Case Name: J. Rufus Terry et al., Plaintiffs, v. Patrick J. Gleason et al., Defendants
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1897-10
Citations: 21 Misc. 368
Docket Number: 
Parties: J. Rufus Terry et al., Plaintiffs, v. Patrick J. Gleason et al., Defendants.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 21
Pages: 368–370

Head Matter:
J. Rufus Terry et al., Plaintiffs, v. Patrick J. Gleason et al., Defendants.
(Supreme Court, Kings Special Term,
October, 1897.)
Taxpayer’s action — Fraudulent city contract — Betrayal of official trust.
■Where the complaint in an action, brought by taxpayers of a city to set asidd a contract made. between the city arid a water company, alleges that the city board of water commissioners, of which . the mayor was a member, has entered into a contract with a water company, of which the mayor is the principal owner, to supply the.city with water, although the city has a water plant of its own; that it is ■ designed by the new -contract to rival and injure the plant of the city; that the mayor and the water commissioners have designedly impaired the existing supply of water arising from the city plant; that the contract was made without the consent of the common council, necessary thereto; that the city is required to pay $80,000 a year to the company; that the charter forbids any city official from being interested, directly or indirectly, in a city contract,' and ' where a denial of the mayor -is confined to an affidavit in which he merely states that he “ ceased to have any interest in said cofnpany ” six months .before he entered upon- his present term as mayor, but fails to allege that he has sold his stock in the company, a case of a betrayal of the public interests is presented which justifies the court in making permanent a temporary injunction granted in the first instance. -
Motion for a permanent injunction.
Foster & Foster, for motion.
Delavan & Van Vechten, opposed.

Opinion:
Gaynor, J.
This is an action by taxpayers of long Island City to have a contract between the city and the Woodside Water Company for the supply of. water to the city annulled as fraudulent, and to have the board of water commissioners restrained from carrying it out. .The complaint shows that the said board, which consists of the mayor, the commissioner of public works, the president of the common council, and two other appointees of the mayor, made the said contract. The said water company was organized by the said mayor in 189-2, and he was one of the incorporators, and, as is shown by the certificate of incorporation, he owned 420 shares of its stock as against 85 shares held by the other incorporators. The said mayor was also the individual owner of the land transferred to the said water company, and from which it obtains its water supply; and it is alleged that by means of bis holdings of stock in said company he is the chief owner of it and controls it. The city has a water plant of its own, and has for many years been engaged in supplying itself with water; notwithstanding which the said board, so composed of the mayor and other commissioners, entered into the contract in question with the water company, with the intention, it is alleged, of rivaling, neglecting and injuring the city's plant, and getting money from the city. The said mayor and commissioners have discontinued pumping stations of the city and removed the machinery and created a water scarcity and alarm, for the benefit of the said company. The said contract requires the city to pay the said company about $80,000 a year. It was made without the consent of the common council, though the city charter requires such consent. By the charter of the city, all officials of the city are prohibited from being interested directly or indirectly in any contract with the city. These things and others of the same tenor are specifically alleged. The mayor makes affidavit that he " ceased to have any interest in said company" six months before he entered upon his present term as mayor. He does not say he sold bis stock. His statement that he ceased to have any -interest, is not for him to make, but is for the court to decide from facts, and if he had shown that he actually and in good faith sold his stock, naming the purchaser, the court might see that he has no interest; but it cannot accept his mere conclusion upon that subject. He may have nominally transferred his stock so that he has no legal interest, and yet he may have an actual interest. This will be decided on the trial when all the facts are brought out. The law, in its administration, should find no difficulty in looking through shams and disguises. It is the mayor's duty and that of the other commissioners to foster and extend the city's water plant, and not rival and neglect it for their own profit, or the profit of anyone else. The facts pleaded present a scandalous case of official dishonor, corruption and betrayal of trust, and the denials presented impair them very little, if at all. Such official be trayals of public interests have become 'so common that it is no wonder if many have come to despair that they will ev.er .be remedied or done away with. That in the charter of the said city, as of many other cities, is found an express prohibition against city officials being interested in contracts with the city, is in itself a striking testimony of the prevalence of official greed, dishonesty and faithlessness. The law of common honor and morality • forbids even the most ordinary agent to have any interest adverse to his principal. Government under which the necessity for such a standing prohibition should continue, could not in the.nature of things long endure.
The plaintiff here should have full opportunity upon the trial to prevent the alleged wrongs he complains of, and to that end the injunction is meanwhile continued.
Motion granted.