Baldwin v. Mayor of New York

The question raised in

this case as to the power of the legislature to pass the act directing the arbitration therein, has been fully examined by Clerke, Justice, at special term in this case ( 42 Barb. 549 ), and by myself in The People ex rel. Baldwin and Jay-cox agt. Haws ( 37 Barb. 440 ; S. C. 24 How. 148 ). It is unnecessary-to reiterate in an opinion here the views then expressed. The conclusions arrived at in those decisions have not been changed, and we refer to those decisions as containing our opinions on the questions now under discussion.

The opinion of Denio, C. J., in Darlington agt. The Mayor ( 28 How. 352 ), contains much not at all necessary to the decision of that case, and the unlimited power claimed in that opinion for the legislature, over the property of municipal corporations, should be authoritatively declared in a case which would make it binding as an authority before it is adopted as law, removing, as in this case, all the protection which the constitution has given to rights to private ; property and to a trial By jury, in cases of disputed claims. I cannot concur in the views expressed by Judge Welles in this case, without abandoning all the rules heretofore adopted for the protection of municipal corporations in

The order appealed from should be affirmed.

Clerke, J., concurred.

The plaintiffs have interposed several preliminary objections to the motion, one of which is, that it was irregular for- the comptroller to make, and, therefore, irregular for the'special term to entertain it, for the reason that the fifth section of the act of 1859, under which the motion was made and decided, is in contravention of section 16, of article 3 of the constitution, which provides that “ no private or local bill which shall be passed by.the legislature, shall embrace more than one subject, and that shall be expressed in the title.” This objection, it seems to me, cannot be- sustained. The provisions of the section in question were incidental to the principal subject of the act as expressed in the title, which was to enable the supervisors to raise money, by tax.

The legislature, for ■ the purpose of determining the aggregate amount to be annually raised by tax in the city and county of ISTew York, must necessarily rely for its data upon information derived mainly from the comptroller, who is the head of the department of finance in the city government. Among other items of his budget- to be laid before the legislature, there is generally one for judgments recovered against the corporation. Except for the section of the statute of 1859 in question, it would be his duty to include all such judgments, and of the legislature to provide for the payment of them all,.in .the amount authorized to be levied; without reference to the question whether they had been obtained by collusion, or were founded in fraud.' The section under consideration was intended to furnish a remedy, for this evil, and declares that whenever the comptroller shall have reason to believe that any.judgmerit then of record against the city, or which might be 'thereafter obtained, should Have been obtained by collusion

The title thus admitting of either of these constructions, that one which the framers of the statute seem by its pro-"’ visions in relation-to the subject of taxes to have intended, should be adopted; and if that be so, it follows that the fifth .section must be confined in its practical application to

The authorities are full to show that except for the fifth section of the act of 1859, this objection would be fatal to the motion. That section, however, if it has not been repealed by subsequent legislation, is a perfect answer to it; But it is answered by the plaintiffs’ counsel, that by a provision contained in the first section of the act entitled “ an act to enable the board of supervisors of the county of New York to raise money by tax for the use of the corporation of the city of New York,” passed April 24, 1863 (Sess. Laws of that year, chap. 227, p. 407), the fifth section of the act of 1859 is, though not in express terms, yet by plain and necessary implication, repealed. The act of 1863 referred to, is the law for the tax levy for that year, and contains an enumeration of the various objects and purposes of the tax thereby authorized, and the amount appropriated to each, among which is the following: “'Salaries, law department, thirty thousand dollars. The head of this department shall have the exclusive right, and it shall be his exclusive duty to appear for and represent the said Mayor, aldermen and commonalty, and their officers, in all motions, actions and proceedings.” This provision

The 26th section of the act to amend the charter of the «city, of New York, passed April 14,-1857 (Chap. 446, p. 874), declares that there shall be a “law department,” which shall have the charge of and conduct all the law business of the corporation and the departments thereof, • &c., and that the chief officer thereof shall be called the “ counsel to the corpipration.” The 5th section of. the act of 1859, repeals in part the 26th section of the act of 1857, • by conferring upon the chief officer of the department of finance the charge and control of a part of the law business of the corporation, and which would otherwise have appertained to the law department.. By the provision referred to of the first section of the act of 1863, the business thus. diverted from the law department is restored, and it is declared to be the exclusive right and duty of the head of that department to appear -for and represent the city corporation and their officers, in all motions, actions and proceedings.

The constitutional validity of this provision in the act of 1863, is .challenged by the counsel for the defendants,, on the ground that it is a subject not embraced in.the title . of the act, and it was held void by. the special term , for that reason. But with all my respect for the learning and judicial accuracy of the justice who made the order, I find myself constrained to. differ with him in his conclusion on that, subject. , I think the provision may be upheld- upon grounds similar to those upon which the fifth section of the act of 1859 is sustained, viz : .that it is incidental to the' main subject .and purpose of the act, and as showing for what purpose, and the whole of. the purpose for. which the thirty thousand dollars...for salaries to the law department.

