Opinion
December 7, 1961
This case is presented on an agreed statement of facts. In 1896, the Common Council of the City of Binghamton adopted a resolution granting to plaintiff's predecessor, its successors and assigns, permission to construct, maintain and operate subways for transmission lines through the city streets. In return plaintiff's predecessor agreed to furnish "city departments" with free or half-rate telephone service. From 1896 telephone service was provided at one half the standard rates to the school board by plaintiff's predecessors and since 1909 by plaintiff. Half-rate service was being furnished the schools by another company until 1916 when plaintiff assumed that obligation also. Thus, from 1916 until 1951 both the board and the schools were billed at the reduced rate. Prior to 1951 it is conceded that the education system was a "city department" and entitled to half-rate service ( New York Tel. Co. v. Board of Educ., 270 N.Y. 111). Plaintiff urges, however, that since as of July 1, 1951, chapter 762 as amended by chapters 763 and 764 of the Laws of 1950 made city school districts fiscally autonomous, the Binghamton School System could no longer be classified a "city department" and thus would not be entitled to telephone service at a reduced rate. Admittedly the fact that the school district is no longer financially dependent on the City of Binghamton eliminates that portion of the rationale of the New York Tel. Co. v. Board of Educ., case ( supra) which held that half-rate service to the school system indirectly inures to the city's benefit. Section 49 of chapter 762 of the Laws of 1950, however, provides in part as follows: "The city school district, after the effective date of this act, shall likewise succeed to and assume all contracts, condemnation proceedings or other proceedings for the acquisition of school sites, buildings or other property for educational purposes entered into or undertaken by the city prior to such date * * * it being the intention that the city school district shall be substituted in the place and stead of such city in all actions, contracts or other matters, growing out of or relating to the possession, ownership, operation, extension and management of schools in such city school district." (Emphasis added.) We construe the legislative intent embodied in this provision to entitle defendant to the benefits under the contracts here involved. The fact that the benefits to plaintiff under the contract flow from the city rather than the school district does not in our view affect the situation. Plaintiff is receiving all the benefits it contracted for. Other considerations must be disregarded in the face of what we construe to be the intent of the Legislature to preserve for the school district those valuable rights which were held by the city for the benefit of the district prior to the 1950 legislation. Judgment for defendant, with costs. Bergan, P.J., Coon, Herlihy, Reynolds and Taylor, JJ., concur.