57 N.Y.S. 1039 | N.Y. App. Div. | 1899
Lead Opinion
Judgments in these several actions were entered amounting to $700,000, by the offer of the then corporation counsel after a series
The learned judge below correctly stated that “ the decision of the-motion depends upon three conditions: Was the settlement effected in good faitJi ? Was it effected in exercise of competent authority % Is it supported by sufficient consideration ? ”
It is con~eded that in "approaching this adjustment and in the carrying of it out, all parties concerned were actnatéd in
And it may further be said that in the transaction of the business-of a municipal corporation, just as in the administration of the-affairs of a private corporation, there must, be power delegate/! tesóme officers to act for the corporation.
Although such authority may be abused and the municipality suffer in consequence, the city is just as likely to-be injured by a¿ neglect to confide to some responsible officers authority to act in a. particular case. Unless something is left to the judgment and discretion of officials and the responsibility placed upon them to determine under what, circumstances the power shall be used, it wereidle-to confer it.
Here, "the zeal, integrity and judgment of .the corporate’officials.
As correctly urged by the appellant, it is beyond the power of municipal officers to make a gift of the moneys or the property of the corporation; and if, upon the facts here appearing, this large amount of money was a mere gift, based on. no consideration, the action taken could not and should not receive the sanction of the "court. In support of the argument that the settlement lacked consideration, our attention is called to the fact that the Court of Appeals (139 N. Y. 543), in one of the several actions brought by these plaintiffs — all of which relate to different sections of the aqueduct— decided, as to section 6, in favor of the city. The court Iield in that case that upon the plans were lines designated by letters
The respondents claim that, on a trial as to the other sections, they could show by additional plans and by the opinion of experts - that the excavation claimed for was within the limiting lines, which, in section 6, were determined by the cohrt without such aid and by mere inspection of the plans. And it appears that for some time prior to the final certificate given by the -chief engineer —. which. Under the construction of the contract, was to he binding — payments were claimed in accordance with the construction given by the defendants to the contract, and that such payments for the excavation were allowed. The fact is not disputed . that' tunnel excavation actually done by the contractors, amounting to more than the- judgments offered, were allowed by the engineer in charge of the work during its performance, although' taken out of -the final certificate as made up by the engineer on the completion of the work.
- Although the appellant insists that the. actions in reference to. the Other sections are for claims similar to the one involved in the action, tried in reference to section 6, the respondent is equally as persistent in claiming that, as the amounts are based upon different contracts, containing -different provisions and concerning different portions of •the work, a recovery could be had without disturbing the rules, and principles laid down in that decision; and that the action on section 6 was based on the unreasonable refusal of a certificate, while the other claims are based on the right to recover by attacking the certificate as fraudulent. To clearly show this distinction, a- change was proposed.in the pleadings, and a-motion to be allowed to amend Was made and denied, and an appeal therefrom is still pending. But even though the city were successful on that motion, the issue would not be determined, for, as the Statute of Limitations has not yet;run, new actions upon the theory which the plaintiff insists that his evidence would support could be commenced.
The various considerations; and motives which actuated the city
“ That, with that end in view, in the summer of 1896, steps were taken by the said Kellogg in one of the above-entitled actions to amend the complaint under which the final certificate of the chief engineer could be attacked as fraudulent and a recovery had upon that theory for the work actually done, but uncertified. This form of action, if said complaint had been so amended, would have been entirely different from the form of action under which the decision of the Court of Appeals upon section 6 was rendered.
“ That while the city was successful in the first instance in defeating the amendment, deponent feared that in the end the plaintiffs might be successful in securing the amendment, and even if they did not, they would still be in a position to commence new actions upon the new basis, the time for commencing same not having expired.
“ That deponent believed that, upon this new form of action and upon this new issue, a question might be presented for the jury upon which it would be necessary to call as witnesses for the city the engineers who had been employed by the city during the building of the aqueduct.
“ That to deponent’s knowledge some of the most important of these witnesses had died or gone to foreign lands, or for other reasons had become unavailable as witnesses for the city.
“If the trial of-the actions still remaining untried should assume this phase, it was quite possible that such actions might be decided in favor of the plaintiffs and a recovery had therein much larger than the amount settled for.
“ In any event the new situation made the matter of the city’s-ultimate success at least doubtful, and seemed to warrant a settlement.
“ That it was also claimed by Mr. Kellogg that all the plans of the work had not been before the court in the case on section 6, so that they could be properly examined and passed upon by the
“ That all of these conditions, and especially the possibility of recovery in the new form of action, were taken into consideration by deponent and formed a strong incentive to induce deponent to advise the making of a settlement in addition to the special grounds ■covered in the correspondence.”
