Stetler v. McFarlane

• Decision Date: 01 March 1921
• Citation: 130 N.E. 591,230 N.Y. 400
• Parties: STETLER et al. v. McFARLANE.
• Court: New York Court of Appeals Court of Appeals

230 N.Y. 400

130 N.E. 591

STETLER et al.

v.McFARLANE.

Court of Appeals of New York.

March 1, 1921.

Action by Henry L. Stetler and another, as taxpayers of the county of Rockland, against John F. McFarlane. Judgment of the Special Term in favor of plaintiffs was reversed by the Appellate Division (181 App. Div. 957,168 N. Y. Supp. 1131), and the complaint dismissed, and plaintiffs appeal.

Judgment of Appellate Division and that of Special Term reversed, and new trial granted.Appeal from Supreme Court, Appellate Division, Second Department.

John S. Sickels, of New York City, for appellants.

James M. Gray, of Brooklyn, for respondent.

CARDOZO, J.

Taxpayers of Rockland county ask that the defendant, a supervisor, return to the public treasury payments challenged as illegal. General Municipal Law, § 51; Consol. Laws, c. 24. The board of supervisors of the county audited and allowed the bills. The Special Term held that most of the items now contested were allowed without jurisdiction, and that the defendant must return the moneys illegally received. He and the public officers who paid him were declared guiltless of willful wrong; the payments had been made and accepted under a mistaken claim of right. Both parties appealed to the Appellate Division, the defendant objecting that the plaintiffs had recovered anything, the plaintiffs that they had not recovered more. The Appellate Division held that the payments, even though illegal, were not subject to reclamation in an action by a taxpayer, unless, in addition to being illegal, they were fraudulent and collusive. The judgment was therefore reversed, and the complaint dismissed.

[1][2] We think a public officer, receiving public moneys without right, may be charged with the duty of restitution at the instance of a taxpayer though he received them without fraud. Smith v. Hedges, 223 N. Y. 176, 119 N. E. 396. Audit in good faith may serve to establish right when the action of the auditors is assailed on the ground of error in the estimate of evidence. Smith v. Hedges, supra. Audit, however innocent, does not avail as a retroactive grant of power, to give validity to action in excess of jurisdiction. Smith v. Hedges, supra. We must distinguish the liability of those who receive from the liability of those who pay. Payment to another without profit to one's self will not expose to liability at the instance of a taxpayer after the transaction has been executed without fraud or willful wrong. Wallace v. Jones, 195 N. Y. 511, 88 N. E. 1134;Daly v. Haight, 224 N. Y. 726, 121 N. E. 862. The result will not be changed, it seems, though the one who profits is a joint defendant, if joint relief is claimed. Wallace v. Jones; Daly v. Haight, supra. Fraud in such cases has been treated as the gist of the conspiracy. We need not now inquire whether that is always the sound view. Here there is but one defendant, the public officer who retains to his own use the moneys which, if collected without right, are still the moneys of the county. Smith v. Hedges, supra, sustains the remedy of a suit by taxpayers in its application to such conditions. The right of action does not find its sole basis in those parts of section 51 of the statute (General Municipal Law [Consol. Laws, c. 24]) which were considered in Wallace v. Jones and Daly v. Haight. It rests as well upon the opening sentences of the section which broadly impose the duty of restitution when moneys, in the hands of a public officer, of right belonging to the public, are wrongfully withheld.

[3] The remedy at the suit of taxpayers has steadily widened in scope since its beginnings in 1872 (Laws 1872, c. 161). Altschul v. Ludwig, 216 N. Y. 459, 111 N. E. 216. We have said that the statutes which define it are to be liberally construed. Ayers v. Lawrence, 59 N. Y. 192, 196. We are unwilling by any narrow interpretation, by any emphasis on verbal niceties, to give exemption to the public officer in possession of public moneys who retains them for himself. The character of such moneys, while in the hands of the delinquent officer, is not changed, in respect at least of civil remedies, because the retention is under claim of right. They are held to the public use unless the claim can be sustained. People v. Wood, 121 N. Y. 522, 24 N. E. 952;People v. Sutherland, 207 N. Y. 22, 100 N. E. 440. We do not now determine the application of the statutory remedy to other situations. Sufficient for present purposes is the decision of the case before us.

