text:
    Board of Education of the Cold Spring Harbor Central School District et al., Appellants, v Antonia Rettaliata, as Supervisor of the Town of Huntington, et al., Respondents. (Action No. 1.) Board of Education of the Sachem Central School District at Holbrook et al., Appellants, v Frank Jones, as Supervisor of the Town of Islip, et. al., Respondents. (Action No. 2.) Board of Education of the Bayport-Blue Point Union Free School District, Appellant, v Frank Jones, as Supervisor of the Town of Islip, et al., Respondents. (Action No. 3.) Board of Education of the Sachem Central School District at Holbrook, Appellant, v Patrick R. Vecchio, as Supervisor of the Town of Smithtown, et al., Respondents. (Action No. 4.) Board of Education of the Commack Union Free School District et al., Appellants, v Patrick R. Vecchio, as Supervisor of the Town of Smithtown, et al., Respondents. (Action No. 5.) Board of Education of the Hauppauge Union Free School District, Appellant, v Frank Jones, as Supervisor of the Town of Islip, et al., Respondents. (Action No. 6.) Board of Education of the Commack Union Free School District, Appellant, v Antonia Rettaliata, as Supervisor of the Town of Huntington, et al., Respondents. (Action No. 7.) Board of Education of the Connetquot Central School District et al., Appellants, v Frank Jones, as Supervisor of the Town of Islip, et al., Respondents. (Action No. 8.) Cora Crimmins, Individually and as a Member of the Board of Education of the Smithtown Central School District, et al., Appellants, v Patrick Vecchio, as Supervisor of the Town of Smithtown, et al., Respondents. (Action No. 9.) Board of Education of the Bay Shore Union Free School District et al., Appellants, v Frank Jones, as Supervisor of the Town of Islip, et al., Respondents. (Action No. 10.) Board of Education of the Three Village Central School District, Appellant, v Patrick R. Vecchio, as Supervisor of the Town of Smithtown, et al., Respondents. (Action No. 11.)
    Argued April 24, 1991;
    decided June 13, 1991

      POINTS OF COUNSEL

      Frederic Block and Richard Hamburger for appellants in actions Nos. 1, 2, 3, 4, 5, 6, 7 and 11; Eugene L. Wishod for appellants in actions Nos. 5 and 6, and Howard M. Bergson for appellant in action No. 7.
    I. The unlawful withholding of trust funds by the towns subjects them to liability to the school districts for monetary damages, in the form of interest, for the period of unlawful retention. (Matter of Clark v Sheldon, 134 NY 333; City of Buffalo v County of Erie, 88 Misc 591, 171 App Div 973, 220 NY 620; Village of Elmira Hgts. v Town of Horseheads, 234 App Div 270, 260 NY 507; Buchanan v Town of Salina, 270 App Div 207, 186 Misc 205, 270 App Div 1074, 297 NY 508; New York State Thruway Auth. v Hurd, 25 NY2d 150; Matter of Rutherfurd, 196 NY 311; Matter of Ayvazian, 153 Misc 467; Matter of Ducker, 3 AD2d 852, 937; Matter of Simenowitz, 36 AD2d 760; Signor v Signor, 122 Misc 444.) II. The decision of the court below cannot withstand rational analysis. (Peirson v Board of Supervisors, 155 NY 105; Matter of City of New York v Tully, 55 NY2d 960; Matter of Brodsky v Murphy, 25 NY2d 518.) III. The school districts have stated a proper cause of action for their damages. (Shepard v City of New York, 216 NY 251; Davison v Klaess, 280 NY 252; Federal Ins. Co. v Groveland State Bank, 37 NY2d 252; Parsa v State of New York, 64 NY23d 143; Diemer v Diemer, 8 NY2d 206.) IV. The applicable Statute of Limitations is six years. (Aetna Life & Cas. Co. v Nelson, 67 NY2d 169; State of New York v Stewart’s Ice Cream Co., 64 NY2d 83; Lorberblatt v Gerst, 10 NY2d 244; Bevelander v Town of Islip, 10 AD2d 170; Fratt v Robinson, 203 F2d 627; State of New York v Cortelle Corp., 38 NY2d 83; People v Duggan, 30 AD2d 736; Bryden v Wilson Mem. Hosp., 136 AD2d 843; Sumner v Century Natl. Bank & Trust Co., 92 Misc 2d 726.)

      Edward J. McGowan for appellants in action No. 8.
    I. The school districts have a cause of action for money damages against the towns based on their persistent disregard of their obligations under the mandate of the Suffolk County Tax Act.
      (Strough v Board of Supervisors, 119 NY 212; Matter of Clark v Sheldon, 134 NY 333; Village of Elmira Hgts. v Town of Horseheads, 234 App Div 270, 260 NY 507; Buchanan v Town of Salina, 270 App Div 207, 297 NY 508.) II. The legislature intended and declared the supervisors to. be trustees and intended their actions to be judged according to commonly recognized principles of the law of trusts. (Peirson v Board of Supervisors, 155 NY 105; Matter of City of New York v Tully, 55 NY2d 960; Matter of Brodsky v Murphy, 25 NY2d 518; Signor v Signor, 122 Misc 444.)

      William D. Wexler and Martin J. Crowley for appellants in action No. 9.
    The precedent set by the Court of Appeals recognizes that a beneficiary of trust funds from a governmental fiduciary is entitled to interest in addition to payment of the trust corpus. (Strough v Board of Supervisors, 119 NY 212; Matter of Clark v Sheldon, 134 NY 333; Village of Elmira Hgts. v Town of Horseheads, 234 App Div 270, 260 NY 507; Buchanan v Town of Salina, 270 App Div 207, 297 NY 508; Matter of Rutherfurd, 196 NY 311; Matter of Ducker, 3 AD2d 852; Matter of Simenowitz, 36 AD2d 760; Parsa v State of New York, 64 NY2d 143.)

      Lawrence W. Reich for appellants in action No. 10.
    An action lies at common law for moneys had and received to recover lost interest income occasioned by the failure of a town to comply with time requirements set forth in the Suffolk County Tax Act. (Strough v Board of Supervisors, 119 NY 212; Matter of Clark v Sheldon, 134 NY 333; Village of Elmira Hgts. v Town of Horseheads, 234 App Div 270, 260 NY 507; Buchanan v Town of Salina, 270 App Div 207, 297 NY 508; Shepard v City of New York, 216 NY 251; Davison v Klaess, 280 NY 252; Central School Dist. No. 3 v Town of Cortlandt, 49 AD2d 899, 38 NY2d 871, 39 NY2d 706.)

