This was an action to recover arrears of wages claimed by the plaintiff to be due to him. The plaintiff alleges in his complaint that the defendant is indebted to him in the sum of six hundred dollars for arrears of pay as a laborer on the streets at the rate of fifty cents per day for each work day that he was employed by the defendant during a period of about six years and paid at the rate of three dollars per day. In substance, his claim is that, during all this time, *Page 280 he was not paid enough and if the city had obeyed that provision of the Labor Law requiring it to pay "the prevailing rate of wages" he would have received three dollars and fifty cents per day.
The defendant demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action. The courts below sustained the demurrer and the plaintiff has appealed to this court from the judgment. The complaint alleges that, prior to the enactment of the Labor Law on May 10th, 1894, the plaintiff had been in the employ of the city as a laborer on the streets and was paid therefor at the rate of three dollars per day, but claims no arrears of pay on account of such services. It is then alleged that the Labor Law was enacted on May 10th, 1894 (Chap. 622, Laws of 1894), and that the plaintiff from that date became entitled to receive wages at the prevailing rate, and that such rate, upon the law taking effect, became three dollars and fifty cents per day. It is then stated that, after the law went into effect, the plaintiff continued to work in the same capacity by the day during about six years, to the first of January, 1900, working in all twelve hundred days and was paid therefor at the rate of three dollars for every day, or three thousand six hundred dollars in all, whereas if the prevailing rate of wages law had been observed he would have received four thousand two hundred dollars. The difference between these two amounts is the sum for which judgment is demanded.
It appears, therefore, from the face of the complaint that the plaintiff worked for the defendant before the law took effect and for six years after, receiving the same wages after the law as before. The course of dealing between the parties during such a long period of time, in the absence of some allegation of fraud, mistake, or of a right expressly reserved, justifies the legal inference that there was a contract between the parties, expressed or to be implied, that the plaintiff was to receive for his work three dollars per day and no more, or that he has waived all claim under the statute. When a *Page 281 servant sues the master for wages, alleging that he worked by the day for more than six years, and was paid for each day's work at the rate of three dollars per day, and makes no claim or allegation that he ever asked any more, or ever objected on the ground that he had not been paid enough, or that he reserved the right to demand more in the future, or that there was fraud or mistake in the dealings, the legal conclusion from the facts must be that there was a full settlement between the parties or an agreement as to the rate of wages, or a waiver of any other claim. (McCarthy v. Mayor, etc., of N.Y., 96 N.Y. 1.) I understand that there is no difference of opinion in this court on this point, and, if not, then the case is decided and it is not necessary to discuss the validity of the Labor Law. That question, as I think, is no longer open in this court. (Peopleex rel. Rodgers v. Coler, 166 N.Y. 1; People ex rel. Treat v. Coler, Id. 149; People ex rel. Lentilhon v. Coler,168 N.Y. 8; People ex rel. North v. Featherstonhaugh, 172 N.Y. 112;People v. Orange Co. R.C. Co., 175 N.Y. 84.) It is, however, supposed to be necessary or useful to reopen that controversy and to make a fanciful distinction between the decisions already made and the case at bar. There can be no sound distinction in the application of the statute to the direct and immediate employees of a city and the case of an independent contractor who has not observed the law. The contention that in the former case the law may be held good though it may be void as to the latter is not based upon any sound reason and is in conflict with the authorities cited. The defendant's charter provides that certain public work, involving the expenditure of money beyond a certain designated amount, must be done by contractors whose bid for the work is the lowest or most favorable to the city, and as to work below this amount it may be done by the city itself directly through its own employees. We have certainly held that, as to the former class of work, the statute with respect to "the prevailing rate of wages" is void, although in that case the city inserted "the prevailing rate of wages" clause in the contract. It is now *Page 282 earnestly contended that there is a distinction to be observed with respect to the validity of the law when applied to the same class of laborers working for a contractor and those working for the city. That as to the former the law is in conflict with the Constitution, while as to the latter it is perfectly valid. Just how the law can bind the city and not bind the contractor is difficult to conceive, since the latter is an instrument of the former in carrying out the purpose of its incorporation. The contractor has no standing to question a valid law under which the city acted when entering into a contract with him. I will only add that, to my mind, there is something preposterous in the proposition that this statute cannot, as we have held, bind a contractor digging a sewer on one side of a street while it can and does bind the city superintendent of streets repairing a pavement on the other side. But if the question was a new one there is, I think, but little difficulty in its proper solution. The question, in its last analysis, is a very simple one, and that is whether a mandatory statute which requires a city to pay to its employees a fixed sum as compensation for their work or as wages is a constitutional exercise of legislative power.
