Opinion
November 22, 1907.
William Lloyd Kitchel, for the plaintiff.
William Morgan Lee, for the defendants.
It appears that the plaintiff is a domestic municipal corporation; that the defendants are copartners doing business as bankers and dealers in investments and securities; that in July, 1907, the defendants, in response to an advertisement of the plaintiff, promulgated in accordance with the provisions of section 129 of the Village Law (Laws of 1897, chap. 414), inviting sealed proposals for the purchase of its bonds in the amount of $18,400, submitted a proposal therefor accompanied by a certified check for $500, offering to purchase bonds, which offer was accepted by the plaintiff. The defendants have refused to complete the purchase of the bonds, contending that they are invalid and illegal. The plaintiff demands judgment that the bonds be declared valid and legal and that the defendants take the bonds and pay for them according to their proposal; the defendants demand judgment that their deposit of $500 be returned to them. The question presented as to the legality of the bonds arises under the provisions of section 5 of the General Municipal Law (General Laws, chap. 17; Laws of 1892, chap. 685). That section reads as follows: "A funded debt shall not be contracted by a municipal corporation except for a specific object expressly stated in the ordinance or resolution proposing it; nor unless such ordinance or resolution shall be passed by a two-third vote of all the members elected to the board or council adopting it, or submitted to, and approved by the electors of the town or county, or taxpayers of the village or city when required by law. Such ordinance or resolution shall provide for raising annually, by tax, a sum sufficient to pay the interest and the principal, as the same shall become due." The proposition submitted to and voted upon by the taxpayers of the plaintiff, the Village of Bronxville, was as follows: "Shall Front Avenue and De Witt Avenue in the Village of Bronxville be graded and paved wholly at the expense of said Village, at a cost not exceeding Eighteen Thousand Four Hundred Dollars ($18,400), the said Village of Bronxville for the purpose of paying the cost thereof to borrow money on its bonds not exceeding in the aggregate Eighteen Thousand Four Hundred Dollars ($18,400); a sum to be raised annually by levying a tax on all taxable property in said Village sufficient to pay the interest and principal of all said bonds as the same become due?"
The defendants' claim may now be understood. They assert that the last sentence of section 5 of the General Municipal Law means that the resolution submitted to the taxpayers shall contain a statement specifying the sum which shall thereafter be raised by tax by the village of Bronxville to pay the interest and principal of the bonds as the same shall become due, and that because no such statement was contained in the proposition submitted to the taxpayers of the plaintiff the proceeding was not had in conformity with law, and the bonds issued pursuant thereto were illegal and invalid.
What our view of this contention might be, were the question presented to us as an original proposition, it is not deemed necessary to state, in view of the decision of the Court of Appeals in New York Rosendale Cement Co. v. Davis ( 173 N.Y. 235). That was a taxpayer's action to restrain the trustees of the village of Rosendale from issuing bonds to purchase the water works plant in that village. The proposition which had been submitted was in the following form: " Resolved, Shall there be raised upon the Village of Rosendale the sum of $40,000 for the purchase of the water works system from the Rosendale Water Works Company?" The judgment for the defendants was affirmed, and it is clear that the effect of the affirmance was to declare in favor of the legality of the bonds. It is apparent that the proposition as submitted in the Rosendale case was even more general than that in the case at bar, and certainly did not conform more nearly to the apparent requirement of that portion of section 5 of the General Municipal Law, which has been noticed. The case arose, however, and the decision was made subsequent to the enactment of that section of the General Municipal Law, and while it was yet in force, and it seems entirely clear that if the bonds in the Rosendale case were valid, they are in this.
The judgment should, therefore, be for the plaintiff, declaring the bonds valid, and requiring the defendants to complete the purchase, without costs.
WOODWARD, GAYNOR, RICH and MILLER, JJ., concurred.
Judgment for the plaintiff on submission of controversy, without costs.