Strough v. Bd. of Supervisors

• Decision Date: 28 January 1890
• Citation: 119 N.Y. 212,23 N.E. 552
• Parties: STROUGH, Supervisor, v. BOARD OF SUPERVISORS.
• Court: New York Court of Appeals Court of Appeals

119 N.Y. 212

23 N.E. 552

STROUGH, Supervisor,

v.BOARD OF SUPERVISORS.¹

Court of Appeals of New York.

Jan. 28, 1890.

Appeal from supreme court, general term, fourth department.

Action by Henry J. Strough, supervisor of the town of Orleans, against the board of supervisors of Jefferson county, to recover the amount of texes collected for the benefit of the town, and wrongfully diverted by the county treasurer. From a judgment of the general term for plaintiff on a case submitted the defendant appeals.

Watson M. Rogers, for appellant.

Wayland F. Ford, for respondent.

ANDREWS, J.

The county treasurer of Jefferson county, from 1873 to 1887, omitted to perform the duty imposed upon him by the fourth section of chapter 907 of the Laws of 1869, as amended by chapter 283 of the Laws of 1871, to apply the taxes assessed during those years on the property of the Clayton & Theresa Railroad, within the town of Orleans, in said county, and collected and paid over to him, either to the purchase of the bonds of said town, issued in aid of the construction of said railroad, or in the purchase of other bonds, to be held as a sinking fund for their redemption. The aggregate taxes collectedfrom the railroad in said town during those years, for state and county purposes, was $4,845.31, and was paid out by the treasurer for general county purposes, including state taxes. It is stated as one of the agreed facts that, at the time the moneys were so applied, neither the county treasurer, nor any officer of the county, was cognizant of the duty imposed by the act of 1871, and that there was no intentional misapplication of the taxes in question. The warrants issued by the board of supervisors, under which they were collected, were in the usual form, and required the collector to pay over certain specified sums to various town officers, and a certain sum to the county treasurer on account of the state tax levied on the town of Orleans, and also to pay to the treasurer the remainder of the moneys collected, not otherwise particularly appropriated. There was no specific direction in the warrants in respect to the disposition to be made of the taxes collected from the railroad, and when paid to the treasurer they were included in the aggregate sum paid to him, and there was no separate application of those moneys by the county treasurer to state or county purposes, but the same were applied by him with and as a part of the other moneys raised in the town for state and county taxes. In the year 1872, bonds of the town of Orleans, to the amount of $80,000, were issued in aid of the construction of the Clayton & Theresa Railroad. Litigation arose as to the validity of the proceedings to bond the town, and no taxes were raised in the town to pay the interest or principal of the bonds until the year 1879, which was after the decision of the United States supreme court, affirming the validity of the bonds, in the case of Orleans v. Platt, 99 U. S. 676, made in 1878. The attention of the board of supervisors and of the county treasurer was first called to the provisions of section 4 of the act of 1871 in the fall of 1887, when a demand was made upon the board in behalf of the town for repayment into the treasury of the county of the taxes collected in said town from the railroad, and used in payment of state and county taxes. Thereafter the plaintiff, as supervisor of the town of Orleans, and the defendant, the board of supervisors of Jeffersoncounty, made an agreed case, for the submission of the controversy between the town and the county, to the determination of the court, under section 1279 of the Code. The general term sustained the claim of the town to have the moneys collected from the railroad, and used for the payment of state and county taxes, refunded by the defendant; but the court limited the recovery to moneys so misapplied within the period of six year prior to May 1, 1888, the date of the submission, and awarded judgment against the defendant for the amount of the taxes diverted during these years, with interest, and directed that the sum recovered should be paid to the county treasurer, to be applied as required by the act of 1871. Both parties have appealed,-the plaintiff from the part of the judgment limiting the recovery to six years, and the defendant from the whole judgment.

The constitutionality of the act of 1871 was considered by the court in Clark v. Sheldon, 106 N. Y. 104, 12 N. E. Rep. 341. That was a proceeding by petition, under the act of 1869, against a county treasurer, to compel him to appropriate taxes collected in the town of Sodus, Wayne county, from railroads in that town, as required by the act, and it was decided that the relief should have been granted.

It is insisted, however, that the plaintiff, as supervisor, cannot maintain the action. There can now be no controversy that the legal rights of the town of Orleans were disregarded by the application of the sums collected in that town for taxes from the Clayton & Theresa Railroad to the payment of state and county taxes. This was an injury to a property right of the town, and may, we think, be redressed, if actionable at all, at the suit of the supervisor of the town as the representative of its interests. The bonds issued were the obligations of the town. They are a charge upon the taxable property within the town, and there is no other resource for their payment. The act of 1869, as amended in 1871, relieved towns, which should issue bonds in aid of the construction of railroads therein, to some extent from the burden of the obligation, by appropriating the taxes on the railroad property therein as a special fund for the payment pro tanto of the bonds issued. It is true that the taxes are collected from individual and private property, and not out of the corporate property of the town, but the statute, in substance, gives the town in its corporate capacity the beneficial ownership of the fund when it directs its application to discharge a corporate obligation. The case of Bridges v Board, 92 N. Y. 570, sustained an action brought by the plaintiff, as supervisor of one of the towns of that county, to recover from the county money raised in the town by taxation on the property of the New York & Oswego Midland Railroad, and applied by the board of supervisors to county purposes, contrary to the provisions of chapter 296, § 2, Laws 1874. By that act, ‘all moneys to be collected [by taxation] upon the real or personal property of the said corporation, in any of the towns or municipalities by which bonds have been issued in aid of the construction of [said railroad,] are hereby appropriated to said towns or municipalities, respectively.’ The act required the collector to pay over the railroad tax, when collected, to the railroad commissioners, who were directed to apply the same to the payment of the interest and principal of the bonds. This is a decisive authority in...