Roosevelt v. Draper

7 Abb. Pr. 108, 16 How. Pr. 137

Opinion

Balcom, J.

Footnotes

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—-My views in this case are briefly as follows : If it be conceded that the deed from the Mayor of the city of ¡New York to the defendant Varnnm is voidable or void, still the plaintiff cannot sustain this action. He cannot maintain it as a creditor of the city, for the reason that the stock he holds is not due, and the city has not made default in the payment of any interest thereon; and he has no lien upon the land in question. The law confers no authority upon the plaintiff to prosecute this action for any person other than himself, and his interest as a tax-payer of the city is too uncertain to entitle him to the interposition of the court as between the city and a vendee of its property; indeed, his interest in the matter in dispute is speculative or imaginary, and clearly no greater or more certain than that of every other owner of city stock and tax-payer within the corporation.

The gist of the case made by the complaint is, that the city has made a void or improvident sale of a portion of its real estate to Varnum, and that the plaintiff believes he will sustain a pecuniary loss by reason thereof, either as a holder of city stock, on which nothing is yet due, or as a tax-payer of the corporation. If the plaintiff can sustain this action, every other tax-payer of the city who owns city stock amounting to §100 may institute a similar one. It seems to me that the sanctioning of such a proposition would produce incalculable mischief, and violate the well-established principle that one person cannot sustain a civil action for an injury of a public nature, when the damage he sustains is no greater than that sustained by every other member of the community.

The earlier decisions in this district, which seem to hold the doctrine that tax-payers may maintain actions similar to the one at bar, have been too much shaken by recent adjudications in this city and the Court of Appeals, to be relied upon as establishing the right of the plaintiff to the relief demanded in his complaint.

The tax-payers of the-city and holders of city stock must find a remedy, if one is to be found, through the ballot-box, the grand jury, or the attorney-general, for abuses of corporate authority, by their Mayor and Common Council, in the disposition of city property, or they must apply to the Legislature for the passage of different laws than are now to be found in the statutes of the State.

I am of the opinion the complaint in the action does not state facts sufficient to constitute a cause of action, and that the order made at the Special Term, overruling the demurrers to the complaint interposed by the defendants Draper and Coleman, should be reversed, and that those defendants should have judgment upon the demurrers with costs, but with leave to the plaintiff to amend his complaint in twenty days, on payment of costs.*

Present, Clerke, P. J., and Sutherland and Balcom, JJ.

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This appeal had been previously argued before the General Term, held by Justices Gierke, Peabody, and Harris. Mr. Justice Harris thereupon prepared an opinion sustaining the demurrers ; but before it had been adopted and announced as the opinion of the court, Mr. Justice Peabody loft the bench, and the cause was subsequently arguejl a second time at another term, and that argument, and the decision thereupon, js the_ one above reported.

The following is the opinion’o^Mr. Justice Harris :

By an ordinance of the corporation _. of Hew York, passed on the 22d day of February, 1844, it -is .declared that all moneys thereafter to be received from certain specified sources,—one- of which is, “ the nett proceeds of all sales of real estate belonging to the corporation when sold,”—are pledged, appropriated to, and constitute and’form’a fhqd qalled ‘ The sinking fund of the city of Hew York, for the redemptipn of the city ‘debt.” By another section of the same ordinance, the mayor, rectirder,.jeamptíoller, and treasurer of the city, together with the chairmen of the finance committees in the Boards of Aldermen and Assistant Aldermen, are constituted commissioners of the sinking fund. By another section, a scale of prices is established to be charged for land under water between Hammond and Thirtieth streets, on the Hudson River. The price to be charged for such land between Gansevoort and Twelfth streets, which is the land in question, is fourteen dollars for each running foot, to be measured in the manner specified. It is not pretended that the provisions of the section have been violated by the sale which is the subject of this action.