      Kevin G. McMorrow for respondents in actions Nos. 1 and 7.
    I. The court below correctly found that an action for money had and received did not exist. (Buchanan v Town of Salina, 270 App Div 207; Parsa v State of New York, 64 NY2d 143; Roberts v Ely, 113 NY 128; Strough v Board of Supervisors, 119 NY 212; Matter of Spauling v Arnold, 125 NY 194; Peirson v Board of Supervisors, 155 NY 105; City of Buffalo v County of Erie, 88 Misc 591; Miller v Schloss, 218 NY 400; Village of Elmira Hgts. v Town of Horseheads, 234 App Div 270; County of Jefferson v City of Watertown, 39 Misc 2d 534.) II. Appellants have no basis for a claim for interest. (Shoreham-Wading Riv. Cent. School Dist. v Town of Brookhaven, 107 AD2d 219; Matter of Brodsky v Murphy, 25 NY2d 518; Matter of City of New York v Tully, 55 NY2d 960; Matter of Brophy v Prudential Ins. Co., 271 NY 644; New York State Thruway Auth. v Hurd, 31 AD2d 563; E. G. May, Inc. v Albany Hous. Auth., 48 AD2d 971; Agostini v State of New York, 255 App Div 264; Matter of 140 W. 57th St. Corp. v State Div. of Hous. & Community Renewal, 130 AD2d 237; Matter of Greco v New York State Tax Commn., 99 AD2d 870.) III. Trust principles do not support appellants’ claim. IV. The appropriate Statute of Limitations is three years. (European Am. Bank v Cain, 79 AD2d 158.) V. Public policy cannot permit appellants’ recovery. (Matter of County of Saratoga v Newman, 124 Misc 2d 626; Matter of Hellerstein v Assessor of Town of Islip, 37 NY2d 1.)

      Robert J. Cimino, Town Attorney of Town of Islip (Lawrence Donohue of counsel), for respondents in actions Nos. 2, 3, 6, 8 and 10.
    I. Demand is required before interest accrues. (Smith v Board of Educ., 208 NY 84; Taylor v Mayor of City of N. Y., 67 NY 87; Rapid Tr. Subway Constr. Co. v City of New York, 259 NY 472; O’Keefe v City of New York, 176 NY 297; Sweeny v City of New York, 173 NY 414; Belscher v New York State Teachers’ Retirement Sys., 45 AD2d 206.) II. The complaint fails to state a cause of action for which plaintiff can recover. (Strough v Board of Supervisors, 119 NY 212; Buchanan v Town of Salina, 270 App Div 207, 297 NY 508.) III. Plaintiffs have failed to prove their case that as a matter of law they are entitled to summary judgment, and thus their motions should have been denied. (Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065.) IV. A claim for trust or breach of trust has not been alleged or shown. (Thompson v Pittman, 123 AD2d 683.) V. The three-year Statute of Limitations prescribed in CPLR 214 (2) or (4) should be applied. (Aetna Life & Cas. Co. v Nelson, 67 NY2d 169; Loengard v Santa Fe Indus., 573 F Supp 1355.) VI. The trial court arbitrarily applied a 9% interest rate.

      Sandra L. Sgroi, Town Attorney of Town of Smithtown (Peter D. Johnson of counsel), for respondents in actions Nos. 4, 5, 9 and 11.
    I. In the absence of proof of damage or loss, or of a benefit to the town, the schools are not entitled to monetary relief. (Palsgraf v Long Is. R. R. Co., 248 NY 339, 249 NY 511; Peirson v Board of Supervisors, 155 NY 105;
      Paramount Film Distrib. Corp. v State of New York, 30 NY2d 415, 31 NY2d 678; Lamborn v Czarnikow-Rionda Co., 221 App Div 737; Reno v Bull, 226 NY 546, 227 NY 591; Baker v Drake, 53 NY 211; Slater v Gulf, Mobile & Ohio R. R. Co., 307 NY 419; Sinclair v Purdy, 235 NY 245; McGrath v Hilding, 41 NY2d 625; Parsa v State of New York, 64 NY2d 143.) II. No monetary remedy can be derived from the Suffolk County Tax Act. (Schmidt v Merchants Desp. Transp. Co., 270 NY 287; Williamson Roofing & Sheet Metal Co. v Town of Parish, 139 AD2d 97; Motyka v City of Amsterdam, 15 NY2d 134; Chapman v Forbes, 123 NY 532; Schank v Schuchman, 212 NY 352; Matter of Brodsky v Murphy, 25 NY2d 518; Town of Amherst v County of Erie, 260 NY 361; Grimmer v Tenement House Dept., 205 NY 549; Bullock v Cooley, 225 NY 566; Shoreham-Wading Riv. Cent. School Dist. v Town of Brookhaven, 107 AD2d 219.) III. No violation of respondents’ trust obligations giving rise to a claim for interest has been demonstrated. (Chapman v Forbes, 123 NY 532; Miller v Robertson, 266 US 243; Matter of Brenner v Bruckman, 253 App Div 607; Matter of Ellis Hosp. v Axelrod, 105 Misc 2d 101; Fallica v Town of Brookhaven, 69 AD2d 579, 52 NY2d 794; Strough v Board of Supervisors, 119 NY 212; Peirson v Board of Supervisors, 155 NY 105; Prager v New Jersey Fid. & Plate Glass Ins. Co., 245 NY 1; Cutter v Mayor of City of N. Y., 92 NY 166.) IV. Proper construction of the Suffolk County Tax Act reveals no violation by the town. (Wood v Young, 141 NY 211; Benson v State of New York, 88 Misc 2d 1035; Wilson v Israel, 227 NY 423; Civil Serv. Employees Assn. v County of Oneida, 78 AD2d 1004; Shoreham-Wading Riv. Cent. School Dist. v Town of Brookhaven, 107 AD2d 219; People v Herskowitz, 80 Misc 2d 693; Delaware County Elec. Coop. v Power Auth., 96 AD2d 154, 62 NY2d 877; Matter of Sinawski v Cuevas, 133 Misc 2d 72, 123 AD2d 548, 68 NY2d 609; Wood v Chapin, 13 NY 509; Matter of Brenner v Bruckman, 253 App Div 607.) V. The decision of Special Term, granting summary judgment was incorrect. (Andre v Pomeroy, 35 NY2d 361; Dal Constr. Corp. v City of New York, 108 AD2d 892; Phillips v Kantor & Co., 31 NY2d 307; Hourigan v McGarry, 106 AD2d 845; Borchardt v New York Life Ins. Co., 102 AD2d 465, 63 NY2d 1000, 64 NY2d 776; Holtz v Niagara Mohawk Power Corp., 147 AD2d 857; Krupp v Aetna Life & Cas. Co., 103 AD2d 252; Monroe Abstract & Tit. Corp. v Giallombardo, 54 AD2d 1084; Bernstein v Freudman, 102 AD2d 805, 64 NY2d 1044; Rein v Mottola, 6 AD2d 57.) VI. The public interest warrants dismissal of appellants’ claims. (Fallica v Town of Brookhaven, 69 AD2d 579; Sharapata v Town of Islip, 56 NY2d 332; City of Newport v Fact Concerts, 453 US 247; Village of Medina v Dingledine, 211 NY 24; Williamson Roofing & Sheet Metal Co. v Town of Parish, 139 AD2d 97; Studley v National Fuel Gas Supply Corp., 125 Misc 2d 956; Matter of Hellerstein v Assessor of Town of Islip, 37 NY2d 1; Matter of Andersen v Rice, 277 NY 271.) VII. Any relief herein would be limited by a three-year Statute of Limitations. (Aetna Life & Cas. Co. v Nelson, 67 NY2d 169; European Am. Bank v Cain, 79 AD2d 158; Connetquot Cent. School Dist. v Greenport Union Free School Dist., 100 AD2d 923; Bryden v Wilson Mem. Hosp., 136 AD2d 843; State of New York v City of Binghamton, 72 AD2d 870; Matter of Paver & Wildfoerster, 38 NY2d 669.) VIII. No individual claim can be asserted against respondent, Patrick R. Vecchio, in action No. 9. (Peirson v Board of Supervisors, 155 NY 105; City of New York v Buckley, 260 App Div 19; Nepola v City of New York, 246 App Div 15; Stewart v Scheinert, 64 AD2d 699, 47 NY2d 826; Rottkamp v Young, 21 AD2d 373, 15 NY2d 831; Shaw v Time-Life Records, 38 NY2d 201.)
   OPINION OF THE COURT

Hancock, Jr., J.

