Court Opinion

ID: 6126531
Source: CourtListenerOpinion
Date Created: 2022-02-04 20:32:17.668466+00
Date Added: 2024-06-11T08:34:18.970267
License: Public Domain

Learned, P. J.
(dissenting):
As to the demurrer to the third count, we might think the defendant’s argument had much weight, if it were not for the decision in Horn v. Town of New Lots (83 N. Y., 100). That decision (and especially the concluding part of it), goes so far, that we cannot say that a complaint for money paid, laid out and expended at the request of a town, states no cause of action. In that case the action was described by the court as one for money had and received, of the same class of cases, therefore, as the present. Perhaps the plaintiff here might be required to make the complaint more definite. But that is not the question before us.
As to the demurrer to the second count, the language of the same case is applicable. “ The legislature has commanded a town in the *339State to issue bonds * * * So far, then, tbe township has been, by legislative power, made an entity, with capacity as a town to incur a debt and make an obligation and become liable to pay.” This count avers a purchase by the town of certain railroad bonds, and an issue therefor of its own bonds, payable in blank, and the purchase by the plaintiff of one of such bonds. It might be that, on. a trial of the issue of fact, no recovery could be had. But since the legislation referred to in the opinion just cited, we ought not to hold such account demurrable. (Perkins v. Church, 31 Barb., 84; Phoenix Bank v. Donnell, 40 N. Y., 410.) The defendant cites the case of Ferrin v. Myrick (41 N. Y., 315). That presented the question whether a certain contract therein described alleged to have been made by an administrator, bound the estate, and therefore bound his successor, the defendant. The demurrer therefore admitted only that the person who was the former administrator, made the contract. Its legal effect was the question of law presented by the demurrer. Here the demurrer admits that the defendant made certain purchases and gave certain bonds. And, as said above, townships have now capacity to incur a debt and to make an obligation. If there Were still (as perhaps there was once) a complete inability in a town ever to make an obligation; or if the town were never, in the language above cited, “ an entity,” the demurrer might have been well taken.
The real merits of this case arise on the tria' of the issues of fact in the first count. The learned justice foum- that three persons were duly appointed commissioners of the defendant under chapter 907 of the Laws of 1869, on the 18th day of March, 1871. That, on the 25th day of March, 1871, these commissioners, intending to comply with the terms of the act, issued certain bonds, described in the complaint, and sold them for cash at par. That the plaintiff purchased the bond set forth in the complaint, and paid the commissioners in cash therefor, without suspicion of defect or irregularity, and that he is still the owner. That the defendant had paid the interest thereon up to January 1, 1879, but not since. The bond (like the others) is dated March 25, 1871; is payable July 1, 1891; and has coupons attached for semi-annual interest. The principal point is that the statute (sec. 4) provides that the bonds shall be due and payable at the expiration of thirty years *340from date, while the bonds actually issued ran a little over twenty. The learned justice finds that this occurred by the mistake' of a scrivener. And he decided that so much of the language of the bond as prescribed an earlier date than thirty years, should be construed as corrected and conformed to the statute. Judgment was rendered accordingly, and also for the recovery of the interest already accrued.
There seems to be no proof in respect to the person who prepared the bonds. The learned justice, in finding that they were thus drawn by a scrivener by mistake, probably meant that they must have been drawn by some person, and that there was no evidence that the commissioners intended that they should be drawn differently from the requirement of the statute. The facts appear to be that the bonds were prepared by some one; that the commissioners executed them, without any notice or knowledge, that they did not conform to the statute in respect to time; and that the commissioners, or one of them at least, read the bonds, or some of them before execution.
It seems, too, that there is sufficient evidence that the commissioners, through Andrews, sold the bonds thus prepared, and that through him they also invested the avails in the second mortgage bonds of the Greenwich and Johnsonville Railroad Company. Up to 1877 the railroad company seem to have paid the interest on the town bonds, in substitution for paying the interest on their own. Afterwards, in 1877, on the failure of the company, the money needed to pay the interest on the town bonds was raised by tax on the town and was paid.
We have, then, this state of facts in brief: The commissioners are said in the act (sec. 5) to represent the municipal corporation ‘f and are said (sec. 4) to issue bonds of the corporation. They issued bonds of the defendant, and they received the plaintiff’s money therefor. They invested the proceeds, as they, lawfully might (sec. 5), in bonds of the railroad. These railroad bonds belonged to the defendant (sec. 5), and were to be in the custody of their treasurer, or other proper officer. (See. 6.) For several years the defendant had the benefit of such ownership of the railroad bonds, inasmuch as the railroad company paid the interest thereon indirectly; that is to say, the railroad company, who were *341not liable on tbe town bonds, paid the interest on them in tbe place of paying the interest on their own bonds, held by the town. So that for several years the town practically received the interest on the railroad bonds. Thus the defendant had the plaintiff’s money, and invested it in railroad bonds, and now refuses to pay the obligation which it gave for this money.