There was, therefore, an actual controversy in which the plaintiffs sought to recover for work actually done, and the outcome of which was considered doubtful. The cases cited in the court below and many referred to upon the argument, establish the principle that a compromise Of a doubtful claim is a good consideration"for a promise to pay money, and when an action is brought upon such, a promise, it- is no answer to show that the claim is not a valid one. (Crans v. Hunter, 28 N. Y. 389, 394.)
It is insisted, however, by the appellant, that while this, rule should be recognized as applying to individuals, a different principle applies to municipal corporations, and to answer these objections, and the further one that, under the facts here "appearing, what was sought to be done was to make a gift without consideration, we cannot do better than refer to the language of the court in Board of Supervisors of Orleans County v. Bowen (4 Lans. 24, 32):
“ It is claimed in behalf, of the plaintiffs that what they undertook to do was to give away the corporate property, and that this was wholly beyond their power; but here was no gift in any just or proper sense of the term. It was a gift in the same sense that every party to a controversy gives when he relinquishes a portion of a •claim he makes against his adversary to effect a settlement and avoid further, litigation, and no other.
“ It is. a sacrifice of a portion of a claim, which may never be fully sustained, upon the altar of peace. Such settlements have always commended themselves to the favor of courts and of the law. What the plaintiffs did in this" case was to throw off the interest and costs upon their claim in order to get rid of the defendants’ appeal, and avoid the expense and delay óf further litigation. * * * . It is of no avail to say that the defendants could not have succeeded on their appeal in reversing the judgment. The court will never
This subject of a compromise by a municipal corporation is ably treated in the case of Prout v. Pittsfield Fire District (154 Mass. 450), where many of the authorities are examined and reviewed, .and where it was held that the plaintiff’s claim, “ whether, on a final -determination, it might or might not be found to be valid, was sufficiently substantial to furnish a good consideration. for the •compromise.”
The claims of these plaintiffs aggregated between $7,000,000 and -$8,000,000, which, with several years of interest, amount to nearly, if not quite, $12,000,000 at the present time, and of this sum the ■plaintiff’s counsel expresses confidence of being able to secure as the result of litigation, more than $3,000,000. Upon such a showing, •coupled with the advice of eminent counsel specially charged with the litigation, and with the further fact appearing that many of the witnesses who secured the victory for the city upon the first trial bad ■died, gone away or were no longer available, can it be said that the action taken was without justification or authority or so lacking in consideration that it was simply a gift of a large amount of the city’s money ? In the letter of the special counsel upon the subject they write: “ Under these circumstances we are of the opinion that a full .and final settlement of all the controversies relating to payments to be .made by the city under the contracts for the construction of the new aqueduct * * * provided the same should not substantially •exceed the sum mentioned by you, would be to the best interest of -the city, and if you have good reasons to suppose that a proposition made by yourself would result in bringing about such a settlement, we are of the opinion that it is your duty to make one.”
As the result, therefore, of the advice and approval of all those ■familiar with the subject, and with the knowledge which the corporation counsel himself had gained as an aqueduct commissioner as to the merits of the claims of the contractors, he pursued the negotiations through many months and finally secured the settlement. As the corporate authorities had reached a conclusion (in which we can-mot say they erred) that a very considerable liability might be fixed
Order accordingly affirmed, with costs.
Van Brunt, P. J., and Ingraham, J., concurred; Patterson and McLaughlin, JJ., dissented.
Sic.
Dissenting Opinion
(dissenting) :
I cannot agree with the other members of the court to affirm this: order. The corporation counsel, in my opinion, had no authority to make the offer upon which the judgments were entered, and,, therefore, his act is not binding on the city. All the power which, the city has is specifically expressed in or necessarily implied from, the charter; and the corporation counsel, the legal adviser of the= city, has no power, other than that derived from the city through the charter, and every act assumed to be done by him in excess of", that power is void. The charter in effect at the time the offer was-made (Consolidation Act, Laws of 1882, chap. 410) did not confer upon the corporation counsel either directly or impliedly the power to-do what he did, and his act is not sustained by any precedent that I. have been able to discover. An attorney acting for an individual cannot, in the absence of express authority, make a compromise for his-client, or conclude him in relation to the subject-matter of an action. (Barrett v. Third Ave. Railroad Co., 45 N. Y. 635); he cannot satisfy a judgment without payment in full, and if he does the satisfaction will be set aside (Beers v. Hendrickson, 45 N. Y. 665); he cannot release his client’s rights or subject him to a new obligation. (Lewis v. Duane, 141 N. Y. 314.) The corporation counsel has no larger powers, as such, to bind the city than those connected with the ordinary relations of attorney and client. This is precisely what was- held in. The People and Taylor v. Mayor (11 Abb. Pr. 66). There judgment was rendered against the city of Hew York, and the corporation counsel, doing what he believed to be for the best interest of the city,, stipulated not to appeal. Subsequently a motion was made to set: aside the stipulation, and the court held that it would not inquirpinto the merits of the action by considering whether the opening of" the judgment would result in gain or loss- to the city ; that the • corporation counsel had no power to make the stipulation, and, therefore, the -city had a legal right to have it vacated. In the course of"
Here the corporation counsel had no power to make the offers and the city has the legal right to have the judgments vacated, and it is no concern of the court whether it is for the best interest of the city or not. The court discharges its duty by determining the question according to the legal rights of the parties. The power to settle and compromise these actions, if the power existed at all (which it is not necessary now to determine), after the claims had been presented to and rejected by the comptroller (McGinness v. Mayor, 26 Hun, 142), was lodged in the common council. The actions are all based upon contracts, and before they were commenced the claims forming the basis of each were presented to and rejected by the comptroller, and after such rejection, in the absence of some act, of the common council, no other body or officer could obligate the city to pay th e same or any part thereof. Section 74 of the Consolidation Act supports this view. That section, among other things, provides that “ no additional allowance beyond the legal claim, which shall exist under any contract with the corporation, or with any department or officer thereof, or for any services on. its account or in its employment, shall ever be passed by the common council except by the unanimous vote thereof ; and in all cases the provisions of any such contract shall determine the amount of any claim thereunder, or in connection therewith, against the said corporation or the value of any such services.”
