Case Name: William C. Heaton and Another, Doing Business under the Firm Name and Style of W. C. Heaton and Company, Respondents, v. City of Cohoes, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1935-03-13
Citations: 244 A.D. 19
Docket Number: 
Parties: William C. Heaton and Another, Doing Business under the Firm Name and Style of W. C. Heaton and Company, Respondents, v. City of Cohoes, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 244
Pages: 19–29

Head Matter:
William C. Heaton and Another, Doing Business under the Firm Name and Style of W. C. Heaton and Company, Respondents, v. City of Cohoes, Appellant.
Third Department,
March 13, 1935.
John A. Brady, Corporation Counsel, for the appellant.
Wiswall, Walton, Wood & MacAffer [Kenneth S. MacAffer and A. Kendall Roberts of counsel], for the respondents.

Opinion:
Heffernan, J.
The city of Cohoes was organized and now exists as a municipal corporation by virtue of chapter 130 of the Laws of 1915 and acts amendatory thereof and supplemental thereto. In 1929 its financial affairs were in a chaotic condition. It had no funds to meet current expenses. Doubt was expressed as to its authority to borrow money, since it was asserted that its debt limit had been exceeded in violation of section 10 of article 8 of the New York State Constitution. The State Comptroller was engaged in examining the accounts of the city's fiscal officers.
The mayor of the city apparently regarded the investigation which the Comptroller was making as political in its nature. He decided to have an inspection made by auditors of his own selection. For this purpose he conferred with a representative of respondents, who are certified public accountants. Respondents agreed to make the examination which the mayor desired for the sum of $4,000 and expenses. This proposal was satisfactory to the mayor, and on October 2,1929, he transmitted to respondents a written communication authorizing them to make an examination of the books and records of the various officers and departments of the city in order to determine its financial situation and also requested them to recommend the installation of a better system of accounting.
On the same day the board of estimate and apportionment of the city, consisting of the mayor, president of the common council, corporation counsel, comptroller and city engineer, convened and unanimously adopted a resolution approving the action of the mayor in employing respondents for the proposed examination at a cost not to exceed $4,000.
Respondents entered upon the performance of their duties and completed the same, with the exception of the preparation of their report, the last of December. Meanwhile, because of the vagaries of politics, the official personnel of the city changed. The political rivals of the mayor and his associates became the masters of the ship. Motivated, no doubt, by the exigencies of politics, the new administration immediately proceeded to condemn the old and to renounce it and all its works and pomps. It made demand upon respondents for all city records in their possession. Respondents requested that they be permitted to retain these documents pending the preparation of their report which was nearing completion. In reply the corporation counsel wrote respondents demanding the immediate return of the papers and at the same time advised them " that the present administration of the City of Cohoes is in no way interested in any examination or report that your associate, Mr. Thomas A. Stack, may have in hand respecting any financial problems that the officials of Cohoes may be confronted with."
Respondents thereupon discontinued the completion of their report and, in accordance with the provisions of the charter, submitted to the comptroller a claim for services for $4,000 and an additional sum of $2,000 for expenses. The claim bore the written approval of the mayor by whose authority the work was done. The claim as presented was audited by the comptroller, but the city declined to pay, and respondents thereupon instituted this action to recover the value of their services.
After a trial jury rendered a verdict in their favor for $4,000 and interest, and the city has appealed from the judgment entered upon that verdict.
The extent of the mayor's authority under the charter of the city is the question for determination. Respondents maintain that section 55 of the Cohoes charter clothes the mayor with ample authority to retain them for the performance of the services which they rendered. The pertinent provisions of that section are:
" § 55. Examination of books and accounts. The mayor shall have authority at all times to examine the books and papers of any officer, employee or department of the city and, as often as he may deem proper, to appoint one or more competent persons to examine, without notice, the accounts of any city officer or department, and the money, securities and property belonging to the city in the possession or charge of any officer or department and to report the result of such examination; and he may administer oaths to witnesses and take affidavits in all cases relating to the affairs of the city and its officers and employees, and he may issue a subpoena commanding a person to appear and produce books and papers in his possession."
Appellant urges that other sections of the charter, to which we shall refer, are controlling and that respondents have not satisfied their requirements. Section 31 provides that " No appropriation of money shall be made for any purpose except by ordinance specifying each item, the amount thereof, and the department or specific purpose for which the appropriation is made."
Section 99 states that " nor shall any such board or officer expend or contract to spend any money or incur any liability upon or by virtue of an open market order until an order in writing, made in triplicate, is submitted to the comptroller and he shall have certified thereon that unexpended funds, appropriated for that purpose, are available to meet a claim therefor."
Section 110 establishes a board of contract and supply and requires that all contracts shall be advertised and awarded to the lowest bidder.
