Court Opinion

ID: 3607251
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:52:24.459731+00
Date Added: 2024-06-11T13:59:07.647581
License: Public Domain

Before any judicial decision by the courts of the State directly upon the point, I came to the conclusion, and so adjudged in Clark v. City of Rochester (13 How., 204), for reasons there imperfectly stated, that the legislature had no power under the Constitution to delegate to, or confer upon, municipal corporations the authority to subscribe for and to hold stock in railroad corporations, and to issue their bonds in payment therefor. In the light of experience and the disastrous effects of the exercise of such power, the corruption of public morals and the burthen of taxation now *Page 139 
resting upon municipalities resulting from its exercise, I see no reason to regret the view I then took of such extra municipal powers. Notwithstanding the reversal of that judgment and the almost unbroken current of decisions adverse to it, there has at all times been a strong dissent from the views which have prevailed, and if the question were res nova it is possible a different result would be reached by the courts. A strong inclination has been manifested, as well by the courts as the people, to retrace the steps taken and turn back, so far as possible, the current of authority. Whenever the people have been permitted to speak as they have done in this State, in Pennsylvania, Ohio and Illinois, and perhaps in other States, the legislatures have been expressly prohibited from delegating such power to municipal corporations. The express prohibition of the exercise of the power at the first opportunity after it was assumed, is some evidence that in committing to the legislature the power to create municipal corporations for the purposes of local government, it was only intended that such powers should be conferred either for the imposition of taxes for the creation of debt, or for any other purpose as directly pertained, and were essential, to the government of a municipality as one of the constituent parts of the State government. Judge DILLON, in his work on municipal corporations (page 147), well remarks: "The judgments affirming the existence of the power have generally met with strong judicial dissent and with much professional disapproval, and experience has demonstrated that the exercise of it has been productive of bad results."
The question was first presented to this court in The Bank ofRome v. The Village of Rome (18 N.Y., 38), in which it was held that there was no constitutional restriction, either in terms or by necessary intendment, upon the power of the legislature, and that it might confer upon municipal authorities the power to subscribe to the stock of a railroad corporation, and to raise the necessary funds by taxation or upon its credit. Five, only, of the judges concurred in this result; Judges COMSTOCK, DENIO and PRATT, although not in terms *Page 140 
dissenting, withholding their assent by taking no part in the decision. The same case was again before the court (19 N.Y., 20) upon the effect of the certificate of the commissioners as to the performance of a condition precedent to the issuing of the bonds, and it was held, Judges DENIO and GRAY expressing no opinion, that the certificate was conclusive evidence, in behalf of abona fide holder of the bonds, of the facts therein asserted.Clark v. City of Rochester (supra), when it came before this court (as reported in 28 N.Y., 605) was decided, so far as the question of legislative power was concerned, upon the authority of The Bank of Rome v. The Village of Rome
(supra); JOHNSON, J., dissenting; INGRAHAM, J., expressing the opinion that the statute and the contract made in pursuance of it were void, and SELDEN, J., taking no part. Although the doctrine was regarded as settled by Bank of Rome v. Village of Rome,
courts and judges have reluctantly yielded to its authority upon the principle of stare decisis, and the number of protestants has always been considerable. In The People v. Batchellor
(53 N Y, 128), the authorities bearing upon the question of legislative power, and the constitutional right to confer upon municipalities authority, by a loan of their credit, to aid private railroad corporations, were collated and considered. In the judgment pronounced in that case, the court went far toward directly, in terms, overruling the former decisions upon the subject, and made a decided retrograde movement in hostility to the existence of the power claimed. Notwithstanding the apparent and nominal disclaimer of the learned judge, now deceased, by whom the opinion was prepared, and the attempt to distinguish the case from others, the cases which affirm the right of the legislature to confer upon municipal corporations the power referred to were, in effect, overruled. Such is the logical and necessary sequence of the judgment; and there is no ground upon which it and the cases which preceded it can be reconciled or made consistent.
Judge JOHNSON, in his opinion, as one of the Commission of Appeals, in The Town of Duanesburgh v. Jenkins (57 N. *Page 141 
Y., 177) was entirely right in his assertion, that to admit the competency of the town by its own assent, or the assent of a majority of its tax-payer or electors, with the authority of the legislature to do the acts in question, was fatal to the argument that the legislature could not compel a town to do the same acts. The legislature could not do indirectly, or by conferring authority on subordinate and local governments, that which it could not do directly and by its own act. It could delegate no power which it did not possess itself. The validity of the act in question depends wholly upon the power of the legislature, as the municipality has no inherent power; and, therefore, when this court decided that the legislature could not directly perform the act, or compel the municipality to perform it, it necessarily decided that power could not be conferred upon the municipality by any vote or assent of its members to do the act. I am constrained, therefore, to regard the last decision of this court as authority. It rests upon sound principles, and must be regarded as declaratory of the law. The case of Weismer v.Village of Douglass* recently decided by this court, and not as yet reported, in which it was held that bonds issued by the village of Douglass in aid of a private corporation, and by authority of the legislature, were invalid, is to some extent an authority in accordance with the views already expressed as to the validity of the bonds in suit, so far as their validity depends upon the legislative power.
