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Village of Arverne-by-the-Sea v. Shepard

20 A.D. 12 Court N.Y. App. Div. English

Delivered by Bradley, J.:

Contents

Majority

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The Village of Arverne-by-the-Sea, Plaintiff, v. Edward D. Shepard and August T. Post, Defendants.

Headnote

Village bonds — when expenditures are “ ex.tram'dinary.”
On June 12, 1897, village bonds, when authorized by a vote of the electors of a village, for “ extraordinary expenditures ” of the village, mentioned in section 4 of title 4 of chapter 291 of the Laws of 1870, as amended by chapter 131 of the Laws of 1884 and in chapter 879 of the Laws of 1895, might be issued, for, any village purpose, where the amount of the expenditure was in excess of the-limit of amount (§500) imposed, by' section 3 of title 4 of chapter 291 of the Laws of 1870, as amended by chapter 400 of the Laws of 1893, upon the village trustees in making “ Ordinary expenditures.”
Submission of a controversy upon an agreed statement of facts, pursuant to section 1279 -of the Oode of Civil Procedure.
John J. Lenehan, for the plaintiff.
Appleton L. Clark, for the defendants.

The subject of the controversy relates to the power of the plaintiff as a municipal corporation to incur the liability represented by its bonds of the par value of $113,000, issued in June last. Following an affirmative majority vote at a -village election, held on the

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fifth of that month, upon resolutions presented, the trustees having issued the bonds, sold them at public sale to the highest bidder on June 12,1897, for $131,788.75, pursuant to notice of sale duly published. Such bidder was "William E. R. Smith, and the bonds were duly awarded to him, who deposited the sum of $2,000 on account thereof. Subsequently Smith, with the consent of the plaintiff’s trustees, duly transferred to the defendants his proposal, bid and contract for the bonds, together with his deposit of $2,000, and they, for a valuable consideration, took and assumed all the rights, agreements and liabilities of Smith thereunder. The bonds, duly executed, were tendered by the plaintiff to the defendants, and payment of the balance of $129,788.75 and accrued interest demanded, and 'they declined to accept the bonds or to pay the balance of the purchase price therefor upon advice of attorneys that the village authorities had no power to borrow money and issue bonds for the purposes mentioned in the resolution (referred to as “ extraordinary expenditures ”), within the meaning of the provisions of chapter 291 of the Laws of 1870, and the acts amendatory thereof and supplementary thereto. It, therefore, seems that the power to issue the bonds under that statute was dependent upon the fact that the purposes for which the plaintiff, through the action of its trustees, sought to incur such liability and issue such bonds came within the meaning of extraordinary, as distinguished from ordinary, expenditures for which bonds might be issued under the provisions of such statute. “ If this question is answered in the affirmative then judgment is to be rendered in favor of the plaintiff, directing the defendants to accept said bonds and pay to plaintiff the balance of the contract price.” Otherwise, judgment is to be rendered in favor of the defendants and directing the return to them of the sum so deposited This is the only question submitted by the parties to the court.

The plaintiff since the year 1895 has been a municipal corporation. It was created and organized as such pursuant to the provisions of the act entitled “ An act for the incorporation of villages,” passed April 20, 1870, and the acts amendatory thereof and supplementary thereto. The statute provided. that “ the expenditures of the village shall be denominated ‘ordinary expenditures’ and ‘extraordinary expenditures.’” (Laws of 1870, chap. 291, tit. 4,

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§ 1.). “ ‘ Ordinary expenditures’ shall be those necessarily incurred to carry- but and.enforce the rules,-by-laws and ordinances which the trustees 'are authorized to -adopt by title 3 of this act, and to give force to -the powers therein conferred, except as such expenditures . may be specifically enlarged or diminished Or controlled by other' provisions of this act.” (Id. § 2.) “ Ho -ordinary expenditure for any one specific act, object, purpose or thing, except the lighting of Streets,, shall exceed the sum of five hundred -dollars.” (Id. .§ 3, as ■ amended by Laws of 1893, chap. 400, § 1.) The statute also provided that “ the trustees shall have power to raise money for an extraordinary expenditure .for any village purposes by. assessment and tax, by submitting a resolution stating the amount to be raised,” ■etc., “ to the annual election or to a special election of the legal electors, entitled to vote,” etc., and upon an affirmative majority vote they might proceed in the manner provided,, and when such resolution provided for raising the same in installments, the trustees might issue bonds, of the village for the amount of such installments, payable respectively when such installments were to be raised, with interest not exceeding, six per cent per annum. Provision was also made for the manner of selling the bonds, and that they should not be sold for less than par. (Id. § 4, -as amended by Laws of 1-884, chap.. 131, § 1, and id. § 5, as amended by Laws of 1895, chap. 879.) There is no question here relating to the regularity of the proceedings taken to their result in issuing the- bonds and selling them, and it is conceded that the statute in those respects was strictly pursued, and that such result was legal and the bonds valid, if the object and purpose of the liability thus created was to raise money for extraordinary expenditures within the meaning of the statute. The purposes sought by the creation of the obligation of the' village were : (1) The making and -improvement of streets in the village; (2) the making and improvement of sidewalks in the village; (3) the construction of a sluice for sewerage purposes; (4) the condemnation ' for the acquisition of the right to construct such sluice or drain; (5) the opening and extension of Ocean avenue, and (6) constructing ■ culverts and drains.

