Smith v. Town of Greenwich

• Decision Date: 09 April 1895
• Docket Number: No. 1.,1.
• Parties: SMITH et al. v. TOWN OF GREENWICH.
• Court: New York Court of Appeals Court of Appeals

145 N.Y. 649

40 N.E. 254

SMITH et al.

v.TOWN OF GREENWICH.¹

No. 1.

Court of Appeals of New York.

April 9, 1895.

Appeal from supreme court, general term, Third department.

Action sy Stephen Smith and Kathleen Ryder, as executors of the estate of Erastus D. Culver, deceased, against the town of Greenwich. From a judgment of the general term (30 N. Y. Supp. 56) affirming a judgment for defendant, plaintiffs appeal. Affirmed.

Brainard Tolles, for appellants.

Charles C. Van Kirk, for respondent.

FINCH, J.

The plaintiffs served an ambiguous complaint. That is the way in which they encountered defeat and the cause of their principal trouble. Their argument here goes upon a denial of that ambiguity, after having admitted it upon the trial, and having refused to remove it when it was explicitly pointed out. The complaint was so drawn as to admit of a construction that the action was to recover interest due and payable upon the sealed bonds of the town of Greenwich issued in aid of a railroad construction. But, regarded as specialties, the instruments were exposed to certain possible objections. The complaint shows that $6,500 of the bonds were issued before May 12, 1871; and therefore, although the commissioners were duly and lawfully appointed, were authorized to borrow the money, and to bind the town to its repayment, they were, nevertheless, specifically limited to the issue of bonds payable in 30 years, and they made the mistake of executing them maturing in 20 years. The balance of $33,500 were issued after May 12, 1871, and when, by an amended act, it was lawful to make the securities payable within any period less than 30 years. But that amendment of the law which made the 20-year credit permissible imposed another condition, which was that the commissioners should not issue the bonds so as to make more than 10 per cent. of the whole loan fall due in any one year.

The question of the liability of the town had three times been before this court anterior to the commencement of this action and the preparation of the complaint therein. Potter v. Town of Greenwich, 92 N. Y. 662;Brownell v. Town of Greenwich, 114 N. Y. 518, 22 N. E. 24;Hoag v. Town of Greenwich, 133 N. Y. 152, 30 N. E. 842. In the last case it was conceded, for the purposes of the argument, but without either discussing or deciding the point, that the 20-year bonds, issued when the law required a credit of 30 years, were for that reason void as securities; but it was held that, disregarding them, the town was still liable upon an implied contract to pay principal and interest of the money loaned. That was the legal situation when the present complaint was drawn. The pleader observed that if, for any reason, the power to issue bonds, concededly existing, was imperfectly or unlawfully executed, there still would remain a right of action founded upon the authorized and completed loan, and resting upon an implied contract of repayment. Observing that fact, he drew his complaint with a double aspect. He sets out the bonds and the precedent facts necessary to make them authorized; but, beyond that, he carefully pleads the loan of the money to the town in good faith, its receipt and use of the money for the permitted purposes, and the failure to pay after demand. All the elements of an action on an implied contract, irrespective of the sealed bonds, were fully and carefully supplied, and they entered into and formed part of what was pleaded as one single and complete cause of action. When the defendant answered, it had to face this ambiguity, and come prepared for either attitude which might be assumed. Regarding the complaint as a suit on the bonds, it alleged defenses aimed at a destruction of their validity. Regarded as an action on an implied contract to recover interest payable on the money loaned, the defense of the 6-year and the 10-year statute of limitations was interposed. To those defenses the plaintiff's demurred. The defendant's brief asserts-and the facts were not denied or questioned on the argument-that at the first trial the defendant's attorney, in open court, offered to stipulate that he would strike out the defenses demurred to, if plaintiffs' attorney would stipulate to recover only on the bonds as valid contracts under seal, or on a cause of action to which the 6 or 10 years' statutes would not be a defense, and the court said openly that an order would be granted sustaining the demurrer if such stipulation should be made. The ambiguity of the complaint-its double aspect-thus came very plainly to the surface. The plaintiffs were charged with it, were asked to remove it, were offered immunity from the pleas of the statute if the ambiguity should be ended, but they steadily and persistently refused. The demurrers were overruled, and thereupon judgment was rendered for the defendant dismissing the complaint. Why that was done the record before us does not show, and...