Plaintiffs — school districts in Suffolk County — brought these actions for money had and received against defendant towns based upon the towns’ failure to disburse collected school tax moneys at the times required by Suffolk County Tax Act § 13 (a), and § 14 (L 1920, ch 311, as amended). By the time the actions were commenced, the towns — although late in doing so —had paid over to the school districts sums equivalent to the principal amount of taxes then due to the districts. The sole issue we address on this appeal is whether a district may maintain a cause of action for money had and received to recover the unpaid accumulated interest notwithstanding its prior acceptance of the principal sum on which that interest became due. We decide only that the districts may maintain such a cause of action.

I

Plaintiffs are 19 Suffolk County school districts, located within defendant Towns of Huntington, Smithtown and Islip. Between November 1988 and February 1989, plaintiffs commenced these 11 consolidated actions challenging the disbursements of tax moneys collected by the town officials under the Suffolk County Tax Act (the Act). Prior to the commencement of the actions, the town officials disbursed to plaintiffs sums equalling the amount of the school districts’ tax levies for the years in question. In all of the complaints, the districts allege that the towns’ disbursements were made in violation of the time requirements of sections 13 (a) and 14.

Defendants moved to dismiss the complaints arguing, inter alla, that the complaints were legally insufficient because the towns had paid the principal amounts of school tax moneys due. Supreme Court denied defendants’ motions to dismiss, granted partial summary judgment to plaintiffs and set the matter for trial on the issue of damages. Following three separate appeals, the Appellate Division reversed and granted defendants’ motions to dismiss the complaints for failure to state a cause of action for money had and received, holding that "no right of recovery under this theory exists where the money sought to be recovered has already been paid to the party claiming it” (164 AD2d, at 901). This Court granted leave to appeal to plaintiffs and we now reverse.

II

Section 13 (a) and section 14 of the Suffolk County Tax Act establish a two-stage process governing the collection and distribution of school taxes. Essentially, the tax receiver of each town is charged with collecting both the town and school taxes and the town supervisor is charged with distributing to the school districts their properly apportioned shares. Because the district boundaries do not coincide with town boundaries, a town through its receiver and supervisor may collect and distribute taxes to more than one district. A district may receive tax moneys from more than one town.

The first stage or section 13 (a) relates to the obligations of the town tax receiver. Within 15 days after the county legislature delivers the tax warrant to the town tax receiver, the receiver must pay to the town supervisor, "in trust for” the school districts, one half of the amount of the districts’ tax levy or one half of the total amount of taxes collected by that time, whichever is less (§ 13 [a] [1]). Within the next 15 days (or 30 days after the county legislature delivers the tax warrant), the town tax receiver must pay to the town supervisor, "in trust for” the school districts, the balance of the school tax levy or one half of the total amount of taxes collected by that time, whichever is less (§ 13 [a] [2]). The tax receiver is commanded to pay the balance of the taxes collected during these 15-day periods to the supervisor for town expenses (§ 13 [a] [3]). After this 30-day period, at 10-day intervals, the tax receiver must deliver to the supervisor the school tax and town tax money collected in proportion to the balance of unpaid tax levies remaining due to each (§ 13 [a] [4]).

Under the second stage or section 14, the supervisor is ordered "to divide and pay over” the school taxes to the appropriate school districts within three days after receiving school tax money from the receiver under section 13 (a). The Act is silent as to the remedies for late disbursements.

In short, pursuant to section 13 (a), the town tax receiver must pay to the town supervisor in trust for the school district a set portion of the taxes it collects. Pursuant to section 14, the supervisor must turn over this money to the school districts within three days of its receipt.

Ill

The issue is whether the school districts’ right to timely disbursement of their apportioned shares of collected school tax levies as dictated by sections 13 (a) and 14 of the Act can be enforced in a cause of action for money had and received when the districts, before commencement of legal action, have received the principal amounts of the taxes improperly withheld but not the accumulated interest on those amounts. Neither the Act nor existing decisional law provides an explicit answer. But, applying the general principles underlying such an action to the particular obligations imposed on a town under the Act, we hold that the districts’ right to collect the interest that they would otherwise have under a cause of action for money had and received is not negated by their receipt of an amount of money equal to the principal sums due. Taking the allegations of the complaints as true, as we must, the towns’ dismissal motions under CPLR 3211 (a) (7) should have been denied.

A cause of action for money had and received is one of quasi-contract or of contract implied-in-law (see, State of New York v Barclays Bank, 76 NY2d 533, 540; Parsa v State of New York, 64 NY2d 143, 148). As this Court has explained, the law recognizes such a cause of action "in the absence of an agreement when one party possesses money that in equity and good conscience [it] ought not to retain and that belongs to another (Miller v Schloss, 218 NY 400, 406-407). It allows [a] plaintiff to recover money which has come into the hands of the defendant 'impressed with a species of trust’ (see Chapman v Forbes, 123 NY 532, 537) because under the circumstances it is ' "against good conscience for the defendant to keep the money” ’ (Federal Ins. Co. v Groveland State Bank, 37 NY2d 252, 258, quoting from Schank v Schuchman, 212 NY 352, 358). * * * The action depends upon equitable principles in the sense that broad considerations of right, justice and morality apply to it, but it has long been considered an action at law (see Roberts v Ely, 113 NY 128; Diefenthaler v Mayor of City of N. Y., 111 NY 331, 337).” (Parsa v State of New York, 64 NY2d, at 148, supra.)

