Case Name: In the Matter of the Application of William Spaulding, a Taxpayer of the City of Lockport, Resp't, v. John Arnold, as County Treasurer of Niagara County, App'lt
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1889-06-22
Citations: 24 N.Y. St. Rep. 879
Docket Number: 
Parties: In the Matter of the Application of William Spaulding, a Taxpayer of the City of Lockport, Resp’t, v. John Arnold, as County Treasurer of Niagara County, App’lt.
Judges: 
Reporter: New York State Reporter
Volume: 24
Pages: 879–882

Head Matter:
In the Matter of the Application of William Spaulding, a Taxpayer of the City of Lockport, Resp’t, v. John Arnold, as County Treasurer of Niagara County, App’lt.
(Supreme Court, General Term, Fifth Department,
Filed June 22, 1889.)
1. Municipal corporation—Bonds issued in aid op construction op railroad—Right op taxpayer to institute proceedings to compel redemption op lands—(Laws 1869, chap. 907, as amended by Laws 1871, chaps. 283, 925).
Any taxpayer residing in any municipality which has, in compliance with the law(Laws 1869, chap. 907, as amended by Laws 1871, chaps. 283 and 925), issued its bonds to aid in the construction of a railroad, may, by petition, institute proceedings to compel the county treasurer to observe the duties imposed upon him by statute requiring him to use and invest the moneys paid to him, derived from taxes collected from the railroads aided in their construction, to the redemption of the bonds.
2. Same—What does not amount to appropriation op money to use OP COUNTY.
The fact that previous county treasurers who have received the fund from the collector, have mingled the same with other moneys belonging to the county, and treated the same as if belonging to the county, does not amount to an appropriation of the money for the use of the county, so that it can be claimed by a present treasurer that it was misappropriated to the use of the county, and that there is no fund from which lie can draw, to comply with the provisions of the statute.
3. Same—Statute op limitation—When cannot be pleaded.
Where there has been an actual continuing and subsisting trust from the time the taxes were first paid into the hands of the treasurer, without any repudiation of the trust by any one of a present treasurer’s predecessors, he cannot plead the statute of limitations in bar in a proceeding brought to compel the proper application of the moneys collected, although more than six years have elapsed since the taxes collected have been paid to the treasurer, prior to the commencement of the proceeding.
Appeal by the county treasurer of Niagara county "from an order made by the county judge of that county, in proceedings instituted before him under provisions of chapter 907 of the Laws of 1869, as amended by chapters 283 and 925 of the Laws of 1871, permitting town and other municipal corporations to issue bonds to aid in the construction of railroads, and applying the taxes assessed upon the railroads aided in their construction by the issue of such bonds to the redemption of such bonds. The city of Lockport, in pursuance of the terms of said act, issued its bonds in the amount of $100,000, to aid in the construction of the Lockport and Buffalo railroad. The order directed the county treasurer out of the moneys in his hands forthwith, to set apart the sum of $1,257.87, and to purchase therewith bonds, etc., or to invest the same, etc., as required by the said acts. The county treasurer, in his answer to the-petition, denied some of the material allegations contained therein, and a referee was appointed to take proofs and report the same with his opinion thereon. The term of the present county treasurer, the appellant, commenced on the first day of January, 1888. There was levied and collected and paid over to the predecessors of the incumbent between and including the years 1878 and 1886, the sum of $1,251.87, as taxes levied upon the property of the said railroad, located in the city of Lockport, none of which were for school or road taxes. From the time the first payment of such taxes to the county treasurer, in the year 1878, up to the time of the hearing of this matter before the county judge, there has been constantly in the hands of the county treasurer moneys in amount m excess of the amount of taxes collected from the said railroad company,* and when the appellant was inducted into the office there was paid over to him by his predecessor the sum of $10,180.97, and when these proceedings were instituted, there remained unexpended of said sum over $9,000., And as the referee reports, the same “is held for and subject to the payment of miscellaneous demands and expenditures of the said county not specially provided for by the board of supervisors.” The referee also found and reported “ that the-said county treasurers respectively, in each of said years, with the knowledge and approval of the board of supervisors of Niagara county, mingled the moneys so received for taxes from said company with other moneys of said county, and treated the same as ordinary county moneys.”'