There can be no distinction in this respect between a statute which fixes the wages of servants directly in dollars and cents at so much per day or so much per hour and a statute which fixes minimum wages by some known or ascertainable rule or standard. The statute requiring the defendant in this case to pay to its workmen a sum described as "the prevailing rate of wages" is, under the circumstances of the case, just as objectionable as if it specified the sum to be paid, since in the one case as well as in the other the city is deprived of the right to make contracts with its employees, fixing the rate of wages, and of all discretion with respect to the same. Considering the power of the legislature over this subject, the question is not always what has been done but what may be done, if the power claimed be conceded. If, in this case, the statute had fixed the plaintiff's wages at five dollars per day there could be no objection made to the law that cannot be *Page 283 made now. If the statute in that case would be bad then the law in its present form is open to the same objection. We learn from the complaint in this case the important fact that just as soon as the statute went into operation "the prevailing rate of wages" instantly rose over fifteen per cent, which is an object lesson throwing much light upon the nature of the power assumed in the passage of the law. It simply means that the legislature has the power to raise or depress wages at pleasure under the vain hope or excuse that the changes will be confined to the boundaries of cities.
There is no attempt made, and obviously none can well be made, to bring the law within the scope of the police power. It cannot be said that it is a law to promote the public health, or public safety, or public order, and no element can possibly be injected into it to render it valid as a police regulation. There is but one ground, if I understand the argument, upon which this law is defended, and that is, when stated in the broadest way, that cities have no rights that the legislature may not regulate and change at pleasure, since cities, it is said, are created and exist only by the will of the legislature and that the power to which they owe their existence is supreme over every detail of their internal affairs; that a city is but an agency of the state that the latter may command, coerce or direct at will. Arguments that contain a considerable element of truth are often difficult to answer, even though when considered as a whole they may be unsound and quite misleading, as this argument certainly is. It is often said in a very general way that cities and other public municipal corporations are agencies of the state, and that is true in so far as they are invested with powers, political or governmental, but surely no one will claim that the relation of principal and agent exists between the state and its several municipalities. Agency is a relation that is generally founded in contract, and the agent, within the scope of his powers, speaks and acts for his principal and so binds him. The principal may impose his will upon the conduct of the agent by commanding him what to buy and what to sell and he may fix the price at his *Page 284 pleasure. But it is scarcely necessary to argue that no such relation can possibly exist between the defendant and the state. The city of New York is not an agent of the state in the sense that the legislature may dictate what price it must pay for property or labor that it may need in the conduct of its local affairs. If this were so, then there can be no such thing as home rule for cities and the idea apparently so popular and so much commended is a delusion.
The precise question that we have to deal with here is whether the most important city on this continent, if not in the world, has got such a measure of autonomy and home rule as to render it independent of legislative interference, at least with respect to the price that it shall pay for common labor or other property that it may require in performing its functions as a local government. It would be of very little use to provide, as the Constitution of this state does, that local officers in cities must be either elected by the people or appointed by some local authority, if it still remained in the power of the legislature to prescribe, by statute, to the officers who are elected to take charge of the streets or public works, the minimum wages which the city must pay for labor, or the price it must pay for property, thus depriving the officer of all judgment and discretion in regard to his duties. If a local officer, as the representative of the city, is not left free in this respect he cannot be said to be acting in the exercise of his own judgment or in the interest of the locality but simply obeying the will of the central power. A corporation, whether public or private, is a person within the meaning of the constitutional guaranties for the security of liberty, property and the equal protection of the law. If, therefore, the legislature may not dictate, by statute, to a private person or corporation what he or it shall pay for property, or the rate of wages to be paid to employees, I fail to see where it can get the power to dictate to the city the wages it must pay to the men it must employ in the care of its streets or other public works. If the legislature can deprive a city of the right to hire its own laborers at such wages as they can mutually agree *Page 285 on, why can it not deprive every corporation of the same right? A private corporation is just as much a creature of the state as a public corporation, but no one has yet contended that a law fixing the rate of wages for a private corporation would be good. When the state creates a corporation, public or private, and sends it forth upon its mission, it becomes invested by the Constitution and the law of its creation with certain rights and privileges that are as inviolable as those of private persons. Its property may not be confiscated or taken from it except by its consent or by due process of law. It cannot be denied the equal protection of the law. The money which a city procures by the exercise of the taxing power cannot be diverted, directly or indirectly, to any private purpose or for the benefit of any class as such. And yet all these constitutional guaranties may be violated if the legislature can fix the wages of laborers or the price to be paid for any property that the municipality may need.
