28 N.Y. 605 | NY | 1863
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *607
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *608
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *609
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *610
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *611
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *612
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *613
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *614 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *616
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *617
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *618
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *619
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *620
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *621
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *622
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *623
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *624
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *625 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *627
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *628
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *629
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *630
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *631 Since this action was commenced, and since the judgment appealed from was rendered, some of the questions which were discussed by the learned judges of the Supreme Court have been decided in other cases in this court. The money which was to be raised by the city of Rochester was, by the statutory provisions which are drawn in question, to be applied in promoting the construction of a rail road terminating in that city, by means of the purchase of shares of stock in the rail road corporation. And it was considered by some of the judges that this was a power which, from its nature and on account of certain constitutional provisions, could not be exercised by a municipal corporation, even with the sanction of the legislature. But it has been determined otherwise by this court in some cases to which reference will presently be made, and the point is, consequently, no longer insisted on by the counsel for the plaintiff.
The only questions which are now open for discussion, and the only ones which have been urged on behalf of the plaintiff, are raised by these two propositions: first, that the sections of the act amending the charter of the city of Rochester, (§§ 285 to 292 inclusive, of ch. 389 of the Laws of 1851,) were not constitutionally passed by the legislature, and hence were never a part of the law of this state; and secondly, if this were otherwise, that the contract between the parties to this suit under which the plaintiff advanced the money which is sought to be recovered in this action, was void, because the common council of the city exceeded the authority which these sections conferred, in entering into that contract. If either of these positions can be maintained, it is further contended that the money advanced by the plaintiff to the defendant can not be retained by the latter, but is to be considered as money received by the city for the plaintiff's use.
(1.) The general purpose of the sections referred to was to enable the city corporation, upon certain conditions, to subscribe for and become the purchaser of stock in the Rochester and Genesee Valley Rail Road Company, an existing *632 corporation whose road was to terminate in the city, to the amount of three hundred thousand dollars; to issue the corporate bonds for that amount of money; and to dispose of the stock by sale; and to raise by taxation the money to discharge the interest of these bonds. The provisions are challenged as not being an emanation of the law-making power which the constitution has committed to the legislature; but it is argued that, on the other hand, they derive whatever authority they possess, as statutory enactments, from the vote of the electors of the city of Rochester. The six sections which precede section 291 contain detailed provisions authorizing the common council of the city to subscribe for the stock and to issue their bonds. They are in the ordinary form of an enabling statute, enacted by the legislature by its proper authority, and then the section 291 declares that these preceding sections shall not take effect until they shall have been submitted to the electors at a special election. Detailed arrangements respecting the election were then made, the purpose being stated to be that of determining "whether or not it is expedient for said city to borrow the money mentioned in said section, for the purposes therein specified." Prior to the election, the sections in question are to be published in two daily papers. The form of the ballots are to be "For the railroad," and "Against the rail road." And it is declared that the former "shall be deemed to approve of said section," and the latter "shall be deemed as not approving it." Provision is then made for canvassing the votes, and the mayor and clerk are to make a certificate that the sections are approved, or are not approved, as the case may be, by two thirds of the electors voting. The next section, (292,) declares if the section shall be approved by the requisite majority, "that the same shall take effect immediately after the filing of the certificate of such approval of the said act." The final section declares that "this act shall take effect immediately."