These same principles of equity and considerations of justice apply no less in cases where one municipality, in violation of some statutory mandate, has withheld or misapplied tax moneys which it was obligated to pay over to another (see, Strough v Board of Supervisors, 119 NY 212; Buchanan v Town of Salina, 270 App Div 207, on remand 186 Misc 205, affd 270 App Div 1074, affd 297 NY 508; Village of Elmira Hgts. v Town of Horseheads, 234 App Div 270, affd 260 NY 507; City of Buffalo v County of Erie, 88 Misc 591, affd 171 App Div 973, affd 220 NY 620; see also, Matter of Clark v Sheldon, 134 NY 333). Thus, in Strough v Board of Supervisors (supra), the Court recognized that a cause of action for money had and received on behalf of a town would lie against a county for using railroad taxes for its own purposes instead of applying them on the railroad bonds as required by a statute. In affirming the judgment against the county for the amount of taxes and for interest thereon, the Court observed that the "county applied [the tax money], in contravention of the act, towards the discharge of county obligations. It ought in justice to restore it and make good to the town what it has lost by its unauthorized acts.” (Strough v Board of Supervisors, 119 NY, at 219, supra [emphasis added].) Moreover, the Court in Strough held that the county became immediately liable upon its misuse of the funds in violation of its statutory obligation and that the town’s cause of action for the amount of these misused funds together with interest arose without the necessity of a demand and a denial of its right. (Id., at 220; see, Wood v Young, 141 NY 211, 217-218 [party receiving money for express benefit of another held to be obligated to pay it over when received and liable for failure to do so without a demand and refusal]; see also, Village of Elmira Hgts. v Town of Horseheads, supra, at 273; People v Hedges, 184 App Div 901.)

The districts point to the mandatory nature of the language in section 13 (a) of the Act "commanding the receiver of taxes” (emphasis added) to collect the taxes as assessed and "further commanding him to pay over” (emphasis added) the sums collected to the school districts in the amounts and within the time limits specifically required by the statute. Under section 13 (a), they emphasize, the receiver’s payments of the apportioned amounts to the supervisor are made "in trust for the school districts”, and, under section 14, it is provided that the supervisor "shall divide and pay over” (emphasis added) the apportioned amounts to the school districts within three days. Plaintiffs point out that this statutory scheme is self-executing and that a town’s obligation to make each payment for the apportioned amount and by the cut-off date as determined by the statute arises automatically. Thus, on the authority of Strough v Board of Supervisors, and subsequent cases, plaintiffs maintain that when a town fails to make a payment by the required date it becomes liable in an action for money had and received — without the necessity of a demand and refusal — for the principal amount of the tax withheld with interest from the date of the improper withholding. We agree with this contention. The decisive question, however, is whether a town may absolve itself from its automatically accruing liability for interest on the amounts improperly withheld by simply paying off the principal sum owed before a district can commence its lawsuit. Plaintiffs argue thát their right to the interest under the self-executing provisions of the Act survives their late receipt of the principal sums and that it would be contrary to the statutory scheme and to the equitable principles underlying an action for money had and received to hold otherwise; such a result would permit the towns to enjoy the use of the districts’ money interest free provided only that they have succeeded in paying the principal amounts before suit. Again, we agree.

There can be little question that under any consideration of "right, justice and morality” (Parsa v State of New York, supra, at 148) plaintiffs, in order to be made whole, should be permitted to assert a claim to recover any interest that may be due them. At any given time after a town’s failure to pay a particular share of taxes to a district in the amount and on the date specified in the tax act, the total owed by the town for that withheld payment would be the principal plus the interest as computed from the date of the improper withholding. There is no suggestion that the districts, when they belatedly received the principal amounts of their shares of the taxes, accepted these payments in satisfaction of the total sums then owed to them — i.e., the principal sums plus the accumulated interest. Nor is there any basis for holding that the districts have abandoned their right to the accumulated interest or that they should in fairness be estopped from seeking to enforce that right. Indeed, our Court has rejected similar arguments where the debtor has become obligated to pay interest.

In Davison v Klaess (280 NY 252) the Court held that where a debtor has agreed to pay interest on overdue amounts, the plaintiffs’ receipt of partial payments which were applied on the principal did not relieve the defendant of the obligation to pay interest. The Court determined that in the absence of an agreement as to how the partial payments should be applied "it became immaterial whether plaintiffs accepted the partial payments and applied them exclusively on the principal indebtedness, for when interest is due by the terms of the contract the payment of the principal is no bar to its subsequent recovery” (id., at 261). In commenting on the equities, the Court observed that if "there ever was a case where the rule of 'just compensation’ and that interest should be added to make plaintiffs whole should be applied (Prager v. N. J. Fidelity & Plate Glass Ins. Co., 245 N. Y. 1), this is one, for while defendant failed to pay an agreed balance due, she has had the advantage [of plaintiffs’ performance] * * * and plaintiffs have been without the use of their money concededly justly due.” (Id., at 263.)

The towns concede that if they had not paid over the principal amounts of school tax levies due to the districts, the districts could properly have brought an action for money had and received, and that any judgment in such action would have included an amount of interest computed from the date that the principal sums were due (see, CPLR 5001). Nevertheless, relying principally on Peirson v Board of Supervisors (155 NY 105), they contend that the districts’ receipt of the overdue principal sums defeats their claims to the interest. But Peirson is readily distinguished and does not help their argument.

Like Strough, Peirson involved an action by a town to recover railroad taxes applicable to town bonds under the Railroad Act of 1871 some of which the county had used for its own purposes in violation of the statute. A portion of the taxes, however, had been paid to the town and used for its benefit. As to this portion, the Court held that the town had no cause of action for money had and received observing that "it would be quite paradoxical to hold that the [town] could recover of the [county] money [the county] never had, but which the [town] had and used for its own purposes.” (Id., at 110.) Here, in contrast, there is no dispute over the ultimate • disposition of the taxes collected. The only question concerns interest on taxes improperly withheld. For at least some periods of time, unlike in Peirson, the towns did have and use the districts’ school- tax moneys and the districts were deprived of that use.

Defendant towns also cite the decisions of our Court disallowing interest where a taxpayer has paid a tax under protest under a valid statute and obtained a refund of the amount improperly paid (see, Matter of City of New York v Tully, 55 NY2d 960; Matter of Brodsky v Murphy, 25 NY2d 518; but see, Matter of O’Berry, 179 NY 285 [interest allowed on recovery of amount paid to State under color of a law held to be unconstitutional and void]). But Matter of City of New York (supra) and Matter of Brodsky (supra) involved litigated disputes over the right of the taxing authority to retain the tax, not the sort of instantaneous liability incurred by the towns here upon their failure to apportion and pay over collected taxes. Under the self-executing provisions of the Suffolk County Tax Act, from the moment of a town’s default, nothing is in dispute. The amount owed and the town’s obligation to pay it are both determined. And from the moment of a town’s failure to pay that amount it is liable for both the principal and accumulated interest in the same way that the debtor in Davison v Klaess (supra) who agreed to pay interest on overdue sums was liable. In Davison we held that despite the plaintiffs’ receipt of overdue principal payments they were nevertheless entitled to accumulated interest on those sums as "just compensation” in order to be made whole (see, Prager v New Jersey Fid. & Plate Glass Ins. Co., 245 NY 1, 6). We see no reason why a different rule should apply where the towns’ liability for principal and interest arises automatically upon their failure to comply with the Act (see, e.g., Strough v Board of Supervisors, supra) and where, as a result of that noncompliance, the school districts have allegedly lost their rightful use of the money.

Accordingly, in each action, the order is reversed, with costs, and the case remitted to the Appellate Division, Second Department, for consideration of all issues, including but not limited to pertinent Statute of Limitations defenses if any, not reached on the appeal to that court.

Chief Judge Wachtler and Judges Simons, Kaye, Alexander, Titone and Bellacosa concur.