That some or all these constitutional rights have been invaded by the statute in question is quite evident. That will appear from the facts of the present case, and by that I mean the facts stated in the complaint and those that are fairly to be inferred therefrom. The city of New York, in the exercise of its chartered powers, must purchase immense amounts of property, real and personal, and must employ a vast army of laborers, and the money to pay for the same must be procured by local taxation. The state, as such, bears no part of these expenses, and the question is whether it may prescribe by statute the price which the city must pay for such property or the wages for such labor, or must all these things be left for the city itself to settle by agreement upon such terms as may be reasonable, just as such matters are settled by private corporations or individuals? If the legislature should pass a statute prescribing the minimum price that the defendant should pay for the carpets and furniture in the city hall and should even name the merchant or dealer from whom alone they could be purchased, every argument adduced to uphold the statute in question would apply with equal force *Page 286 to such a law. If the legislature has the power to fix the price of common labor, what objection can there be to a statute fixing the minimum or maximum price of such commodities? This case is a good illustration of the operation of a statute fixing the price of labor. We are informed by the complaint that, prior to the enactment of the Labor Law on May 10th, 1894, the plaintiff was employed by the day to work on the streets and was paid wages at the rate of three dollars per day. There is no claim made that the wages thus paid were not fair wages or the going wages. There is no claim that the plaintiff ever asked or expected any more, but it seems, or at least the complaint so states, that, just as soon as the Labor Law went into effect on May 10th, 1894, "the prevailing rate of wages" at once rose to three dollars and fifty cents per day, but the plaintiff was apparently oblivious of that fact, or, at all events, paid no attention to it, but continued to work in the same way and draw pay at the same rate for six years without, so far as appears, making any objection to the rate of wages, or demanding any increase. Now, it is said that the city is in arrears and is indebted to him in the sum of six hundred dollars, being fifty cents more for each day that he worked and was paid three dollars per day. This claim has, of course, no foundation except in the statute, which, as he claims, gave him the right to the additional fifty cents.
If the plaintiff can recover, so can hundreds and possibly thousands of other people, and such demands in the aggregate must amount to a very large sum of money that the city must raise by taxation and pay to its employees after their work has been performed. Who will assert that the money so paid out of the treasury is devoted to a legitimate city purpose? Who can deny that the millions of dollars which the city is required to raise and pay for such arrears is not in the nature of a gratuity to private persons? The position of the city is that it owes the plaintiff nothing and if it must pay at all it will be under the coercion of the legislative enactment. The power of the legislature over municipal corporations in *Page 287 all matters political or governmental, within constitutional limits, is conceded, but surely that does not include the power to interfere in every detail of its internal affairs, and the right of the city to hire its own employees who work upon the streets on such terms as can be fairly agreed upon is one of the things that does not concern the state, but is confided to the local authorities. The compensation of all city authorities and of the clerical force in the several departments may be fixed and regulated by law, since their duties are public, political or governmental, but the wages of laborers or the price of property is something that cannot be fixed and regulated by statute without undermining every principle of local autonomy. It would be a very idle ceremony to provide in the Constitution that all moneys raised by taxation in cities must be devoted to city purposes if the legislature may enact a law which will enable the plaintiff at the end of six years and after drawing pay all the time at the rate of three dollars per day, that being, so far as appears, all he asked or expected, to reopen the account to add over fifteen per cent more to the amount paid to him for his labor and which it is apparent he was satisfied with at the time as his compensation.
It is no part of the legitimate powers or functions of government to fix wages any more than it is to prescribe the price of bread. If a statute may be enacted to put wages up, so may one be enacted to put wages down. If wages for the employees of a city can be fixed by a statute at five dollars per day, they can be fixed at fifty cents per day, all depending upon the temper of a majority of the legislature. Such legislation cannot be justified upon the ground that it is aimed only at a great city existing under a legislative charter.
