Case Name: Marshall T. Davidson, Appellant, v. The Village of White Plains, Respondent
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1910-01-11
Citations: 197 N.Y. 266
Docket Number: 
Parties: Marshall T. Davidson, Appellant, v. The Village of White Plains, Respondent.
Judges: 
Reporter: New York Reports
Volume: 197
Pages: 266–279

Head Matter:
Marshall T. Davidson, Appellant, v. The Village of White Plains, Respondent.
Municipal corporations — methods of paying obligations Of municipal corporations — when water commissioners of a village are agents thereof with power to contract obligations binding on the village — enforcement thereof by creditor.
There is a distinction between a provision of law which prescribes how a creditor of a municipal c< rporation may obtain payment of his claim and one which simply prescribes the method by which the corporation is authorized to obtain funds with which to pay the claim, merely regulating the internal management of the corporation itself.
As a general practice, municipal undertakings of a permanent character, involving great and extraordinary expense, are defrayed by the issue of municipal bonds, and in many, if not most, cases it is enacted that the proceeds of the bonds shall be devoted solely to the special public work authorized, but such provisions are not held to constitute a particular mode of paying a claim.
Where the water commissioners of a village, under the provisions of a statute, are directed to acquire the necessary lands and easements in the name and on behalf of the village, and all the revenues derived from the supply of water are paid to the village, the relation of principal and agent exists between the commissioners and the village. Although in such case it is the duty of a creditor to apply to the commissioners to audit and certify his claim, upon their refusal he is not restricted to proceedings by mandamus but can maintain an action against the village.
The failure to allege in the complaint that the water commissioners unreasonably refused to audit and certify the claim would be ground for demurrer, but upon the trial plaintiff had a right to rely upon the admissions in the answer which show that the commissioners had repudiated all liability for the demand. (Dannat v. Mayor, etc., of JV. Y., 66 N. Y. 585; Swift v. Mayor, etc., of N. Y., 83 N. Y. 528, distinguished.)
Quaere, as to whether mandamus would lie in such case.
Davidson v. Village of White Plains, 121 App. Div. 287, reversed.
(Argued November 30, 1909;
decided January 11, 1910.)
Appeal from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered October 21, 1907, affirming a judgment in favor of defendant entered upon a dismissal of the complaint by the court at a Trial Term.
The nature of the action and the facts, so far as material, are stated in the .opinion.
Frank Verner Johnson for appellant.
The action was properly brought against the village of White Plains and a cause of action stated. (Fleming v. Vil. of Suspension Bridge, 92 N. Y. 368; King v. Vil. of Randolph, 28 App. Div. 25; Pettengill v. City of Yonkers, 116 N. Y. 558; Seeley v. City of Amsterdam, 54 App. Div. 9; Bolton v. Vil. of New Rochelle, 84 Hun, 281; Walsh v. Mayor, etc., 107 N. Y. 220; Appleton v. Water Comrs., 2 Hill, 452; Gunnison v. Board of Education, 80 App. Div. 480; 176 N. Y. 11; F. & D. Co. v. City of New York, 108 App. Div. 263; Reilly v. City of Albany, 112 N. Y. 30.)
John M. Digney for respondent.
The method of securing payment of a claim affecting the water supply of the village of White Plains is prescribed by the statute. (L. 1896, ch. 769.) The claimant is confined in the first instance to the method of payment prescribed by the statute. (Dannat v. Mayor, etc., 66 N. Y. 585; Swift v. Mayor, etc., 83 N. Y. 528; E & D. Co. v. New York, 108 App. Div. 263; Gunnison v. Board of Education, 80 App. Div. 480; 176 N. Y. 11; Heiser v. Mayor, 104 N. Y. 68; Holroyd v. Toxon of Indian Lake, 180 N. Y. 318.) In the event of the refusal of the water commissioners to audit or certify the plaintiff’s bill, or the refusal of the village authorities to issue a draft for its payment out of the water fund, or the refusal of the treasurer to pay such draft, the plaintiff’s remedy is by mandamus. (Dannat v. Mayor, etc., 66 N. Y. 585; Swift v. Mayor, etc., 83 N. Y. 528; People ex rel. McCabe v. Matthies, 179 N. Y. 242; People ex rel. Root v. Board of Supervisors, 146 N. Y. 107; People ex rel. v. W. S. S. R. Co. v. Barnard, 110 N. Y. 548; People ex rel. Wooster v. Maher, 141 N. Y. 330; Baird v. Supervisors, 138 N. Y. 95; Holroyd v. Town of Indian Lake, 180 N. Y. 318.)

Opinion:
Cullen, Ch. J.
The action was brought to recover the price of a pumping engine alleged to have been sold and delivered to the village of White Plains, for which defendant failed to pay. The answer denied the sale to the defendant, alleged that the sale was to the water commissioners of the village; that "there was an agreement that the engine would do certain work; that the pump failed to comply with the terms of the agreement, and that it was rejected by the commissioners and the plaintiff notified to remove the same. At the opening of the case the defendant moved to dismiss the complaint on the ground that the action could not be maintained against the village and that the plaintiff's remedy, if any, was by mandamus against the board of water commissioners. The motion was granted and the judgment entered on that nonsuit has been affirmed by the Appellate Division.
