I think that the order should be reversed. My conclusion rests upon two propositions: First, that the Rapid Transit Act, as amended in 1912, requires that such part of the expenses of the Public Service Commission as went into the cost of construction of the dual system of subways should be paid from the proceeds of the sale of corporate stock, and not from the general tax levy; and, second, that the board of estimate and apportionment has power to correct the erroneous method of raising the funds to pay such expenses. If these two propositions are correct, it follows that the order enjoining action under the resolution of the board should not have been granted.
First. Prior to the enactment of chapter 226 of the Laws of 1912, the board of estimate and apportionment, the Public Service Commission, the Interborough Rapid Transit Company and the Brooklyn Union Elevated Railroad Company had, after long-continued negotiations, agreed upon the terms of contracts for the construction and operation of a comprehensive system of rapid transit known as the dual system of subways. At the session of the Legislature in 1912 the Rapid Transit Act was amended so as to authorize the making of these contracts already formulated. (See Admiral Realty Co. v. City of New York, 206 N. Y. 110.) This amendment is chapter 226 of the Laws of 1912.
Prior to this amendment all of the expenses of the Public Service Commission, incurred in the performance of its duties in regard to subway construction, were paid from the proceeds of revenue bonds issued in anticipation of the receipt of taxes. (Laws of 1891, chap. 4, § 10, as amd. by Laws of 1909, chap. 498.) The contracts, which the law of 1912 was enacted to authorize, provided that both the city and the railroad companies should contribute in agreed amounts to the cost of construction and that after certain preferential payments to the railroad companies the city should receive from the revenues of operation a percentage *203on the amount contributed by it to the cost of construction sufficient to pay interest on any corporate stock issued to pay for the same and to furnish a sinking fund for its retirement. There was inserted in the contracts a clause which provided that the words “ cost of construction ” should include part of the expenses of the Public Service Commission, such as superintendence, insurance, damages, engineering and legal expenses. The effect of this clause was to give the city a larger participation in the revenues of the roads. It was to authorize contracts with such provisions that chapter 226 of the Laws of 1912 was passed.
As, therefore, the contracts provided that the city should receive an amount that was equivalent to interest on these expenses with a sinking fund for their retirement, it was reasonable and just that they should be paid from the avails of the sale of corporate stock, which would presumably be taken care of from the revenues of the roads. To accomplish this purpose section 10 of the act was amended by adding the following words: “ If the said Commission shall determine that part of its expenses shall be included in determining the cost of construction of a railroad constructed under sections twenty-six, twenty-seven, twenty-nine or thirty-three of this act, then- and in that event the said board of estimate and apportionment or other board or public body upon the requisition of the Commission duly made may appropriate such sum or sums of money as may be requisite and necessary for such part of its expenses and authorize the issue of corporate stock for such purposes, and it shall thereupon become the duty of the comptroller of said city to issue and sell corporate stock of the city for such purposes.”
The “ determination ” by the Public Service Commission evidently means the determination expressed in the terms of the contracts. The act speaks of a determination by the Commission that part of its expenses be included in determining the cost of construction. When the contracts were executed the Public Service Commission did determine that a part of its expenses should be included in determining the cost of construction. The regular proceedings under the act, therefore, should be, I think, as follows: The Public Service Commission should make requisition on the board of estimate *204and apportionment for such portion of its expenses. This requisition, like any other budget or requisition of an executive department to form the basis of an appropriation by a legislative department, is necessarily made in advance of the expenses that are to be paid from the appropriation, and consequently is based on estimates. This is so from the necessity of the situation. It has always been the course under section 10 before the amendment of 1912 and is the course adopted under such amendment for the year 1919. The requisition is not the “ determination.” Upon such requisition the board of estimate and apportionment should make a proper appropriation and authorize the issue of the corporate stock. I think that the use of the word “ may ” does not import that the board of estimate and apportionment may elect whether to provide the funds by sale of corporate stock, or from the tax levy. The word “ may ” precedes the word “ appropriate.” Certainly it is not left to the discretion of the board, to appropriate the moneys to carry out the contracts; and if the money is appropriated the authorization of the corporate stock necessarily follows. When the intent of the law that a certain act shall be done is obvious, the word “ may ” should be read “ must.” (People ex rel. Conway v. Supervisors, 68 N. Y. 114; Hagadorn v. Raux, 72 id. 583.) The principle is applied in cases where the public interest is concerned. (Newburgh Turnpike Co. v. Miller, 5 Johns. Ch. 101.)
If the issuance of the stock is to wait until the construction account, in so far as it includes these expenses, is settled between the railroads and the Public Service Commission, which may be years — in fact it appears that the adjustment has been reached up to the year 1915 only — from what source are these expenses to be paid as incurred? Nothing in the act justifies the position that they may be paid temporarily from the tax levy, for, as we have seen, it requires them to be paid from the avails of the sale of corporate stock.
