Opinion
June Term, 1902.
Samuel H. Evins, for the appellant.
Howard R. Bayne, for the respondent.
The basis of the defendant's demurrer is the proposition that under section 14 of article 8 of the Constitution, and under section 661 of the Greater New York charter (Laws of 1897, chap. 378), the city is without power to make such a contract for the board of destitute and dependent children as it is alleged to have made in the third and fourth causes of action set out in the complaint.
The Constitution prohibits payments by counties, cities, towns or villages to charitable, eleemosynary, correctional or reformatory institutions, wholly or partly under private control, for the care, support and maintenance of any inmate "who is not received and retained therein pursuant to rules established by the State Board of Charities."
The Greater New York charter provides that no payment shall be made by the city of New York to any such institution for the care, support, secular education or maintenance of any child surrendered to said institution, or committed to, received or retained therein, in accordance with other specified sections of the charter, "except upon the certificate of the commissioner having administrative jurisdiction that such child has been received and is retained by such institution, pursuant to the rules and regulations established by the State Board of Charities."
It will be observed that the portions of the complaint now under consideration set out two executed contracts, one relating to children temporarily committed to the Richmond County Society for the Prevention of Cruelty to Children, and the other to those permanently committed. It is alleged that the plaintiff has furnished board to these children at the request of the city of New York. From this allegation an undertaking or obligation to pay would ordinarily be implied, but it is argued that no such implication arises in the present case, because the Constitution and the charter forbid payments by a city to a charitable institution under private control for the maintenance of any inmates except such as are received and kept therein pursuant to the rules framed by the State Board of Charities. This means that the alleged contract was ultra vires, and we are asked to condemn the complaint because it does not contain express averments showing that the requirement in respect to the rules of the State Board of Charities has been observed; or, in other words, because it does not negative the defense of ultra vires by way of anticipation.
I think the contention of the appellant in this respect rests upon a misconception of the rule of pleading applicable in such a case. Ultra vires is an affirmative defense. It involves an admission that the corporation went through the form of making a contract, and an assertion that its act was ineffectual because it had no power to enter into the agreement. A defense of this character must be pleaded. ( Keating v. American Brewing Company, 62 App. Div. 501.) The question cannot be raised by demurring to a complaint which simply sets out the making of the contract by the corporation and its performance by the other party.
For these reasons I think that the demurrer to the third and fourth causes of action was properly overruled, and that the city should have an opportunity, if its law officers so desire, to plead the defense of ultra vires by way of answer.
It follows that the interlocutory judgment, after a slight modification, should be affirmed. In regard to the fourth cause of action, the interlocutory judgment provides that in case the defendant does not elect to answer over, the plaintiff shall have final judgment for the sum of $4,443.31, with interest from January 1, 1899. This date should be July 1, 1900, the date on which the complaint alleges that the payment was demanded of the defendant. Interest can be allowed only from the date of the demand. ( Taylor v. Mayor, 67 N.Y. 87, 94.)
All concurred.
Interlocutory judgment modified as indicated in the opinion of BARTLETT, J., and as modified, affirmed, with costs.