Court Opinion

ID: 6599178
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:06:12.327784+00
Date Added: 2024-06-11T15:57:57.434083
License: Public Domain

By the Court,

Colb, J.
We are unable to adopt the construction placed upon the act of 1856 (see chap. 128, Priv. *328Laws of 1856, p. 211) bj the counsel for the respondent. He contends that that act gave the commissioners no power whatever to dispose of the bonds for any thing tut cash; and that if they transferred them to persons willing to take them in payment for school house sites and for making the improvements therein authorized, it was a violation of the power and authority vested in them, and that the bonds are void and should be so declared by the court.
The 5th section of the act required that the bonds, after they had been executed as therein prescribed, should be delivered to the commissioners, who were^appointed and designated as “the city improvement commissioners of the city of Water-town,” and who were to act for and in behalf of the city, and were vested “ with full power to negotiate the sale of said bonds, to take charge of and superintend the expenditure of the proceeds thereof,” for the objects therein mentioned. The occasion of the law, or the object to be accomplished by issuing the bonds, was to provide the means “topurchase two fire engines and the erection of houses for the same; the erection of two school houses on the union plan, and the location and purchase of suitable lots for the same; the building of two bridges in said city, across Rock River, at,” &c. Now it appears that the first five bonds described in the complaint were transferred to the appellant to pay for lots for school house sites sold and' conveyed by him to the city. The others were sold or transferred by the commissioners as part payment for labor and materials furnished for the erection of a bridge. And it is insisted that this disposition of the bonds was not valid — was not an execution of the power given the commissioners “ to negotiate the sale of the bonds,” but was an appropriation of them in a manner not authorized by the act of the legislature.
There is, however, nothing in the act which requires the commissioners to sell the bonds for cash only, and we can perceive no sufficient reason for placing such a restriction upon their power. Suppose the commissioners found a person owning lots *329suitable for school sites, which they desired to purchase, who was willing to sell them and take his pay in the city bonds instead of the money. Can it be said to be a departure from the power to negotiate the sale of the bonds, for the commissioners to pay him directly for his property in these securities, without resorting to the idle ceremony of first selling him the bonds for cash and then paying him back the same money for his lots the next instant ? Can the law attach so much importance to the mere form of making the sale, and disregard the essential nature of the transaction ? It appears to us not. We have no doubt but the disposition made of the bonds by the commissioners was a sale of them within the meaning and intent of the act, and was a proper execution of the power. Clark v. Farrington, 11 Wis., 306; Blunt v. Walker, id., 334; Cornell v. Hichens, id., 353.
We were referred on the argument to the cases of Starinv. The Town of Genoa and Gould v. The Town of Sterling, 23 New York, 439, in support of the views of the respondent. It was there held, among other things, that a power given certain town officers to borrow money on the credit of the town and pay it over to a railroad corporation, taking in exchange therefor the stock of such corporation, was not well executed by exchanging the bonds of the town for an equal nominal amount of stock, leaving it in the power of the corporation to sell such bonds at a discount. The reasoning in those cases has always appeared to me to be exceedingly refined and technical, but I shall not stop to examine it now. There is nothing in those cases which militates against the views already expressed. Here the power given was, to sell the bonds and apply the proceeds in a certain manner; and the commissioners sold the bonds directly for the things they wanted. In doing this we do not think they were guilty of any breach of duty or transgressed any auth^ity in them vested.
Another objection taken to the validity of the first five bonds is, that they were transferred to one of the commissioners in *330payment of lots purchased of Mm. It is said that the appellant, being intrusted with the bonds as commissioner with power to sell them, could not himself purchase. There were six commissioners appointed by the act, and it is alleged, in substance, in the reply of the appellant, that he made a proposition to the commissioners for the sale of his lots, and that three of them voted to accept it, he himself refraining from voting upon the question. Besides, he shows that the contract was referred to the common council, who, after examination, ratified and approved of the purchase. The 7th section of the act provided that all contracts made by the commissioners by virtue of any powers conferred by the act should be submitted to and approved by the city council before they should be binding upon the city. If indeed there was any informality or irregularity in the contract of purchase as made by the commissioners originally, it was fiilly cured or removed by the subsequent ratifi cation and confirmation of the contract by the city council. And for a like reason it is very clear that if there was any irregularity in applying the bonds to the payment of the indebtedness of the city for building the bridge, it was cured by the action of the city council. We do not think there was any such irregularity, but that the disposition made was strictly within the scope of the authority vested in the commissioners. But. if we are wrong in this, there can be no doubt that the transfer and application of these bonds were valid, having been ratified and confirmed by the city authorities.
It results-from this that the demurrer to the plaintiff’s reply was improperly sustained. The order sustaining it is therefore reversed, and the cause remanded for further proceedings according to law.