In each action, order reversed, etc.

       The following table illustrates how a town tax receiver would apportion to a school district various sums of tax moneys received during the time periods established by section 13 (a). Assume that of the total of $10,000,000 of taxes to be collected $8,000,000 are allocable to the school district and $2,000,000 to the town.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Association of Surrogates and Supreme Court Reporters within the City of New York et al., Plaintiffs, v State of New York et al., Defendants.
    Argued and submitted May 30, 1991;
    decided June 27, 1991
    POINTS OF COUNSEL

      David Schlachter for plaintiffs.
    I. The collective bargaining agreements between plaintiff-appellant unions and defendants-respondents are binding contracts and are not subject to annual legislative appropriation. (O’Neil v State of New York, 223 NY 40; Ball v State of New York, 52 AD2d 47, 41 NY2d 617; People ex rel. Palmer v Travis, 223 NY 150; Matter of Burke v Bowen, 40 NY2d 264; Piro v Bowen, 76 AD2d 392, 52 NY2d 702; Matter of Board of Educ. v Yonkers Fedn. of Teachers, 40 NY2d 268; Matter of Yonkers Fedn. of Teachers v Board of Educ., 44 NY2d 752; Matter of Board of Educ. v Yonkers Fedn. of Teachers, 49 AD2d 753; North Syracuse Cent. School Dist. v North Syracuse Educ. Assn., 45 NY2d 195; Matter of Susquehanna Val. Cent. School Dist. [Susquehanna Val. Teachers’ Assn.], 37 NY2d 614.) II. Defendants-respondents abrogated the collective bargaining agreements between plaintiff-appellant unions and the State of New York-Unified Court System in violation of article I, § 10, cl 1 of the United States Constitution. (Fletcher v Peck, 6 Crunch [10 US] 87; Dartmouth Coll. v Woodward, 4 Wheat [17 US] 518; Allied Structural Steel Co. v Spannaus, 438 US 234; Energy Reserves Group v Kansas Power & Light, 459 US 400; Keystone Bituminous Coal Assn. v DeBenedictis, 480 US 470; Home Bldg. & Loan Assn. v Blaisdell, 290 US 398.)

      Robert Abrams, Attorney-General (Andrea Green of counsel), defendant pro se, and for State of New York and another, defendants.
    I. The lag payroll legislation did not impair an existing contract, and, in any event, is constitutional. (Anderson v Regan, 53 NY2d 356; Home Bldg. & Loan Assn. v Blaisdell, 290 US 398; El Paso v Simmons, 379 US 497; Stephenson v Binford, 287 US 251; Kirschner v United States, 603 F2d 234, 442 US 909; Koch v Yunich, 533 F2d 80; Energy Reserves Group v Kansas Power & Light, 459 US 400; Allied Structural Steel Co. v Spannaus, 438 US 234; United States Trust Co. v New Jersey, 431 US 1; Matter of Subway-Surface Supervisors Assn. v New York City Tr. Auth., 44 NY2d 101.) II. Defendants, the State of New York and Robert Abrams, Attorney-General of the State of New York, should have been dismissed: (Papasan v Allain, 478 US 265; Pennhurst State School & Hosp. v Halderman, 465 US 89; Mendez v Heller, 530 F2d 457; Gras v Stevens, 415 F Supp 1148.)

      Kenneth Falk and Michael Colodner for Matthew T. Crosson, defendant.
    I. The lag payroll legislation does not impair or abrogate plaintiffs’ existing contract rights because plaintiffs’ collective bargaining agreements are dependent upon the annual legislative appropriations process. (Anderson v Regan, 53 NY2d 356; O’Neil v State of New York, 223 NY 40; Ball v State of New York, 41 NY2d 617; Mutual Aid Assn. v City of Yonkers, 60 AD2d 856.) II. The lag payroll legislation is valid under the Contract Clause of the United States Constitution. (Home Bldg. & Loan Assn. v Blaisdell, 290 US 398; Kirschner v United States, 603 F2d 234; El Paso v Simmons, 379 US 497; Energy Reserves Group v Kansas Power & Light, 459 US 400; Allied Structural Steel Co. v Spannaus, 438 US 234; Faitoute Co. v Asbury Park, 316 US 502; Plaza Health Labs. v Perales, 878 F2d 577; Equal Employment Opportunity Commn. v State of New York, 907 F2d 316; Matter of Subway-Surface Supervisors Assn. v New York City Tr. Auth., 44 NY2d 101.)

      Nancy E. Hoffman, Jerome Lefkowitz and Marilyn S. Dymond for the Civil Service Employees Association, Inc., amicus curiae.

    I. The New York State Legislature gave its approval of the 1988-1991 labor contracts between the Unified Court System and the unions that represent its employees by passing legislation in 1988 to implement those contracts. This legislation constituted the legislative approval contemplated by Civil Service Law § 201 (12) and § 204-a (1), and created a binding contract for the full three years of the 1989-1991 collective bargaining agreement. (Town of Kent Police Benevolent Assn. v Town of Kent, 42 AD2d 747; Board of Trustees of Maplewood-Colonie Common School Dist. [Maplewood Teachers’ Assn.], 85 AD2d 764, 57 NY2d 1025; Matter of County of Niagara v Newman, 104 AD2d 1.) II. Defendants-respondents abrogated provisions of their labor contracts with plaintiffs-appellants. They did so pursuant to State law which impairs their obligation under contract. (United States Trust Co. v New Jersey, 431 US 1; Matter of Subway-Surface Supervisors Assn. v New York City Tr. Auth., 44 NY2d 101; Home Bldg. & Loan Assn. v Blaisdell, 290 US 398; Energy Reserves Group v Kansas Power & Light, 459 US 400; Crane Neck Assn. v New York City/Long Is. County Servs. Group, 61 NY2d 154; Megalopolis Prop. Assn. v Buvron, 110 AD2d 232; Matter of Board of Educ. v Yonkers Fedn. of Teachers, 40 NY2d 268.)

      Eve I. Klein for the New York State Court Clerks Association, amicus curiae.

    I. The Taylor Law does not require annual approval by the Legislature of the compensation provisions of multiyear collective bargaining agreements. (Matter of Board of Educ. v Yonkers Fedn. of Teachers, 49 AD2d 753; Creedon Police Benevolent Assn. v City of Utica, 44 AD2d 890; City of

      Amsterdam v Helsby, 37 NY2d 19; Matter of Reese v Lombard, 47 AD2d 327; Town of Kent Police Benevolent Assn. v Town of Kent, 42 AD2d 747; Matter of Cobbleskill School Dist. v Newman, 105 AD2d 564, 64 NY2d 1071; Matter of Board of Educ. v Yonkers Fedn. of Teachers, 40 NY2d 268.) II. The lag payroll legislation unnecessarily and unreasonably impairs the contractual rights of nonjudicial employees in violation of the Contract Clause of the Constitution. (United States Trust Co. v New Jersey, 431 US 1; Allied Structural Steel Co. v Spannaus, 438 US 234; Energy Reserves Group v Kansas Power & Light, 459 US 400; Keystone Bituminous Coal Assn. v DeBenedictis, 480 US 470; Kirschner v United States, 603 F2d 234; Nassau Ch., Civ. Serv. Employees Assn. v County of Nassau, 88 Misc 2d 289.)

