Bush v. . O'Brien ( 1900 )

The plaintiff, as a taxpayer of the city of New York, brought this action against the city and the comptroller, in his official capacity, to restrain them from paying certain judgments recovered against the city by the other defendants composing the firm of O'Brien Clark and Brown, Howard Co. All of the defendants interested in the judgments demurred to the complaint on the ground that it did not state a cause of action. The demurrer has been sustained in the courts below, and the only question involved in the appeal to this court is whether, upon the facts appearing on the face of the complaint, the plaintiff has any cause of action.

The complaint contains the necessary averments to qualify the plaintiff as a taxpayer, and then states the following facts:

(1) That the several defendants representing the firms named procured judgments to be entered in the Supreme Court on the 27th of December, 1897, for various sums, which are separately stated, amounting in the aggregate to $700,000.

(2) That the judgments were entered upon claims arising out of the construction of the new aqueduct.

(3) That said judgments were entered in actions in favor of the said firms and the members thereof against the city upon offers of judgment for the respective amounts stated in each case executed and verified by the corporation counsel in behalf of the city, claiming to have authority in that behalf; that the offers were accepted by the parties so bringing the actions, and upon such offers and acceptances the judgments were entered.

(4) That the judgments were not entered by any other authority, and upon information and belief the corporation counsel had no power to make the offers and that his acts in that respect are void.

(5) That the parties procuring the judgments had demanded payment of the same from the comptroller and had threatened to commence legal proceedings to collect and enforce the same, to the damage of the city and the waste of its estate.

(6) It is averred, upon information and belief, that the corporation counsel has been requested to move in said actions to vacate the judgments upon the ground "hereinbefore stated," but that he has not done so, and the motion was based on other grounds to the exclusion of the grounds "herein set forth," and that the motions were denied and the order denying the same affirmed on appeal, and, upon information and belief, that the plaintiff has no other remedy at law or in equity to prevent the injury complained of. Then follows the demand for relief, to the effect that the several judgments be vacated and that an injunction issue restraining the payment thereof.

It is believed that every material fact contained in the complaint is embraced in the foregoing statement. It is not alleged or claimed that there was any collusion, fraud or bad faith in the transaction on the part of any one. It is not even alleged that the claims upon which the judgments were entered were infected with any vice whatever, or that they were not justly due to the claimants. The plaintiff's sole claim is, not that the judgments or any of them are founded upon any illegal, fraudulent or unjust demand, or that the creditors or the city officers who made the offer of judgment acted fraudulently or collusively, but that the judgments were not regularly entered, since the corporation counsel was without power to make the offer. The relief demanded is solely against an irregular judgment, and whether it is such or not is a matter of law depending upon the power of the corporation counsel as an attorney and a public official. There is no law that permits a taxpayer to interfere by action to vacate a judgment against a city solely on the ground of some irregularity in the procedure by which it was entered.

For aught that appears in the complaint the corporation counsel offered to allow judgment in an action against the city founded upon a just and valid claim, to which the city had no defense. When a party applies to the court to open a judgment by default, or to set it aside for irregularity, he is ordinarily required to furnish an affidavit of merits, and certainly no less should be required of a taxpayer who invokes the powers of a court of equity to vacate a judgment, not against himself but the city of which he is a member. He should be required at least to allege that the judgment which he proposes to attack, or the claim upon which it is founded, is infected with fraud or illegality, or that the city has some meritorious defense to the same. The plaintiff's complaint is silent on all these points. It does not even show that the judgment was irregularly or improperly entered, but it does show just the contrary. It appears that the judgment was entered upon an offer by the corporation counsel, under the provisions of sections 738 and 740 of the Code. These provisions required the corporation counsel to prove to the court that he was authorized to make the offer, and the complaint alleges that he complied with the statute, since it is averred in substance that the offer was accompanied by the usual verification. Certainly the complaint does not aver a non-compliance with these provisions of law, and without the complaint the presumption is that the proper proof was made to authorize the entry of the judgment. So that the judgment described in the complaint is, upon its face, entirely regular, and the authority of the corporation counsel to make the offer, being mere matter of proof, is adjudicated by the judgment itself. What the plaintiff proposes now to do is to show in some way dehors the record itself that there was no authority to make the offer and thus to contradict it. The complaint avers, as we have seen, that the judgment was entered without authority, which is not a fact, but a legal conclusion, and is so treated by the learned counsel for the plaintiff in his argument. (Talcott v. City of Buffalo, 125 N.Y. 280; B.C.Institute v. Bitter, 87 N.Y. 250; Bogardus v. N.Y.L. Ins.Co., 101 N.Y. 328.) His contention is that the counsel to the corporation, though possessing all the powers of an attorney in an action, superadded to those conferred upon him by statute as a public officer, had no power to offer judgment in a pending action. The statute devolved upon him full charge of all the law business of the city, and designates him as an officer upon whom all legal process against the city may be served. Certainly the power to make the offer was not conferred upon any other officer, board or body, and if it was not possessed by the head of the law department of the city it did not and could not exist at all.

