louis J. Lefkowitz, Atty. Gen. (Edward J. Grogan, Jr., Albany, Paxton Blair, Hillsdale, and George A. Radz, Troy, of counsel), for respondent.

FULD, Judge.

We granted leave to appeal in this case primarily to consider the question, of state-wide interest and application, whether the State Board of Equalization and Assessment was validly constituted when, in August of 1960, it fixed the equalization rate for a town for the year 1959.

Some 10 or 15 years ago, because of an increase of real estate values with which local assessments had not kept pace, many equalization rates throughout the State were found to be extremely inequitable. To meet this situation, the Legislature in 1949 created a temporary commission, known as the State Board of Equalization and Assessment, to review and revise State equalization rates and to hear and determine appeals of equalization rates fixed by county boards of supervisors and other local authorities (L.1949, ch. 346). It consisted of 3 members appointed by the Governor: the Comptroller at that time, the Honorable Frank C. Moore the Director of the Budget and the President of the State Tax Commission. This body was continued by express statutory enactment until April 1, 1960, when the board was reconstituted as a permanent agency (L.1960, ch. 335; Real Property Tax Law, Consol.Laws, c. 50-a, art. 2, §§ 200-216).

The new legislation or, more particularly, section 200 of the Real Property Tax Law, provided that the State Board was to consist of the Commissioner for Local Government an office created in 1959 (L.1959, ch. 335, as amd. by L.1960, ch. 320) and 4 other members to be appointed by the Governor for terms of 8 years, by and with the advice and consent of the Senate. Until the new law became effective on April 1, 1960, the temporary board continued to consist of the 3 members occupying the positions referred to above. No appointments were made to the new board until January, 1961, at which time the Governor designated the respondents, the 3 men who had constituted the temporary board. A Commissioner for Local Government has not yet been appointed.

On August 25, 1960, after a hearing, the respondents made a determination reducing the equalization rate for the Town of Smithtown from 43% to 34%. Considering itself aggrieved, the town thereupon brought this proceeding, pursuant to section 760 of the Real Property Tax Law and article 78 of the Civil Practice Act, to annul the determination on two grounds: (1) the permanent State Board was not properly constituted indeed, that it could not be until the Governor had appointed its full complement of 5, including the Commissioner for Local Government and, therefore, the action taken by the respondents was without legal authority and void and (2), in any event, the determination made by the board was arbitrary, capricious and unreasonable. The courts below decided against the petitioner on both grounds.

The board is charged with a duty of fixing equalization rates for some 1,600 units of government for 30 vitally important governmental purposes. ¹ Surely, as the Appellate Division so well put it, the Legislature could not have intended 'to deprive the public of the benefits of the statutes relating to the equalization of tax assessments in any interval between the termination of the existence of the temporary commission and the bringing of the membership of the permanent board to its full statutory complement.' Nor could the Legislature have contemplated that, no matter how long the Governor took to act in designating all 5 members, equalization rates were to remain as they had been, petrified and frozen into outworn patterns despite constantly rising and changing real estate values in various sections of the State. Yet such would be the result were we to accept the petitioner's contentions.

It is obvious from the statute creating the permanent board that uppermost in the minds of the legislators was the continuation of the operations of the temporary board without break or interruption. Section 11 of chapter 335 of the Laws of 1960 provides for the transfer of all 'officers and employees' of the temporary board to the permanent one. And section 14 of the statute, entitled 'Continuity of authority', explicitly recites that, 'For the purpose of succession to functions, powers and duties transferred and assigned to and devolved upon the state board of equalization and assessment by this act, such board shall constitute a continuation of the temporary state board of equalization and assessment.'

