Case Name: In the Matter of John Broderick et al., Respondents, against City of New York et al., Appellants, et al., Defendants
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1946-06-13
Citations: 295 N.Y. 363
Docket Number: 
Parties: In the Matter of John Broderick et al., Respondents, against City of New York et al., Appellants, et al., Defendants.
Judges: 
Reporter: New York Reports
Volume: 295
Pages: 363–380

Head Matter:
In the Matter of John Broderick et al., Respondents, against City of New York et al., Appellants, et al., Defendants.
Reargued January 15, 1946;
decided June 13, 1946.
Ignatius M. Wilkinson, Corporation Counsel (Seymour B. Quel and Harry Hollander of counsel), for City of New York and others, appellants.
I. The modifications of the budgets for the fiscal years 1942-43 and 1943-44 so as to provide for ten additional deputy chief§ were validly made by the budget director and the comptroller in accordance with the terms and conditions of the budgets. (Matter of Rushford v. La Guardia, 280 N. Y. 217, 280 N. Y. 707; Matter of Daly v. McGoldrick, 280 N. Y. 210; Matter of Staudt v. McGoldrick, 280 N. Y. 675; People ex rel. Plancon v. Prendergast, 219 N. Y. 252; Matter of Dobrovolny v. Prendergast, 219 N. Y. 280; French v. Weeks, 259 U. S. 326; Hannibal Bridge Co. v. United States, 221 U. S. 194; Lloyd Royal Belge Societe Anonyme v. Elting, 61 F. 2d 745; The City of Harvard, 52 F. 2d 461.) II. The Board of Estimate may transfer appropriations within the budget -during the fiscal year. The power of the Board of Estimate to make such transfers is a valid basis for the limited power of the budget director and the comptroller to transfer appropriations from one line to another within a code in the budget at the-request of a department head. (Matter of Weldon v. Rheinstein, 101 N. Y. L. J. 2606, June 6, 1939, 259 App. Div: 860, 283 N. Y: 753; Matter of Lange v. McGoldrick, 103 N. Y. L. J. 456, Jan. 29, 1940; Matter of O’Connor v. Kern, 103 N. Y. L. J. 1213, March 16, 1940; Matter of Divisich v. Marshall, 257 App. Div. 294, 281 N. Y. 170.)
Edward G. Bathon and Charles B. Barrett for James W. 0. Wood and others, appellants.
I. The Board of Estimate is vested with the power to abolish and create positions during the course of the budgetary year. (Matter of Weldon v. Rheinstein, 259 App; Div. 860, 283 N. Y. 753; Matter of Lange v. McGoldrick, 103 N. Y. L. J. 456, Jan. 29, 1940; Lederer v. Wise Shoe Co., 276 N. Y. 459; Matter of Rouss, 221 N. Y. 81.) II. The Board of Estimate may by inclusion of appropriate terms and conditions in the budget validly delegate to the budget director the power to modify the budget by transfer of appropriations between codes. (Matter of W. S. A. & P. R. R. Co., 115 N. Y. 442; People ex rel. Plancon v. Prendergast, 219 N. Y. 252; Matter of Dobrovolny v. Prendergast, 219 N. Y. 280; Matter of Daly v. McGoldrick, 280 N. Y. 210.)
Albert De Roode for respondents.
