Leffingwell v. Scutt

Davis, J.

(dissenting). In the year 1924 the village assessors were of the opinion that they were not capable of making an accurate assessment of some of the more valuable properties. By concerted action the assessors arranged with the board of trustees that an engineering firm skilled in such matters should be employed to assist in making a sound and scientific appraisal of such property as the basis of assessment. This was done and it appears that the aggregate assessment of property was increased more than $750,000 over that of the preceding year. Many owners of property seem to have accepted without question the increased assessment. It is apparent that the village revenues will be increased or the rate lowered by this policy, the justice of which is to a large extent unquestioned. The plaintiff is one whose assessment was increased. There was no special appropriation of funds for payment on a contract of this nature. The trustees ordered payment of about $2,000 to these engineers from the contingent fund, and an undetermined balance is still due.

I will assume, as found by the learned trial court, that the contract was illegal as having been made in excess of delegated powers. I will assume further that the action by plaintiff is governed by interest in the public welfare and is detached from any personal feeling because of his increased assessment. We have then, as it seems to me, the question only as to whether there has been such waste of the public funds that a court exercising equitable jurisdiction will be justified in intervening to restrain the payment of money for a beneficial purpose.

The action is entirely statutory. A taxpayer had no remedy at *468common law such as is sought here. The legislation culminating in section 51 of the General Municipal Law is interesting in its origin and history. It was enacted because of corruption in municipal government and the lack of any legal remedy. (Altschul v. Ludwig, 216 N. Y. 459, 465.) In view of the causes that promoted this legislation, it is easy to understand the strict rule originally laid down Iby the courts and the somewhat drastic language used in stating the doctrine. If not only what was decided but what was said in opinions may now be deemed a fair statement of the law, there can be no question but the plaintiff is entitled to the remedy he seeks. But in my view of it, conditions have changed. Open, flagrant and unpunished corruption in municipal government has to a large extent disappeared. The powers exercised by municipal officers have been greatly augmented as municipal activities have widened in recent years. As the expenses of government have been increased there has been constant effort to make all property owners bear their fair share of such expense. There can be no doubt that the purpose of these village officials, acting under advice from the State Tax Commission, was to distribute more equally the burdens of taxation and make large owners of property pay their proportionate share.

Did the acts of the municipal authorities in paying the engineers for assistance in obtaining a more correct assessment of property, thereby equalizing tax burdens, constitute or promote actual waste, resulting in injury to the interests of taxpayers generally? The waste of municipal funds may be roughly divided into three classes: (1) Expenditures made unwisely and uneconomically by officers within the limits of their authority. The remedy for this is entirely political. (2) Disbursements made illegally by fraud, corruption and collusion. It was primarily the purpose of section 51 of the General Municipal Law and preceding statutes to give to the courts power to prevent such waste and to permit recovery of funds thus unlawfully expended. (3) Expenditures made without express authority by officers for useful or beneficial purposes in good faith, with a belief in their legality, where actual injury did not follow. This case falls within the latter class.

It has been said that “ The term waste, as used in the act, includes every wrongful act of mismanagement of the property rights or interests of the municipality causing the loss or damage. The word ‘injury ’ includes every wrong, everything that is not done rightfully.” . (Ayers v. Lawrence, 59 N. Y. 192, 197.)

Notwithstanding this" stringent definition (made in 1874) in which wrongful ” and illegal ” appear to be synonymous, the courts in many instances since have not permitted such an action *469to be maintained where the expenditure, though not strictly legal, was meritorious and benefit resulted; and where the waste was only technical and not harmful. (Cobb v. Fellows, 59 Hun, 627; sub nom. Cobb v. Ramsdell, 14 N. Y. Supp. 93; Edwards v. Ford, 22 App. Div. 277; Lawson v. Lincoln, 86 id. 217; affd., 178 N. Y. 636; Shoemaker v. Buffalo Steam Roller Co., 165 App. Div. 836.) The rule, not always quite clear in the cases cited, found definite and vigorous expression in Western N. Y. Water Co. v. City of Buffalo (242 N. Y. 202). In that case it was said (p. 207): “ The basic theory of such an action is that the illegal action is in some way injurious to municipal and public interests and that if permitted to continue it will in some manner result in increased burdens upon and dangers and disadvantages to the municipality and to the interests represented by it and so to those who are taxpayers.”

