Newburgh Savings Bank v. Town of Woodbury

64 A.D. 305, 72 N.Y.S. 222

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: October 15, 1901
• Status: Published

Opinion

Woodward, J.:

There is no substantial dispute as to the facts in this case. On ■the 3d day of December, 1893, the board of supervisors, acting under the provisions of chapter 664 of the Laws of 1892, authorized the reimbursement of drafted men within the town of Wood-bury, in the county of Orange, and for this purpose a provision was made for the issuing of the bonds of such town in the manner pointed out by the statute. The plaintiff advanced to the town of Woodbury, through the supervisor, $4,000, taking four of the bonds •of the town for $1,000 each, payable February 1, 1895, 1896, 1897 And 1898, with interest at five per cent per annum, which interest, together with the first of the series of bonds, was paid on the 1st day of February, 1895, since which time no payments have been made. The town, through its supervisor, paid the $4,000 received for such bonds to the County treasurer on the 1st day of February,. . 1894, and simultaneously therewith, through its collector, a further sum of $1,346 raised by taxation for the same purpose. These two-sums, aggregating $5,346, were deposited in the county treasurer’s, general account February 1, 1894, and transferred to the “ Drafted Men’s Account” February 2, 1894. On that day the defendants-Earl, Owens and Stokem presented vouchers for payments of commutation moneys under the draft of 1863, and these were duly paid by the county treasurer, under the impression that the defendants-were entitled to the money under the laws of this State.

The defendants Earl and Owens received this money, supposing themselves entitled to it under the provisions of chapter -664 of the-Laws of 1892, and there is no suggestion in the pleadings or the proofs that there was any fraud, compulsion, duress, misrepresentation, concealment or mistake of facts on the part of any one connected with this transaction. The payments, in so far as the town of Woodbury and the county treasurer are concerned, were purely voluntary; they had been authorized by the petition of a majority of the resident taxpayers, representing more than one-half of the-taxable property of the town of Woodbury; the board of supervisors, exercising a discretion authorized by the statute, had provided for the raising of the money, and the county treasurer, in making the payments to the .holders of vouchers, was merely performing a ministerial duty in behalf of the town of Woodbury, and the citizens and taxpayers of the town had acquiesced in these payments, without protest, for a series of years. Subsequently, and in-1899, the Court of Appeals, in Bush v. Board of Supervisors (159 N. Y. 212), held chapter 664 of the Laws of 1892 unconstitutional,, and the plaintiff brought this action, claiming the right to recover the money advanced, whether in the. hands of the county treasurer or of the other defendants.

Upon the trial at Special Term the learned court found the facts, substantially as stated above, holding, not without reluctance, that “ While I am riot entirely clear that the mistake in payment is not. one of law alone, which, under the general rule, will prevent a recovery back of the money, equity demands that the money the bank advanced without any consideration, being traced to defendants, should be returned by them, as they have no moral right to it, and as the mistake in payment perhaps involved a mixed question of law and fact, the question of fact being whether the statute was enacted in violation of the restraints of the Constitution.” Acting upon this theory, the learned court directed that the “ decree will provide that County Treasurer repay money he holds, $1,782.00,. and direct that defendants Owens, Earl and Stokem each repay to plaintiff $767.25,” and from the judgment entered the defendants Earl and Owens appeal to this court, having duly filed exceptions, to the findings of facts and conclusions of law.

In the view which we have taken of this question, it is unnecessary to consider the process by which the learned court reached its conclusions as to the amounts due to the plaintiff from the defendants, who now appeal, for unless the whole current of authority is to be overturned, the plaintiff cannot recover in this action as against the appellants. It is certainly a new doctrine that any question of fact, which would help the plaintiff, can be involved in the question of “ whether the statute was enacted in violation of the restraints of the Constitution.” The Constitution, subject to the Federal limitations, is the supreme law of this State, and if the citizen is to be presumed to know the law at all, he may fairly be expected to know the fundamental law; and this has at. all times, within the scope of this controversy, declared that no county, city, town or village should be allowed to incur any indebtedness except for county, city, town or village purposes. (Art. 8, § 10.)

