Gifford v. Town of White Plains , 32 N.Y. Sup. Ct. 606 ( 1881 )

Gilbert, J.:

The act of April 28, 1877, required the collector of taxes to make a return on oath to the supervisor of the town of all taxes remaining unpaid at the time of such return, and required the supervisor, whenever he should receive from the collector or receiver of taxes an account of such unpaid taxes under the direction and authority of a board composed of himself, the justices of the peace and town clerk of the town, to borrow on or before the first day of May next thereafter upon the credit of the town a sum not exceeding the amount of unpaid taxes so returned, and to pay said amount to the county treasurer. (Laws 1877, chap. 193, §§ 1, 2, 3.) The amount of taxes remaining unpaid, as shown by the return of the collector made pursuant to the foregoing requirement, was $6,526.88. The board of town officers provided by the statute on the 31st of May, 1877, directed the supervisor to raise the amount aforesaid, less the amount then in his hands applicable to the payment of unpaid taxes, upon certificates of indebtedness of the town. Accordingly certificates in proper form were issued, one of which is the one in suit. That certificate was payable to the supervisor or order and was received by the plaintiff directly from the supervisor in the latter part of July, 1877. It appears that at that time certificates amounting to $6,000 had been issued, and that the supervisor liad paid to the county treasurer the whole of the amount so returned for unpaid taxes with the proceeds of such certificates and other moneys in his hands applicable to that purpose. The issuing of the plaintiff’s certificate, therefore, was a breach of duty on the part of the supervisor, and was an act in violation of the direction of the board of town officers.

The certificate, however, was negotiable by delivery, and the plaintiff received it in good faith for value, and without actual notice of the facts which tend to invalidate the instrument. The limitations of the authority of the supervisor in respect to the amount of certificates to he issued was, perhaps, sufficient to put the plaintiff upon inquiry as to the extent of such authority. Assuming that to be so, yet the proper, person of whom the inquiry should be made was the supervisor himself. lie was an officer of the town. Although his authority to issue the certificate was derived from the statute of 1877, yet his acts done in performance of such authority and within its apparent scope were, as respects the plaintiff, corporate acts, and were binding upon the town as principal.

The issuing of the certificate held by the plaintiff was equivalent to a declaration by the supervisor that he had not transcended the limitation contained in the resolution of the hoard of town officers. There were no public records by an inspection of which the plain tiff might have ascertained that the supervisor had exceeded that limitation, nor were the entries in the account kept by the supervisor, showing that fact, made until after the plaintiff had loaned his money on the faith of the certificate. Moreover, the certificate itself contained a recital that it was issued under and in pursuance of the act of 1877 and the resolution of the board of town officers of the town of White Plains. Under such circumstances we think the town is estopped from setting up against a bona fide holder the lack of authority in its agent to issue the certificate, upon the principle that where a power is conferred, if the agent does an act which is apparently within the terms of the power, the principal is bound by tbe representation of the agent as to the existence of any extrinsic facts essential to the proper exercise of the power, when such facts rest peculiarly within the knowledge of the agent. (Farmers’ and M. Bk. v. Butchers’ and D. Bk., 16 N. Y., 125.) When the resolution of the board of town officers was passed the supervisor alone knew what amount was in his hands applicable to the payment of unpaid taxes. That board therefore vested him with the power of determining what sum applicable to the payment of unpaid taxes was in his hands. His determination was manifested by the issuing of the certificate, and by the recital therein before referred to, and it was to the effect that he had not in his hands such an amount as would show that he had transcended his authority by issuing the certificate. The town is bound to the plaintiff by that representation, although in point of fact it was false and fraudulently made, by the rules which govern negotiable instruments, and also upon the principle of estoppel in pais. The latter principle implies an act in itself invalid, and rests upon the equitable consideration that where one of two innocent parties must suffer through the misconduct of another, he who employed the latter should be the loser. (Hern v. Nichols, 1 Salk., 289; Swan v. North Brit. and A. Co., 7 H. & N., 603; Bank of Rome v. Village of Rome, 19 N. Y., 20; Gelpcke v. City of Dubuque, 1 Wall., 203 ; Comrs. v. Aspinwall, 21 How. [U. S.], 545; St. Joseph v. Rogers, 16 Wall., 659; Lynde v. The County, Id., 13; Com’s. v. Clark, 4 Otto, 287.)

The supervisor was authorized to issue the certificates during the period running from the time when he received from the collector an account of unpaid taxes until the first day of May thereafter; such is the language of the act of 1877. Nor did the act require the registration of the certificates as a condition precedent to the issuing thereof. On the contrary, only certificates which had been issued were required to be registered.

The judgment should be affirmed, with costs.

Barnard, B. J., concurred. Present — Barnard, P. J., Gilbert and Dykman, JJ.

Judgment affirmed, with costs.