People v. Westchester Cnty. Nat. Bank of Peekskill

• Decision Date: 31 August 1921
• Citation: 231 N.Y. 465,132 N.E. 241
• Parties: PEOPLE v. WESTCHESTER COUNTY NAT. BANK OF PEEKSKILL.
• Court: New York Court of Appeals Court of Appeals

231 N.Y. 465

132 N.E. 241

PEOPLE

v.WESTCHESTER COUNTY NAT. BANK OF PEEKSKILL.

Court of Appeals of New York.

Aug. 31, 1921.

Proceeding by the People of the State of New York against the Westchester County National Bank of Peekskill, N. Y. From a judgment of the Appellate Division (-- App. Div. --, 188 N. Y. Supp. 944) directing judgment in favor of the plaintiff upon submission of controversy with an agreed statement of facts, defendant appeals.

Judgment reversed.

Cardozo and Pound, JJ., dissenting.

Appeal from Supreme Court, Appellate Division, Third department.

Louis Marshall and Chester D. Pugsley, both of New York City, for appellant.

Charles D. Newton, Atty. Gen. (J. S. Y. Ivins, Edward G. Griffin, and P. H. Clune, all of Albany, of counsel), for respondent.

Charles G. Blakeslee, of Binghamton, Charles P. Coffey, of Ithaca, and Samuel E. Aronowitz and Edward N. Scheiberling, both of Albany, for American Legion.

ANDREWS, J.

The only question before us is the validity of chapter 872 of the Laws of 1920. The defendant was the successful bidder for $25,000 of bonds issued under the authority of that act. It later refused to accept them. If the act is constitutional, under the submission the plaintiff is entitled to an affirmance of the judgment of the Appellate Division in its favor. If not, the defendant should succeed.

The act provides for the issue of $45,000,000 of bonds by the state. Their proceeds are to be paid into the state treasury and expended for a bonus to persons who served in the military or naval service of the United States at any time between April 6, 1917, and November 11, 1918. These moneys, therefore, must be applied for this object and for no other purpose whatever. Constitution, art. 7, § 4. ‘Every person, male or female, who was enlisted, inducted, warranted or commissioned, and who served honorably in active duty in the military or naval service of the United States at any time’ during the war ‘for a period longer than two months, and who at the time of entering into such service was a resident of the state of New York, and is a resident at the time this act takes effect, and who was honorably separated or discharged from such service, or who is still in active service, or has been retired, or has been furloughed to a reserve’ (section 5), is to receive $10 for each month of active service, not exceeding, however, $250 in the aggregate. If dead the same amount shall be paid to the relatives of the deceased. As required by its terms, this act was submitted to the people and was approved by a vote of 1,454,940 in its favor as against 673,292 in opposition.

The logic of this opinion is not that the Legislature is unauthorized to aid the wounded. We cannot too clearly emphasize at the outset of our discussion that this is not an act to care for and restore to health and usefulness those who became disabled in the performance of their duty. To do this is a sacred trust. Every human impulse prompts us to its full accomplishment. Neglect here spells disgrace. Yet by this act help for the wounded is at least postponed. For them as a class nothing is done. Whatever right the state may have to use its moneys in making these the subject of its first and devoted consideration, this right finds no expression in the present statute. The wounded are not a reason or a ground for its enactment. He who occupied a perfectly safe, although highly useful, desk in a department, stands on a level under this act's provisions, with that other who comes back to us shattered in mind or body because of a more perilous service. This court, of course, considers the purpose of the act as it is written. What we may say has no bearing upon and is no definition of the power of the state to provide for the disabled, for whose prompt and adequate care there is an insistent and righteous demand. The statute includes every one indiscriminately who served the United States for two months, whatever the circumstances of his or her induction into the service. It is not in fulfillment of any promise made to encourage enlistment. The Selective Service Act (U. S. Comp. St. 1918, U. S. Comp. St. Ann. Supp. 1919, §§ 2044a-2044k) expressly provided that no bonus should be given for that purpose, and that no substitute should be accepted. It called upon every citizen of the United States between certain ages to render his full obligation to the nation. The only exceptions allowed were those made in the act itself. It is also true that the number of the beneficiaries and the amount they will receive is indefinite.