I. The purported establishment by the budget director of these additional offices of deputy chief was invalid because contrary to the restrictions of sections 127 and 128 of the New- York City Charter. II. The ten new offices of deputy chief in» the Fire Department were not validly created even under the ‘ ‘ terms and conditions ’ ’ of the budget because the comptroller did not approve of such “ modification ” of the budget nor countersign the certificate of the budget director purporting to modify the budget. (Matter of Hines v. La Guardia, 293 N. Y. 207; Ontario Knitting Co. v. State, 205 N. Y. 409.) III. The Board of Estimate was impotent through the mechanism of “ terms and conditions ” to assign to the budget director or the comptroller any power in respect of modifying the budget after it was adopted because these two officials were ineligible to exercise such power sought to be imposed upon them by the terms and conditions. (Matter of Natilson v. Hodson, 264 App. Div. 384, 289 N. Y. 842.; Matter of Hines v. La Guardia, 293 N. Y. 207.) IV. The Board of Estimate could not delegate to others its duties and powers in respect to modification of the budget or the creation of additional offices or the fixing of salaries. (Matter of Rushford v. La Guardia, 280 N. Y. 217, 280 N. Y. 846; Ontario Knitting Co. v. State, 205 N. Y. 409; Birdsall v. Clark, 73 N. Y. 73; Matter of Pet. of Emigrant Ind. Sav. Bank, 75 N. Y. 388; Phelps v. Mayor, 112 N. Y. 216.) V. The Board of Estimate was without power at budget-making time or any other time to establish positions for an “ unlimited number ” of positions. (Schechter Corp. v. United States, 295 U. S. 495.) VI. The additional ten offices of deputy chief could be created by the Board of Estimate, or the budget director, only at budget-making time. (Matter of Rushford v. La Guardia, 280 N. Y. 217, 280 N. Y. 846.)
H. H. Nordlinger and J. M. Dinnes for Citizens Budget Commission, Inc., amicus curies, in support of respondents’ position.
I. The power of creating positions is vested by section 68 of the Charter in the Board of Estimate. This power could not lawfully be delegated by that body to a subordinate administrative officer, appointed by the Mayor. ■ (People v. Klinck Packing Co., 214 N. Y. 121; Ontario Knitting Co. v. State, 205 N. Y. 409; Matter of Rushford v. La Guardia, 280 N. Y. 217; Carlton v. City of Marshalltown, 212 Iowa 373, 380.) II. Section 123 of the Charter, which in prescribing the form of the budget, authorizes the Board of Estimate to “ set forth the terms and conditions under which such appropriations shall be administered ” does not by implication authorize the Board of Estimate to delegate to the budget director,, with the countersignature of the comptroller, a power to create new offices. Accordingly, so much of the “ terms and conditions ” of the budget as purports to delegate this power is invalid. (Matter of Natilson v. Hodson, 264 App. Div. 384; People ex rel. Collins v. Ahearn, 120 App. Div. 95; Lyons v. City of New York, 82 App. Div. 306, 176 N. Y. 609; Matter of Collins v. City of Schenectady, 256 App. Div. 389; Matter of Wingate v. McGoldrick, 279 N. Y. 246.) III. Authority cannot be found for the budget director’s action in section 128 of the Charter. IV. The practice sought to be justified cannot be sustained on the alleged ground of convenience or of administrative construction. (Matter of Hines v. La Guardia, 293 N. Y. 207; Neuberger v. Commissioner, 311 U. S. 83; United States v. San Francisco, 310 U. S. 16; Estate of Sanford v. Commissioner, 308 U. S. 39; City of New York v. New York City Ry. Co., 193 N. Y. 543; People ex rel. W. S. El. Co. v. C. T. & E. S. Co., 187 N. Y. 58; Burns v. Weber, 171 Misc. 808; Matter of Davison, 137 Misc. 852, 236 App. Div. 684; Matter of Naughton v. Boyle, 129 Misc. 867.) V. The action of the budget director, which has been held illegal by the courts below, is not saved by the provision in the budget purporting to create “ an unlimited number ” of positions in every department.

Opinion:
Loughbak, Ch. J.
In June, 1943, the Budget Director of the City of New York with the concurrence of the Comptroller modified the expense budget of the city for the fiscal year 1942-1943 by eliminating ten positions of battalion chief in the Fire Department and by creating therein ten additional positions in the next higher rank of deputy chief. The ten additional positions were then filled by-way of promotion thereto of ten battalion chiefs. A battalion chief was paid $5,300 and a deputy chief $6,300 annually. The fiscal year 1942-1943 ended on June 30, 1943. On the following day the Budget Director and the Comptroller issued a further order directing the continuance of the ten additional positions under the expense budget for the fiscal year 1943-1944.