Other departments of the city government, as well as that of finance, might also incur liabilities for legal services, by employing counsel not connected with the law department, which it would be claimed the city was bound to pay,

The foregoing are among the reasons which have brought me to the conclusion that the provision under consideration of the act of 1863, is incidental and germain to the main subject and purpose of the act as expressed in the title, and, therefore, not in contravention of the constitutional 9 provision referred to. The views herein expressed upon the preliminary objection last considered, have proceeded upon the assumption that the act of 1863 is either a private or local act, or both private and local. This is denied on the part of the plaintiffs, who by their counsel, have presented in their brief furnished'upon the hearing, a very strong argument to show that the act is neither private or local. I incline very strongly to the opinion that the counsel are substantially correct in this respect, and if so, it is neither within the letter or spirit of the prohibition of the article of the constitution referred to. I forbear

The comptroller no doubt, believed, for reasons which were satisfactory to him, that the judgment in this case was collusive or fraudulent, and that was sufficient to justify, and require him to institute proceedings under the

, In view of these definitions, there can be no pretense that the judgment in this case was obtained by collusion. After several ineffectual attempts to obtain payment of the award of arbitrators appointed under the act, and after being told by the courts that their remedy was by action upon the award, this action was brought. The defendants

Was the judgment founded in fraud, or had it a fraudulent foundation ? Did it originate in a dishonest and wicked design on the part of the plaintiffs to obtain money from the tax-payers of the city, to which they knew they were not entitled ? Where is .the evidence which leads to an affirmative response to these inquiries, or either of them ? The question on this motion is not whether the plaintiffs had or had not, in fact, a valid legal or equitable claim against the city, which could, be enforced in the courts, but it is whether they believed in good faith that they had such claim, and have in like good faith sought to enforce it in the manner provided by the act of the legislature, in obtaining the award of the arbitrators, and afterwards seeking to collect that award by action in the supreme court. Is there any evidence before this court tending to show that the plaintiffs in all this were actuated by dishonest or fraudulent motives; or with any other design than the prosecution of a claim which they supposed they had against the" city corporation ? If there is, I confess my inability to discover it. The expression “ founded in fraud,” which by the fifth section, of the act of 1859, is made one of the grounds of a motion by the comptroller •for relief against a judgment, contemplates an act or acts, or a line of conduct on the part of a person obtaining the judgment, which implies moral turpitude—actual, positive fraud—craft, deceit or contrivance, used to circumvent, deceive or mislead another.. They were not designed by

Independent of the consideration of the abstruse and complicated class of questions which would devolve upon the comptroller, who is not necessarily or generally a lawyer, to decide upon such construction of the section, before he could feel himself called upon or authorized to move in the matter, and of the delay and expense that would be likely to follow, I think it apparent from the language of the section that no such interpretation was contemplated by the makers of the law. The comptroller must have reason to believe, first, that the judgment was obtained by collusion, which by all the definitions to be found, implies such actual and positive fraud; or, second, that it was founded in fraud. The section provides for two stages or periods of time at which the objectionable attributes or qualities of the judgment are found to exist; the one relating to the means or agencies by which it was obtained, and the other going back and relating to its foundation. With respect to the latter, the words “ founded in fraud/’ were intended to express the same moral quality attributable to the judgment in its origin or foundation, as the words “ obtained by collusion,” employed to designate the means by which it was obtained. In both cases the section seems to look to one and the same objection to the judgment, but applicable to different periods of its history, and in each implies bad faith, and a corrupt and dishonest purpose.

It is claimed on the part of the defendants, that so much

The plaintiffs’ counsel in answer to this objection, takes three positions, viz:

1. That the whole act, including that part of the fourth section to which the objection refers, was agreed to by the defendants, through their agents, before the act had become a law, and while on its passage through the legislature; and that the passage of the act as we find it, was the result of an agreement entered into between these parties, without which agreement no part of the act—at least no part of the fourth section—would have received the assent of the legislature. That the act- was passed upon the application of the Croton Aqueduct Board and the city corporation, by their authorized agents, for the benefit of the city, and that the same has been sanctioned and adopted

,Under the provisions of .section four, just recited, the, arbitrators were appointed, and organized, a hearing was, had, and a report made by them in favor of the plaintiffs, for $61,821, which report was filed in the office of the clerk, of the county of New York on the ,19th day,of January, 1861; and an order of confirmation entered on, the same, day. Notices of the time and place of hearing before the arbitrators, were duly served on the then mayor, on the" then ■ comptroller, and upon the Croton Aqueduct Board,- and the mayor gave notice to the then counsel 4o the comp-: troller, who declined to appear or take any part on said, arbitration, upon the ground, as he alleged, that the law, department would not have any duty to perform.in the, premises until a question should necessarily arise upon the power of the legislature to pass the law authorizing the. arbitration. In order to an accurate appreciation of this position of the plaintiffs’ counsel, it is necessary to notice more particularly the circumstances und.er which this act of 1860 became a law.

