Nelson v. Mayor of New York

This action is brought to recover the sum of $54,550.60, and interest for a balance claimed by the plaintiff to be due to him upon a contract for furnishing sewer drain, pipes and invert blocks. The contract was made on the 29th of April, 1871, between the plaintiff and the defend

The second ground of nonsuit, however, presents a question of greater difficulty. By the charter which was in force at the time of the passage of the act of 1866 (Laws of 1857, chap. 446, § 28), it was provided that no expense should be incurred by any of the departments or officers thereof, whether the object of expenditure should have been ordered by the common council or not, unless an appropriation should have been previously made covering such expense. The act of 1865 (chap. 381), empowers the Croton aqueduct board to frame a plan of sewerage for the whole city, and for that purpose to employ engineers, surveyors, inspectors, and other persons, and to take and acquire lands, and to invite proposals for the work to be done, and contract therefor. It then provides that the expenses incurred by the board in pursuance of that act, including the cost of land, shall be assessed upon the property benefited by the improvement. But the board are authorized to insert, in each contract made by them, a provision that payments, by monthly installments of seventy per cent of the amount of work done, will be made during the progress of the work, the remainder to be retained until the confirmation of the assessment. The comptroller is required, on the requisition of the board, to pay all the expenses incurred by it under the act, from the proceeds of assessment bonds to be issued in accordance with existing laws.

The amendment of 1866 (chap. 551) consists simply of the addition to the act of 1865 of three sections, numbered nine,

Section 10 provides that for the purpose of making such payments the comptroller may issue assessment bonds in addition to those authorized by existing laws, not to exceed $100,000.

Section 11 requires the board, upon the completion of any sewer, to certify to the assessors the quantity of materials used and the price thereof, and the charges for engineers, surveyors, inspectors or other persons, which have been paid by virtue of section 9, for each sewer, in order that the expenses for said materials and labor may be apportioned, together with the other expenses of construction, on the property benefited by the improvement, the bonds to be redeemed from the assessments collected.

The first question which presents itself is, whether it was the intention of the act of 1866 to limit the expenditure for materials, engineers, surveyors, inspectors or other persons employed by the board in the construction of sewers, to the sum of $100,000 to be raised by the revenue bonds specially authorized. If such was the intention of the act, there was no authority given to the board to incur any liability on the part of the city beyond that amount for the purposes specified. That would be the extent of the appropriatiori for those purposes, and the provisions of the charters of 1857 and 1870 and the amendments of 1871 positively prohibit any such appropriation being exceeded.

It is claimed, however, that by section 11, added by the amendment of 1866, the cost of the materials and labor may be assessed upon the property benefited, and, consequently, no specific appropriation was required. But it does not clearly appear that all such expenses would be thus assessed. The language of section 11 is peculiar. It does not provide for the assessment on property of all the expenses which may be incurred, but only of such of them as have been paid by virtue of section 9; that is to say, from the proceeds of the bonds thereby specially authorized. On the completion of each sewer, the Croton aqueduct board is required to certify to the assessors the quantity of materials and the price thereof, and the charges for engineers, etc., which have been paid by virtue of section 9 for each sewer. The only authority to pay contained in section 9 was to pay from the proceeds of the special issue of bonds, thus showing that it was

It is also obvious that materials might be purchased under the authority contained in the act of 1866, which would never be used in the construction of any sewer. The object of the act appears to have been to enable the city to lay in a stock of suitable material, to be used from time to time in the construction of such sewers as might be ordered. The case is the same as if the city had been authorized to lay in a stock of paving stones, flagging, Croton water pipes, or other articles, for future use. The articles, when purchased, would become the property of the city, and although, if used, the city would ultimately be reimbursed by assessments, yet it might take years to consume the stock laid in, and some of it might never be used. The drains, pipes, etc., purchased under the present contract might have been rendered valueless by being superseded by new and improved manufactures, or they might have been lost or destroyed.

It was not certain, therefore, that all the articles purchased would be paid for by assessments. In the mean time, a debt on the part of the city was to be created, and it seems to us that, taking into consideration the provisions of the act of 1866, restricting the issue of bonds to $100,000, and requiring the payments to be made out of the proceeds of such bonds, in connection with the then existing provision of the charter of 1857, that no expense should be incurred unless an appropriation covering it should have been previously made, the authority to issue the bonds and apply the proceeds to the payment of these expenses was regarded as an appropriation, and it was the intention of the legislature to restrict the amount of indebtedness to be incurred by the city to the amount thus appropriated; and that even if the contract had been made before the adoption of the charter of 1870 and the amendment of 1871, we should be obliged to hold that it was subject to the objection that it purported to create an indebtedness larger than was authorized by law.