      Richard R. Rowley, David C. Rowley, David P. Miranda and Kevin S. Casey for New York State Inspection, Security and Law Enforcement Employees, District Council 82, American Federation of State, County and Municipal Employees, AFL-CIO, amicus curiae.

    Harmonizing the relevant sections of article 14 of the Civil Service Law to give all sections meaning and to apply the law as public employers and employee organizations have done for over 20 years, requires that the question certified be answered in the negative. (Matter of Town of Haverstraw v Newman, 75 AD2d 874; Matter of Teachers Assn. [Board of Educ.], 34 AD2d 351; Sharkey v Thurston, 268 NY 123; Matter of Alro Liqs. v New York State Liq. Auth., 29 AD2d 271, 27 NY2d 984; People v Mobil Oil Corp., 48 NY2d 192.)

      Edward J. Groarke, Richard L. O’Hara and Scott P. Shelkin for New York State AFL-CIO, amicus curiae.

    The lag payroll materially changes employee compensation to the individual employee’s detriment and undermines the collective bargaining process. (Matter of County of Ulster v CSEA Unit of Ulster County Sheriff’s Dept., 37 AD2d 437; Matter of Sirles v Cordary, 49 AD2d 330, 40 NY2d 950; Matter of Levy v Evans, 118 Misc 2d 1; County of Orange v County Employees Unit, 76 AD2d 878; United States Trust Co. v New Jersey, 431 US 1.)

      Bernard F. Ashe and Kevin H. Horren for New York State United Teachers, amicus curiae.

    New York State’s Taylor Law allows prospective legislative approval of multiyear agreements. (Creedon Police Benevolent Assn. v City of Utica, 44 AD2d 890; Matter of Board of Educ. v Yonkers Fedn. of

      Teachers, 40 NY2d 268; Matter of Susquehanna Val. Cent. School Dist. [Susquehanna Val. Teachers’ Assn.], 37 NY2d 614; Rochester City School Dist. v Rochester Teachers Assn., 41 NY2d 578.)
   OPINION OF THE COURT

Per Curiam.

This appeal — here on a question of statutory interpretation certified to us by the United States Court of Appeals for the Second Circuit — requires us to determine whether Civil Service Law § 204-a (1) makes "the compensation sections of collective bargaining agreements to which it applies conditional upon or subject to annual legislative appropriations.” For the reasons that follow, we answer that question in the negative.

I.

This action was brought in the United States District Court for the Southern District of New York as a constitutional challenge to legislation enacted by the State of New York (L 1990, ch 190, § 375), which provided that, as of March 1991, the salaries of nonjudicial officers and employees of the New York State Unified Court System hired on or after April 7, 1983 would be payable by the State two weeks after they became due. (Court employees hired before April 7, 1983 and other State employees were already subject to a two-week delay.)

The State Comptroller implemented the legislative direction by a "lag payroll”: commencing November 7, 1990, affected employees were paid 9 rather than 10 days’ salary in each two-week pay period, for 10 periods. As a result, during the 1990-1991 fiscal year ending March 31, 1991, employees were paid for 50 rather than 52 weeks of work. Withheld amounts were to be repaid upon termination of employment at the employees’ then rate of salary.

Plaintiffs are 11 labor organizations representing nonjudicial employees and 11 individual employees of the court system. Each of the labor organizations was a party to a collective bargaining agreement with the Unified Court System for the three-year period from April 1, 1988 to March 31, 1991. Each agreement provided that "Bi-weekly salaries will be computed on the basis of 10 working days.”

Plaintiffs contend that the lag payroll violates the provision of their contracts that salaries will be computed on the basis of 10 working days; that the legislation authorizing the lag payroll is an unconstitutional impairment of their contracts (US Const, art I, § 10); and that the law transgresses their equal protection and due process rights (US Const 14th Amend).

The District Court granted summary judgment for the State (749 F Supp 97). It concluded that the collective bargaining agreements were not impaired because each agreement contained the following clause, as required by Civil Service Law § 204-a (1):

"It is agreed by and between the parties that any provision of this agreement requiring legislative action to permit its implementation by amendment of law or by providing the additional funds therefor, shall not become effective until the appropriate legislative body has given approval.”

The District Court read this clause to mean that the compensation sections of the collective bargaining agreements were provisions "requiring legislative action to permit [their] implementation * * * by providing the additional funds therefor,” and as a result that the compensation sections took effect only when the Legislature appropriated money for that purpose. The court rejected plaintiffs’ argument that the Legislature had given the requisite "approval” by ratifying the agreements, concluding that since the Legislature’s appropriation for the court system for fiscal year 1990-1991 contemplated the lag payroll, there was no contractual impairment. Alternatively, the court held that any impairment was "reasonable and necessary” because of the State’s budget crisis, and that there was no due process or equal protection violation.

After argument of plaintiffs’ appeal, the Second Circuit, noting the District Court’s decision and the decision of Supreme Court, Albany County, holding the lag payroll unconstitutional (Matter of Quirk v Regan, 148 Misc 2d 300), certified that a novel question of State law was presented, with serious implications for the State’s obligations with respect to its public employment contracts. The court therefore asked us to decide the unsettled threshold question of New York statutory law: whether section 204-a (1) makes "the compensation sections of collective bargaining agreements to which it applies conditional upon or subject to annual legislative appropriations.” No constitutional issue is presented.

On April 4, 1991, we accepted the certified question for review (77 NY2d 933).

II.

Section 204-a (1) is part of article 14 of the Civil Service Law — the Public Employees’ Fair Employment Act, also known as the Taylor Law. Section 204-a (1) provides that written agreements between public employers and employee organizations determining the terms and conditions of employment must contain — as did the contracts in this case — notice that any provision requiring "legislative action to permit its implementation by amendment of law or by providing the additional funds therefor, shall not become effective until the appropriate legislative body has given approval.”

Accepting the State’s arguments, the District Court held that the legislative history of the clause meant that it was "susceptible of but one meaning — that legislative appropriations are necessary before compensation or salary provisions of collective bargaining agreements become effective.” (749 F Supp, at 101.) This reading finds its best support in the statutory reference to provisions "requiring legislative action to permit [their] implementation * * * by providing the additional funds therefor”. As with any other expenditure of funds by the State, money for public employees’ salaries must be appropriated by the Legislature each year (NY Const, art VII, § 7; Anderson v Regan, 53 NY2d 356, 359). One possible interpretation of the statute, therefore, is that each year’s compensation provisions require "additional funds,” and are not effective until the Legislature gives its approval by appropriating money for that purpose.

That, however, is not the only possible reading of the statute. In our view, the construction advanced by plaintiffs is equally plausible.

