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(182 N.Y.S.) (111 Misc. Rep. 577)
SEVENTY-EIGHTH ST. & BROADWAY CO. v. ROSENBAUM. (Municipal Court of City of New York, Borough of Manhattan, Fifth District.
May 12, 1920.) 1. Evidence Own 5 (2)--Fact of shortage of housing facilities judicially known.
The courts will take judicial notice of the fact that there is a great
shortage of housing facilities in the country. 2. Evidence fm 5(1) - Judicial notice of all matters of general knowledge.
Judicial cognizance may be taken of all matters of general knowledge. 3. Landlord and tenant 222_Statute does not give court power to fix rent.
Laws 1920, c. 136, § 1, relating to unreasonable and oppressive rents, permits a tenant, as defendant in an action at law for the recovery of rent, to set up the defense that the rent is unjust and unreasonable, but does not give the court the power to fix the rent, or make a new agreement for the parties; the extent of the court's power being to hold, on proper
facts being shown, that an agreement is oppressive. 4. Landlord and tenant am 231(1)-Statute relating to unreasonable rents
does not limit amount.
Laws 1920, c. 136, § 2, relating to unreasonable rents, does not fix the limit of rent increase within one year at 25 per cent., but is merely a rule of evidence by which, where the rent increase has been less than 25 per cent. within one year, tenant still has the affirmative to prove its oppressiveness, and where there is more than 25 per cent. increase the landlord
must show its reasonableness. 5. Landlord and tenant Ew218_Statute permitting tenant to defend action on
ground of oppressiveness constitutional.
Laws 1920, c. 136, permitting tenant in action for rent to set up as a defense the oppressiveness of rent, is constitutional, resting upon the police
power of the state and upon broad principles of public policy. 6. Constitutional law Emo 87—State may interfere with rights of private prop
erty, where safety, hcalth, and morals demand it.
The state may interfere with the rights of private property, where the
safety, health, and morals of the community demand it. 7. Constitutional law Ow70 (3)-Efficacy and soundness of statute legislative
Whether the Legislature could have passed more efficacious laws, and whether it acted on sound economical principles in passing a
law, is not for the courts to determine; granting legislative power. 8. Action 02—Relief given against unconscionable contract.
Where one takes an undue advantage of another's situation and circumstances, and thereby obtains an unfair and unconscionable contract, the
court may grant relief. 9. Action Cm 25 (4)–Equitable defense interposed in actions at law.
Equitable defenses may be interposed in actions at law. 10. Landlord and tenant E218—Statute relating to oppressive leases not reof no other construction, and this is particularly true where the statute, if retrospective, would impair the obligation of contracts or interfere with
Laws 1920, c. 136, permitting tenants in actions for rents to set up defense of unreasonableness of rent, is prospective in its effect, and not retroactive, and cannot be set up as a defense in an action under a lease
executed prior to April 1, 1920. 11. Statutes aww263—Operate prospectively.
As a general rule, statutes will be construed to operate prospectively
only. 12. Statutes On 263, 265—Retrospective only, where intention is clear.
No retrospective operation can be given to a statute, unless the lan. guage employed and the intention manifested is so clear that it will admit For other cases see same topic & KEY-NUMBEP, in all Key-Numbered Digests & Indexes
vested rights. 13. Constitutional law w148—Retrospective statute, permitting tenant to set
up oppressiveness of rent, would impair obligation of contracts.
If Laws 1920, c. 136, permitting a tenant in an action for rent to set up defense that the rent was unreasonable and oppressive, was construed to be retrospective, so as to apply to leases or contracts entered into prior to April 1, 1920, it would violate constitutional provisions against impair.
ment of obligations of contract. 14. Constitutional law w 48—Construction rendering statute valid will be
Where statute is capable of two constructions, one of which would render it invalid and the other valid, the construction which will uphold its
validity must be adopted. 15. Landlord and tenant On 222—Statute relating to oppressive rents may be
set up by tenants from month to month.
The statutory defense given by Laws 1920, c. 136, may be set up against unreasonable rents, where the tenancies are monthly, or from month to
month. 16. Landlord and tenant C218_Statutory defense of unreasonableness of
rents may be set up by tenant holding from month to month prior to April 1, 1920.
In monthly tenancies, or tenancies from month to month, though the same rent may have been paid prior to April 1, 1920, the exaction of the rent after such date is not based upon any contract made prior to that date, but upon the renewal of contract from month to month, and such a tenant may set up the defense of oppressiveness and unreasonableness of the rents given by Laws 1920, c. 136.
Action by the Seventy-Eighth Street & Broadway Company against Joseph Rosenbaum. Judgment for plaintiff.
Henry S. Mansfield, of New York City, for plaintiff.