The Governor did not, it is true, specifically appoint the 3 members of the former board to the permanent one until 1961, nor has he as yet made the additional appointments mandated by the statute, which he will ultimately have to do, since his duty is a continuing one. (See, e. g., Matter of Ottinger v. Voorhis, 241 N.Y. 49, 148 N.E. 784.) But the statute did provide for the transfer of officers and employees to the new board and for the continuity of its functions and authority. As for the requirement that there be 5 members rather than 3, it is significant not only that the applicable provision of the Real Property Tax Law announces that 'a majority' of the members of the board are authorized to act as a body when establishing equalization rates (Real Property Tax Law, § 202, subd. 2, as amd. by L.1960, ch. 335), but that section 41 of the General Construction Law, Consol.Laws, c. 22, in defining a quorum as a majority of 'the whole number', declares that 'the words 'whole number' shall be construed to mean the total number which the board, commission, body or other groups of persons or officers would have were there no vacancies'. We could say, as did the court at Special Term, that the respondents were empowered to act on the theory that the members of the old board served until their successors were appointed. Or we could say, as did the Appellate Division, that the respondents who acted as members of the permanent board under color of right and with the general acquiescence of State and local officials 'were at least de facto officers, and their acts were valid.' But, however the thought be phrased, we deem it clear that the 3 respondents were empowered to act as a majority of the permanent board and fix the requisite equalization rates.

If the construction to be accorded a statute is clearly indicated, it is to be adopted by the courts regardless of consequences. Where, however, doubt exists as to its meaning, and a choice between two constructions is afforded, results become important, for, although 'Consequences cannot alter statutes * * * (they) may help to fix their meaning.' (Matter of Rouss, 221 N.Y. 81, 91, 116 N.E. 782, 785; see, also, Kauffman & Sons Saddlery Co. v. Miller, 298 N.Y. 38, 44, 80 N.E.2d 322, 324.) We must, therefore, have in mind the far-reaching and upsetting consequences which would attend reading the legislation before us as the petitioner urges and holding that the State Board was improperly constituted after April 1, 1960 and that all of its subsequent acts are void. Since, as noted above, approximately 1,600 tax districts throughout the State are involved, annulling and setting aside the rates which the respondents fixed after April 1, 1960 would cause a breakdown in the operation both of local tax machinery and of many important local governmental functions. Nothing in the wording of the new statute requires the drastic interpretation of its provisions sought by the petitioner.

Since, then, the board was validly constituted, we proceed to a consideration of the petitioner's second contention, namely, that the determination made by the board was arbitrary and unreasonable.

Section 1200 of the Real Property Tax Law, entitled 'Studies for establishing state equalization rates', directs the State Board, 'as part of its procedure for establishing state equalization rates', to 'sample', at least once in every 5 years, 'the ratio of assessments to market values for each major type of taxable real property * * * in all cities, towns and villages.' The 1959 rate, challenged in this proceeding, was based on studies made in 1952 and 1957.

On June 10, 1960, the board notified the petitioner that it had tentatively fixed its equalization rate for 1959 at 34%, a reduction of 9% below the rate previously fixed. The petitioner filed a written complaint, a hearing was held and, after considering the objections voiced and the evidence adduced, the board adhered to the 34% rate. This determination has been sustained by the courts below against the charge of arbitrariness and unreasonableness. ²

In computing the equalization rate for the petitioner, the board chose 90 samples of property for appraisal, selected at random from among the four types of property chiefly represented in Smithtown and comprising 85% the minimum requirement is 80% of the total assessment roll. The 4 types consisted of 1- and 2-family residences (comprising 61.16% of the assessment roll), residential land vacant (11.62%), estates (5.53%) and commercial, under $50,000 in value (6.88%). The State Board, pursuant to settled procedure, makes no classification of its own of sample properties for appraisal. Its rules require local assessors to indicate on the assessment roll the type of property being assessed for each of the parcels listed, and it then adopts the classifications which have been made by the local assessors. In collecting sales data to verify its appraisals, the board used 45 bona fide sales reported to it by the local assessors for the period from April 1, 1956, through September 30, 1957. The...