It is easy to be led astray by the word “ determine,” used both in the act and in the contracts. The word is used twice in the act with obviously different meanings. The act reads: “ If the said Commission shall determine that part of its expenses shall be included in determining the cost of con*205struction.” The word as used the first time means the decision that part of the expenses of the Commission shall be so included; as used the second time, it means the adjustment of the amount. In neither case does it mean the requisition. The first determination, already made by the provisions of the contract, is a condition to the requisition, the appropriation and the issuance of the stock. The second determination, i. e., the settlement of the amount of the cost of construction, may follow long afterwards. As a matter of fact, the requisition has already been made and the money appropriated. The requisition stated that eighty per cent thereof would be for cost of construction. This, I think, was sufficient to warrant the board in authorizing special revenue bonds for twenty per cent thereof and corporate stock for eighty per cent. If not sufficiently definite, the board could have required more particular specification. The authorization of special revenue bonds for the whole amount of the requisitions was unwarranted. The resolution enjoined now makes, in part at least, the separation and shifts the burden to the proper source.
The contracts have been signed, the determination made therein, and the provisions of the act for the payment of such expenses from the proceeds of the sale of corporate stock are, I think, mandatory. There is no reason why we should construe the act so as to permit the board of estimate and apportionment to impose on the taxpayers a financial burden for the discharge of which other provision has been made in the contracts. The reasonable construction of the act is that as in the contracts authorized by the act provision is made for the payment of the interest and principal upon corporate stock, such stock should be issued.
Second. If I am right in the first proposition, money to pay for that part of the expenses of the Commission included in the cost of construction, which should have been provided by the sale of corporate stock, for the payment of which, out of the revenues of the road, provision is made by the contracts, has been improperly exacted from the taxpayers through the medium of special revenue bonds covered into the general tax levy. The power to issue corporate stock to meet such expenses was conferred by section 10 of the *206act. That power is not impaired by the unwarranted action of the board in issuing special revenue bonds. The conditions to the exercise of the power still exist. The determination of the Commission that a part of the expenses shall be included in determining the cost of construction has been made in the contracts, a sufficient requisition by the Commission has been made, the sum has been appropriated, and the duty to issue the corporate stock follows. A resolution to perform that duty is not an “ illegal official act.” The argument that corporate ■ stock cannot be issued to furnish funds for the current operating expenses of the city government or to redeem special revenue bonds, although accurate as an abstract proposition of law, is superficial and does not reach the question. The real purpose of issuing the stock is not to meet current expenses, or to retire special revenue bonds, although it has that incidental effect, but to pay for the cost of construction; and that is what it really does. The general fund has been improperly depleted and no reason exists why it may not be made good by money derived from the proper source.
If the board of estimate and apportionment have the discretion whether to pay these expenses from taxes or from the avails of corporate stock, the conclusion reached by the learned justice who decided the motion is supported by authority and is palpably correct; but such is not my reading of the act.
I cannot refrain from saying that in my opinion the difficult question is whether the board of estimate and apportionment can correct their erroneous , method of raising funds without special authority from the Legislature. My judgment is that it can be done.
The conclusion arrived at renders unnecessary the examination of the question whether a taxpayer’s action lies in this case.
The order should be reversed and the motion denied.
Jenks, P. J., concurred.
Jenks, P. J.:I am of the same opinion as Blackmar, J. To me, his reasoning seems cogent and correct. Believing that he is *207correct in his application of the law, I add but a few words to show my view of this controversy.
The condition that confronts the board of estimate and apportionment is that special revenue bonds and revenue bonds outstanding were issued whereby funds were provided to meet certain obligations. As such bonds are charged by law upon the tax levies, it follows that the funds were provided by the tax levies. This financing under the circumstances of this case is against the law.
The board of estimate now furnishes funds by the issue of corporate stock, which is the means provided by law. And the law provides that this corporate stock shall be discharged, not by the tax levies, but presumptively by a sinking fund made by the moneys received by the city from the revenues of the railroads. In this instance, part of the proceeds of the sale of such corporate stock is devoted to meet the said special revenue bonds, which otherwise (if not refunded into revenue bonds) must be met by the next ensuing tax levy, and part of the said proceeds of the sale of such corporate stock is to be paid into the general fund for the reduction of taxation in order to offset the revenue bonds which are a charge upon the tax levies. Thus in effect the tax levies are relieved from any depletion by the special revenue bonds and the said revenue bonds.
The previous scheme, which in effect resorted to the tax levies (inasmuch as the special revenue bonds and the revenue bonds must be met therefrom), cannot be recognized as financing to provide the final funds to meet the obligation in question, for, as I have said, the law forbade resort to the tax levies; but that scheme may be regarded as a method whereby funds were advanced or borrowed, so to speak (whether legally or not, it is not necessary to decide), on the security of the tax levies, evidenced by the said special revenue bonds and the said revenue bonds. And the present action of the. board of estimate may be regarded as proper financing in this matter of an existing obligation whereby lawful ways and means replace this advance or this loan by moneys raised from a source which the law prescribed shall afford the final payment, namely, the sinking-fund made by the revenues received from the railroads.
*208And so this present action need not be considered as of the taking of one lawful way of raising the final funds in substitution for another lawful way heretofore taken, since the present action is the sole lawful way. It is not selection, but correction.
In the absence of this action the tax levies remain charged contrary to law. The wrong to the taxpayer, if any, would be in diversion of the tax levies to provide the final payment of these obligations, when the law declares that such payment must be met by funds furnished from another source, not taxation, but revenues received from the railroads.
Order affirmed, with ten dollars costs and disbursements.