The duty imposed upon him exclusively to have charge of all the law business of the city necessarily involved the exercise of judgment and discretion, and embraces the power to offer judgment when, in his opinion, that course was for the best interest of the city. It is said that the power is liable to be abused, but so is every power conferred upon a public officer. The argument that power may be abused does not prove that the power does not exist, and the learned counsel for the plaintiff has failed to point out any other officer, department or body, connected in any way with the city government, where the power could be more safely or properly lodged, or where it would be more likely to be exercised in the interests of the city.

But since this court has expressly affirmed the existence of this power in the corporation counsel, as we shall see hereafter, it is unnecessary to discuss this feature of the case upon principle, but it may be well to view it in another aspect. It is established law that a judgment cannot be attacked by a suit in equity on the ground that it was entered without authority, but the proceeding must be by motion in the action. (Vilas v. P. M.R.R. Co., 123 N.Y. 440, and cases there cited.) It appears on the face of the complaint that the city did avail itself of that remedy through all the courts and failed. The motion was made upon all the facts that appear in the complaint, with many others that do not appear. Not only was the question of authority involved in the motion, but the merits of the claims upon which the judgment is based as well, and the motion was denied, and that order was affirmed in this court. (O'Brien v. Mayor,etc., 40 App. Div. 331; affd., 160 N.Y. 691.) The plaintiff now proposes to take up the case where the city was compelled to leave it and litigate the whole matter over again. Of course, if the plaintiff is not concluded by the decision against the city made without collusion or fraud, then there is no reason why some other taxpayer may not take up the case and litigate the whole matter again should the plaintiff fail in this action, and thus the controversy would be continued indefinitely. The plaintiff as a taxpayer has no rights in this action except such as are derived from some act of the city or its officers. The wrong, if any, is to the city and not to the plaintiff personally. The position of the taxpayer in such an action is analogous to that of a stockholder in a private corporation seeking to impeach some corporate transaction. Whatever will bar or estop the city or the private corporation will bar or estop the taxpayer or the stockholder. (Alexander v. Donohoe, 143 N.Y. 203.)

It cannot be doubted that the final order upon the application by the city to vacate the judgment in question concludes it and is a bar to any other application for that purpose. A final order in such an application has the same effect as a judgment in an action. The city is precluded by the decision from raising any question involved or decided in that motion, or which could have been litigated or decided. These propositions are fully sustained by the authorities cited in the learned opinion below. (Culross v. Gibbons, 130 N.Y. 447, 454; Ashton v. City of Rochester,133 N.Y. 187; Bell v. Merrifield, 109 N.Y. 202; C.P.P. M.Co. v. Walker, 114 N.Y. 7; Lorillard v. Clyde, 122 N.Y. 41;Barber v. Kendall, 158 N.Y. 401.) The application to vacate and the decision denying the same appear upon the face of the plaintiff's complaint, and it follows that he is also concluded by the former adjudication. He cannot do what the city is estopped from doing. If he had alleged that the former proceeding was fraudulent or collusive then the effect might be different, but he did not and presumptively could not.

It is said that this action is based upon narrower ground than the motion by the city to vacate. The only difference in the two applications is that the former presented all the facts and circumstances to the court, while the present one presents only a part of them. But surely that cannot change the effect of the decision against the city. If there was no authority in the corporation counsel to offer judgment, then the city ought to have succeeded in the motion, but since it failed the point must have been decided adversely to it, and so it appears from the decision which was adopted by this court. (O'Brien v. Mayor,etc., supra.) Moreover, it has been held in other cases that a motion of that character made by the city, when finally decided, binds not only the immediate parties but the citizens and taxpayers as well. They are deemed to be represented by the city in the proceedings, and in the absence of fraud or collusion are bound as effectually as the city itself. (Ashton v. City of Rochester, supra;Osterhoudt v. Rigney, 98 N.Y. 223; Rogers v. O'Brien,153 N.Y. 357.)

This case involves much more than the narrow question concerning the power of the corporation counsel to offer judgment in a pending action, even if it was still an open one and not conclusively settled against the plaintiff, as I think it is by the decision of this court in this and other cases. (O'Brien v.Mayor, etc., supra; Mark v. City of Buffalo, 87 N.Y. 184;People v. Stephens, 52 N.Y. 306; People ex rel. Burby v.Common Council, 85 Hun, 601.) The legislature has just changed the law in that respect — a clear recognition of the fact that it was otherwise before. (Chap. 284, Laws of 1900.)

But the plaintiff's complaint is defective in the other particulars which have been pointed out, even if the plaintiff could impeach the judgment record and the affidavit of the corporation counsel as to his authority to make the offer, a proposition that is more than doubtful in the absence of any allegation of fraud. Conceding every fact alleged, they furnish no ground for an action in behalf of a taxpayer to impeach the judgment, and, moreover, it appears from the complaint that the plaintiff is seeking to litigate questions already decided against the city, and consequently against the citizens and taxpayers, since they constitute the city. (1 Dillon on Munic. Corp., sec. 40.)

For these reasons the judgment should be affirmed, with costs, and the question certified answered in the negative.

BARTLETT, VANN and CULLEN, JJ., concur with HAIGHT, J., for reversal; PARKER, Ch. J., and O'BRIEN, J., read for affirmance, and LANDON, J., concurs.

Judgment reversed, etc.