By section 38 of the amended charter of the city of New York (Sess. Laws of 1857, chap. 446, p. 814, vol. 1), all contracts to be made or let by authority of the common council, for work to be done, or supplies to be furnished, involving an expenditure of. more than $250, shall be made and entered into. by the appropriate heads of departments,, unless, by a vote of three-fourths of the .members elected;

On or about the 27th day of September, 1858, the Croton Aqueduct Department advertised for proposals for’ building the gate-houses-and aqueduct of the new reservoir. " Within the time specified in the advertisement for that purpose,' and tinder ¡and in pursuance thereto", the plaintiffs sent in sealed proposals for the work: The plaintiffs’ bid was the lowest, and the Crototi Aqueduct ‘Board thereupon awarded the work to the plaintiffs, and communicated their proceedings and award to "the common council on the 28th of October, in the year last aforesaid. The affidavit of Baldwin, one of the plaintiffs, after stating these proceedings, but with much more particularity, proceeds as follows: “That deponent and said Jay cox, thus feeling, -the assu-ranee that they were by law entitled to said work, and entertaining no. doubt but that the said award of the Croton Aqueduct Board would be confirmed by the "common council, and it being represented to them by the said Cro-ton Aqueduct Board that it was very important that they ,- said "Baldwin and JaycoA, should be'prepared to go on with the ivork as early as possible in April then next, as' Stated in their annual report of said board for 1858, they,said Baldwin 'arid Jaycox, ■ proceeded to make extensive arrangements for performing said work, the obtaining-materials and labor for same, and made contracts for that purpose, and expended a great,deal of money, and incurred very large liabilities by reason of their commencement of, aiid preparations for the carrying out of said aAvard.”

• ‘The affidavits in opposition to the motion show, that the confirmation of -the award'of- the. Groton Aqueduct Board by the common council, was opposed-by Fairchild,- Walker

The plaintiffs then commenced an action in the supreme court against the city and Fairchild, Walker & Co., to prohibit the city from permitting the latter to construct said gate-houses and aqueduct, and to restrain them from doing the work, in which action the plaintiffs were defeated, on the ground that they had no technical legal right to the job of doing the work, for want of confirmation by the common council. The plaintiffs then instituted proceedings for a mandamus, requiring the Croton Aqueduct Board to procure and execute to them the contract for doing said work, and to permit the plaintiffs to proceed and build the gate-houses and aqueduct, in which proceedings the plaintiffs were defeated. The plaintiffs then invoked the aid of the attorney general of the state against the city, as having violated its ¿barter in awarding and letting said job to

, It will, therefore be perceived that at this stage of the transaction, the corporation of the' city and its Croton Aqueduct Board, were, by the last mentioned .injunction,, and the provisions of the said' 38th section of the amended charter of the city, prevented from proceeding."in-the work of constructing the said gate-houses and aqueduct, and practically ffom - progressing with the construction of the new reservdi-r to its completion, as it- is elsewhere shown in the papers that it -vims absolutely- necessary that the, work of constructing the reservoir, or at least of a considerable portion of it, and of the gate-houses and aqueduct, should proceed together. In this emergency, an application was made by the Croton Aqueduct Board, to the legislature of 1860,; for a law authorizing the said board, among other things, .to proceed with the construction of the gatehouses and aqueduct, and for that purpose to purchase the materials necessary therefor, and to construct the same, at such prices and in such manner, by contract or otherwise, as-they might deem the public interests required. The; plaintiffs opposed the passage of such law as an invasion of their rights under the said award of the Croton Aqueduct Board, and as an attempt "on the part of the city and its Croton. Board to evade the effect of the action-brought in the" name of the people against the city, and the injunc

The affidavit of the plaintiff Baldwin, read in opposition to the motion, states in this connection : “ That deponent and said Jaycox succeeded in preventing the passage of said law in the form so prepared by the city and its Croton Aqueduct Board,.and the city could not obtain the passage thereof.” The plaintiff Jaycox, in his affidavit, states that he has personal knowledge of the facts stated in Baldwin’s affidavit, and that the same, and the statements therein contained, are true as therein stated.

