Town of Mentz v. . Cook , 108 N.Y. 504 ( 1888 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] It would not be difficult to sustain the conclusion of the General Term in this case if we could disregard a question of pleading not brought to its notice, but resolutely argued and pressed at our bar. The action was in equity to compel the surrender and cancellation of three bonds of $1,000 each, which were part of a series issued by the railroad commissioners of the town of Mentz in aid of the Cayuga Northern Railroad. No such road has been constructed, and after paying the interest coupons for a single year the town resists and alleges the utter illegality and invalidity of the bonds. The Special Term granted the relief asked for, but the General Term reversed the judgment because, conceding the invalidity of the bonds, there was a complete and adequate remedy at law. But no such defense was pleaded. On the contrary the answer explicitly submitted the case to the disposition of the court and assented to its authority to try the issues presented upon its equity side. The complaint, after alleging the insufficiency of the petition presented to the county judge and the consequent invalidity of his judgment for want of jurisdiction, so that the bonds issued stood unsupported by the lawful consent of the taxpayers, concluded thus at the end of the fourth paragraph: "whereby said bonds with their coupons became and remain apparently a valid indebtedness against said town and a lien or incumbrance upon all its property and the property of all its taxpayers, real and personal, whereby also the collection of said bonds and coupons is liable to be enforced by the exercise of the taxing power without any action at law for that purpose, as well as by actions at law, and in the latter event by numerous actions at law, subjecting said town to a multitude of grievous suits for such enforcement, or to proceedings for the collection of said bonds and coupons which will leave to the town nor to any one aggrieved any adequate remedy at law for resisting the enforcement of the same." This allegation was admitted by the answer, and the admission is conclusive unless the averment consists wholly and fairly of a mere conclusion of law. It is something more than that. It asserts not only that a state of facts exists out of which arises the jurisdiction of a court of equity, but also alleges a due occasion and necessity for the exercise of that jurisdiction, specifying as facts the difficulties and dangers calling for that exercise. The answer neither denies the jurisdiction nor the propriety or necessity of its exercise. On the contrary, it concedes both, and deliberately assents to the trial of the issues in equity. It plants itself first upon the validity of the bonds as lawful obligations of the town, and next upon the doctrine of equitable estoppel growing out of the fact that one year's interest upon the bonds had been paid by the town before defendant's purchase. The answer, therefore, admitted the authority of the chosen forum to determine the issues presented, and made no effort to withdraw them from that tribunal.

It appears to be settled by a very general concurrence of authority, that a defendant cannot, when sued in equity, avail himself of the defense that an adequate remedy at law exists unless he pleads that defense in his answer. (Grandin v. LeRoy, 2 Paige, 509; Le Roy v. Platt, 4 id. 77; Truscott v.King, 6 N.Y. 147; Cox v. James, 45 id. 557; Green v.Milbank, 3 Abb. N.C. 138; Pam v. Vilmer, 54 How. 235.) The rule proceeds upon the basis that parties may by their mutual assent litigate their differences in a court of equity, where the assent of the defendant, if withheld, might induce the court to refrain from the exercise of its jurisdiction. That jurisdiction existing over the general subject, the question of its exercise in the given case cannot be raised, unless the answer raises it. Much more should that be true, where the answer explicitly admits an allegation of the complaint that the plaintiff has no adequate remedy at law. If that had been denied or the contrary asserted in the answer, the plaintiff might have come to the trial prepared to prove facts and circumstances bearing upon the inquiry, which are not now in the case, because assumed to be needless under the pleadings. The defendant's objection, therefore, came too late, when, waiving it by his answer, he sought to raise it at the opening of the trial. It was not covered by his objection that the complaint did not state a cause of action, for upon a demurrer for that reason it would have certainly been held sufficient. There was jurisdiction beyond question and enough stated to make a case for its exercise. We feel bound to follow the uniform current of authority, and to hold that the defense was not available.

The validity of these bonds, asserted in the answer, depended upon the jurisdiction of the county judge in adjudging that the consent of the requisite number of taxpayers had been given. The petition was presented after the amendment of 1871 to the act of 1869, and was defective in not averring that the petitioners were a majority of the taxpayers of the town of Mentz, excluding those taxed for dogs or highway tax only. The fatal character of the defect has been so adjudged in this court as to end further discussion. (Green v. Smith, 55 N.Y. 135; Town ofWellsborough v. N.Y. H.R.R. Co., 76 id. 182; Metzger v.Attica Arcade R.R. Co., 79 id. 171.) Our attention has heretofore been drawn (Hills v. Peekskill Savings Bank,101 N.Y. 490) to the definition of the word "taxpayers," given in section 1 of the act of 1871, and to the fact that such definition and its effect had never been directly passed upon by this court. The argument advanced is that the word "taxpayers," as used in the act, is declared to mean taxpayers exclusive of those taxed for dogs or highway tax only, and that it is illogical to deny to the word, when used in a petition under the act, the meaning ascribed to it by the act itself. The suggestion is by no means conclusive, and admits of a satisfactory answer. The definition was given to avoid useless repetition, and is confined to its use in the act itself. The petition is required to be verified, and to show on its face the consent of the requisite majority, and is not satisfied by an ambiguous oath, true in one sense and not true in another. We are not convinced that we ought to overrule our existing line of decision for the reason assigned. The defect, therefore, was fatal, and the Special Term correctly decided that the bonds were invalid.

Only a word needs to be added as to the defense of estoppel. The act of the town officers in paying the first year's coupons was not so within the scope of their authority as to estop the town. They had no warrant of law for their action, and acted without real authority. Cases may and do arise where, without the existence of an estoppel, there has been such inexcusablelaches on the part of the town as to justify the refusal of its relief by a court of equity. (Alvord v. Syracuse Sav. Bk.,98 N.Y. 599.) But this is not such a case. A single year's interest was levied and paid. The fact drew attention at once to the claimed obligation of the bonds, and was followed by legal proceedings to prevent any further waste of the public funds. The delay was not so unreasonable as to be without excuse, or to convict the town of sleeping upon its rights. If it had persisted in such payments to a greater or less degree, it might have lost its right to the remedial relief of a court of equity.

It follows that the order of the General Term should be reversed, and the judgment of the Special Term affirmed, with costs.

All concur.

Order reversed, and judgment affirmed.