It is not necessary to consider whether the amendment of 1871 superseded the existing appropriation of $100,000 made by the act of 1866, and required that a new appropriation be made by the city officers under the act of 1871. Assuming that the appropriation made by the act of 1866 continued in force, yet the contract being for $181,000 and upward, it is obvious that it was in excess of the appropriation, and therefore prohibited. If held valid to the extent of $100,000, yet, more than that amount having been paid by the defendant, there could be no recovery on the contract for the excess. (Donovan v. The Mayor, etc., 33 N. Y., 291 .)

It is claimed on the part of the plaintiff that the nonsuit should not be sustained on the ground of the limitation of the amount of the bonds to $100,000, because it was not shown or alleged that the funds thus provided had been exhausted, and if such allegation had been made it could have been shown that the $127,000 already paid had been paid from money received from assessments, and no bonds had in fact been issued.

It does not follow, however, that though the contract be void the plaintiff would be entirely without remedy. If, as is alleged, the city has obtained his property without authority, but has used it and received the avails of it, it would seem that, independently of the express contract, an implied obligation would arise to make compensation. In the case of Argenti v. San Francisco ( 16 Cal., 255 , cited in Dillon on Municipal Corporations, § 384), it is said by Field, Ch.. J., that “ the doctrine of implied municipal liability applies to cases where money or other property of a party is received under such circumstances that the general law, independent of express contract, imposes the obligation upon the city to do justice with respect to the same. If the city obtain money of another by mistake or. without authority of law, it i$ her duty to refund it, not from any contract entered into by her on the subject, but from the general obligation to do justice which binds all persons, whether natural or artificial. If the city obtain other property which does not belong to her, it is her duty to restore it, or if used by her to render an equivalent to the true owner.” (See, also, cases cited in Dillon on Municipal Corporations, § 750.) It has often been adjudged that if a city obtains money on a void bond, or for an illegal tax, or by mistake, and the money goes into the city treasury, the city can be compelled to refund. If it obtains property under a void contract and actually uses the property and collects the value of it from property owners by means of assessments, the plainest principles of justice require that it

But there is a view of this case which renders it unneces-" sary to pursue the question of implied liability, notwithstanding that when the contract was made it was invalid for the' reason that an expense was thereby incurred in excess of the amount appropriated to cover such expense, yet it was clearly within the power of the legislature subsequently to validate* the contract by providing for the payment of the expense thereby incurred; and it is claimed, on the part of the plaintiff, that this has been done by the act of 1872. (Ohap. 872,' § 8.) That section provides, that in addition to the amounts' authorized by existing laws, the comptroller is required to' issue assessment bonds to the amount of $100,000 annually, the amount realized therefrom to be applied to the payment of “ the expenses incurred in the construction of sewers already built or to be built,” and to provide the means to' reimburse the city treasury for the advances made under the' acts of 1865 and 1866.

The object of this section seems to be to supply the defect arising from the insufficiency of the previous appropriation" to cover the expenses incurred under the acts of 1865 and" 1866. The specific reference to those acts shows that they: were present to the mind of the legislatüre; and the expression “ expenses incurred in the construction of sewers to be built ” refers to the class of expenses provided for by the act' of 1866, and shows that it was intended to supplement the appropriation thereby made to cover those expenses. The eighth section of the act of 1872 could have had no other object. No necessity for such an enactment existed for any other purpose. All the expenses to be incurred under the act of 1865, in constructing sewers, were provided for by that act. The only limitation or restriction as to amount was contained in the act of 1866, which restricted the amount of

Before the commencement of this action, the amount of bonds which the comptroller was authorized to issue for the purpose of meeting these expenditures, had reached at least $300,000 — a sum much more than sufficient to pay the claim of the plaintiff. The city admits that it has received and used the materials furnished by him. The legislature has provided the means of payment, and by so doing has taken the case out of the general provision requiring a previous appropriation ; and, unless some substantial defence can be shown to the claim, we see no reason why it should not be paid, in accordance with the intention of the legislature.

The judgment should he reversed and a new trial ordered, with costs to abide the event.

All concur ; Folger and Miller, JJ., not sitting.

Judgment reversed.