Plaintiffs do not dispute the necessity for a legislative appropriation before State funds may be paid as salary to public employees. What they do dispute is an interpretation of the statute that equates legislative "approval” with annual appropriations. In plaintiffs’ view, the statute requires only one legislative "approval”: ratification of the collective bargaining agreement by the Legislature. Once that approval is given, the contract binds the State. Nothing in the statute, plaintiffs contend, requires that approval be given more than once or permits the State to evade its obligations by simply failing to appropriate the necessary funds.

The disagreement between the parties thus centers on the meaning of "approval” in section 204-a (1). The State defendants urge that "approval” is not a one-step process, that initial approval of a contract does not end the Legislature’s role, and that each year’s appropriation of funds is a separate "approval” of the compensation provisions of collective bargaining agreements. In contrast, plaintiffs argue that the Legislature’s ratification of the three-year agreements constituted the only "approval” required by the statute. While the State’s interpretation is consistent with the statutory reference to "legislative action to permit its implementation * * * by providing the additional funds therefor,” plaintiffs’ interpretation is supported by the fact that the statute refers only to legislative approval, not to multiple approvals during the life of a contract.

Given the plausibility of each interpretation, we reject both parties’ contentions that the plain language of the statute compels one construction over the other, and turn to other sources for guidance in applying Civil Service Law § 204-a (1) to the facts before us. We begin with the legislative history of section 204-a (1).

III.

Section 204-a (1) was enacted in 1969, two years after the Taylor Law, as one of a number of amendments to that law.

The District Court rested its reading of section 204-a (1) on a Memorandum of the Senate Rules Committee stating that a purpose of the amendments was to "obviate confusion as to the effect of an agreement between an employer and employee organization by making clear (through a change in the definition of 'agreement’ and by requiring notice to all employees) that legislative action is needed before the agreement becomes effective as to those provisions requiring legislative approval such as, for example, the appropriation of funds for salaries” (1969 McKinney’s Session Laws of NY, at 2365). From this statement the District Court concluded that section 204-a (1) meant that "legislative appropriations are necessary before compensation or salary provisions of collective bargaining agreements become effective.” (749 F Supp, at 101.)

The quoted statement of legislative purpose establishes that the objective of the amendment creating section 204-a (1) was to make explicit the requirement of legislative approval of certain types of provisions — in particular, those requiring the appropriation of funds — contained in collective bargaining agreements. That statement does not, however, answer the question posed by this case — whether the requisite "approval” consists of the Legislature’s initial ratification of a three-year collective bargaining agreement, or the annual appropriations of the necessary funds. We cannot agree, therefore, that this legislative history in any way settles the question before us.

Like the District Court, we find no additional guidance in the balance of the legislative history of section 204-a (1). It is clear from documents contained in the Bill Jacket relating to the 1969 amendments that controversy focused on proposals relating to fines and the forfeiture of membership dues. The amendment with which we are concerned received scant attention. Indeed, neither the Interim Report of the Governor’s Committee on Public Employee Relations (dated June 17, 1968), nor its second report (dated Jan. 23, 1969) containing specific suggestions for amendments to the Taylor Law, even mentions the amendment codified as section 204-a (1). The 1969 Report of the Select Joint Legislative Committee on Public Employee Relations (1969 NY Legis Doc No. 14, at 20), which was prepared subsequent to the passage of the 1969 amendments, confirms that the purpose of the amendment was to "preserve to the legislative body its independence in approving commitments made by the chief executive officer in negotiations,” but is silent as to the meaning of "approval.”

Thus, the only conclusion we can draw from the legislative history of section 204-a (1) is that it sheds no light on the question before us.

IV.

"[A] primary command to the judiciary in the interpretation of statutes is to ascertain and effectuate the purpose of the Legislature,” and in "finding such purpose, one should look to the entire statute, its legislative history and the statutes of which it is made a part” (Rankin v Shanker, 23 NY2d 111, 114). These elemental principles of statutory interpretation focus our attention on the Taylor Law and its history.

The Taylor Law, effective September 1, 1967, was the consequence of recommendations put forward by the Governor’s Committee on Public Employee Relations, headed by Professor George W. Taylor. In approving the legislation, the Governor noted that he had been prompted to appoint the committee because the need for a change in the law had been "unquestionably demonstrated over the years by the utter inadequacy of the Condon-Wadlin law to resolve paralyzing strikes and threats of strikes by public employees” (1967 McKinney’s Session Laws of NY, at 1527).

The Condon-Wadlin Act (Civil Service Law former § 108) prohibited strikes in public employment and provided severe penalties for public employees who did strike. Perhaps because of its harshness, the act failed in its purpose (Staff Report to Joint Legis Comm on Industrial & Labor Conditions, at 2 [Aug. 1962], quoted in Ruffo, The Residue of Sovereignty in New York Public Employment, 39 Alb L Rev 165, 177, n 71). "Public employees violated that law freely, since they knew that the public did not want these penalties administered and that public officials were reluctant to administer them.” (Note, Good Faith Bargaining Under the Taylor Law, 39 Brooklyn L Rev 658, 660 [1973].) It was "common knowledge that the 'automatic’ penalty provisions of Condon-Wadlin have never been enforced (with but two exceptions) over an almost 20-year period, in which the strikes by public employees have been too numerous to recall or record” (Matter of Di Maggio v Brown, 19 NY2d 283, 289).

Against this background, on January 15, 1966, the Taylor Committee was established by Governor Rockefeller. The Governor requested that the Committee "make legislative proposals for protecting the public against the disruption of vital public services by illegal strikes, while at the same time protecting the rights of public employees.” (Governor’s Committee on Public Employee Relations, Final Report [Taylor Committee Report], Mar. 31, 1966, at 9 [reprinted in 1966 Public Papers of Governor Rockefeller, at 878 et seq.].)

The Taylor Committee found that there were sound reasons for continuing the prohibition against strikes by public employees, noting that instead of "the constraints of the market place on collective bargaining, including the right to strike, which are in the private sector, negotiations in the public sector are subject to the constraints imposed by democratic political processes.” As a result, while a "work stoppage in the private sector involves costs primarily to the direct participants,” "a strike of government employees * * * introduces an alien force in the legislative processes.” (Taylor Committee Report, at 15.) Therefore, while recommending repeal of the Condon-Wadlin Act, the Taylor Committee also advised that the statutory prohibition against public employee strikes be continued (Taylor Committee Report, at 6, 8, 18).

At the same time, however, the Taylor Committee concluded that it "is elementary justice to assure public employees, who are estopped from using the strike, that they have the right to negotiate collectively.” (Taylor Committee Report, at 20.) The Committee found that public employee strikes "have often been caused by a feeling of futility on the part of public employees because of the absence of other means by which they could participate in the determination of the terms and conditions of their employment,” and that in "some instances their inability to form or join organizations which are assured of standing as recognized representatives has contributed to this sense of futility and has led them into strike action.” (Taylor Committee Report, at 42.) To solve this problem, the Committee recommended that public employees be permitted to organize and negotiate with public employers.