But there is still another section of the ordinance -which authorizes the commissioners of the sinking fund to sell and dispose of all real estate belonging to the corporation, and not in use for, or reserved for public purposes, in the manner and upon the terms therein specified. Such sales were to be made at public auction, upon twenty days’ previous notice, and for a price not less than the appraisement of the same lands to be made by the commissioners of the sinking fund, within one month next preceding the time of the sale. The sale in question was not made in conformity with these requirements, and for that reason it is insisted that the transaction was unauthorized and void. I think, however, that even in respect to sales made by the commissioners of the sinking fund, the provisions of this section are not applicable. It seems to me to be rather a case within the other provisions of the ordinance relating to the grant of lands under water. But however this may be, there is nothing in the ordinance which stood in. the way of the sale by the corporation. The proceeds of all sales of real estate had been devoted to the sinking fund, provided for the redemption of the city debt. The purchase money received for the land in question, could not be diverted from this object, without a breach of faith. But the authority granted by the ordinance to the commissioners of the sinking fund to make sales, was but a special power to be exercised in a specified manner. The corporation was the principal. The commissioners of the sinking fund were the agents. The agents were not at liberty to depart from the line of proceeding prescribed for them, but there is nothing in the ordinance which thus restricts the principal. Being the owner, it might sell upon such terms and in such manner as it might deem expedient. The only restriction upon the exercise of its discretion, was in the disposition of the proceeds. These had been already appropriated. They belonged to the sinking fund, and could not lawfully be diverted. No complaint is made in this respect. It is not pretended that the $40,000 received upon the sale have not been paid over to the commissioners of the sinking fund for the purposes contemplated by the ordinance of 1844. So far, therefore, as it relates to the manner of making the sale, there is nothing to impeach its validity. The corporation was competent to make the grant, and the defendant Varnum was competent to make the purchase. There was nothing illegal in the mode of proceeding by which it was effected.

But it is alleged, and the demurrer admitsJ¡h¡^(ftíÍ!W!^ENbe grant was made to the defendant Vamum, yet that the defendant Dfftptfr j\a^*ls<Haterested in the purchase, and being at the time a goveriror.t^Bne Almshouse, mid, as such, an officer of the corporation, the fact that he-.was so interested, rendered the whole transaction illegal and void. It is also allesedvari^i ^vie' purposes of this question, admitted, that the other defendants -Vmium and Colemah, at the time they severally received their conveyances, knew that Drappivwas ^interested in the purchase, and it is insisted that they are tl^qrlfli jtnetr tiititle^ to protection as purchasers in good faith. X

The 19th section of the act to amend thechertei^if'me city of New York, passed April 2, 1849 (Laws of 1849, 283), declares that “ no member of the common council, head of departments, chief of bureaus, deputy thereof, or clerk therein, or other officer of the corporation, shall be directly or indirectly interested in the purchase of any real estate, or other property belonging to the corporation.” The same act provides for the distribution of the executive power of the corporation, and establishes various departments in which such power is vested. Among these is the Almshouse department, the chief officers of which were to be called “the governors of the Almshouse.” A governor of the Almshouse, therefore, is one of the heads of an executive department of the corporation, and as such is prohibited from being in any way interested in the purchase of real estate belonging to the corporation.

The question which this state of facts presents is, what is the effect of this violation of the statutory inhibition upon the conveyance by the corporation to Varnum ? Upon its face, the transaction is legal. It is an executed contract between competent parties. The grantor was competent to convey, and the grantee was competent to purchase. Had the contract remained executory, perhaps neither party could have enforced its performance, for the reason that it contained an element of illegality. An officer of the corporation was interested in the purchase, and this was prohibited by law. The parties to the contract denied this, and yet they executed it. If the law was violated thereby, both parties agreed in such violation. They were in pari delido. In such cases the rule is, potior est conditio defendentis. Thus where land is conveyed in consideration of the composition of a felony, the grantor cannot avoid- the deed on the ground that the transaction was illegal. (Inhabitants of Worcester a. Baton, 11 Mass., 368; 1 Story’sEq. Jur., § 298.) It was therefore very.properly conceded by the counsel for the plaintiffs, upon the argument, that the corporation of New York could not maintain an action to avoid the conveyance.

