Court Opinion

ID: 3595821
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:43:16.930725+00
Date Added: 2024-06-11T07:45:33.689617
License: Public Domain

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The issue in the action of the receiver against the county of Niagara was whether the bank or the county was equitably entitled to the proceeds of the note and draft which Arnold, the defaulting treasurer, had deposited with Ellsworth. The receiver was defeated because he was not, as against the county, equitably entitled to recover the overdraft. Whatever his rights were against Arnold, he had none against the county. The referee found in substance that the alleged overdraft was a fiction. It was produced by charging Arnold's account as county treasurer with $4,400 and $5,150 which Arnold, in 1891, to the knowledge of the bank, wrongfully advanced to it from the county funds. Thus the bank appropriated the very money it conspired with the treasurer to abstract from the county, and the amount appropriated was used to swell the total of his indebtedness to the bank. The more the bank could induce the treasurer to abstract for its use, the greater would be his overdraft on its books. If the bank had refunded the money and taken back its note and draft, and credited the treasurer's account with the same, there would have been no overdraft. By the judgment of *Page 492 
the court the proceeds of the note and draft were used for the purpose for which they were originally intended, namely, to restore to the county the money that the bank had wrongfully obtained from it; and, continuing the method of bookkeeping employed by the bank, when the bank, under the judgment of the court, paid the note and draft through Ellsworth to the county, the treasurer's account should have been credited with the amount, and thus the overdraft would have disappeared. The assignment by Arnold of the note and draft to the bank could have no rightful purpose except to restore to the county the funds misappropriated on the pledge of these securities. That Arnold used the proceeds of his alleged overdraft to pay the obligations of the county does not aid the bank or its receiver. In equity there was no overdraft, and the judgment in the former action concludes the receiver upon that issue. (Young v. Farwell,165 N.Y. 341.)
After the final judgment against the receiver, chapter 614, Laws of 1900, was passed. Its letter and purpose are to vacate the judgment obtained by the county and to grant a new trial to the receiver before a referee to be specially appointed for the purpose. In an action between private parties, it is well settled that after the litigation is closed by final judgment, the legislature cannot grant a new trial. To do so would be to deprive the successful party of his established rights and vested property, and for the legislative department to nullify the accomplished acts of the judicial department. The legislature has control of remedies by which final judgments may be obtained, but cannot confiscate, recall or put again in jeopardy the rights and property established by judgments already obtained. (GermaniaSavings Bank v. Village of Suspension Bridge, 159 N.Y. 362;Roberts v. State, 30 App. Div. 106; affirmed, 160 N.Y. 217;People v. Carnal, 6 ib. 463; Ely v. Holton, 15 ib. 595;Gilman v. Tucker, 128 ib. 190; Van Rensselaer v. Secor,
32 Barb. 469; Main v. Davis, Ib. 468; affirmed Ct. App., 31 How. Pr. 639.)
Individuals not under legal disability can wage their litigations upon equal terms as to their liability for their acts, omissions, *Page 493 
contracts and representations; but the liability of municipal corporations or of their officers is often so dependent upon the power given them by statute that the limitations upon that power sometimes compel a judgment against the individual contrary to the merits. Before the amendment of the Constitution in 1874, now sections 9 and 10 of article 8, which prohibit either state, county, town or village from making gifts or loans except for the public purposes duly committed to their several care, this court held that the legislature by enactments somewhat like the one before us could direct the levy of a tax upon the taxable property of a county, city, town or village, as the case might be, and appropriate the same to the payment of the claim of an individual who had been defeated in an action brought by him to recover the same claim. (Town of Guilford v. Board ofSupervisors, 13 N.Y. 148; Brewster v. City of Syracuse, 19 ib. 116; Darlington v. Mayor, etc., of N.Y., 31 ib. 164;Brown v. Mayor, etc., of N.Y., 63 ib. 239; People ex rel.Conway v. Board of Supervisors, 68 ib. 119; People ex rel.Witherbee v. Board of Supervisors, 70 ib. 228; Mayor, etc.,of N.Y. v. Tenth National Bank, 111 ib. 446.) The case last cited was decided in 1888, but involved an act passed in 1874. The amendments referred to took effect in 1875. In Wrought IronBridge Co. v. Town of Attica (119 N.Y. 204) the plaintiff, under a contract with the commissioner of highways, who was directed by the town board to make it, built a highway bridge for the agreed price of $3,975; the commissioner accepted the bridge, the public used it, and the auditing board of the town audited the bill, and the electors of the town in their annual town meeting voted that the supervisor should provide for its payment. This was not done, and the plaintiff sued the commissioner for the contract price and was defeated because the proceedings were unauthorized. In 1887 the legislature legalized the proceedings of the town board, commissioner of highways, auditing board, and of the town meeting in the matter, and authorized the plaintiff to sue the town to recover what his labor and materials were worth. He did so, and his recovery *Page 494 
was sustained. Judge O'BRIEN, speaking for the court, although without referring to these provisions of the Constitution, said: "The principle that claims, supported by a moral obligation and founded in justice, where the power exists to create them, but the proper statutory proceedings are not strictly pursued or for any reason are informal and defective, may be legalized by the legislature and enforced either against the state itself or any of its political divisions, is, we think, now well settled."
We think this rule applies to these amendments. (See Cole v.State, 102 N.Y. 48; O'Hara v. State, 112 ib. 146.) We may also refer to Matter of Jensen (44 App. Div. 509) and Matterof Straus (Ib. 425), not as authority, for we do not know whether either case has been appealed, but for able discussions of the question. The distinction between the gratuity which the Constitution now forbids and the meritorious claim which it permits municipal bodies to satisfy, notwithstanding judgment adverse to the claimant, is apparent. Where such final judgment is upon the merits, for the legisture to vacate or disregard it and direct the levy of a tax to pay it, either without a new trial or with judgment upon it, would be the bestowal of a gratuity. But where such judgment is not upon the merits, but because of some defect in the authority of the officers to bind the municipal body for which they assume to act, and thus in good conscience is not decisive against the justice of the claim, the legislature may, in order that justice shall prevail, direct its re-examination and determination, and, if found to be just, direct that it be provided for by taxation. The limitations which the law wisely imposes upon the powers of public officers and their methods of exercising them may sometimes result in vesting in the municipal body, without any fault of the individual, his money or labor or their products beyond remedy or recall, except by special legislative action. The legislature may ratify what it might originally have authorized, and it seems to be right that it should have the power to relieve against the special injustice which may sometimes result from the limitations it has *Page 495 
imposed upon the authority of the officers which it has empowered with the administration of its municipal creations. Whether in a given case the legislature has kept within its power or has exceeded it, is, of course, a judicial question. (Weismer v.Village of Douglas, 64 N.Y. 91.) Tested by this rule this act must fail, for the judgment, which it aims to relieve against, passed against the receiver upon a full examination of the merits and not because of any disability of the county to do right, or lack of liability to respond, as the merits might require. If the receiver had recovered final judgment against the county in the former action, it is plain that the legislature could not have reopened the case in favor of the county; the judgment awarded the county affirmative relief because of its rights, not negative relief because of its disability, and, therefore, the judgment in its favor is as much above legislative invasion as if it had been in favor of the receiver.
The order should be affirmed, with costs.
PARKER, Ch. J., BARTLETT, MARTIN and VANN, JJ., concur; O'BRIEN and HAIGHT, JJ., dissent.
Order affirmed.