57 Misc. 2d 181 | N.Y. Sup. Ct. | 1968
Plaintiff moves for summary judgment in this action seeking a declaration that the defendant does not have the power or the 'authority to provide for or collect interest on the unpaid balance of advances made by the State of New York to the plaintiff; that defendant may not require payment of interest in repayment agreements with plaintiff; that there is no legal obligation on the part of plaintiff to pay such
It is the defendant’s position that plaintiff became obligated for payment of interest under the provisions of subdivision 2 of section 357 of the Public Authorities Law wherein provision is made for an agreement between the 'authority and the State Director of the Budget that the indebtedness of the authority shall be paid at such time and in such manner as such agreement shall provide. Plaintiff, on the other hand, contends that payment of interest is not authorized by either a general or special statute and that to require it to pay interest would contravene subdivision 2 of section 93 of the State Finance Law.
To establish his right to interest defendant asserts that where the governing statutes are silent on the subject, interest is payable, and that in order to be interest free, affirmative language to that effect must be found in the statute. In support of this argument, defendant cites authorities which set forth the common-law rules relating to interest in the usual debtor-creditor relationship. However, the question presented here is whether defendant is authorized by the statute under which he claims the right to impose interest, and the common-law rules have no relevancy. As stated by Justice Foster in New York State Thruway Auth. v. State of New York (50 Misc 2d 957, 961, affd. 28 A D 2d 607) and cited with approval by Justice Hunt in New York State Thruway Auth. v. Hurd (supra, p. 1059) the principal amount was not “ advanced directly as a lo'an to the Authority but appropriated to the Department of Public Works * * * Any expenditures from the appropriation were to be repaid to the State in the manner provided by subdivision 2 of section 357 of the Public Authorities Law ”. Obviously, therefore, the right to interest must be found in the statute or not at 'all.
Defendant’s contention that interest is payable where the statute is silent as to its payment and that the statute must
While defendant points to prior agreements between the parties hereto which provided for payment of interest, the agreement of March 1, 1965 specifically provides for a judicial determination of defendant’s right to impose interest. This agreement was arrived at because both parties considered that there was a bona fide question as .to the right to interest provided for in the former agreements. The determination reached here is that defendant was without authority to impose interest on the balance of the advances made to the plaintiff.
Accordingly, plaintiff’s motion for summary judgment for the relief sought in the complaint is granted.