It may be that the commissioners were not town officers. But yet they acted for the town, and the statute says that they represent the municipal corporation. It is of little consequence whether the persons who are to act for the town are chosen by a majority of electors who are present at a town meeting, or are appointed by the country judge at the request of the majority of the taxpayers. If ■ the law authorizes such persons to act for the town, that is enough. The town is bound by their lawful action. (Marsh v. Little Valley, 64 N. Y., 112; Horn v. Town of New Lots, ut supra; Thompson v. Perrine, 108 U. S., 806, overruling Horton v. Thompson, 71 N. Y., 513.) The defendant cites the remarks in Wellsboro v. New York and Connecticut Railroad Company (76 N. Y., 185), that the bonding acts are subversive of the just rights of the minority. That is so; for the reason that lending money to railroads or investing in railroad stock is not the proper business of towns, and therefore it is unjust that the legislature should have authorized the majority to bind the minority for such business. It would be equally unjust if done through the town officers and by the consent of an overwhelming majority. And it is unfortunate that courts ever held such laws to be constitutional, but it is now too late to change. And since such transactions have been held to be valid, towns must be held to have capacity in these respects “ to incur a debt and make an obligation and become liable to pay.” And it may be remarked in passing that the case last cited did not involve the rights of bona fide holders. The decision in Sheboygan County v. Parker (3 Wall., 93) that similar commissioners were not “ county officers ” was a decision, under the Constitution of Wisconsin, which requires county officers to be elected by the electors. It did not touch on the extent to which such commissioners could bind the body which they represented. And that such commissioners are agents of the town is repeatedly stated in Gould v. Oneonta (71 N. Y., 308). ' The defendant being authorized to borrow money with which to make a certain purchase did *342through its commissioners, as it lawfully might, borrow part of that money from the plaintiff and used the same for the purpose for ' which it was borrowed. Both the plaintiff and the commissioners intended that, as the evidence of such loan and as the obligation for its repayment, a bond of the defendant should be given in the manner prescribed by the act of 1869. Through some mistake the bond ran only for twenty instead of thirty years. The defendant with the plaintiff’s money and other money similarly obtained made the purchase contemplated. The question is, should the plaintiff lose his money. Several views may be urged in his behalf: 1st. That the bond in its present form is a valid obligation of the town. 2d. That the bond should be reformed to correspond with that authorized by the statute. 3d. That if not originally valid it has been ratified. 4th. That the plaintiff should recover his money on the original consideration.
First. We are unable to say that the bond in its present form is a valid obligation of the town. In the case of Rock Creek v. Strong (96 IT. S., 271), cited to support this view, the bonds according to the act were to be payable not more than thirty years from date. They were dated September tenth and were made payable thirty years from October fifteenth, but they were not registered by the auditor until October seventeenth. The court held that they were, practically, thirty-year bonds. That is very different from this case. In Singer Manufacturing Company v. City of Elizabeth (42 N. J. Law, 257) the city was authorized to issue bonds payable in not less than twenty years. The obligations issued were payable on demand. The court said: “ The plaintiff in good faith loaned to it the requisite sum, and such money in common honesty must be repaid.” The decision may stand as giving a recovery on the original consideration. In Johnson v. County of Stark (24 Ill., 92) the county had issued bonds with coupons payable in New York. Previous decisions had held that county obligations must be paid at the treasurer’s office. The court held that the part which mentioned the place of payment might be rejected. If that were sound doctrine, yet it could not be applied to this case. It is not a mere rejection but an entire change which is needed. We do not see how an authority to issue thirty-year bonds can justify the issue of bonds running only twenty years.
*343Second. It is claimed that the bond should be reformed, and this was the opinion of the learned justice. The defendant’s counsel urges, and we think correctly, that this is not the ordinary case of mistake in the execution of an instrument,, inasmuch as there is no reason to think that 'the plaintiff and the commissioners did not understand its contents. But there is another view. The commissioners were public officers appointed for a certain purpose. If they neglected or refused to perform their duties they might be compelled to perform. It was their duty to execute bonds running thirty years. The plaintiff, whose money they had received, had a right to compel them to discharge the duty they owed to him, As it was said in the ease of Gould v. Oneonta (ut supra), where certain coupons had been taken off, “ there was nothing which prevented the commissioners from reannexing the coupons to the bonds and then pay: ing them. Or if they had destroyed them they could execute new ones. * * * They could then home done what they should in the first i/nsta/nce ha/oe done. They could home righted a wrong which they committed.” It ought not to deprive the plaintiff of his right to such a bond as the commissioners should have given; that he trusted that they would do their duty. He was not to blame, and they were. It is not an answer to this view to say that the commissioners sold him a twenty year bond, and that is the end of the bargain. It was not, accurately speaking, the sale of the bond of some third party. It was the executing of the defendant’s obligation for money lent to the defendant. And when the public officers, authorized to execute a proper obligation, did negligently execute one which was improper, the plaintiff should have, in some way, the obligation which the law declared he should have. The-learned justice suggests that the constitutional provision stands in the way of the execution of the proper bond. We doubt whether that provision impairs obligations existing at its adoption. At any rate, the form of the judgment in this case obviates any objection on that point. We do not think it necessary to discuss the question of ratification.
But we may say that, if the plaintiff is not to receive the bond to which he was entitled running for thirty years, we see no reason why he should not recover back his money from the defendants. The case of Horn v. Town of New Lots (ut supra), is strongly in *344his favor. There by an illegal assessment the plaintiffs money had been taken, and it had been used for the benefit of the town in paying some obligations. It was held that the plaintiff might recover as'for money had and received. Here the plaintiff’s money has been used for the benefit of defendant in buying railroad bonds. But his money, instead of being taken from him by an illegal assessment, has been filched from him by an illegal bond. And the defendants are the persons who set up its illegality. If the defendants refuse, as it is proved that they did in this case, to execute a bond in accordance with the act, it is simply unjust that they should keep the plaintiff’s money. They have had the railroad bonds which they bought with it, and whether the purchase was profitable or not, cannot matter to him. Even if their “treasurer or other proper officer ” has not taken proper care of those bonds, that is no reason why they should not pay the money they have liad.
The judgment should be affirmed, with costs.
Judgment reversed, new trial granted, costs to abide event.