As enacted, therefore, the Taylor Law had two purposes: "to promote harmonious and cooperative relationships between government and its employees and to protect the public by assuring, at all times, the orderly and uninterrupted operations and functions of government.” (Civil Service Law § 200.) In approving the legislation the Governor confirmed that the purpose of the law was both to secure fair treatment for public employees and to protect the public, stating that the legislation "ushers in a new age of public employee relations in New York State” and that it "proclaims the rights of government employees, yet recognizes the special obligations borne by those who provide the vital services of government.” (1967 McKinney’s Session Laws of NY, at 1527.)

Present practice under the Taylor Law overwhelmingly favors multiyear collective bargaining agreements. Nearly all of the contracts on file with the Public Employment Relations Board for the period 1988-1991 were multiyear contracts. That multiyear contracts further the purposes of the Taylor Law by avoiding the unrest of perpetual labor negotiations, and by allowing parties to balance out their demands and concessions over longer periods of time, is manifest.

While the Taylor Law does not require multiyear agreements, it explicitly contemplates them (see, e.g., Civil Service Law § 201 [12]; § 208 [2] [b]; § 209 [4] [c] [vi]). Significantly, public employers are forbidden to refuse to continue the terms of an expired agreement while a new one is being negotiated (Civil Service Law § 209-a [1] [e]).

In interpreting provisions of the Taylor Law — including section 204-a (1) — we of course must give weight to its statutory purposes, and to the provisions that express a policy in favor of multiyear collective bargaining agreements. Of the two possible readings of section 204-a (1), only plaintiffs’ construction furthers those purposes.

As defendants would interpret section 204-a (1), the Legislature decides anew each year whether to approve — or to disapprove — the compensation provisions of multiyear collective bargaining agreements when it appropriates funds for that purpose. While "compensation” is principally regarded as salary, it has also been held that "compensation” under particular contracts included insurance (Matter of Town of Haverstraw v Newman, 75 AD2d 874), pensions, vacations and military leave (Matter of Teachers Assn. v Board of Educ., 34 AD2d 351, 353), even uniform allowances (City of Auburn v Auburn Firefighters, 6 PERB ¶ 4512). Moreover, other contract terms may also require expenditure of funds by the public employer. Under defendants’ interpretation, therefore, not only salary terms but all contract provisions requiring an expenditure of additional funds by a public employer would be at risk of annual revision through the appropriations process.

Defendants do not suggest that plaintiff labor organizations have any power corresponding to the Legislature’s unilateral power to modify the provisions of multiyear collective bargaining agreements that require expenditures, or that they have any recourse when the Legislature chooses to exercise that power — though plaintiffs are prohibited from striking (Civil Service Law § 210 [1]). Thus, under defendants’ view, the provisions of multiyear collective bargaining agreements are one-sided: they are binding on labor organizations for their full terms, but subject to annual revision by the Legislature.

This imbalance conflicts with the Taylor Law policy in favor of collective bargaining agreements for periods longer than one year. Defendants deny that their interpretation will have any effect on the extent to which labor organizations are willing to enter into multiyear collective bargaining agreements, and suggest that "the negotiation of single or multiyear agreements in the future will be a function of the parties’ respective confidence in, and the predictability .of, the condition of the State’s economy.” While the State’s economic health is undoubtedly relevant to such negotiations, we are unable, to accept the contention that labor organizations will be undeterred from entering multiyear collective bargaining agreements with public employers if we adopt defendants’ interpretation of section 204-a (1). As plaintiffs and the amici urge, employees would not likely agree to be bound for several years by compensation provisions of a collective bargaining agreement that did not also bind the employer.

We thus conclude that defendants’ interpretation of section 204-a (1) is inconsistent with the language and purposes of the Taylor Law.

V.

A legislative construction of a statute may be implied from legislative action (McKinney’s Cons Laws of NY, Book 1, Statutes § 75 [a]). "A uniform course of action involving the right to the exercise of an important power by the State government without question is no unsatisfactory evidence that the power is rightfully exercised” (Matter of Koenig v Flynn, 258 NY 292, 300, affd 285 US 375). Here, the converse is true: the legislation, ratifying the collective bargaining agreements at issue here, and the Legislature’s past practice in such matters, demonstrate that the Legislature has never regarded itself as having the power to approve separately each year of an approved multiyear collective bargaining agreement.

The 1988-1991 contracts of most of the labor organization plaintiffs were ratified effective April 1, 1988 (L 1988, ch 787). The language used in ratifying these agreements supports plaintiffs’ reading of the statute over the State’s.

The ratification statute begins with the declaration that the "purpose of this act is to implement these agreements” (L 1988, ch 787, § 1 [emphasis supplied]). No limitation is expressed; the language used is keyed precisely to section 204-a (1). Moreover, the ratification statute explicitly approves the pay increases scheduled for each year of the three-year agreement (see, L 1988, ch 787, § 8 [b], [c], [d]), thus supporting plaintiffs’ contention that by ratifying the agreements the Legislature gave "approval” within the meaning of section 204-a (1) to the entire three-year obligation expressed in the contract, not simply to its first year.

Apart from the statute ratifying the agreements here, the Legislature’s past practice with regard to multiyear collective bargaining agreements has been consistent with plaintiffs’ position. Plaintiffs contend — and defendants do not deny — that the Legislature’s practice has been to ratify such agreements once and thereafter to appropriate the necessary money. The Legislature has not previously asserted any separate right to disapprove the compensation sections of multiyear collective bargaining agreements. Neither the lag payroll legislation nor the Governor’s Memorandum of approval suggested that the Legislature was exercising a right under section 204-a (1) to withhold approval of previously ratified collective bargaining agreements (L 1990, ch 190, § 375; 1990 McKinney’s Session Laws of NY, at 2707).

Another relevant aspect of past practice is that, so far as the record discloses, the State has never béfore unilaterally imposed a lag payroll on its employees. While lag payrolls were imposed on executive branch and court system employees during 1982-1983, in both instances that was done pursuant to negotiated agreement.

In short, a review of the Legislature’s ratification of the collective bargaining agreements here and its past practice reveal a consistent course of action supporting plaintiffs’ interpretation of section 204-a (1) over the State’s.

VI.

Thus, we conclude that Civil Service Law § 204-a (1) does not make the compensation sections of the collective bargaining agreements before us conditional upon or subject to annual legislative appropriations. We reach this conclusion from the language of section 204-a (1), considered in the light of legislative history and past practice.

Accordingly, the certified question should be answered in the negative.

Judges Simons, Kaye, Alexander, Titone, Hancock, Jr., and Bellacosa concur in Per Curiam opinion; Chief Judge Wachtler taking no part.

Following certification of a question by the United States Court of Appeals for the Second Circuit and acceptance of the question by this Court pursuant to section 500.17 of the Rules of the Court of Appeals (22 NYCRR 500.17), and after hearing argument by counsel for the parties and consideration of the briefs and the record submitted, certified question answered in the negative.

      . Laws of 1988 (ch 787) did not ratify agreements with all the labor organizations that are plaintiffs here, but no contention is made that that act is materially different from legislation ratifying agreements with the other plaintiffs.

      . Appendix B to the brief submitted by amicus New York State Inspection, Security and Law Enforcement Employees, District Council 82, AFSCME, demonstrates that this has been the Legislature’s practice with regard to the collective bargaining agreements between that union and the court system.