We are at liberty to carry the decision in People v.Batchellor to its clear, logical results, and apply to loans of credit by municipal corporations since its promulgation the doctrine necessarily involved in the judgment there given. As there was no inherent power in the town of Duanesburgh, as a municipal corporation, to incur the obligation, and the legislature had no power to compel its assumption by the town officials in behalf of the town, or by its own act to impose such extra municipal obligations upon the corporation or the inhabitants of the town, it follows that but for the previous decisions of this court we should be constrained to hold that the bonds *Page 142 
were void and the issue of them ultra vires, and that they could not be validated by a transfer to a purchaser for value. There could be no bona fide holder, as all would take with full knowledge of the want of power in the agents to bind the town. But the bonds in suit had been issued and transferred to the present holders for value before the prior adjudications of the court had been judicially impeached or questioned; and the purchasers took them upon the faith of those decisions, relying upon them as declaratory of the law of the State. If the bonds had been issued since the last decision of this court that would have controlled; but having been issued before, there are cogent reasons for holding, if possible, that they are protected by the prior decisions commencing with Bank of Rome v. Village ofRome (supra). The Supreme Court at Washington has held that courts cannot destroy or affect the validity of obligations incurred pursuant to powers decided by the highest courts of the State to have been constitutionally conferred and before such decisions have been overruled by a different interpretation of the Constitution and the constitutional powers of the legislature. (Thomson v. Lee County, 3 Wall., 327;Havemeyer v. Iowa County, 3 id., 294.) Whether it is intended by these decisions to deny, as is implied by the language of the opinions of the learned judges, the constitutional power of a State court to impair the obligation of a contract by a decision promulgated after the making of the contract overruling a prior decision of the same court by which the contract would, by the Constitution and law of the State, as before expounded, have been adjudged valid, or merely that under such circumstances the later judgment would not be followed as a rule of decision in respect to contracts made after the first and before the promulgation of the later, is not material to the case in hand. They are precedents which, under the circumstances, may be followed, for holding that the first decision should govern as to obligations incurred before such decision was impeached, and while it was properly regarded as the true exposition of the Constitution and laws of the State. In no other way can those who *Page 143 
have become the holders for value of bonds which have been issued by municipalities and by authority of the legislature in aid of private corporations be saved from loss.
The validity of the bonds, so far as their validity depends upon the power of the legislature, being assented to for the reasons and upon the authorities stated, the only other questions are whether the conditions precedent and upon which the existence of the authority in the local agents to bind the town by the issue of the bonds had been performed, and as to the effect of the enabling and validating act of 1864. (Laws of 1864, chap. 402.) That the conditions were not complied with, and the necessary consents of the taxable inhabitants procured is, I think, very clearly shown, and but for the acts of the legislature, and especially that of 1864 (supra), the plaintiffs would have failed in this action by reason of the want of power in the officers to act. (Dillon on Munic. Corp., 413, and cases cited; Marsh v. Fulton Co., 10 Wall., 676.)
I should have had great difficulty in giving the effect to the act of 1864 claimed for it so as to make the bonds, given for what is manifestly an extra municipal purpose, valid notwithstanding the want of power in the officials to issue them, if the question was an open one at this time. It is not entirely clear to me that the cases relied upon to establish the legislative authority and the force and efficacy of the act to vitalize the bonds, or the principles upon which they rest, are applicable to or decisive of the question. But, in respect to the issue of the bonds of the present defendant, of which those in suit are a part, this court is concluded by The Town ofDuanesburgh v. Jenkins (supra), in which the Commission of Appeals, a court of concurrent jurisdiction and equal authority with this court, has decided the precise question after a deliberate examination; and it would be indecorous, if we were disposed to do so, to review that decision. It must stand not only as the law of the case, but conclusive as to all the bonds of the present defendant issued by the same authority and under the same circumstances.
Without, therefore, considering the question or re-examining *Page 144 
the same, or the principles upon which that decision rests, but giving effect to it as an authority binding upon this court, I am willing to affirm the judgment, on the ground that the bonds were valid and obligatory by the act of 1864, notwithstanding the alleged defects in the actual power of the agents to bind the town.
RAPALLO, J., concurs with ANDREWS, J.; FOLGER, J., concurs on grounds stated in memorandum. CHURCH, Ch. J., concurs with ALLEN, J.; MILLER, J., not sitting.
Judgment affirmed.
* 64 N.Y., 91.