Section 115 provides: " Power to purchase and contract limited. No person shall have power to make any purchase or contract any debt for which the city shall be liable unless Specifically authorized by the provisions of this chapter."
Section 187 is that "No written contract providing for the payment of two hundred and fifty dollars or more, entered into by the city or any of its officers, boards or departments, shall be acted under until there shall be indorsed thereon by the corporation counsel a certificate to the effect that the city officer, board or department, which has executed the same on behalf of the city, had authority and power to make such contract, and that such contract is in proper form and properly executed."
Respondents assert that the sections referred to have no application to the facts in this case and, therefore, constitute no defense to their claim.
A provision similar to section 55 of the Cohoes charter is incorporated in many city charters in this State. A like provision is found in section 56 of the Second Class Cities Law.
In the interpretation of the section of the charter in question it is important to keep before our minds the fundamental principles of statutory construction. The intent of the lawmakers is the soul of the statute. It must prevail over the literal sense and the precise letter of the language employed. A statute should be construed having in mind the nature and reason of the remedy and the object of the statute, in order to give effect to the legislative intent. The powers conferred upon municipal corporations and their officers must be construed with reference to the object of their creation. Their powers should be construed so as to carry into effect every power clearly intended to be conferred and every power necessary to be implied for the complete exercise of those granted.
The powers expressly granted to the mayor by section 55 of the charter carry with them such other powers as are necessarily implied in or incident to such grants and also those which are indispensable to the attainment and maintenance of the declared objects and purposes of the corporation. This is a very salutary provision and is designed for the protection of the municipality and its inhabitants. The public mischief to be avoided if this provision of the charter is construed so as to support the right of the mayor to make summary investigations of the accounts, moneys, securities and property belonging to the city is at once apparent. Should officers become dishonest or corrupt, the power to investigate summarily is indispensable to the honest administration of municipal government.
The mayor is the chief executive officer of the city and undoubtedly the Legislature conferred extraordinary authority upon him to investigate without notice in order that corrupt municipal officers may be compelled to restore municipal funds which they have wrongfully expended or misapplied or for which they have failed to account.
Appellant's criticism of the section of the charter because it does not restrict the mayor either in the extent of the employment or the expense to be incurred we regard as a misconception of the law. The corporation counsel urges that even if it be held that the mayor has power to investigate under this section, his appointee must serve gratuitously. We do not so construe this statute. True it is there is no express provision in this section for the compensation of those employed by the mayor. This is no insuperable obstacle. The authority to employ necessarily carries with it the authority to pay. The law will imply a liability to pay reasonable compensation to persons rendering services at the direction of the mayor in the discharge of his duties imposed or authorized by law. The power conferred upon the mayor, however, should be exercised conscientiously, in good faith and for a municipal purpose and entirely free from the taint of personal, political or other ulterior bias.
If we should adopt the construction of this section urged by the corporation counsel it would result in rendering it meaningless. If the mayor should desire to investigate the comptroller's office that official could prevent it by refusing to certify pursuant to section 99 of the charter that there were funds available for such purpose. Again if the mayor desired to investigate the affairs of the common council that body could thwart his efforts by refusing to make the appropriation under section 31 of the charter. In the same way the corporation counsel could prevent any examination of his records by refusing to make the certificate required by section 187 of the charter. In other words, if section 55 is limited by the other sections then the conclusion is irresistible that the mayor has no power whatever to make any investigation. We are not willing to sanction any such absurd construction.
The appellant also urges that respondents have not substantially performed their contract. That they did perform as far as they were permitted to do so is amply sustained by the evidence. Furthermore, the learned trial judge submitted that as a question of fact to the jury and the verdict has definitely determined that respondents did perform. Their work was completely performed except to file their report. As already pointed out, the corporation counsel waived the filing of that document. Appellant cannot now be heard to say that this report was never presented because presentation was waived. (Amies v. Wesnofske, 255 N. Y. 156; DeForest R. T. & T. Co. v. Triangle R. S. Co., 243 id. 283.)
Appellant also contends that it is relieved from all liability to respondents because at the time the obligation was created it was indebted in an amount in excess of the limitation of indebtedness permitted by section 10 of article 8 of the New York State Constitution. Even if it be assumed that the city was indebted beyond the constitutional limitation, the claim of the respondents is not within the intent of the constitutional debt limitation. Their compensation for services rendered is merely a current charge and part of the current expenses of the city. (O'Reilly v. City of Kingston, 175 App. Div. 207; Levy v. McClellan, 196 N. Y. 178.)
Many other alleged errors are assigned by appellant for a reversal of this judgment. We have examined them all carefully and find that they are without merit.
The judgment and order appealed from should be affirmed, with costs and disbursements to respondents.
Hill, P. J., and Bliss, J., concur; Rhodes, J., dissents, with an opinion, in which McNamee, J., concurs; McNamee, J., dissents, with an opinion, in which Rhodes, J., concurs.