The argument in that respect embodies a fundamental error, in that it fails to observe the legal character of a municipal corporation possessed as it is of dual powers; the one governmental, legislative or public, and the other proprietary or private. When imposing taxes, enacting ordinances and conducting public improvements, the city is exercising a part of the sovereign power, but in hiring laborers and purchasing *Page 288 property for the corporate use it acts as a private individual entitled to all the privileges and immunities that the Constitution secures to private persons. These latter powers are conferred and exercised for the private advantage of the particular corporation as a distinct legal personalty, and as to such powers and to property acquired thereunder and contracts made with reference thereto, the corporation is to be regardedquo ad hoc a private corporation. (Dillon on Municipal Corporations, § 66.) It is upon this principle that cities are made liable for acts or omissions under the law of negligence. The law of master and servant is applicable, just as it is applicable between private parties.
In Conrad v. Trustees of the Village of Ithaca (16 N.Y. 158) it was held that where the trustees of the village were made by its charter commissioners of highways they were to be regarded, in respect to that function, not as independent public officers, but as the agents of the corporation, so as to make the latter civilly responsible for their acts of omission, according to the law of master and servant. In a note to the case last cited is published an opinion by Judge SELDEN in Weet v.Trustees of the Village of Brockport, wherein he points out the principle that lies at the basis of the rule which makes a municipal corporation liable under the maxim of respondentsuperior as follows: "That whenever an individual or a corporation, for a consideration received from the sovereign power, has become bound by covenant or agreement, either express or implied, to do certain things, such individual or corporation is liable, in case of neglect to perform such covenant, not only to a public prosecution by indictment, but to a private action at the suit of any person injured by such neglect. In all such cases the contract made with the sovereign power is deemed to enure to the benefit of every individual interested in its performance." This liability of the municipality as to the care of the streets was again recognized by this court in Ehrgott v. Mayor, etc.,of New York (96 N.Y. 264). Judge EARL, after citing Conrad v.Trustees of Vil. of Ithaca (16 N.Y. 158); Requa v. City ofRochester *Page 289 (45 N.Y. 129); Hutson v. Mayor, etc., of N.Y. (9 N.Y. 163);Davenport v. Ruckman (37 N.Y. 568); Hume v. Mayor, etc.,of N.Y. (74 N.Y. 264), observed that the rule has been somewhat criticised, but that "it has the sanction of a wise public policy, the support of good reasons, and that its operation is generally just and beneficent." This principle has been recognized in many other cases in this state that need not be cited. It has also been approved by the Supreme Court of the United States in Barnes v. District of Columbia (91 U.S. 540), and by the Circuit Court of the United States in BarneyDumping-Boat Co. v. Mayor, etc., of City of New York (40 Fed. Repr. 50).
In Missano v. Mayor, etc., of N.Y. (160 N.Y. 123, 129) this court held, after a review of the authorities, as follows: "It is clear upon principle and authority that the city of New York, in the ordinary and usual care of its streets, both as to repairs and cleanliness, is acting in the discharge of a special power granted to it by the legislature, in the exercise of which it is a legal individual, as distinguished from its governmental functions when it acts as a sovereign. (Maxmilian v. Mayor,etc., 62 N.Y. 164.)"
In the present case the legislature in enacting the Labor Law was dealing with the city of New York in its proprietary or private capacity, wherein it is to be regarded as a legal individual as distinguished from its governmental functions when it acts as a sovereign.
Sweeping aside all forms and seeking to establish the real legal situation, the city in this respect is nothing more than an aggregation of private citizens who are taxpayers and as such are entitled, acting in the combination created by the charter, to the protection through the legal entity thereby created, of all those individual rights and privileges precisely as if each was acting for himself.
If it be true, as the foregoing authorities clearly establish, that a municipal corporation, acting as a legal individual, is liable in damages for the negligence of its servant, it must logically follow that it is entitled to all the immunities and privileges *Page 290 incident to that situation, and this involves the right of the city under the Constitution to hire its own laborers and servants, since it would be intolerable if their employment could be regulated and controlled by the central power, while the city alone is made liable for their negligence or mistakes. The legislature may authorize burdens to be imposed upon them for public works or improvements and possibly may require the same by mandatory laws in the interest of the general public, but this does not embrace the power to dictate to the city the wages it shall pay to its employees in the performance of its work or to deprive the local authorities who act for the taxpayers of all judgment and discretion upon that subject. A taxpayer in a city has the right to have such questions decided by the judgment of the local authorities who represent him and not by the central power at the capital of the state.