Under modern conditions the courts have recognized that it has never been the purpose of the law to permit officers, often serving without pay, to be harassed constantly by vexatious suits, based on some innocuous illegal act in an effort by an officious taxpayer to restrain their honest efforts to administer the government for the general benefit of the municipality and its citizens. City and village charters are rarely so clear in their language that mistaken views cannot be entertained of powers conferred. When they act in good faith seeking benefit to the community, there should be no absolute rule that municipal officers and those with whom they contract must interpret statutory powers at their peril of personal loss. Such a rule would inspire timidity and obstruct progress. Municipal officers should not be called to account in the courts for their acts on trivial, technical and fictitious complaints that delegated authority has been exceeded. There should be substance to the charges made and they must involve more than illegality, and include genuine waste causing actual injury to municipal and public interests. (Western N. Y. Water Co. v. City of Buffalo, supra.) “ It is absurd to suppose that the Legislature, by the statute, intended to draw into the preventive jurisdiction in equity, at the instance of any taxpayer, any proposed illegal official act, irrespective of the fact whether the act sought to be restrained involves a waste of public property or a violation of public rights, or any injury to the interests of taxpayers, as such.” (Rogers v. O’Brien, 153 N. Y. 357, 362.)

There is no claim here that the acts of the officials were tainted with fraud, collusion or dishonesty. There can be no doubt that the result of the enterprise attempted was beneficial, not wasteful. In fact, it has been found by the learned trial court that no actual waste was charged or established by plaintiff. It is perhaps sig*470nificant that no complaint has been voiced except by one who was personally aggrieved by an increased assessment. If such increase was not warranted by the facts, he has the remedy of review by certiorari, which we are told he has adopted. There are other penalties which may be visited upon officers who disregard their responsibilities and transgress their limitations.” (Western N. Y. Water Co. v. City of Buffalo, supra, 207.)

The action, as I have said, is statutory but the principles governing it are those prevailing in suits in equity. There is a certain discretion vested in the court when its action is invoked and “ the equitable remedy of an injunction under the General Municipal Law is to be granted or withheld in accordance with the general principles which govern the exercise of equitable jurisdiction.” (Southern Leasing Co. v. Ludwig, 217 N. Y. 100, 103.) The taxpayer bringing the action, if he desires injunctive relief, must show that besides being illegal the act threatened or in part accomplished is one calculated to imperil the public interests or cause public injury or mischief. (Altschul v. Ludwig, supra, 467.) The waste or injury must not be fictitious but real to actuate a court of equity to interpose its discretionary and equitable powers of injunction.” (Brown v. Ward, 218 App. Div. 643, 645.) This discretionary power will not, of course, extend to permit reckless, ill-advised acts which are also illegal, if actual waste in some substantial and' appreciable manner results.

In this case I,find no threat of injury or peril to the public interests. There is here no waste, corrupt and wanton. On the contrary,' the purpose was honest and benefit resulted. Entertaining these views, I favor affirmance.

Hinman, J., concurs.

Judgment reversed on the law a,nd facts, with costs, and judgment rendered, with costs, in favor of plaintiff, adjudging that the contract •with the defendants Barrows, Reeves and Pollard is illegal and void and restraining the defendants, members of the board of trustees of the village of Watkins and the president and treasurer of said village, from paying any funds of the village to the defendants Barrows, Reeves and Pollard, in consideration of services performed under said alleged contract, and restraining said Barrows, Reeves and Pollard from receiving any village funds in payment upon said contract.

The court disapproves of findings of fact numbered sixteen, eighteen and nineteen and all findings of fact included in the conclusions of law. The court makes the findings as found by the trial court at the request of the plaintiff; also that the defendants *471Barrows, Reeves and Pollard demand payment of the balance due for services under the alleged contract and that payment thereof will be made unless restrained by the court; that plaintiff is entitled to