But it is said, or such inference may fairly be drawn from the prevailing opinion, that the corporation counsel had power to do what he did, because his act was approved by the mayor, the special
The corporation counsel, as we have seen, had no authority under the charter to authorize the judgments to be entered, and something' more than the- facts which appear in the record must be shown . before he could obligate the city to pay $700,000. The settlement may have been a wise one, but that has nothing to do with the question of whether or not he had the 'power to make it. The fact remains that the act of the corporation counsel was unauthorized, • and the city having attacked it, as it had a legal right to do, the judgments should be vacated.
■ I am also of the opinion that the judgments should be vacated for want of consideration. The city is not an eleemosynary corporation. It must be just, but it cannot be generous. It mtist pay its obligations, but it cannot give its property away.
The'claims involved, in these actions, in the condition in which . they were when the judgments were entered, could not be legally enforced against the city. That has been decided by the Court of Appeals in O'Brien v. Mayor (139 N. Y. 543). A comparison of
The only consideration, therefore, for the judgment was prospective or threatened legislation, once applied for and refused, or judicial action, once applied for and denied. That this was the consideration clearly appears from the correspondence between the corporation counsel and the special counsel and the aqueduct commissioners.
In the letter of the corporation counsel to the special counsel under date of .November 25, 1896, he said : “ The decision already rendered in the one case which has been tried doubtless affords ample protection to the city so far as litigation is concerned, but offers no assurance against legislative attacks. Last year, as you are aware, a bill was introduced in the Legislature looking to the appointment of a commission to make awards upon these claims, and I am informed upon authority, which appears to me to be worthy of credence, that a similar attempt will he made during the forthcoming session. I am very apprehensive that either this year or some other year such a measure will be passed, and I feel that if it should our chance of complete success before a commission would, for many and obvious
And, in a letter of the special counsel to the corporation counsel, under date of October 25, 1897, referring to the previous advice as to the advisability of a settlement, they said : “We were not influenced in any considerable degree by any opinion or belief that the claims of the contractors had any foundations whatever in law, justice or equity. Our advice was founded upon the possibility that the city might, through the chances and changes of time, lose the benefit of evidence. now accessible to it or that the Legislature might be induced, under the pressure of the contractors, into some ill-advised measure of indulgence toward them. We regarded the decision of the Court of Appeals as a final determination adverse to all the claims of the contractors, and that it would be equally' available against any of such claims. * * * In giving our former advice we assumed that there was some danger of such indulgence, notwithstanding the entire want of justice and equity in the claims. * * * It may reasonably be supposed that they selected what they supposed to be their strongest claims for active prosecution, but we do not regard this as a sufficient assurance against legislative intervention. * * * ”
; And, in a letter of the corporation counsel to the special counsel, under date of November 17, 1897, he said : “ So far as any strictly legal claim is concerned, its non-existence has been determined by the Court of Appeals;' and, if the rule of stare decisis applied to the Legislature as well as the courts, there would be no reason for making any compromise at all; ” and, in a letter to the aqueduct com
The property of the city cannot be used to prevent hostile legislation or to “ purchase peace ” by preventing the prosecution of •claims which have no legal existence. I cannot conceive of a more -dangerous precedent to the city than this one if the order be affirmed, as it practically' puts the disposition of the property of the city in the hands of the corporation counsel.
The order appealed from should be reversed and the motion granted, with'costs.
Patterson, L, concurred.
Order affirmed, with costs.