It is shown by the affidavits read in opposition -to the motion, that after much negotiation, and various statements by the parties pro and con, before and to the committee of the legislature having the subject in charge, it was finally consented and agreed by and between the plaintiffs and those representing the cityóf New York and the Croton Aqueduct Board, that the act of April 16, 1860, as it now appears (Sess. Laws of 1860, p. 772) should pass and become a law ; that the plaintiffs should cause the action commenced in the name of the people on the relation of the plaintiffs', to be discontinued, and the injunction granted therein should be withdrawn, and that the plaintiffs should unite with the city and its Croton Aqueduct Board in requesting and urging the legislature to pass the law; and that thereupon, and in consideration of such consent and agreement, the legislature passed the law as it now stands. That the city, by its Croton Aqueduct Board, availed itself of all of the provisions' of the act particularly' favorable to its interests, and that the then mayor appointed one of the arbitrators, in pursuance of the provisions of the fourth section, which were incorporated into the act' in favor of the plaintiffs, and which are now challenged as unconstitutional ; that the plaintiffs also carried out their part of. the agreement in writing, with those representing the city and the Croton Board, in requesting and urging the passage

Thus, I think, it is shown that the portion of the fourth section of the act which provides for adjusting and determining the damages that the contractors to whom the gatehouses and aqueducts, specified in the same section, were awarded by the Croton Aqueduct Board on the 27th day of October, 1858, which they might be equitably entitled to recover of the city of New York, was constitutionally valid, on the ground that it was assented and agreed to by all the parties interested therein, and that the voluntary arbitration which followed, provided the same was in all material respects organized and conducted regularly and pursuant to the said section, was valid and binding upon the city ; and upon the further ground that the law after its passage, has been adopted and acted .upon by the head of the. city government, in writing, with the plaintiffs, in creating and organizing the board of arbitration ; and furthermore, on the ground that the city authorities .have availed themselves of so much of the act and of the fourth section as was beneficial to the city, thereby, ratifying, if , that was necessary, all the provisions of the act, and precluding themselves from alleging its invalidity.

2.. Another position taken by the plaintiffs’ counsel, independent of the one just considered is, that since the recovery of the judgment and before the motion to the-special term, the .legislature had passed a law recognizing the judgment,, and providing for its payment. By the first section of the act for the tax levy of the city of New York, passed April 25, 1864 (Sess. Laws of that year, chap. 415, p. 940), the supervisors are authorized and required to order, and cause to be levied and raised by tax, &c., and to be collected according to law, for the use of the m,ayor, • aldermen and commonalty of the city of New York, an amount of money equal to the aggregate of the several sums thereinafter mentioned, after deducting from such

It is abundantly shown oh behalf of the plaintiffs, that this sum was made up of the amounts of "three several judgments then existing argainst.the city corporation, one of which was the judgment in question in favor of the plaintiffs. That the act last mentioned was passed Upon the application of "the comptroller of the city, and founded upon the budget by" him laid before the legislature as the basis thereof. "It: also-appears that the same amount went intó and formed a part of the tax for the year 1864, subject to such ratable deduction for estimated receipts and income as stated in "the "said first section of the act, and the presumption is that the" same has been Collected. If .that is so, I can conceive of-no good-reason why.it should be withheld from the plaintiffs. It has been appropriated by the legislature to that object,’ and tlie.city has no right ■without further legislation to.divert,it;to any".other. ■ ;

3; Another position taken- by the plaintiffs .in answer to .the allegation of the want of power in the, legislature to pass the act,of April 16,-1860, takes issue.ypoñ the allegation, and asserts the constitutional power to "pass the law.

The defendants are a municipal corporation, constituting a branch or portion of the.,government; pf the state as applied to th.e city of New York; invested with certain legislative, municipal and administrative powers, as .defined -in its charter, which is a grant of political power,- creating a civil institution to be employed in the administration of the government. In the case of" Woodward agt; Dartmouth College ( 4 Wheat. 518 ), "Washington, J., said, that there .were .twd kinds- of corporations aggregate, via í “ Such as

Here was a claim by the plaintiffs - against the city of Sew- York,-for damages arising from the ¡failure of the former to obtain the contract awarded to them-by the Croton Aqueduct Board. The- legislature deeming the claim A ■meritorious’one, or that the-plaintiffs were" "entitled to have an opportunity of -proving it to be such, provided* =for the 'creation of a tribunal to determine, the character of-, the 'claim-, and if meritorious" ¡and justóte determine its amount, -and providing further, in case the determination'should be •in favor of -the- plaintiffs, for carrying such" determination into effect. The parties "were, in reality, only the state "and the plaintiffs. It is true "the taxpayers of the ■ city were interested,-but when- the-’ state interferes in an- act of -government, and as a- question of power, the people of the ‘ whole state, represented by- -their legislature, become- the only party besides the plaintiffs, and it was; therefore, competent for it to pass this law without the assent 'of the city or its cooperation. I think this is not only-good logic, but - is substantially sanctioned by the reason df- Judge" Dentó,

. For the foregoing reasons, I,am of the opinion that the order of the special term should be reversed, with ten dollars costs oPthe appeal, and ten dollars costs of opposing the motion before the special term.