Opinion
June 19, 1967
In a proceeding pursuant to CPLR article 78 to review and annul a determination by the New York City Rent and Rehabilitation Administrator that a certain apartment does not qualify for decontrol, the petitioner appeals from a judgment of the Supreme Court, Kings County, dated February 21, 1964, which denied the petition and dismissed the proceeding. Judgment reversed, on the law, without costs, and proceeding remanded to respondent for a hearing and further consideration in accordance herewith. At bar, no hearing was held by the respondent Rent and Rehabilitation Administrator with respect to whether Roger Ack was in fact the "owner" of the house in which the apartment was located, within the meaning of subdivision 11 of section 9. of the Rent and Eviction Regulations of the temporary State Housing Rent Commission, because the Administrator held that Ack's execution and conveyance of a deed to petitioner effectively terminated Ack's ownership. The Administrator erroneously relied on section 2 (subd. f, par. [11]) of the Rent, Eviction and Rehabilitation Regulations of the City Rent and Rehabilitation Administration, which became effective, pursuant to section 4 thereof, on May 1, 1962; since petitioner asked for decontrol in 1961, the earlier promulgated subdivision 11 of section 9 applies at bar. Nevertheless, since the language of the two regulation provisions is almost identical, the error is not material. However, a conveyance, absolute in form, as is the deed from Ack to petitioner, if intended merely as security for an obligation, will be construed as a mortgage ( Mooney v. Byrne, 163 N.Y. 86; Lee v. Beagell, 174 Misc. 6). In order to determine the intent of the parties, recourse may be had not only to the deed but also to oral testimony and to a consideration of the surrounding circumstances and the acts of the parties ( Chase Nat. Bank v. Tover, 245 App. Div. 615, affd. 271 N.Y. 518 ; 38 N.Y. Jur., Mortgages and Deeds of Trust, § 29). While the Administrator is not bound by petitioner's bare assertions that Ack was owner of record, her determination should have been based on objective grounds (cf. Matter of Asco Equities v. McGoldrick, 285 App. Div. 381, 384, affd. 309 N.Y. 738). Aside from negative implications to be drawn from petitioner's contentions, there is no reasonable basis in the record for the Rent Administrator's determination that Ack was not an "owner" of the subject apartment within the meaning of the Rent and Eviction Regulations (cf. Karley v. Weaver, 200 N.Y.S.2d 1001). Accordingly, the proceeding should be remanded to the Administrator for the holding of a hearing to determine whether Ack was indeed the owner in fact for the requisite period of time. Brennan, Acting P.J., Rabin, Hopkins, Benjamin and Nolan, JJ., concur.