The next and more important question is, whether the action can be sustained by this plaintiff? He is the owner of property in the city of New York, which, in common with the property of thousands of other citizens, is liable to taxation for the payment of the debts and expenses of the corporation. He has no interest, legal or beneficial, in the property in question. The relation of cestui que trust and trustee does not exist between him and the corporation. The property, like all other property owned by the corporation, and like property owned by the State or the national government, was held upon a public trust. Those intrusted with the control of public affairs, whether it be in a city, State, or nation, act under the obligations of a duty to the public, and are bound so to dispose of the property" committed to their charge, as, in their judgment, will best subserve the public interests: what will best accomplish this end, it is for them to determine. The mere subject of the government, because he is liable to contribute towards the support of that government, is not authorized to call its officers to account before a judicial tribunal for the manner in which they have discharged their official trusts.

I am aware that two or three cases have been decided in New York which seem somewhat to invade the general principle to which I have referred. In Christopher v. The Mayor, &c., of New York (13 Barb., 567), an injunction was allowed to restrain the city government from entering into a contract for rebuilding a market. The plaintiff was allowed to interfere, to prevent an illegal contract which would have the effect to increase the city taxes, upon the ground that he was a tax-payer, and owned land subject to taxation. The order was sustained upon appeal by the general term, and a decision to the. same effect was again made in De Baum v. The Mayor, &c., of New York (16 Barb., 392). The case of Milhau v. Sharp (15 Barb., 435), and also Stuyvesant v. Pearsall (15 Barb., 244), are regarded as authorities to the same point; but I think the decisions in the latter cases may be defended upon less questionable grounds. The acts which the plaintiffs sought to restrain were unlawful, and would result in special injury to the property of the plaintiffs. This alone was sufficient to sustain the actions. See Milhau v. Sharp (17 Barb., 445). The case of Brower v. The Mayor, &c., of New York (3 Barb., 254), was also cited by the plaintiff's counsel as authority in favor of his right to maintain this action ; but that case was decided upon the well-settled principle that one party may restrain another from erecting a nuisance, when it will injuriously affect his own property. Lawrence v. The Mayor, &c., of New York (2 Barb., 577), was decided upon a kindred principle. The plaintiff was the owner of property bounded on a street, and, as such owner, was entitled to the use of the street; and it was held that he had such an interest in the street that he might maintain an action to prevent the corporation from closing up any part of it.

The case of Adriance v. The Mayor of New York (1 Barb., 19), is referred to by Mr. Justice Mitchell in his opinion delivered in De Baum v. The Mayor, &c., of New York, above cited, as a decision in favor of the doctrine that a tax-payer may maintain an action to restrain a municipal corporation from making an illegal appropriation of public funds. But that case can scarcely be regarded as authority for such a purpose. It was undefended. The court, when the plaintiff moved for judgment, expressed its own doubt whether it had jurisdiction in such a matter ; but as the defendants did not choose to oppose it, the relief asked for was granted. It is worthy of notice, that the same judge who decided that case did not concur in the decision made in the very case in which it was referred to as the leading authority.

I think, therefore, that I am justified in saying, that the only cases in which the right of a tax-payer, as such, to maintain an action for the mere purpose of restraining a municipal corporation from doing an unlawful thing, which may by possibility increase the amount of taxes with which he may become chargeable, are those of Christopher «. The Mayor, &c., of New York (18 Barb., 567), and De Baum v. The same (16 lb., 392), each of which cases was decided by a divided court. And I may add, that the doctrine of these cases seems to me to be in conflict with the general principle of law, that no private person can maintain a remedial action for an illegal act from which he suffers no other injury than that which he suffers in common with the whole community. It is a familiar rule, that no person can maintain an action for relief unless he can show some special injury beyond that which is suffered by the public at large.