The act under which these bonds were issued did not purport to' provide for any town purpose'; it was entitled “An act to enable the several cities and towns of this state which have not already done so, to refund the money expended in furnishing substitutes, or in commutation by the men who were drafted into the military service of the United States,” etc. In a like manner, the act of the board of supervisors in providing for the issuing of bonds, for which no direct authority appears in the statute, is entitled “ An act to authorize the town of Woodbury, in the county of Orange, to borrow money for the purpose of reimbursing the drafted men of October 8th, 1863, pursuant to chapter 664, Laws of 1892.”

Knowing, or having the means of knowing, these facts (for it. is not suggested that the plaintiff was in any way misled) and knowing, as it is presumed, to know, that the law forbade the town of Woodbury contracting any indebtedness except for town .purposes, the plaintiff in this action advanced $4,000 for the express purpose •of paying the claims of the defendants, whose relations were not with the town, but with the Federal government, and it now claims the right of passing over the head of the town, which could not become obligated, and of recovering this money from the defendants. The payment made by .the plaintiff, if we may disregard the intermediate parties, was not made at the request of the defendants; it was not induced by fraud or improper conduct On the part of the •defendants, but on the contrary, was made with full knowledge of all the facts and circumstances growing out of and connected with the claim, and the error on the part of the plaintiff was one of law, not of fact. (Flynn v. Hurd, 118 N. Y. 19, 26.) The rule is well, established that money paid under such circumstances cannot be recovered back. In order to support such an action it is essential that a request on the part of the person benefited, to make such • payment, either expressed or fairly to be implied from the circumstances of the case, must be proved. (City of Albany v. McNamara., 117 N. Y. 168, 172, and authorities there cited.)

In the case at bar no such fact appears. The statute under which the parties supposed themselves to be acting (Laws Of 1892, chap. ■664, § 2) provides under certain circumstances, that “ the board of supervisors may in its discretion levy and assess, upon the taxable property and persons of such city or town, a sum sufficient to pay the drafted men of such city or town as aforesaid,” but nowhere in the statute is there any provision for the issuing of the bonds of the town for this purpose, and, so far as appears from the record, the ■defendants involved in this appeal had no knowledge whatever of the relations existing or supposed to exist between the plaintiff and the town of Woodbury. So far as we are aware, the defendants may have believed the money which they received from the county treasurer had been provided in the manner pointed out by the statute, and there is no room for the assumption that they had anything whatever to do with the payment of the money on the part of the plaintiff. The request to act on the part of the defendants lies at the foundation of the alleged right of recovery, and is a substantive fact in the controversy, not the subject, of a presumption, (City of Albany v. McNamara, supra, 173, and authorities there cited.) Putting the plaintiff in the best light possible under the facts proven, it has stepped in and paid to the defendants the> amount of money claimed by them under the provisions of a statute ; it has determined a question of law for itself, and has paid the money to these defendants" voluntarily, under the impression that the town of Woodbury had a legal right to issue its obligations, and that the same would be paid. The claim, on its face, was; against the town of Woodbury ; the defendants had not asked the plaintiff for this money, and high authority asserts the rule that “no person can make himself a creditor of another by voluntarily discharging a duty which belongs to that other; and no obligation can be implied in law from a voluntary payment of the debt of another, without his request, by one who is under no legal liability or compulsion to make it.” (National Bank of Ballston Spa v. Board of Supervisors, 106 N. Y. 488; Vanderbeck v. City of Rochester, 122 id. 285, 289; Redmond v. Mayor, 125 id. 632, 636.)

It adds nothing to the plaintiffs case that the defendants gave no consideration for the money. In the early English case of Brisbane v. Dacres (5 Taunt. 147) the plaintiff was the captain of a ship under command of defendant’s testator, Admiral Dacres. The plaintiff had received a considerable sum for transporting specie, one-third of which he paid to the admiral, under a mistaken apprehension that he was entitled to it, and then brought an action té recover it back. In deciding the case Gibbs, J., said: “We must take this payment to have been made under a demand of right.”' “ The principle has always been this : whenever the money has been paid in consequence of a demand as of a right, then, although the demand was unfounded, the payment cannot be recovered back,”1 and this doctrine was applied in the case of Mowatt v. Wright (1 Wend. 355, 364), and has been generally followed. (See Clarke v. Dutcher, 9 Cow. 674, 686.)