In so reconstructing the budgets in question, the director supposed that he was acting by the authority of the Board of Estimate of the city. His profession of such jurisdiction has been rejected by the courts below. By leave of the Appellate Division, the city is the appellant here.
(1) Fundamental in its argument is an insistence that the controversy is ruled by section 68 of its municipal charter (New York City Charter [1938]). The text of that section is as follows: "The board of estimate may at any time, subject to the provisions of this charter and of the civil service law and except as otherwise provided by statute, create, abolish or modify positions and grades of persons paid from the city treasury." These words were construed by this court in Matter of Rushford v. LaGuardia (280 N. Y. 217). We there held: First: The phrase " create, abolish or modify positions and grades of persons " does not mean " reduce the salary of any person." Second: The power conferred by section 68 can be exercised by the Board of Estimate only when it adopts a budget.
Since the first of those two propositions was enough to dispose of the Rushford case, the city now maintains that the second proposition was a mere obiter dictum. This is a misconception. Indeed, when two or more points arise and are argued and the appellate court passes upon them all, no branch of the decision is merely incidental, but all the grounds thereof must be taken to be equal in force and together constitute the judgment (O'Brien v. Union Central Life Ins. Co., 207 N. Y. 180, 187; Matter of Fay, 291 N. Y. 198, 215. See United States v. Title Ins. Co., 265 U. S. 472, 484; Richmond Co. v. United States, 275 U. S. 331, 340; Cheater v. Cater, [1918] 1 K. B. 247, 252-253; London Jewellers, Ld., v. Attenborough, [1934] 2 K. B. 206, 222).
Though the second basis of our decision of the Rushford case was plainly stated (280 N. Y. at p. 232), the reasons given therefor seemingly need a new emphasis and so we shall here go over the same ground once more. The present charter of . the City of New York was drafted by a Charter Revision Commission and was adopted by the electors of the city at the polls, after the commission had published a report in respect of the design and range of the instrument (see L. 1934, ch. 867). In that address, the commission said: " The annual expense budget is to be prepared by the Budget Director and presented by the Mayor for adoption by the Board of Estimate and the Council, very much as this is now done. In addition to the law-making power, which will constitute its chief function, the Council will also retain the important power of adopting the expense budget . The Board of Estimate remains as at present, composed of the Mayor, the Comptroller, the President of the Council, each with three votes, the Borough Presidents of Manhattan and Brooklyn, with two votes each, and the presidents of the boroughs of The Bronx, Queens and Richmond with one vote each.- The Board of Estimate passes upon the Mayor's budget and is free to amend it by adding, increasing, decreasing or omitting items. After the Board of Estimate has passed the budget, it goes to the Council, which may reduce or strike out the amounts appropriated for particular items. The Board of Estimate holds hearings so that it is before this small body of elected officers that the people have an opportunity to criticize the budget or any item in it." Thus the charter was designed to give effect to the historic principle that any tax measure ought to have its origin in the public will. When section 68 is read against that background, the limits thereof are scarcely open to misapprehension. But however this may be, at least that section cannot be taken to be a license to the Board of Estimate at its pleasure to set at naught the budget-making machinery elsewhere so carefully dictated by the same document. We reaffirm, therefore, the second ground of our decision in the Rushford case, viz.: Section 68 empowers the Board of Estimate to create, abolish or modify positions only when it adopts a budget (280 N. Y. at p. 222).
(2) Section 123 of the city's charter requires that the code items of an expense budget " shall set forth the terms and conditions under which such appropriations shall be administered." Under the caption " Terms and Conditions," each of the budgets in question made this provision: " 3. Modification of Schedules: Any schedule supporting an appropriation for personal service contained in this budget may be modified at any time by adding new positions under new or existing titles but only by resolution of the Board of Estimate, or by the issuance of a certificate by the Director of the Budget, countersigned by the Comptroller, approving such modification . Such modification may be made by the Director of the Budget, countersigned by the Comptroller, upon request or consent of the head of the agency The " Terms and Conditions " of each of the budgets in question also contained a resolution of the Board of Estimate declaring that positions and wages as they then appeared in the budget were established and fixed " for an unlimited number of incumbents."