The defendant, then, is liable for payments innocently received, if there was usurpation of jurisdiction in their allowance by the auditors. To determine jurisdiction, we must examine, one by one, the classes of contested items.

[4] 1. The defendant submitted bills for attending meetings of the board of county canvassers and inspectors, for reporting, correcting, and recapitulating the assessment and tax rolls, and for preparing the annual town statement, a separate statement to the board of supervisors, and a list of incorporated companies. We find no basis in the statutes for any of these charges. The audit and allowance exceeded the jurisdiction of the auditors, and the payments made must be returned.

[5] 2. The defendant submitted bills for services rendered in connection with county highways. The statute draws a distinction, which it is unnecessary to elaborate, between county highways and county roads. Highway Law, § 3 (Consol. Laws, c. 25), as amended by Laws 1910, c. 567, and Laws 1911, c. 254. The services rendered by the defendant were in connection with county highways. Each supervisor was appointed by the board as a committee to take charge of the county roads within his town. There being in Rockland county no county roads in the strict sense, we may assume that what was meant was the charge of county highways. The defendant insists that for his services in this connection he is entitled to per diem compensation as for other services rendered as the delegate of the board. County Law, § 23; Consol. Laws, c. 11. There might be merit in this claim if it were not for the fact that for services in respect of highways he has received other compensation which the statute declares to be exclusive. Section 110 of the Highway Law (Consol. Laws, c. 25) provides that--

‘The supervisor and town clerk of each town shall receive annually, as compensation for services under this chapter in lieu of all other compensation and fees, an amount to be fixed by the town board. Such compensation shall be a town charge.’

The defendant has received compensation from the town. The question is whether he is entitled to compensation from the county. His argument is that since section 110 is found in the article relating to town highways, the compensation which it secures is for services in connection with town highways, and no others. The statute says that the payments shall be compensation for ‘services under this chapter,’ and in lieu of all other fees. The defendant construes it as if it read that the payments shall be for ‘services under this article of this chapter,’ services under other articles to be, however, unaffected. We think that construction inadmissible. The payments made to a supervisor under section 110 of the Highway Law are in full for every service which his compliance with that law occasions, whether he renders the service alone or as a member or committee of a board. Duties may be subdivided and apportioned among members for convenience of administration, but not with the result of adding to fees limited by statute. Personal, in any event, remains the service, and personal the reward. The board is not competent to swell the compensation of its members beyond the statutory maximum by distinguishing supervisors as individuals from supervisors as delegates, and awarding to the delegates the fees which the individuals must refuse. The Legislature will have to speak more plainly before we will assume that such results were contemplated.

[6] The most that can be said in favor of the defendant is that the general language of section 23 of the County Law involves the construction of section 110 of the Highway Law in some measure of uncertainty. The uncertainty, we think, must be resolved in favor of the taxpayers. The public officer seeking payment from the public treasury must put his finger on some statute whereby payment is permitted (Public Officers Law, § 67; Consol. Laws, c. 47; Crofut v. Brandt, 58 N. Y. 106, 109,17 Am. Rep. 213;Gibson v. Roach, 2 App. Div. 86, 88,37 N. Y. Supp. 567. The defendant is unable to satisfy that test. We think the board of supervisors exceeded jurisdiction in the allowance of these charges.

3. The defendant submitted bills, at a per diem rate, for services in the discharge of duties when the board was not in session. The bills are attacked upon the ground that the services upon the days enumerated occupied a part only of each day, and also upon the ground that the defendant in rendering them was not the delegate of the board.

[7] Section 23 of the County Law (Consol. Laws, c. 11, as amended by Laws 1911, c. 554) provides that--

‘Each supervisor * * * may also receive compensation from the county at the rate of four dollars per day while actually engaged in any investigation or other duty, which may be lawfully committed to him by the board, except for services rendered when the board is in session.’

[8][9] The plaintiffs construe this to mean that payment is to be made upon a graduated basis, $4 for a full day's work, and a proportionate sum for less. We are unable to accept that construction of the statute. Supervisors cannot always pick and choose the days and hours of their service. They must deal with the business of each day as the day and its emergencies require. What rule ought to be applied where there has been a fraudulent prolongation of activities we need not now determine. That is not the situation found or proved. We think the...