The general question involved in the present appeal has *633
been passed upon by this court on several occasions. (Barto v.Himrod, 4 Seld. 483; The Bank of Rome v. The Village ofRome,
(2.) The other question is whether the contract between the parties contains provisions not warranted by the statute, considering it to be a valid law. The provisions of the act *638 necessary to be considered in resolving this question, are these: The common council were authorized to exchange the stock, in whole or in part, for the bonds, and in the event of such exchange they were to cancel the latter; they were authorized to dispose of the stock to any one who would purchase it for cash; but they might not sell it for less than par, except at public sale, of which notice by advertisement was to be given, and if it should be sold, the proceeds were to be strictly applied to the redemption of the bonds. As to the bonds, the directions were that the $300,000 might be borrowed for a term not exceeding twenty years, at a rate of interest not exceeding seven per cent per annum, and corporate bonds might be given therefor; and it was enacted that the common council might `dispose of such bonds to such persons or corporations as they shall deem most advantageous to the city, but not for less than par.' Prior to the entering into the contract between the city and the plaintiff, the former had executed bonds to the amount of $100,000, and had disposed of the same for a premium amounting in the aggregate to $4655. The contract was dated March 2, 1853. It recites that the city had subscribed for and obtained the $300,000 worth of stock, for which it was to pay that amount, or such part of it as the rail road company should require. By its terms the city sells, and the plaintiff purchases, the whole of the stock at $300,000, payable $20,000 down, and $2000 on the 1st day of January in each year thereafter for twenty years, and the whole residue on the 1st day of January, 1873, with interest on the part at any time unpaid at six per cent, payable semi-annually. This interest was to be received on $100,000 from January 1, 1853, that being the date of the $100,000 of stock sold, and on the residue from the time the city should be required to pay the money to the rail road company as its subscription for stock. The city was to issue to the plaintiff or his appointee corporate bonds to the amount of $180,000, for which he was to pay them the par amount in money as they should be issued. The *639 plaintiff was to have paid to him the premium realized on the $100,000 of stock which had been sold "so that the sale," as the contract reads, "of the whole amount of bonds shall be, when taken together, a sale at par." The city was to retain the title to the stock and the scrip issued for it, and to have all the rights of stockholders, but the plaintiff was to have all dividends made by the rail road company. The plaintiff was entitled to anticipate his payments upon surrendering an equal amount of bonds, and might then call for a transfer of a proportionate amount of stock. A failure by the plaintiff to perform in any respect was, at the election of the city, to involve a forfeiture of the contract and all payments made by him. The bonds issued were, and those to be issued were to be, on interest at the rate of six per cent per annum. It is urged in the first place, by the plaintiff's counsel, that the sale of the stock was on credit and not for cash as required by the statute; but I think the position is satisfactorily answered by the suggestion that the stock was not to be parted with until the money was paid. Nothing depended upon the personal responsibility of the purchaser. The sale was in one sense conditional and executory, but when executed in such manner as to divest the city of the title to the stock, it was to be paid for in cash. There is nothing in the act forbidding such a transaction. The inhibition to sell otherwise than for cash was inserted to guard against a sale upon the credit of any person, or upon any security other than the stock itself. As long as the city retained the stock until the money should be paid, it can not be said that they sold it on credit, or otherwise than for cash. It is then insisted that the stock and the bonds, one or both of them, were sold at less than par, which was forbidden, except as to the stock which might be sold at a discount if it should be subjected to a public sale. But the sale was not a public one. The violation of these provisions is inferred from the undertaking of the city to allow the premium which it had realized on the first sale. As to the bonds, they might *640 have been made to bear an interest of seven per cent consistently with the act, but those sold, as well as those which were to be issued, carried but six per cent interest. In my opinion the intention of the legislature was simply to limit the interest to be paid by the city to seven per cent. This will not be exceeded or equaled by the amount actually made. Considered simply as a sale of the $180,000 of bonds, the payment of the $4655 would not bring the interest upon the money to be paid by the plaintiff up to seven per cent per annum, if the bonds should be made to run until the closing up of the affair in 1873, and the city had the right to determine what time of payment should be inserted in them. The difference between the seven per cent and six per cent on the $180,000 would absorb the premium in less than three years. Supposing the prohibition to be against selling the bonds at less than par, at whatever rate of interest they might be issued, it is yet doubtful whether, if, taking the sale of all the bonds together, the rate would not be exceeded, (and such would not be the case taking the whole $280,000 into the account,) the statute would be violated. Without, however, placing any considerable reliance upon this last view, I am of opinion, upon the whole, that the spirit and effect of the act was not violated.
No objection can be made to the price at which the stock was contracted to be sold. The plaintiff was to pay par and interest for it, and although it was connected with the agreement to sell the bonds, the paying over to the plaintiff of the realized premium should not be attributed to the depreciation of the stock, for it was, in terms, made a part of the transaction respecting the bonds, and the circumstances do not afford any occasion for transferring that feature of the contract to the sale of the stock, if, as I have supposed, it was a legitimate portion of the bargain respecting the bonds.
I am in favor of affirming the judgment of the Supreme Court. *641
HOGEBOOM, J. read an opinion in favor of affirmance, and DAVIES, WRIGHT and MULLIN, JJ. concurred.
JOHNSON, J. dissented. INGRAHAM, J. thought the statute, and the contract entered into in pursuance of it, void.
SELDEN, J. took no part in the decision.
Judgment affirmed.