Rogers v. Smith

Headnote

Chapter 638 of 1874 — power of legislature to renden' valid, bonds issued without compliance with statutory requirements — Article 8, § 11, of amended Constitution— not retrospective.

Chapter 638 of 1874, providing that the bonds of the town of Greenwood, issued by the commissioners therein named, should be legal debts and obligations against said town, is constitutional and valid.

Its validity is not affected by the fact that the Court of Appeals had previously decided that the county judge had acquired no jurisdiction of the proceedings in which the commissioners were appointed by reason of the petition’s being defective in not stating that the railroad company was a corporation in this State.

Section 11 of article 8 of the amended Constitution, prohibiting any county, city, etc., from issuing bonds to any corporation, does not operate retrospectively.

Appeal from an order continuing an injunction, in an action to restrain the commissioners and supervisor of the town of Greenwood, county of Steuben, from proceeding for the' purpose of levying a tax to pay coupons or interest on bonds issued by the town.

On September 5th, 1872, the county judge of Steuben county, upon a petition duly presented to him, appointed the defendants

Brundage, Ersley and O’Hargan, commissioners, and authorized and directed them to issue bonds of the town of Greenwood to the amount of $30,000, and to invest them or their avails in the stock of the Rochester, Hornellsville and Pine Creek Railroad Company. The commissioners, on 26th September, 1872, issued that amount of bonds, and they were, on the same day, registered in the office of the clerk of that county, and invested in and exchanged for an equal amount of the capital stock of said railway company. On the 30th September, 1872, upon the application of one Rogers, as relator, a writ of certiorari to review the proceedings had before the county judge was issued, directed to such county judge. The adjudication of the county judge was affirmed by the judgment of the General Term of this court, and was reversed by the Court of Appeals,'upon the ground that the petition did not contain the statement that the railroad company was a corporation of this State. ( 56 N. Y., 1 .) Afterward, by act of the legislature, the order or adjudication of the county judge appointing the commissioners to issue the bonds referred to, and the action of the commissioners, were ratified, confirmed, and declared legal and valid; and the bonds thus issued were declared legal obligations, and the commissioners were authorized to discharge their further duties as such. (See Laws 1874, chap. 638.) This action was afterward brought in the names of four of the tax-payers of the town of Greenwood, and the preliminary injunction order, after a hearing had (upon which the record of the adjudication of the county judge, the papers and proofs upon which it was made, and the act above referred to by the legislature, were produced), was continued. From this order the defendants appeal.

The act of the legislature (chap. 638, Laws 1874) was effectual to render the commissioners legal. officers, their action valid, and the bonds by them issued subsisting obligations. {Bank of Chenango v. Brown, 26 N. Y., 467 ; The People v. Mitchell, 35 id., 551 ; Butler v.. Palmer, 1 Hill, 324 ; Town of Guilford v. Supervisors of Chenango Co., 3 Kern., 143; Thomson v. Lee County, 3 Wall., 327 ; Town of Duanesburgh v. Jenkins, 57 N. Y., 179 ; reversing S. O., 46 Barb., 294 .)

This action may be maintained by the tax-payers, to set aside the bonds. That tbe town may maintain such an action is well settled. (Town of Venice v. Breed, 1 N. Y. S. C., 130.) The statute of 1872 (Laws of 1872, chap. 161, p. 467) authorizes tax-payers of a municipal corporation to maintain such an action. (Ayers v. Lawrence, MS. Court of Appeals.) The law of 1874 does not validate these bonds. The adjudication of the county judge, after the reversal, was gone, utterly annihilated and expunged. (Mead v. Mead, 18 Barb., 578 .) The proceedings of the county judge were coram non judice- — void from the beginning. No one had any authority to act, and no rights could be acquired under them. (People v. Spencer, 55 N. Y., 1 , 7; Dobson v. Pearce, 12 id., 156, 164; Harrington v. People, 6 Barb., 607 , 610.) Therefore, no one could be a bona fide holder of them, for every man who took the bonds took them with notice of what was in the judgment record, and that the petition was defective, and he was bound, at his peril, to ascertain whether the statute authorizing their creation had been complied with. (Pearce v. M. and 1. R. R. Go., 21 How. [U. S.], 441-443; Starin v. Town of Genoa, 23 N. Y., 439 ; Town of Venice v. Breed, 1 N. Y. S. C., 130; Floyd Acceptances, 7 Wall., 666 , 676; Marshv. Fulton Go., 10 id., 676, 683 .) The legislature cannot, by retrospective legislation, make valid proceedings which had been had in the courts, but which were void for want of jurisdiction. (Cooley’s Const. Lim., 107,108, note 1, 383; Denny v. Mattoon, 2 Allen, 361 ; McDaniel v. Cornell, 19 Ill., 226 ; Mayor, etc., of Baltimore v. Horn, 26 Md., 194 ; People v. Supervisors, 16 N. Y., 424 , 432.) The legislature could not compel the town to issue its bonds and invest in the stock of this railroad. '{People v.'Batchelor, 53 N. Y., 128 ; Richland v. Lanjorence, 1¿ Ill., 1-7.) The State cannot make a contract for it. (Dillon on Mun. Corp., § 43; People v. Mayor of Chicago, 51 Ill., 17 ; 2 Am., 278,286; Sharpless v. Mayor, 21 Penn. St., 148 ,165.) It cannot compel the corporation to invest its money in the stock of a railroad company. {Sweet v. HuTbert, 51 Barb., 312 , 317; Olarlce v. Rochester, 24 id., 473; People v. Batchelor, 53 N. Y., 128 ,140,141.)