Case Name: The Commissioners of Highways of the Town of Cortlandville vs. Peck
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1843-05
Citations: 5 Hill & Den. 215
Docket Number: 
Parties: The Commissioners of Highways of the Town of Cortlandville vs. Peck.
Judges: 
Reporter: Hill's Reports
Volume: 5
Pages: 215–218

Head Matter:
The Commissioners of Highways of the Town of Cortlandville vs. Peck.
The right of commissioners of highways to negotiate amicable settlements of con, troversies relating to encroachments upon public roads, is incident to their gene, ral power of prosecuting for the recovery of penalties incurred by such encroachments. Per Nelson, Ch. J.
Promissory notes or other securities taken on such settlements are valid, and pay. ment thereof may be enforced by action at the suit of the commissioners. Per Nelson, Ch. J.
Though commissioners of highways are individually responsible for the proper ap. plication of moneys received by them, yet they may loan such moneys at their own risk, if not immediately required for public purposes, and enforce payment of the securities taken therefor. Per Nelson, Ch. J.
Accordingly, in an action by commissioners of highways upon a promissory note payable to them as such, tire consideration of which was for moneys loaned by them belonging to the public; held, that they were entitled to recover.
In order to establish the illegality of a loan of money by public officers, it must appear that the act of lending was in violation of public policy or the provisions of some statute; the mere absence of an express authority to make the loan is not sufficient. Per Nelson, Ch. J.
Suits by commissioners of highways should be brought in their individual names, with the addition of their official title; and if their names be not mentioned, it is ground for nonsuit at the trial.
Error to the Cortland C. P. The action was brought by “ The Commissioners of Highways of the town of Cortiandville,” without mentioning their names, on a promissory note in these words; “1 promise to pay the commissioners of highways of the town of Cortiandville one hundred dollars and sixty-six cents, with use, one year from date, for value received. February 16th, 1841. The consideration is for borrowed money. (Signed) Nathan Peck.” The declaration contained the mo ney counts only, with a copy of the note annexed. On the trial, after the execution of the note had been proved, the defendant’s counsel moved for a nonsuit, on the ground, among others, that commissioners of highways had no right to loan money and maintain actions in their official capacity upon securities taken therefor. The court below being of opinion that the plaintiffs were not entitled to recover on the note, the plaintiffs’ counsel offered to prove that, a few days before the date of the note, a settlement took place between the parties in respect to certain penalties and costs which had been incurred by the defendant for not removing an encroachment upon a highway pursuant to an order of the plaintiffs and the certificate of a jury, upon which settlement the defendant promised to pay the sum of money mentioned in the note, and that the money was afterwards paid to the plaintiffs, who immediately loaned it to the defendant, taking the note in question as security for its repayment. The defendant’s counsel objected to the introduction of this evidence, on the same ground upon which he had asked for a nonsuit, and also for the reason that penalties and costs could not be recovered under a declaration in assumpsit upon the money counts. The court sustained the objection and directed a nonsuit. The plaintiffs’ counsel excepted. After judgment, the plaintiffs sued out a writ of error.
Commissioners of Highways of Cortlandville v. Peck.
M. T. Reynolds, for the plaintiffs in error.
S. Beardsley, for the defendant in error.

Opinion:
By the Court, Nelson, Ch. J.
We have already decided that the plaintiffs cannot maintain a suit in their official name or title; but must use their individual names, annexing their official title. (Supervisor of Galway v. Stimson, 4 Hill, 136.) The plaintiffs were therefore properly nonsuited, and the judgment must be affirmed.
But as it may be important to the ultimate disposition of the question between the parties, and save further litigation, we will express our opinion upon the other question raised, to wit, whether the note taken by the commissioners for money lent is valid and collectable.
Commissioners of highways are authorized to prosecute for the recovery of penalties for encroachments on highways ; (1 R. S. 521, § 136, 2d ed.;) and are, of course, competent to adjust controversies in relation to such encroachments by amicable settlement. If, in so doing, they deem it advisable, in the exercise of a sound discretion, to take security for the payment of money at a future day, I can perceive no reasonable objection to such an arrangement. Their implied authority to settle the claim, affords, of necessity, some latitude in fixing upon the terms. They may certainly exercise their discretion in respect to the sum demanded; and why not, also, as to the time of payment and kind of security 1 It may frequently be for the interest of the town which the commissioners represent, that an amicable settlement should be made; and even after judgment recovered for the penalties, there may be cases in which prudence would dictate an extension of the time of payment on obtaining satisfactory security. The commissioners should act in the matter as prudent men would act, under similar circumstances, in their individual concerns ; and so long as they keep within the scope of their powers, I see no reason why they should not be indulged- in the exercise of a discretion which will enable them so to act.
The power of commissioners of highways to loan moneys in their hands, and to enforce the collection of securities taken therefor, is fairly derivable from their general powers and duties. They are at times in the possession of large sums of money belonging to the public. In addition to penalties which they are directed to collect, unexpended commutation moneys and funds raised for the purpose of erecting and repairing bridges are paid over to them. (1 R. S. 509, § 54, 2d ed.; id. 520, § 123.) They have the control and management of these funds, and are to expend them from time to time as the public exigencies may require. If they should deposit them for safe keeping with third persons, or should even invest them, when not immediately required, upon unquestionable security, so as to realize-the inter est, can it be doubted that the person receiving the money would be legally liable for its repayment 1 The commissioners may be individually responsible to the town for the proper application of funds placed in their hands for public pmposes; but I am unable to perceive any such illegality in the disposition of them in the manner suggested, if the commissioners "choose to take the risk upon themselves, as will invalidate the security upon that ground and prevent a recovery in default of payment. To sustain such a defence, it must be made to appear that the act of lending was in violation of public policy or the provisions of some statute. (State of New-York v. The City of Buffalo, 2 Hill, 434, 438, 9.) The mere absence of an express authority to loan affords no ground to the borrower for repudiating the payment.
It was held in Brewster v. Colwell, (13 Wend. 28,) that trustees of common schools might become the endorsees of a promissory note, and set it off in a suit against them. The court observed: " The trustees are a corporation for certain purposes ; they may do sundry acts which involve to some extent the transaction of monied concerns. They, no doubt, may receive, for money due to them, the note of a third person. Until the note was impeached, or some defence made against it, they were under no obligation to show how they came by it." The same remarks are applicable to commissioners of highways. They are engaged in various public concerns involving considerable moneyed transactions—such as building and repairing bridges, roads <fcc.—which may lead to extensive and multifarious contracts and other business operations. .
I am satisfied, therefore, if the action had been properly brought, that the plaintiffs would have been entitled to recover.
Judgment affirmed.