It is now assumed that $45,000,000 will suffice. It may be so. It may be equally true that a far larger sum will be required to make the payments designed. We all know how often, when an issue of bonds is proposed, the amount that will be required in the end is underestimated. More than once we have had that experience. Nor is there any assurance that other and greater debts may not be incurred if a second bonus is proposed. It may be said, and said truly, that $10 a month will not compensate our soldiers for their sacrifices. Elsewhere the sum of $15 or more has been allowed under somewhat similar acts. Should New York, it has already been asked, do less than others? We see no limit to the indebtedness with which the state may be burdened.

If, however, the Legislature has the power to create a debt for the purpose declared in this act, these considerations are not for us. They serve but to admonish us to scrutinize our Constitution with the greater care, to use the greater caution in deciding how and when and why New York may incur indebtedness under its limitations. To that question we confine ourselves.

At the basis of our ideas as to the relation of the citizen to the state is one outstanding principle of taxation. Whether or not the Legislature is curbed by any constitutional formula no tax may be imposed except it be for a public purpose; otherwise, however, unless for some constitutional restriction the taxing power is plenary. Except for such restriction the Legislature may appropriate public moneys for private corporations or for individuals if thereby the public welfare is promoted. Town of Guilford v. Board of Supervisors, Chenango County, 13 N. Y. 143.

[2] It is said that this act serves no such purpose. We think, however, that it does In deciding whether the object for which taxation is imposed is for a public object, the courts ‘must be governed mainly by the course and usage of the government, the objects for which taxes have been customarily and by long course of legislation levied, what objects or purposes have been considered necessary to the support and for the proper use of the government, whether state or municipal. Whatever lawfully pertains to this and is sanctioned by time and the acquiescence of the people may well be held to belong to a public use, and proper for the maintenance of good government, though this may not be the only criterion of rightful taxation.’ Citizen's Sav. & Loan Association v. Topeka, 20 Wall. 655, 665 (22 L. Ed. 455). In this state the granting of pensions and gratuities for military service is not a new experiment. By the act of May 11, 1784 (Laws 1784, c. 63), public land was granted to revolutionary veterans. By chapter 8 of the Laws of 1814, pay in addition to that granted by the United States was given to soldiers of the War of 1812. By chapter 178 of the Laws of 1904 a pension was granted to the last survivor of that war. By section 220 of the Military Law (Consol. Laws, c. 36) a pension was given to any member of the militia who had been disabled within 10 years in the performance of duty. A pension policy has long been adopted by the United States and acts similar to ours have been passed in at least 19 other states.

[3][4][5] The payment of a pension or a bonus for past services showing the gratitude of the people, showing that the state is mindful of those who have made sacrifices for it, is an incitement to patriotism and an encouragement to defend the country in future conflicts. Even if such a payment is not clearly one made in the general interest, at least there is such ground for the claim that, where the Legislature has accepted that view, the courts may not interfere. That they believe the action unwise or unnecessary is immaterial. As to that question the Legislature is the final arbiter. Jones v. City of Portland, 245 U. S. 217, 38 Sup. Ct. 112, 62 L. Ed. 252, L. R. A. 1918C, 765, Ann. Cas. 1918E, 660;State ex rel. Atwood v. Johnson, 170 Wis. 218, 175 N. W. 589, 7 A. L. R. 1617;State ex rel. Atwood v. Johnson, 170 Wis. 251, 176 N. W. 224;Gustafson v. Rhinow, 144 Minn. 415, 175 N. W. 903;State ex rel. Hart v. Clausen (Wash.) 194 Pac. 793;Opinions of the Justices, 211 Mass. 608, 98 N. E. 338. What long custom and usage has sanctioned, what the weight of judicial authority has approved, that we should be slow to declare wrongful. Nor may a distinction be made between such a bonus as our act provides and a pension. The one is a reward for past military services payable at once; the other such a reward payable in installments.

We are to determine, therefore, whether there are any limitations in our Constitution upon the powers of the Legislature which affect the matter before us. Originally there were none. In the constitutional convention of 1846, however, it was found that the state had contracted dobts which with interest amounted to some $38,000,000. Six million dollars represented instances where the public credit had been used to finance railroads then insolvent; $2,700,000, for railroads still rated as solvent, but whose condition was precarious. There was much discussion as to how this debt should be paid, and as to how in the future ‘abuses of delegated power’ should be prevented. Gross extravagance was charged. There was fear of repudiation. Moneys raised by loans could be wasted with little comment, when the same waste would...