42 Barb. 488 | N.Y. Sup. Ct. | 1864
Lead Opinion
It appears by the allegations in the complaint, that the money which the plaintiffs seek to recover back in this-action was paid by them with full knowledge of all the facts upon which their present claim is based,
The plaintiffs do not controvert the general rule above stated, but they insist that the defendants are precluded from objecting that the payment in question was voluntary, by reason of the terms of a resolution adopted by their common council, on the faith of which the plaintiffs allege the- payment was made. The resolution is in these words: “ Resolved, that-in case the Commercial Bank shall pay its tax and assessment at any time prior to the issuing of a warrant for the collection thereof, such payment, shall not be treated or regarded as a voluntary payment, but as a payment under protest, and after the issuing of such warrant and a levy upon its property to enforce such payment.” If there were no question as to the power of the common council to bind the coloration, by the resolution referred to, I should have no difficulty in assenting to the plaintiffs’ position. The rule that a voluntary payment can not be recovered back is intended solely for the protection of the party receiving the money, and it is undoubtedly competent for him to waive the benefit of the rule by a valid agreement to that effect. In Brisbane v. Dacres, (5 Taunt. 143,) Gibbs, J. said: “ There are many doubtful questions of law; when they arise, the defendant has an option, either to litigate the question, or to submit to the demand, and pay the.- money. : I think that by submitting to the demand, he that pays the money gives it to the person to whom he pays it, and makes it his, and closes the transaction between them. He who receives it has a right to consider it as his without dispute ; he spends it in confidence that it is his;,and.it would..be most mischievous and unjust if he who has acquiesced in the right by such v’óluútárv payment should be at liberty, at any time within the statute of limitations,6 to rip up the matter, and recover back the money. He who received it is not in the same condition; he has spent it in the confidence
These considerations show the value of the rule to the party receiving the money. They also suggest, in the case at bar, the importance of the question whether the common council had authority to make the agreement expressed in the resolution above transcribed. The resolution shows, on its face, that the payment was not compulsory in fact, and its express purpose was to waive the rule under consideration and subject the corporation to the mischiefs which the rule is designed to prevent. I cannot resist the conclusion that by their action in that respect the common council exceeded their "rightful powers.
(2.) It is no answer to the position above stated,.to say that the same consequences might have resulted if the tax, instead of being paid voluntarily by the plaintiffs, had ■ been collected by compulsory process of law. By the charter of the city, the power of collecting and receiving taxes is vested, not in the common council, but exclusively in the city treasurer, and collectors appointed by him. (Laws of 1850, cJi. 262, §§ 282, 106.) The treasurer is chosen by the electors of the corporation, (§ 9,) and the common council are expressly prohibited from appointing any other person to receive taxes, (§ 106.) The mode in which taxes shall be collected, when not paid voluntarily, is specifically pointed out, in the
(3.) By the resolution in question, the common council, in order to induce a tax payer to pay his tax voluntarily, surrendered, as we have seen, a valuable right of the city. If - they had gone a step further and bartered away the money of the city, as for instance, if they had agreed to allow interest, or to make a deduction from the amount of the tax, in consideration of its payment in advance of the issuing of a warrant for its collection, no argument would be needed to show the utter invalidity of their action. But upon the question of power I do not ¡perceive that the case is altered by the circumstance that the thing bartered away is a legal right, instead of money or a chattel.
The only part of the charter to which the plaintiff has called our attention, upon the question of authority, is section 48, which provides that the common council “shall have the management and- control of the finances, rights and interests, buildings and all property, real and personal, belonging to the city, and may make such rules and by-laws relating to the same, as they shall deem proper and necessaiy.” This general provision does not confer upon the com
The resolution of the common council being unauthorized, the payment must be regarded as voluntary. Those who deal with the agents of a municipal corporation must take notice of the restrictions in its charter, in respect to the powers of the corporation and its agents, and the mode in which such powers may be exercised, and must see to it that the contracts on which they rely are authorized by the charter. (Brady v. Mayor &c., 20 N. Y. Rep. 312.) The plaintiffs are presumed, in law, to have known when they paid the money voluntarily, that the agreement which they now set up was void.
As the common council assumed to incur an obligation which even the corporation was not authorized to do by agreement, the corporation is not made liable by the fact that it has received the consideration for the obligation. A corporation can not, by subsequent ratification, make good an act of an agent which it could not have distinctly empowered. (Hodges v. Buffalo, 2 Denio, 110. Halstead v. The Mayor &c., 3 N. Y. Rep. 430.) But, in fact, the question of ratification does not arise. The agreement being void, to the knowledge of the plaintiffs, the case is the same as if the payment had been made without the agreement. The defendants are exempt from liability for the reason that the payment was voluntary in fact, and there is no sound legal principle upon which it can be otherwise treated. •
For the reasons above expressed, I think the judgment below should be reversed, and judgment entered for the defendants, on the demurrer.
Welles, J. concurred.
Dissenting Opinion
(dissenting.) Upon the ground upon which the decision is put I can not concur with my
The rule in respect to what would constitute a voluntary payment, when no recovery could be had for the restoration of money paid, or when the payment would be held compulsory and a recovery allowed, within the case of Harmony v. Bingham, was doubtless understood by the plaintiffs and by the defendants, or by their respective counsel under whose advice they acted, at the time of the payment of the tax in question in this action; and both parties doubtless had that case before them and understood its force, and acted in reference to the rule there laid down.