It is a curious fact that every argument in support of statutes of this character, whether proceeding from the bench or the bar, contains the broad admission that if such laws were made applicable to private corporations or individuals they would then be clearly in conflict with the Constitution. These arguments, like that to sustain the statute in question, entirely overlook or ignore the important distinction between these powers and functions of municipal corporations that are public or political and those that are private. This distinction has nowhere been better stated and illustrated than in the opinion of Judge COOLEY in the case of People ex rel. Park Comrs. v. Common Council ofDetroit (28 Mich. 228). After stating what he considers as settled law, the proposition that cities, considered as communities endowed with peculiar functions for the benefit of their own citizens, have always been recognized as possessing powers and capacities and as being entitled to exemptions distinct from those which they possess or can claim as conveniences in state government; that they possess powers and capacities which are private in contradistinction to those in which the state is concerned and which are called public, thus putting such corporations, as regards *Page 291 all such powers, capacities and interests, substantially on the footing of private corporations or individuals, the learned judge then proceeds to amplify this distinction as follows: "Whoever insists upon the right of the state to interfere and control by compulsory legislation the action of the local constituency in matters exclusively of local concern, should be prepared to defend a like interference in the action of private corporations and of natural persons. It is as easy to justify on principle, a law which permits the rest of the community to dictate to an individual what he shall eat, and what he shall drink, and what he shall wear, as to show any constitutional basis for one under which the people of other parts of the state, through their representatives, dictate to the city of Detroit what fountains shall be erected at its expense for the use of its citizens, or at what cost it shall purchase, and how it shall improve and embellish a park or boulevard for the recreation and enjoyment of its citizens. The one law would rest upon the same fallacy as the other, and the reasons for opposing and contesting it would be the same in each case. And while it may be entirely possible that in any particular instance the interference would be beneficial to the person or the community whose rights are invaded, it is not to be overlooked that an interference to compel a person to submit to something for his own good may be made use of as a precedent to compel him at some future time to submit to extortion and plunder. The law very properly draws a line between that which is admissible and that which is not, and it does not allow outside dictation in matters purely of local concern, for one very good reason, among others equally good, that the motive for outside interference will very likely be something besides a desire to do good to a community in which the parties interfering have no personal interest, unless of a merely sentimental nature, and whose burdens they are not to share, or enjoyments participate in. All such matters are left to those whose interests will prompt them to act with prudence, and who because of their interest, and because they relate to matters that must come under their own view and *Page 292 observation, they are presumptively best qualified to decide upon."
It was held in the Orange County Road Constr. Co. Case (supra) that a statute making it a crime for a person contracting with a municipal corporation to require more than eight hours' work for a day's labor was unconstitutional and void. It was held in the Rodgers Case (supra) that a similar statute forfeiting a contractor's right to compensation for his work if he omitted in doing the work to pay what is called the prevailing rate of wages, was also in conflict with the Constitution. In the Rodgers case the city resisted the claim of the contractor for compensation. It had no other defense and this court held that it constituted no answer to the contractor's claim to set up a violation of a statute which was invalid and beyond the power of the legislature to enact. What distinction, if any, there is or can be between these cases and the one at bar I confess I am unable to state. I leave that to my brethren who now differ with me, only adding that it does not seem to me wise to introduce fanciful distinctions in the construction of statutes of this character whenever the membership of the court happens to be changed. It must be remembered that in theRodgers case it was the city that set up and claimed the protection of the statute, and we held that the law had no force or effect to defeat the claim of the contractor, but in the present case it is to be held that it is a good basis for a common laborer upon which to assert a valid claim against the city treasury; or, in other words, a statute held to be void as against the claim of the contractor is the very cornerstone and foundation for a claim against the city by one of its servants or employees.
I am in favor of affirming this judgment on the point first above stated, but I am not in favor of going out of our way to change the construction already given to the Labor Law on the basis of a distinction so frail and fanciful as that contended for by the learned counsel for the plaintiff.
HAIGHT, CULLEN and WERNER, JJ., concur with PARKER, Ch. J.; BARTLETT and VANN, JJ., concur with O'BRIEN, J.
Judgment affirmed. *Page 293