48 N.Y.S. 604 | N.Y. App. Div. | 1897
The facts of this case, as they appeared before the court upon the return of the order to show cause why the temporary injunction ■should not be made permanent pending the action, are without dispute. The questions presented are of law, and their disposition will determine "the controversy. The action is brought by a taxpayer, ■and its purpose is to restrain the issue and delivery by ■ the town of Southfield, through its supervisor, of 140 bonds of $1,000 each to the Edward C. Jones Company, it being the purchaser at a public sale of the same. The bonds in question were issued pursuant to and under the authority contained in the County Law, upon the ■application of the commissioners of highways and town board of the town of Southfield, to the board of siipervisors of Richmond county, ■coupled with the consent of the trustees of the village of Edgewater, "in which village some of the highways proposed to be improved are .situate.
No claim is made but that the proceedings taken by the above-"named town officers and by the trustees of Edgewater conformed to
In pursuance of the act, bonds to the number of 140 wrere prepared, a public sale of the same was advertised by the supervisor, resulting in a sale to the Edward C. Jones Company upon their bid of par and 25.277 per centum premium, the premium amounting to $35,307.81. The aggregate amount realized upon the sale was $175,367.81. The plaintiff seeks to have the proceedings which have led to this result annulled, to have the bonds declared
There are several grounds stated why this result should be the judgment of this court. The first, and the one which attacks the proceeding at its inception, is that the town has no power to- issue long-time negotiable bonds under the provisions of the County- Law. It may be conceded that, unless there exists some statutory authority authorizing the issue of bonds for a public improvement by a municipality, none can be issued, and that a mere grant of power to borrow money for municipal purposes does not confer such authority. We are, therefore, to see if the necessary authority is found in the provisions of the County Law relied upon to sustain what has been done. By section 69 of the County Law (Laws 1892, chap. 686, ■ amended by chap. 1Y8, Laws 1896) authority is conferred upon boards of supervisors, upon a proper application by constituted ' authority, to authorize a town to improve its highways, either by construction of new" ones, or the repair of those already existing, and to this end authorize the town to borrow money as may be necessary for such purpose. By section YO of the same act it is pro" vided that “ The board shall, from time to time, impose upon the taxable property of such towns sufficient tax to pay such obligations as they shall become due. The supervisor and town clerk shall each keep a record showing the date and amount of the obligations issued, the time and place of their payment, and the rate of interest thereon. The obligations shall be delivered to the supervisor of the. town, who shall dispose of the same for not less than par.” It would seem that the language of those two sections, when construed together, authorizes the improvement upon the credit of the town, ■ and makes provision for the payment of the debt to be incurred. The language provides that the credit of the town shall be pledged. The manner in which it shall be pledged is by the issuance, of an obligation of the town, and such obligation shall specify its amount, the rate of interest, the time and place of payment, and the supervisor and town clerk are required to make a record of it. The obli-. gations when issued are to be delivered to the supervisor, and by him be disposed of at not less than par. The language also contemplates that there may be more than one obligation.
■ It is quite clear that bonds in the form and of the character of the
The language of the statute also imports that the obligation which may be issued shall provide for a more or less extended credit, and evidently contemplates a long-term credit. This is made more plain when this language is considered with other provisions of the County Law. By section 12 of the County Law the board is given general power to fund any debt of the county not represented by bonds, and borrow money for the erection of county buildings and the purchase of' sites, and issue obligations therefor; and also to allow towns to borrow money for town purposes on its credit, and issue its obligations in the manner authorized by law. By section 13 a limitation is placed upon a town in the issue of its obligations, that it shall not exceed ten per cent of the assessed valuation of the real estate, etc. It is quite evident that the obligations referred to in these two sections embrace long-term bonds, or, father, a long extension of credit. This is made still clearer by .a reference to the next section (14), where provision is made for the form of such obligations and their terms, which must not exceed thirty years, or the rate of interest the legal rate. No reason is suggested "why any different signification should be placed upon the obligations here spoken of than those mentioned in section 70. Indeed, nó other authority is found,, aside from that which appears in section 14, where the character of the obligation which may be issued is defined, and it evidently embraces those provided for in section 70. Under the former provisions of law, from which the County Law was in lárge measure taken (Laws 1869, chap. 855, and amendments thereto), the authority