John E. Pound, for app’lt; S. Cady Murray, for resp’t.

Opinion:
Barker, P. J.
The controlling legal propositions involved in this case have already been examined and determined in several cases, some of them by the court of' appeals, and are not open for discussion in this court.
Any taxpayer residing in any municipality which basin compliance with the law, issued its bonds to aid in the construction of a railroad, may, by a petition, institute proceedings to compel the county treasurer to observe the duties imposed upon him by statute requiring him to use and invest the moneys paid to him derived from taxes collected from certain railroads mentioned in the statute upon which these proceedings are founded. Matter of Clark v. Sheldon, 106 N. Y., 104; 8 N. Y. State Rep., 537.
The statutory provision on the subject is imperative, for it declares that "all taxes, except school and road taxes, collected, etc., shall be paid over to the treasurer of the county in which said town, city or village-lies." " It shall be the duty of said treasurer, with the-money arising from taxes levied and collected as aforesaid, which have heretofore or shall hereafter be paid to him, to-purchase bonds, etc. In case any county treasurer shall unreasonably refuse and neglect to comply with the provisions of this act, any taxpayer in any town, city or village theretofore having issued bonds in the construction of any railroad or railroads, is hereby authorized to apply to. the county judge on petition for an order compelling said treasurer to execute the provisions of this act "
The moneys thus levied and collected and paid over to the county treasurer never came into his hands for any other purpose than that mentioned in the statute, and they are devoted by law to the benefit of the municipality, and must be held and invested in the mode and manner directed. The statute appropriates the taxes and makes it the duty of the county treasurer to separate and set them apart as a sinking fund. Matter of Clark v. Sheldon (supra).
When the money was paid into the hands of the respective county treasurers during the period of years mentioned, it was their duty to separate the taxes paid by the railroad assessed on lands in the city of Lockport from the other moneys which came into his hands, which he could have readily done, and invested the same as required by the said. statute.
These moneys have never been paid out and are now in the hands of the present treasurer mingled with other moneys. His predecessor transferred them to him; he at the same time being informed as to the source from which a. portion of the money was derived, and he was authorized to apply so much of the same as was necesssary to comply with the provisions of the statute.
It does not appear from the papers that the county of ¡Niagara claims the funds, and if it did, the claim would be wholly unfounded as it has no title, whatever, to the money; nor is it subject to its order.
The fact that the respective county treasurers who received the fund from the collector of taxes have mingled the same with other moneys belonging to the county and treated the same as if belonging to the county, does not amount to an appropriation of the money for the use of the county, so that it can be said that the money was misappropriated by the appellant's predecessors to the use of the county, and that there is now no fund in existence, from which he can draw in compliance with the order appealed from. The fund has been preserved and may now be invested by the present county treasurer, who may be treated as trustee, holding the money for the uses and purposes to which it was devoted by law. The statute of limitations is no bar, although more than six years have elapsed since some of the annual collections óf taxes have been paid to the treasurer, prior to the commencement of these proceedings. The trust has continued uninterrupted from the time the taxes were first paid into the hands of the treasurer, without any repudiation of the trust by either of the appellant's predecessors in office. The incumbent received the fund impressed with the trust and he was charged with the same duty which the law had imposed on the person from whose hands he received the fund.
The case of Wood v. The Supervisors of Monroe County (50 Hun, 1; 18 N. Y. State Rep., 671), does not in any respect sustain the appellant's point. In that case the county had received the trust fund from the hands of a county treasurer and misappropriated it to its own use, and it was held that the county might be liable to interested parties in the capacity of trustees, yet the statute of limitations may be pleaded in bar of a recovery, as it had become a trustee by implication or construction of law. In that case it is pointed out when a trustee may and may not plead the statute in bar of a recovery. He cannot rely upon the statute as a defense where there is an actual, continuing and subsisting trust, and such is the case at bar. Wood v. Supervisors (supra).
The order should be affirmed.
All concur.