279 F. 435 | S.D.N.Y. | 1921
(after stating the facts as above).
The evidence of value consisted of an assessment for the year 1920 of $265,000, made on October 1, 1919, an assessment for the year 1921 of $300,000, made on October 1, 1920, an expert’s valuation of $350,000 as of October, 1920, a private valuation by experts for the defendant company as of December, 1915, of $340,000 and an actual sale of the property in April of this year of $320,000, $155,000 on mortgage and the rest cash. The master’has found that the value for the period from October, 1920, to October, 1921, was $320,000, and there can in my judgment be no fair challenge of this conclusion. The point, therefore, turns upon the proper time at which value is to be taken. The tenants argue, borrowing in this respect from the reasoning in Hall Realty Co. v. Moos (App. Term, First Dept.) 115 Mise. Rep. 506, 188 N. Y. Supp. 858, 860, that, as the legislation was intended to prevent “unreasonable” rents, no values can be accepted as the basis for fixing •.rents which are themselves based upon existing “unreasonable” rents.
“One year prior to the time of the agreement under which the rent is sought" to be recovered.”
It has been argued that values might be taken just after April 1, 1920, when the legislation itself had presumably affected values and rents; but that does not meet the discrimination I have mentioned. Karlier leases would still remain intact, and preference would still be given to extortionate lessors. It is by no means unlikely that this interpretation accomplishes all that was intended, though the legislation is indeed not marked by scrupulous exactitude of definition. Its purpose was primarily to prevent wholesale evictions, with their resulting misery and disorders. That could, of course, have been most completely accomplished by preventing any future rise in rents whatever, but that was either thought to be unconstitutional or unfair. If those lessors who did raise their rents were checked by a standard determined by those already in existence, the purpose was in part anyway accomplished. I can only say that, if more was intended, more should have been expressed. Section 3 I read as merely putting to his proof any lessor who had raised his rent within a j^ear.
It is not likely that the return upon tenements of this character was less than that upon such securities, and in the absence of proof it is fair to accept that figure. Higher profit, if it was peculiar to this class of investment, is certainly matter of proof, and here there is no proof. Nor can I feel bound by the dicta in Hirsch v. Weiner, supra. If the declaration of 10 per cent, in that case as' a proper rate was not based upon evidence, with great deference I cannot feel it authoritative upon me. If it was, it depended upon the proof there offered. I therefore allow a return of 8 per cent, on $300,000, or $24,000. It results that I find “reasonable” rents to have been $51,411.09, which is almost exactly 90 per cent, of $57,244, the rents demanded. I therefore allow the receivers against the exceptants 90 per cent, of the rents charged them, instead of 80 per cent., as they concede.
The affidavit offered at the hearing is'rejected. The receivers will bear the costs of the reference as provided heretofore.