The plaintiff has been defeated on the principle that where a particular mode of discharging the obligation of a municipal corporation is provided by law that mode must be pursued, the learned courts below placing their decision on the-autliority of Dannat v. Mayor, etc., of N. Y. (66 N. Y. 585) and Swift v. Mayor, etc., of N. Y. (83 N. Y. 528). That this principle is correct cannot be gainsaid, but we must be careful to distinguish between a provision of law that prescribes how a creditor of a municipal corporation may obtain payment of his claim and one which simply prescribes the method by which the corporation is authorized to obtain funds with which to pay the claim, merely regulating internal management of the corporation itself. We think the case before us does not fall within the principle of the Dannat or Swift case. In the Dannat case the contract was made not with the corporation but with the board of education, which discharged the governmental function of providing public instruction. Under the statutory scheme the board of education was to deliver to the creditor its draft on the comptroller, who was required to pay the same if there were funds to the credit of the board sufficient for the purpose. It was held that the action of the comptroller, if a draft were presented, was merely ministerial and could be enforced by mandamus, and that he was not required to act until the draft was procured. In the Swift case the contract was not that of the city but of the board of police, which had its own treasurer, to whom all the funds to be disbursed by the department were paid by the city officers. In neither of these cases was there any general obligation upon the city to discharge obligations incurred by the contracts made by those boards. The case before us is different. The water commissioners, under the statute, are directed to acquire the necessary lands and easements in the name and on behalf of the village, and all the revenues derived from the supply of water are paid to the village. That the relation of principal and agent existed between the commissioners and the village seems clear under the authorities. (Fleming v. Village of Suspension Bridge, 92 N. Y. 368; Walsh v. Mayor, etc., of N. Y., 107 N. Y. 220.) There is no prescribed limit to the amount which commissioners are authorized to expend. The liability of the village for the obligations incurred by the commissioners is general and unlimited. They are directed from time to time to file a statement of the sums which are required by them for the purpose of the act, on the receipt of which the trustees of the village are directed to issue bonds of the village, sell the same and place the proceeds in the village treasury to the credit of the commissioners, and the clerk of the village upon the receipt of a requisi tion fronl the water commissioners is required to prepare and sign a draft for any account or bill which is presented and certified by the president and secretary of the commission as audited by it, which draft it is made the duty of the president of the village to sign " in the same manner as drafts of the village are signed." This scheme is radically different from those in the Dannat and Swift cases. The creditor gets no draft of the water commissioners on the village or its treasurer. If his claim is recognized it is the duty of the commissioners to certify to that effect to the clerk, and the creditor gets the draft of the village itself. A bond is not to be given for the particular debt or liability incurred by the commissioners, but bonds are to be sold in sufficient amount to provide a fund from which those debts or obligations can be paid. In my opinion this scheme does not provide any particular mode for the payment of the obligations of the village in the discharge of liabilities incurred in the construction and maintenance of the water plant within the true meaning of that •rule. As a general practice municipal undertakings of a permanent character involving great and extraordinary expense are defrayed by the issue of municipal bonds and in many, if not most cases, it is enacted the proceeds of the bonds shall be devoted solely to the special public work authorized. But such provisions are not held to constitute a particular mode of paying a claim within the rule to which reference has been made. The case of O'Brien v. Mayor, etc., of N. Y. (139 N. Y. 345) was an action to recover on a contract made by the aqueduct commission of the city of Hew York for the construction of the 'new aqueduct. The claim was for a very large sum. The statute (L. 1883, ch.490) provided for the issue by the city of water stock to defray the expenses of the improvement, and directed the comptroller tó make payments on the certification of the commissioners. The plaintiff received no such certificate. The point was not decided, but it was assumed in the opinion that if , the certificate was unreasonably refused an action would lie against the city. In principle we think the present case is similar to that of Fleming v. Village of Suspension Bridge (supra).
Tliough it was the duty of the plaintiff in the first instance to apply to the board of water commissioners to audit and certify his claim, upon their refusal to comply with the demand he was not restricted to .proceedings against the commissioners by mandamus. It may be questioned whether mandamus would lie in case the claim was in dispute. However this may be,- such refusal would give a right of action against the village itself. In Reilly v. City of Albany (112 N. Y. 30) the contract price was in express terms payable only out of the' proceeds of the local assessment to be levied for the improvement. The common council having failed to levy a proper assessment it was held that an action against the city would lie, and that the plaintiff was not restricted to mandamus to compel the common council to impose an assessment. The same rule was held in Weston v. City of Syracuse (158 N. Y. 274). It is urged that while the complaint alleges that the claim was presented to the water commissioners as well as to the other village authorities, it does not allege that the water commissioners unreasonably refused to audit and certify the same. This objection may be well founded, and had it been taken by demurrer might properly have prevailed. But the defendant having waited till the trial of the action, the plaintiff could rely on the admissioi s in the answer, which showed that the water commissioners and the village had repudiated all liability for the plaintiff's demand, if Cohu v. Husson, 113 N. Y. 662; Haddow v. Lundy, 59 id. 320.) Moreover, the complaint was dismissed solely on the ground that no action could be maintained against the village, not on the ground now suggested. Had that objection been then taken, doubtless the trial court would have permitted an amendment.
The judgment should be reversed and a new trial granted, costs to abide the event.