Those contemplated improvements Were for village purposes,, and in that sense they came within. those which may be denominated “ extraordinary expenditures,” and. yet, if they -had not exceeded

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the limitation in amount, they or some of them, would have come within such as might have been deemed ordinary expenditures. By reference to the statute, it is seen that the powers of trustees of villages were quite specifically recited. (Laws of 1870, chap. 291, tit. 3, § 3, subd. 25, as amended by Laws of 1893, chap. 212.)

It is suggested and urged on the part of the defendants that • the class denominated extraordinary was distinguished in nature from that of ordinary expenditures. If that view is supported, the bonds in question were issued without authority. In Allen v. The Village of Northville ( 39 Hun, 240 ) Mr. Justice Learned said: “ It is not the amount, but the natu/re of the expenditure which makes it ‘ ordinary.’” Such remark was unnecessary to the result. And Mr. Justice Bockes, in a concurring opinion, expressed a contrary view, and said: “ If in excess of this sum ($500), the expense was an ‘extraordinary expenditure.’ ”

This, in view of the statute, as shown by its provisions, seems to be the reasonable and necessary meaning of that term. Both classes of expenditures were for village purposes, and, as has been observed, the statute expressly provided that the extraordinary expenditures might be made “for any milage purposes?' There does not appear to be any statutory limit in the nature, occasion or purpose of the expenditure, to render them extraordinary, further than that they be made for village purposes. And to hold that the distinction between the two classes of expenditures, within the contemplation of such statute, was in their nature and not in the amount, would render the provisions of the statute relating to extraordinary expenditures substantially nugatory. The trustees, as administrative officers of the municipal corporation, were vested with certain powers, among which were necessarily some to enable them to raise money for its general purposes. But upon this there was a limitation to what may be termed ordinary expenses. It was contemplated by the Legislature that something beyond this limit upon the power of the trustees would become necessary, and it was, therefore, provided that the people of the village, entitled to exercise the right, should, by a. majority vote, be permitted to authorize a larger expenditure within and for the purposes specified. This, within the meaning of the statute, constituted an extraordinary expenditure as distinguished from the ordinary one. It was rendered so without

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reference to its nature, but because it was an expenditure thus provided for beyond the limit in amount prescribed for that which the' trustees might provide for without the direction or authority'derived, from the. majority vote of their constituency, taken in the manner prescribed by the statute. Ho further discussion of this question seems necessary. The court is called upon, by the matter submitted, to answer the single question, and if it is determined in the affirmative to direct judgment for substantially the specific performance of the contract of sale and purchase of the bonds, which contract appears by the agreed statement of facts to have been made and partially performed on June 12, 1897. The time of the making of such contract is particularly referred to, because the provisions, original and amendatory, of the general act relating to the incorporation of villages, as they were prior to and up to the 1st day of July, 1897, then ceased to exist, and -were repealed by the Laws of 1897 (Chap, 414), now known as “ The Village Law.”-

If the contract for the sale and purchase of the bonds was effectually made, as is assumed by the parties in the statement of facts presented here, then the obligation created by it was not impaired by the repeal of the statute under which the bonds were issued. (Const. IT. S., art. 1, §, 10.) We deal only with the question which the parties have seen fit to submit to the court for determination. The views upon the facts presented lead to the conclusion that the question submitted should be'answered in the affirmative, and that judgment, be directed accordingly in favor of the plaintiff, without costs.

All concurred.

. Judgment for plaintiff ■ on agreed statement of facts, without costs.

Statutes and regulations cited