Since writing the above, I have met with, and perused with delight, the masterly argument of Mr. O’Connor in Wetmore v. Story (22 Barb., 414), where the decisions I have noticed, and many others bearing upon the same question, have been examined, and the principles they involve discussed, with a degree of thoroughness and power which have commanded my admiration. My own reading has rarely brought to my notice so complete a discussion of a great and interesting subject as the report of this argument presents.

While it may be, that, sitting in this court, I am bound to regard it as settled by authority that a private action may be maintained against a principal corporation to restrain an act which may be deemed injurious to the public interest, yet I may be allowed to say, that in my judgment the decision of the Superior Court upon the same question, in Davis v. The Mayor, &c., of New York (2 Duer, 663), stands upon a much firmer basis. I am not satisfied with the doctrine, that every resident within the bounds of a municipal corporation may, at his pleasure, call the authorities of such municipal government to account before a civil tribunal, upon the mere allegation that he has contributed to the support of the government, and apprehends that he may again be called upon to do so, and that those who have the management of the government, have done, or are likely to do, something which they are not authorized to do, and which in the judgment of the plaintiff will injuriously affect the interests of the community. Such a ground of action was never before asserted. If it has now found a stand in this court, I will submit to its authority, but at the same time protest against extending it beyond the limits it has already secured.

In the case now under consideration, the action is brought, not, as in the cases already decided, to restrain an illegal act on the ground that it will prove injurious to the public interests, but to rescind a contract already executed. The property was sold for a large price, a large amount of the purchase money was paid, and it may be assumed has actually passed into the hands of the commissioners of the sinking fund ; the balance has been satisfactorily secured, and belongs to the same fund. No fraud or collusion is alleged. It is faintly asserted that, at the time of commencing the action, the property was of greater value than the price for which it was sold. It is not pretended that the city authorities knew, or had reason to believe, that it was worth more than the amount, or that the property could have been sold for any greater sum. The plaintiff says, indeed, that some persons have estimated the property as high as 8300,000, which is nearly double the amount for which it was sold, hut such an allegation is worth but little, when the plaintiff himself has not sufficient confidence in it to make the allegation upon his own responsibility. In short, to sustain this action and annul the conveyance, the court must hold, that although the sale was made for an adequate price, or at least for a price not so inadequate as to furnish any evidence of fraud, and although the corporation had the right to sell and the grantee to purchase, yet, inasmuch as an officer of the corporation was interested in the purchase, and thus was guilty of a technical violation of law, although without any pretence of collusion or actual fraud, the transaction is void. And not only this, hut even though the parties to the contract are content to give it effect, and though ail the citizens of Hew York, who are alike interested in the proper administration of the affairs of the corporation, except the plaintiff, are willing that the contract, as it has been made and executed, shall stand unrescinded and unchallenged, yet, that the plaintiff alone, merely because he has paid taxes, and may again he called upon to do so, has a right of his own mere motion, against the will of the municipal authorities of the corporation, and without the consent of the public expressed in any manner recognized by law, to demand the judgment of this court, declaring the conveyance void, recalling the purchase money already received by the commissioners of the sinking fund and by them invested in the manner provided by law, requiring this money, thus to be recalled, to be paid," not to the plaintiff, for he has no interest in it, but by some of the defendants to other defendants, and directing the purchasers of the property, whether they are able to do so or not, to reconvey to the corporation, with covenants against their own acts, and free from incumbrances. Such a judgment, to quote the emphatic language of Mr. Justice Eoosevelt, in De Baum v. The Mayor, &c., of Hew York, would indeed be “ an unheard-of remedy” applied to “an unheard-of grievance," It seems to me, that it needs but to consider the character of the relief which must he given, if the action is sustained at all, to see that the plaintiff has not, by his complaint, presented a case which entitles him to any relief. I am of opinion, therefore, that the order of the special term should he reversed, and that the demurrers to the complaint should be allowed, but with liberty to the plaintiff to amend his complaint within twenty days after service of this decision, upon payment of the costs upon the demurrers; and this appeal to he taxed by the clerk of this court in Hew York.