On the strength of these budget recitals, the city argues that when the director here modified the budgets by adding ten to the number of deputy chiefs originally authorized at $6,300 per annum, he was " merely making provision for additional incumbents of a position already created at the rate, established therefor by the original budget." This undoubtedly is true as a matter of form, but is by no means a solution of the case. Any process whereby the expense budget of a city may be thus summarily realigned to the length of "an unlimited number of incumbents " is surely an affair that calls for a clear warrant of law.
Section 128 of the city's charter is said to be such a warrant. It is thereby provided: " The director of the budget, upon request of the head of an agency, shall, with the approval of the board .of estimate, have power during any fiscal year to transfer an appropriation or part thereof from one line to another within the same schedule, provided the total appropriation for the applicable code item is not increased. A copy of the line affected, as amended, shall forthwith be filed by the director of the budget with the treasurer and the comptroller." But section 128 is silent both as to " new positions under new or existing titles," and as to " an unlimited number of incumbents." On the other hand, the section does say that all transfers of appropriations made thereunder by the budget director are conditioned upon the " approval " of the Board of Estimate. To our minds such " approval " means that the board itself must first be satisfied with each separate transfer order made by the budget director. A like question arose in Brown v. Newburyport (209 Mass. 259). In that case a city treasurer was authorized to borrow " from time to time, with the approval of the' committee on finance ' '. Rttgg, J., said for the court (p. 266): " Approval, in this connection, means that the members of the finance committee, acting upon their official responsibilities and having in view the public welfare, shall investigate and sanction according to their own independent judgment, each separate borrowing made under the order. It implies reflection and sound business discretion as to each loan proposed. It did not confer a mere ministerial function, but imposed active and important prudential obligations." In that view, which we believe to be sound, the official duty of the Board of Estimate under section 128 — the duty to pass judgment upon actual transfers of appropriations — cannot be delegated. In a word, we are unable to find in section 128 any warrant whatsoever for the course here pursued by the budget director.
Nor can we see any ground upon which the scope of section 128 can be deemed to have been enlarged through administrative construction. The charter was adopted by the voters of the city at the general election of 1937. A preliminary draft thereof was published by the Charter Revision Commission on April 27, 1936. What is now section 128 was in that draft numbered 129. The phrase " with the approval of the board of estimate " was not contained therein. At a public hearing held by the commission on May 11, 1936, Mr. Harold Riegelman, on behalf of the Citizens Budget Commission, urged that a number of procedures which were included in the " Terms and Conditions " of the 1936 budget should be written into the charter. He went on to say: " While none of the foregoing provisions of the existing terms and conditions are written into the proposed charter, an objectionable existing provision is found in section 129, which permits the budget director, without the approval of the Board of Estimate, to modify appropriations within codes. This provision, in our opinion, has led to abuses in that it opens the way to surreptitious salary increases by covering up the amounts appropriated for useless positions which have become vacant and which would otherwise accrue to the end of the budget year and then be eliminated." (See minutes of public hearing held by New York City Charter Revision Commission, May 11, 1936.) The Charter Revision Commission thereafter amended the then section 129 by adding thereto the words " with the' approval of the board of estimate ". (See minutes of executive meetings of New York City Charter Revision Commission held June 23 and 25, 1936.) Against such a background, we take section 128 to be a limitation upon the practice that had previously been made use of by the budget director in his handling of appropriations within cod§s, and hence section 128, in our judgment, cannot be controlled by that antecedent practice. Whether section 128 has been subjected to any official interpretation since it became effective in 1938, is, of course, of no significance (Grimmer v. Tenement House Department, 205 N. Y. 549, 550; Lawrence Construction Corp. v. State of New York, 293 N. Y. 634).
(3) Considering the case in the above aspects, we conclude,, that the method of the creation of the ten additional positions of deputy chief in the Fire Department was not authorized by law, as the courts below have held'.
Medalie, J., participated in the decision of this case and voted for affirmance.
The order should be affirmed, with costs.