Marsh v. Town of Little Valley — 8 N.Y. Sup. Ct. 554

Majority

p. 554

ORRIS MARSH, Respondent, v. THE TOWN OF LITTLE VALLEY, Appellant.

Headnote

Towns—when action will lie against—Bonds of— rights of bona fide purchases' of— Effect of repeal of act authorising the issue bf town bonds.

Town bonds, payable to bearer, and which appear on their face to be issued-in pursuance of the express authority of the legislature, are not, when in the hands of a bona fide purchaser for value, open to any defense in respect to their validity.

St. Joseph Township v. Rogers ( 16 Wall., 644 ) followed.

The holder of such bonds may maintain an action at law against the town, and is not compelled to resort to mandamus.

No action at law will lie against a town in respect to all that class of claims, accounts or demands, which come within the scope of the powers and duties, conferred upon the board of town auditors, to examine, settle,adjust and allow; certainly not until they become fixed, recognized and admitted debts. But this rule does not apply to settled and admitted debts, resting on bond, or upon other adjusted admission or obligation, binding on the town.

The doctrine laid down in Bell v. The Town of Esopus ( 49 Barb., 506 ) limited.

p. 555

The rights of a Iona fide purchaser of such bonds, cannot be taken away or affected by the subsequent repeal of the act under which they were issued.

Appeal from a judgment in favor of the plaintiff, entered upon the trial of this case before the court, without a jury.

This action is upon three town bonds, given by the defendant for bounties to soldiers, mustered into the service of the United States, upon the call of the President, in 1864, and issued under chapter 590, of the Laws of 1869, legalizing the acts of the town meetings of said town, in August, 1864, under which, said bounties were authorized.

The cause was tried, by a judge at the circuit, without a jury, who rendered judgment for the plaintiff, for $1,073.31, the amount of said bonds, holding them to be legal and valid bonds, and enforceable by action against the town.

Henderson c& Wentworth, for the appellant.

Gary <& Jewell, for the respondent.

The circuit judge, we think, correctly held that the bonds in suit were valid obligations against the defendants. These bonds were payable to bearer and are valid commercial instruments, and, it appearing that the plaintiff was a bona fide holder of them, for value, and, as they appeared on their face to be issued in pursuance of the express authority of the legislature, they were not open to any defense in respect to their validity, within the case of St. Joseph Township v. Rogers.^[3]

As it is stated in the points of the appellant’s counsel, that neither the town, nor officers, nor the board of supervisors, controverted or disputed this claim, nothing is really presented for our consideration, but the single question whether the remedy of the plaintiff for the recovery of said bonds, was by action or mandamus. The judge at Special Term, held that the plaintiff could maintain this action, and gave judgment therein, accordingly.

The towns of this State are invested, to a certain extent, with the rights and duties of a corporation, and may sue and be sued in the manner prescribed by law.^[4]

p. 556

They may sue to enforce corporate rights, and be sued for the enforcement of their corporate liabilities, when the assertion of such rights, or the enforcement of such duties, shall require such a proceeding.^[3] It is undoubtedly true, that, in respect to all that class of claims, accounts or demands against a town, which come within the scope of the powers and duties conferred upon the board of town auditors, to examine, settle, adjust and allow, no action at law will lie against the town; certainly not until they become fixed, recognized and admitted debts. The case of Bell v. The Town of Esopus^[4] asserts this doctrine, and I think the court in that case did not intend to assert any other. That case should be limited to the large class of unliquidated charges against towns, which rest in claim and demand, until passed upon, audited and adjusted by some lawful authority. All such claims may be properly termed claims arising upon contract, and for which an action will not lie, within the intent and meaning of that case. But, clearly, the rule of that case does not apply to settled and admitted debts, resting on bond or upon other adjusted, liquidated admission or obligation binding on the towns. In such cases, the preliminary stages, as in this, of dispute, contestation and settlement and adjustment, have all been duly passed.

The bonds in this action are the clear, undisputed, liquidated debts of the town, and we have no doubt that the action was properly brought thereupon, as held by the judge at the circuit, and was rightfully sustained, within the cases of Brown v. The Town of Canton,^[5] Hathaway v. The Town of Homer,^[6] St. Joseph Township v. Rogers^[7] and Northrup v. Town of Pittsfield.^[8]

The repeal of the act of 1869, by chapter 21 of the Laws of 1873, could not take away or affect the plaintiff’s vested rights, as a Iona fide purchaser of these bonds.

The judgment should be affirmed.

Present—Mullht, P. J., Smith and Gilbert, JJ.

Judgment affirmed.

* Lorrilard v. Town of Monroe, 11 N. Y., 394 .

† † 49 Barb., 506 .

‡ ‡ 4 Lansing, 418.

§ § 5 Lansing, 273.

ǁ ǁ 16 Wallace, 645.

¶ ¶ 2 N. Y Sup. Ct., 108 .

Footnotes

* 16 Wallace, 644.
† † 1 Rev. Stat., 337, sec. 1.