The cases decided in the United States Supreme Court and relied upon by the plaintiff are distinguishable from the case at bar, and cannot be admitted as authorities in support of the judgment. In Louisiana v. Wood (102 U. S. 294) the city, for the purpose of evading the provisions of a statute requiring the registration of all • municipal bonds, “ and with the intent to make it falsely appear that said bonds were not subject to the requirements of said law, caused said bonds to be antedated as of the first day of January, 1872, and caused it to be falsely stated in them that they were signed, countersigned and sealed on the day last named.” Upon this state of facts the court held 'that an action to recover the money could be maintained. It was said: “ It would certainly be wrong to permit the city to repudiate the bonds and keep the money bor- ■ rowed on their credit. The city could lawfully borrow. The -objection goes only to the way it was done. As the purchasers were kept in ignorance of the facts which made the bonds invalid, they did not knowingly make themselves parties to any illegal transaction.” In the. case at bar the town had no power to borrow money for other than town purposes. The plaintiff, being bound to know the law knew this, knew that the statute did not pretend to authorize the borrowing of the money for any purposes of the town, but for the benefit of individuals having no legal or moral claims against the community.

Parkersburg v. Brown (106 U. S. 487) bears no analogy to the present action, and while some of its language may be cited in support of the judgment, its spirit is rather with the; defendants, and we find-nothing in Chapman v. County of Douglas (107 U. S. 348). which conflicts with the law of the case at bar as developed in this- • discussion. In all of the cases there are considerations of equity between the parties to the illegal contract, while in the case at bar the town of Woodbury has received no benefit from the advance of money made by the plaintiffs. On the contrary, in addition to the sum originally contributed in taxes, the town has paid $1,000 of the principal, together with the interest on $4,000 for one year. The plaintiff knew at the time the money was advanced that the town-was not to be benefitted, and having accepted the bonds of the town, when it*must have known.that they were not issued for a town purpose, its payments to the defendants must be considered as voluntary payments under a mistake of law, and as such beyond the power of recall.

The complete judgment is not before us upon this appeal; the notice of appeal only calls up so much ol the “ judgment in púrsuance of said decree entered in the Orange county clerk’s office herein Dec. 10, 1900,” as is “in favor of the plaintiff, the Newburgh Savings Bank, and against each of the defendants, John G. Earl and Israel Owens.” (See Code Civ. Proc. § 1300.)

The county treasurer, who was merely the custodian of the funds, in his answer claimed no interest in the money, and asked that he be protected in making disposition of the same under the judgment, and there is no appeal from the decree or the judgment in so far as it directs the repayment of the fund in his hands to the plaintiff. Section 1205 of the Code of Civil Procedure provides that where the action is against two or more defendants and a several judgment is proper the court may, in its discretion, render judgment or require the plaintiff to take judgment against one or more of the defendants, and the court having directed judgment against the several defendants in the amount found to be due from them, that judgment must stand as to all parties who have not appealed. “ Where a judgment is against two or more persons,” says Freeman on Judgments (2 Freem. Judg. § 481) “ one only of whom appeals, its reversal, if the judgment was binding upon the defendants jointly, or if all must co-operate in complying with the judgment, affects the parties who did not appeal to the same .extent as those who did. But if a defendant does not appeal and is not made a party to the appeal by the service on him of notice thereof, an appeal by his co-defendant, followed by a reversal of the judgment, cannot authorize the retrial of the cause as against the non-appealing defendant, and the new trial must be confined to the issues between the parties to the appeal.” (See Morris v. Metropolitan Street R. Co., 51 App. Div. 512, 516.)

The judgment should be reversed in so far as it finds any sum of money to be due from the defendants Earl and Owens to the plaintiff, and a new trial granted.

Goodrich, P. J., Jenks and Sewell, JJ., concurred; Hirschberg, J., not sitting.

Judgment, so far as appealed from, reversed, and new trial granted, costs to abide the event.