133 N.Y. 152 | NY | 1892
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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *156
The objection urged on behalf of the parties defending this action that the judgment of the county judge authorizing the bonding of the town was not shown to have been founded upon the necessary jurisdictional facts, is answered by the provision of the statute which explicitly enacts that "such judgment and the record thereof shall have the same force and effect as other judgments and records in courts of record in this state." (Laws of 1869, chap. 907, § 2; Laws of 1871, chap. 925, § 2.) The evident purpose and legitimate effect of this provision is to clothe the judgment with the usual legal presumptions which attend the adjudications of courts of record having general jurisdiction, and to throw the burden of proving a lack of jurisdiction upon those asserting it. (Craig v. Town ofAndes,
A further objection, affecting many, though not all of the bonds, grows out of a prior adjudication in which the error referred to was sought to be cured by a reformation of the securities. (Potter v. Town of Greenwich,
The bonds which form the subject of this controversy divide themselves into two groups according as they were issued before or after May 12, 1871. Four bonds issued before that date have been adjudged void, and the remaining twenty-six issued after that date have been declared valid. Each party appeals from so much of the judgment as is adverse. The act of 1869, which authorized the issue, directed the bonds to be made payable in thirty years. The act of May 12, 1871, authorized their issue payable in not to exceed thirty years (Chap. 925, § 6); but further directed that not more than ten per cent of the total authorized debt should be made payable in any one year. All the bonds issued were drawn so as to become due in twenty years, and that fact is relied upon to defeat both groups of the bonds in controversy.
There are several facts essential to a just appreciation of the nature and character of the difficulty in addition to those which have been already mentioned. The transaction authorized was a borrowing of money by the town to be used for certain specific purposes. Describing it as a sale of the bonds does not alter the real nature of the contract. The town could not sell its own promise to pay, and the bonds in its hands were that and nothing more. They acquired no vitality as securities capable of a sale until they had obtained a valid inception in the hands of the first holder. The consideration described as paid by him is in truth a loan of so much money to the town, for which he takes the town's promise to pay in the form of a bond. The result is in no respect different from what it would have been if the town borrowing the money had given as a voucher its promissory note. The bond and the note alike are but evidences of the debt which itself is the obligation to repay the loan. I think the authorities fully *160
justify this view of the nature of the transaction. (Coddington
v. Gilbert,
It is important, next, to consider and define the position and attitude of the commissioners appointed under the act of 1869. By force of the judgment of the county judge they became the authorized agents of the town, empowered to borrow, upon its credit, the sum of forty thousand dollars, but restricted as to the term of credit to be given. That agency is denied by the appellant, who insists that no such relation was established, citing two decisions of this court as authority. (Gould v.Town of Sterling,
Now, what those agents did as it respects the four bonds issued before May 12, 1871, was within the scope of their authority in every respect except one. They could borrow the money which the bonds were meant to secure for and in behalf of the town; and they did so borrow that money, and by that act lawfully bound the town to repay it. They could appropriate it on behalf of the town to the purchase of the designated railroad bonds, and did so appropriate it, and the securities bought became the lawful property of the town. What these agents could not lawfully do was to bind the town to a repayment by bonds maturing in twenty years when the statute required them to run for thirty, and that mistake they made. We may concede that for such reason the four bonds were void as bonds, as vouchers or securities; but it does not at all follow that the loan was void, that the borrowing was unlawful, that the lender lost his money and the town was at liberty to perpetrate a disgraceful robbery by means of the fault or mistake of its own agents. Treating the four bonds as void, we are required to dismiss them from the transaction, but not to repudiate the transaction itself. They were unlawful incidents of a perfectly lawful transaction and may be disregarded while the transaction stands. Conceding them to be void, they become nullities, mere blank and worthless paper, to be treated as if they had never existed, and to be appealed to for no purpose, at least by the party who avoids them. Dismissing them entirely, we may turn to what remains, and I am confident that enough remains to work out that measure of justice which we all feel it to be our duty to attain. Turning to the transaction itself, there appear to be two further facts, either proved without contradiction or involved in the findings. One of the commissioners testifies that he meant and intended to borrow the money and issue the bonds in strict accordance with the enabling statute, and there is not the least doubt of that fact. It is found that those who loaned the money did so in entire good faith, and that is true only upon the theory that they intended *162
a loan in obedience to the statute and not as a fraud upon the law. There is no difficulty, therefore, about the intent of either party. Their minds met in one common purpose. The lenders meant to lend and the borrowers to borrow in accordance with the terms of the law. If the vouchers given indicated a different intent, they have ceased to have any force and owed their form to some inadvertence or mistake as to what were in fact the requirements of the statute which both parties intended to obey and under which it was their purpose to contract. Throwing aside the bonds, therefore, we have left this substantial transaction. The commissioners, duly appointed as and adjudged to be the agents of the town to borrow for its use and upon the credit of the town the sum of forty thousand dollars, did so borrow that sum and no more, of which four thousand dollars was loaned by the holders of the four bonds in question, both parties intending a loan under the statute and according to its terms, which sum the town received through such authorized agents, but for which it has given no voucher or obligation or express promise of repayment. (Louisiana v. Wood,
As to the group of bonds issued after May 12, 1871, and which, because payable at the end of twenty years, violated, to some extent, the statutory provision that no more than ten per cent of the entire loan should fall due in any one year, we agree with the General Term and hold them valid upon the ground stated by VANN, J., in Brownell v. Town of Greenwich (
The extra allowance awarded should be computed upon the amount of interest recovered, and not, as was done, upon the amount of the bonds.
The judgment should be modified by allowing a recovery, additional to that awarded at Special Term, for the interest upon the loan represented by the four bonds issued before May 12, 1871, and computing the extra allowance only upon the entire interest recovered in this action, and, as modified, should be affirmed. The plaintiff should also recover costs.
All concur, except GRAY, J., who concurs as to the bonds other than the four issued before May 12, 1871, and as to those he concurs in result; MAYNARD, J., concurs in result.
Judgment accordingly. *164