SPIEGELBERG, J. The plaintiff brings this action to recover the first installment of rent falling due under a written lease for one year and six months. The lease was executed on March 22, 1920. The defendant sets up as a defense that he was in possession of the premises under a lease commencing April 1, 1919, that the lease upon which the action is brought provides for a rental which represents an increase of more than 25 per cent. over the rent as it existed one year prior thereto, and that the rent demanded is unjust, unreasonable, and oppressive, and that the agreement under which the same is sought to be recovered is oppressive. The plaintiff rested its case upon the proof of the agreement and the nonpayment of the rent.
This case involves the validity and construction of chapter 136 of the Laws of 1920, which took effect on April 1, 1920. That law is one of the 12 statutes, to wit, chapters 130 to 139, 209, and 210, which were recently passed by the Legislature to give relief to tenants from the grave situation which has arisen in this and other cities, due to the ever-increasing rents. Chapters 136, 137, and 139 form the keystone of this programme. Chapter 136 deals with actions at law, and
For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
(182 N.Y.S.) the other two with summary proceedings. These laws were called forth by the present emergency. They apply only to cities of the first class and cities in the county of Westchester, and are limited in duration until November 1, 1922.
[1, 2] The situation which confronts the vast majority of our population, due to the shortage of housing facilities, is well known. The courts may take judicial notice thereof without supporting evidence. People v. Charles Schweinler Press, 214 N. Y. 395, 404, 108 N. E. 639, L. R. A. 1918A, 1124, Ann. Cas. 1916D, 1059. Judicial cognizance may be taken of all matters of general knowledge. Muller v. Oregon, 208 U. S. 412, 420, 28 Sup. Ct. 324, 52 L. Ed. 551, 13 Ann. Cas. 957.
The Legislature has incorporated its views of the situation in the statute. Section 1 reads:
“Unjust, unreasonable and oppressive agreements for the payment of rent having been and being now exacted by landlords from tenants under stress of prevailing conditions whereby the freedom of contract has been impaired and congested housing conditions resulting therefrom have seriously affected and endangered the public welfare, health and morals in certain cities of the state, and a public emergency existing in the judgment of the Legislature by reason thereof, it shall be a defense to an action for rent accruing under an agreement for premises in a city of the first class or in a city in a county adjoining a city of the first class occupied for dwelling purposes, other than a room or rooms in a hotel, lodging house or rooming house, that such rent is unjust and unreasonable and that the agreement under which the same is sought to be recovered is oppressive."
(3] This act permits the defendant in an action at law for the recovery of rent to set up the defense that the rent is unjust and unreasonable and that the agreement under which the same is sought to be recovered is oppressive. It does not give the court the power to fix the rent or make a new agreement for the parties. The court, upon proper facts shown, may hold that the agreement is oppressive. That is the extent of its power. Section 2 reads:
"Where it appears that the rent has been increased more than twenty-fire per centum over the rent as it existed one year prior to the time of the agreement under which the rent is sought to be recovered, such agreement shall be presumptively unjust, unreasonable and oppressive.”
 It is perhaps unnecessary to point out that this section does not fix the limit of rent increase within one year at 25 per cent. It is merely a rule of evidence. Ordinarily, where an affirmative defense is pleaded, it is incumbent upon the defendant to establish the facts in support thereof. By this law, where the rent increase has been less than 25 per cent. within one year, the tenant still has the affirmative to prove its oppressiveness. Where it is more than 25 per cent., the landlord must show its reasonableness.
Section 3 of the statute gives the plaintiff an opportunity to plead and prove a fair and reasonable rent for the premises and recover judgment therefor, or to institute a separate action for the recovery thereof.
 The act in question is constitutional. Its validity rests upon the police power of the state, and, secondly, upon the equally broad principles of public policy.
 There has never been a time when the state was denied the power to interfere with the rights of private property, where the safety, health, and morals of the community demanded it. The police power for the protection of the public welfare has recently been vastly extended. Public use does not mean a direct use by the entire public. In Strickley v. Highland Boy Gold Mining Co., 200 U. S. 527, at page 531, 26 Sup. Ct. 301, at page 302 (50 L. Ed. 581, 4 Ann. Cas. 1174), the court, commenting on Clark v. Nash, 198 U. S. 361, 25 Sup. Ct. 676, 49 L. Ed. 1085, 4 Ann. Cas. 1171, says:
“In discussing what constitutes a public use it recognized the inadequacy of use by the general public as a universal test. While emphasizing the great caution necessary to be shown, it proved that there might be exceptional times and places in which the very foundations of public welfare could not be laid without requiring concessions from individuals to each other upon due compensation which under other circumstances would be left wholly to voluntary consent.”