It is apparent, therefore, that the payment in question was not made or received with intention to waive the right of the plaintiffs to test the legality of the tax in question by subsequent litigation. Both parties clearly understood this, and there can be no pretense that the payment was intended to be a voluntary one, within the rule which forbids a recovery for such payment. The complaint states that the plaintiffs appeared before the assessors and there insisted that they were not liable to be assessed and taxed for the $100,000 of the United States securities, held by them as part of their capital; and that after the assessors had completed their roll, including an assessment for securities, they (the defendants) contested the question before the common council of the city, and opposed the confirmation of such assessment, and
The rule that voluntary payments can not bé recovered' is clearly for the sole benefit of the party rec^ivitig^the pqy-, ment, and it can not be doubted that such páijty nrqy \vRiAe the objection, before or after suit brought; andqt'bán not^be;. denied that this resolution does upon its face anticipate' and expressly waive such objection. It stipulates ?iiqt..j.fguedy' payment shall not be treated or regarded as a voluntary payment.” This is an agreement that in any suit or controversy about such tax no such objection shall be taken or made that the same was voluntary. And it says further, that such
This, I think, is a mistaken view of the question, and of the power of the common council. It is true that the people of the city of Rochester constitute the body politic and corporate of such city; but for all substantial and practical purposes the mayor and aldermen, constituting the common council, are the actual corporation. The common council so composed is the legislative authority of the city, and represent the city, in the same sense that the state legislature represents the state. They are its acting and speaking power, and the only agency or voice by which it acts, speaks and contracts to bind itself or others.
By the express provision of the first section of the charter the inhabitants are incorporated by the name of the city of Rochester, with all the power conferred by the statutes of this state upon corporations, as well as those conferred by the charter itself. By the -fortieth section of the charter it is declared that “The common council shall have the management and control of the fiscal and prudential affairs of said city, and of all property, real and personal, belonging to the city, and may make such orders and by-laws relating to the same as it shall deem proper and necessary.” Here is an
By section 117 of the charter, the common council was expressly authorized in case any mistake should be made or error committed in any tax or assessment upon any property, real or personal, “to remit such assessment or the tax based thereon if uncollected, and to refund the same if collected.” Under this section^ the common council could have corrected the assessment in question in this action, before the tax was collected, or refunded it after made. If they could do this upon their own conviction that such assessment or tax was erroneously imposed, certainly they could stipulate to submit the question to the court without suit, or to submit, before payment or after payment, without raising any question aside from the merits. And this is what they have agreed. They have stipulated with the plaintiffs to litigate the question in dispute upon the merits without raising the question whether the prepayment of the tax should or should not be regarded as voluntary.
When the common council passed the resolution in question they knew that the plaintiffs claimed that the tax on the §100,000 of United States government securities was illegal, and proposed to contest its legality and to sue for its recovery back; and they passed this resolution in order that the city might immediately receive said tax and the plaintiffs might immediately pay the same, without affecting their rights in such litigation.
When this suit was actually commenced the common council was the only power to defend it. They were under no obligation to violate their resolution and interpose or raise the objection that such payment was voluntary. They were
But to go further; the common council being the only power to determine whether an action—this action—to recover the amount of such tax should be defended or not, it could certainly stipulate for its own action that no such defense, as that such payment was voluntary, should be interposed or made by its authority. The city attorney, by whom the defense in the suit is interposed, is the mere agent of the common council. He is appointed and removed by them, and acts under their authority and control. The resolution in this view binds the common council not to make the defense in question, or authorize or allow it to be interposed. It therefore controls, legally and lawfully, the defense of the action, and the defendants are bound by such stipulation. It merely waives a formality in the prosecution of the suit not connected with or affecting the merits of the question in dispute, and for such stipulation the defendants received a consideration in the prepayment of the tax and the use of the money pending the litigation, which was obviously of some advantage to the city, provided it should ultimately prevail in the action.
The defense or objection to the plaintiffs’ claim to recover the amount of the tax alleged to have been illegally imposed, being thus interposed solely upon the authority and direction of the common council, and for which they alone are responsible, I think we should hold that the common council is the principal in making such defense, and is to be treated and regarded as though it was the corporation in fact, and
But if the common council can not he regarded as the virtual defendant in this action, and the city is not therefore estopped from setting up the defense that the payment in question was voluntary notwithstanding said resolution, then I think the defendant, the city, the body corporate, the whole body of the inhabitants, is bound by its acts as its or their agen'ts acting in their behalf and for their benefit. As such agents they stipulated that if the plaintiffs would pay them the tax before the warrant issued, no such defense as that of a voluntary payment should be made. The plaintiffs paid the tax accordingly into the city treasury. The city has had the money, and received and obtained it four or five months in advance of the time when it could be legally enforced, upon the inducement and representation held out to the plaintiffs in the resolution. The city having thus received the consideration for the agreement, can not be allowed to retain the benefit acquired by its agents and disown and disavow its part of the bargain. The city has kept and retained the money that it obtained upon the faith of such resolution, and is bound by the acts of its agents, as much as an3>- private individual. It can not keep the money and cut off the plaintiffs from the benefit which they expected to receive, and which the defendants’ agents stipulated they should receive for its payment be'fore it was legally due or collectable.
It is well settled that if a person, not duly authorized, makes a contract on behalf of a corporation, and the corporation takes and holds the benefit derived from such contract, it is estopped from denying the authority of the agent. (The Episcopal Charitable Society v. The Episcopal Church, 1 Pick. 372. Hayward v. The Pilgrim Society, 21 id. 270. Randall v. Van Vechten, 19 John. 60. Foster v. Essex
Judgment for the defendants, on the demurrer.
X. 0. Smith, Welles, and X Darwin Smith, Justices.]