The- case of Brenham v. German-American Bank (144 U. S. 173), relied upon by the respondent, is not in conflict with this view. In that case there was simply the general power to borrow money. As we have seen, in the present case there is not only authority to borrow the money, but authority to issue the obligation. It is further urged that no authority exists to sell more bonds than was suL fieient, with the premium, to idealize the sum of $140,000. It is clear that the debt authorized to be incurred does not exceed the amount authorized, and no greater obligation is created against the town than would have been created had the bonds been sold at par. There- can be no question birt that the board of supervisors possessed the power to authorize the issue of 140 bonds of the par value of $1,000 each bond; and if they have done this, then the fact that the town has been sound enough in its credit to realize a sum beyond the face value of the bonds furnishes no reason for vitiating the sale, and it can have no effect upon the power of the board to authorize the creation of the indebtedness. By reference to section 3 of the act passed by the board, it clearly appears that the language contemplates that the bonds authorized are to issue at par value, and these bonds have been issued in accordance with the direction therein contained. The board possessing the authority,
The excess by way of premium upon the sale of the bonds must be regarded as an incident to the exercise of the power authorized. Kor do we think that the direction by the board to pay the interest upon the bonds out of the proceeds, until the tax provided to pay the same should be collected, is void and beyond the power of the board to direct. Taxes can only be collected at specified times and in a specified manner, and it was of far greater importance to the town that its credit should be maintained by the prompt payment of its interest than that it should be dishonored by its default. This direction was made in order that such result might not happen. It was to meet a condition created by the issuing of the bonds and was so far an incident to the exercise of the power in creating the indebtedness that it was proper to make temporary provision therefor. Its effect was not to deprive the town of any of the money or its benefits. It was a simple provision in anticipation of the tax. It was said by Judge Selden in Ketchum v. The City of Buffalo (14 N. Y. 364): “ Municipal corporations, especially, obtain their funds, for the most part, periodically, by means of annual taxation, and it is impossible by any degree of care to adjust their means to their wants so accurately but that exigencies will arise,, rendering
It is further claimed that there is no authority for the issue of bonds to improve the roads within the village .of Edgewater. In support of this contention, the respondent relies upon Bull v. Town of Southfield (14 Blatch. C. C. 216). It may be assumed that this case correctly construed the statute as it then existed. But since that time the statute has been amended to meet the conditions suggested by that decision, and the law as amended now forms a part of section 70 of the County Law. The consent of the trustees of the village was obtained and forms a part of the record in the case. Besides, section 69 now contains the provision that the board may act upon the application of any town liable or to be made liable to taxation in whole or in part for constructing, etc. The two sections as now existing abundantly answer this objection.
By section 6 of the act of the supervisors, the defendant Harsh, who is the supervisor of the town, was authorized to retain, by way of compensation for his services, one-half of ■ one per cent for all moneys received from the proceeds of the sale of bonds, and a like sum for all' moneys disbursed in prosecuting the improvements contemplated. . It is now claimed that this provision was beyond the power of the supervisors to make. The answer must depend upon whether the duties imposed were devolved upon him as supervisor, for which he receives compensation under general provisions of law. The supervisors of the county of Richmond are paid a fixed sum annually for services as such officers. Services rendered the town, where authorized by law, shall be a town charge. By section 178 of the Town Law (Laws of 1890, chap. 569, as amended by. chap. 252 of the Laws of 1897), when no fee is allowed by law for the service, a supervisor shall receive two dollars per day for services rendered the town. While it is true that no duty beyond receiving the bonds, disposing of them and paying over the
So far as attempt was made by the town board to. fix the compensation of the engineer is concerned, it was an absolute nullity. Ho power in this regard was conferred upon such board, and its act was of no more effect than the act of any other three persons upon the same subject.
It is not necessary that we should now determine whether the drainage bonds are valid, outstanding obligations or not. We are quite clear that they are not obligations ■ of the town of Southfield,for by section 2 of chapter 303 of the Laws of 1871 no portion of the cost, expenses, land damages and compensation, provided for in the act, shall be assessed to. or paid by any incorporated village, town or county in which the lands to be drained are situated, unless a majority of the board of trustees in case of a village, a majority
It follows, from these views, that the act of the board of supervisors was a valid exercise of legislative power, and that the bonds issued thereunder are valid obligations of the town of Southfield.
The order appealed from should be reversed and the injunction vacated, with ten dollars costs and disbursements.
All concurred.
Order modified, with ten dollars costs and disbursements to the appellant, and injunction vacated, except so far as it restrains the payment of commissions to the supervisor and compensation to the engineer;