Forward-looking legislation has broadened state control over private property to meet social needs, and the courts have likewise advanced in sustaining the broadening legislation. It may be of interest to point out that in People v. Williams, 199 N. Y. 131, 81 N. E. 778, 12 L. R. A. (N. S.) 1130, 121 Am. St. Rep. 854, 12 Ann. Cas. 798 (decided 1907), the prohibition of night labor by women was held to be unconstitutional as affecting the freedom of contract, while in People v. Schweinler Press, 214 N. Y. 395, 108 N. E. 639, L. R. A. 1918A, 1124, Ann. Cas. 1916C, 1059 (decided 1915), legislation of the same kind was upheld. In 1909 the limitations upon the use of land, by restricting the height of signs on buildings, were held to be unconstitutional in People v. Murphy, 195 N. Y. 136, 88 N. E. 17, 21 L. R. A. (N. S.) 735, while substantially the same law was upheld in 1915 in People v. Ludwig, 218 N. Y. 540, 113 N. E. 532.
In the famous case of Munn v. Illinois, 94 U. S. 113, 24 L. Ed. 77, the court held, in substance, that when the owner of property devotes it to a use in which the public has an interest, he grants to the public an interest in such use, and must, to the extent of that interest, submit to be controlled by the public for the common good. Chief Justice Waite in that case says at page 124 of 94 U. S. (24 L. Ed. 77):
“When one becomes a member of society, he necessarily parts with some rights or privileges which, as an individual not affected by his relations to others, he might retain. ‘A body politic,' as amply defined in the preamble of the Constitution of Massachusetts, 'is a social compact by which the whole people covenants with each citizen, and each citizen with the whole people, that all shall be governed by certain laws for the common good.' This does not confer power upon the whole people to control rights which are purely and exclusively private (Thorpe v. R. & B. Railroad Company, 27 Vt. 143); but it does authorize the establishment of laws requiring each citizen to so conduct himself, and so use his own property, as not unnecessarily to injure another. This is the very essence of government, and has found expression in the maxim, 'sic utere tuo ut alienum non lædas. From this source come the police powers, which as was said by Mr. Chief Justice Taney in the License Cases, 5 How. 583, ‘are nothing more or less than the powers of government inherent in every sovereignty ;
that is to say,
* the power to govern men and things. Under these powers the government regulates the conduct of its citizens one towards another, and the manner in which each
(182 N.Y.S.). shall use his own property, when such regulation becomes necessary for the public good.”
And again at page 125 of 94 U. S. (24 L. Ed. 77):
"This brings us to inquire as to the principles upon which this power of regulation rests, in order that we may determine what is within and what without its operative effect. Looking, then, to the common law, from whence came the right which the Constitution protects, we find that when private property is 'affected with a public interest, it ceases to be juris privati only.' This was said by Lord Chief Justice Hale more than 200 years ago, in his treatise De Portibus Maris, 1 Harg. Law Tracts, 78, and has been accepted without objection as an essential element in the law of property ever since. Property does become clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large. When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use; but, so long as he maintains the use, he must submit to the control."
In Noble State Bank v. Haskell, 219 U. S. 104, 31 Sup. Ct. 186, 55 L. Ed. 112, 32 L. R. A. (N. S.) 1062, Ann. Cas. 1912A, 487, the constitutionality of an act of the Legislature of the state of Oklahoma was attacked whereby an assessment of 1 per cent. of a bank's average daily deposits was levied for the purpose of creating a depositors' guaranty fund. The purpose of the fund was to secure repayment of deposits of banks which may become insolvent. The plaintiff bank claimed that it was solvent, and that it could not be called upon to contribute towards securing or paying the depositors in other banks, and that the state had no right under the Constitution to take any of its property for private uses. The court, at page 111 of 219 U. S., at page 188 of 31 Sup. Ct. (55 L. Ed. 112, 32 L. R. A. (N. S.) 1062, Ann. Cas. 1912A, 487), referring to the police power of the state, uses this very significant and sweeping language:
“It may be said in a general way that the police power extends to all the great public needs. Camfield v. United States, 167 U. S. 518. It may be put forth in aid of what is sanctioned by usage, or held by the prevailing morality or strong and preponderant opinion to be greatly and immediately necessary to the public welfare."
In German Alliance Insurance Co. v. Kansas, 233 U. S. 389, 34 Sup. Ct. 612, 58 L. Ed. 1011, L. R. A. 1915C, 1189, it appeared that the state of Kansas passed a law regulating and controlling the business of fire insurance companies. Fire insurance in the state of Kansas had not been in any way licensed by the state and received no privilege whatever from the state. The court at page 405 of 233 U. S., at page 616 of 34 Sup. Ct. (58 L. Ed. 1011, L. R. A. 1915C, 1189), sums up the opposition to the statute as follows:
"The basic contention is that the business of insurance is a natural right, receiving no privilege from the state, is voluntarily entered into, cannot be compelled nor can any of its exercises be compelled ; that it concerns personal contracts of indemnity against certain contingencies merely. Whether such contracts shall be made at all, it is contended, is a matter of private negotiation and agreement, and necessarily there must be freedom in fixing their terms.'