Opinion
Argued March 21, 1884
Decided June 3, 1884
A.J. Vanderpoel for appellant.
Charles E. Miller for respondent. Thomas Allison for respondent.
The decision of the General Term is placed wholly on the ground that the money authorized to be raised by the act of 1871 (Chap. 269, § 3) was money of the State, and that consequently the constitutional amendment of 1874 (Art. 8, § 10) abrogated the authority granted to the supervisors of the county of New York to raise such money by tax and to pay it over to the plaintiff. The conclusion reached is, that the money was illegally raised; that the direction to pay it to the plaintiff became void, being in violation of the fundamental law, and, therefore, no action could be maintained by the plaintiff for any part thereof.
The constitutional provision relied upon is in the following words: "Neither the credit nor the money of the State shall be given or loaned to or in aid of any association, corporation, or private undertaking. This section shall not, however, prevent the legislature from making such provision for the education and support of the blind, the deaf and dumb, and juvenile delinquents, as it may deem proper. Nor shall it apply to any fund or property now held or which may hereafter be held by the State for educational purposes."
The section of the act of 1871 which is supposed to be in conflict with this constitutional provision is as follows: "Section 3. The board of supervisors of the county of New York shall in the year 1871, and each and every year thereafter, levy and collect by a tax upon the taxable property of the city and county of New York, to be levied and collected at the same time and in the same manner as the contingent charges and expenses of the said city and county are levied and collected, the sum of $5,000, and pay the same over to the said corporation (the plaintiff) to be applied to the purposes and objects of the said corporation."
The objects of the corporation were to receive and adopt children and youths of both sexes between the ages of twelve months and fifteen years, who were orphans, half orphans, or otherwise friendless; these to keep, support and educate, apprentice and place out to service, trades and schools. Also to receive children of poor clergymen for training and education, who might be deemed eligible and who should be approved by the trustees, and to receive other children and youths for education and training to such extent as in the judgment of the trustees might be expedient.
By chapter 775 of the Laws of 1868, the several magistrates of the city of New York were authorized to commit to the charge of the plaintiff such orphans and friendless children as might come under their jurisdiction, and the commissioners of the public charities and correction of said city were authorized to transfer to the plaintiff such orphans and friendless children as should be eligible, etc.
The act of 1871, before referred to, provides for placing at service the children in charge of the society, with the approval of the mayor or surrogate or one of the commissioners of public charities and correction of said city.
The first question which arises is, whether the money authorized to be raised by the supervisors to be paid over to this institution was money of the State within the meaning of section 10 of article 8 of the Constitution. It seems to us that that section had reference to money raised by general taxation throughout the State, or revenues of the State or moneys otherwise belonging in the State treasury or payable out of it (1 R.S., chap. 9, art. 1, tit. 1) and not to money raised by ordinary local taxation for local purposes, and to be disbursed by the local authorities. The Constitution itself in article 8 recognizes the distinction between the two classes of funds. Section 10 impliedly permits the application of State money to corporations or private institutions, for the benefit of the blind, the deaf and dumb, and juvenile delinquents, making an exception from the general prohibition, in favor of those objects, but making no such exception in favor of private or local institutions for the benefit of the poor, thus leaving that class of charities to be provided for by their respective localities; while section 11 of the same article prohibits counties, cities, towns and villages from giving any money or property, or loaning their credit in aid of any individual, association or corporation, but reserving from such prohibition such provision for the support of the poor of the locality, as may be authorized by law. County money as well as State money is raised by taxation under authority of the legislature, yet by a comparison of these two sections of the Constitution, we see that they are not put on the same footing. And the fact that money is raised by local taxation by the supervisors of a county, pursuant to an act of the legislature, does not make it money of the State. That point was expressly adjudicated by this court in the cases of People v. Ingersoll ( 58 N.Y. 1), and People v. Fields (id. 491). The general scheme of the constitutional provisions referred to seems to be that the general funds of the State shall not be given to local charitable institutions, except in aid of the blind, the deaf and dumb, and juvenile delinquents, and that the poor are to be provided for in their localities; counties, cities, towns and villages being allowed to make any provision for the support of their poor which may be authorized by law. Carrying out the designated charities through the instrumentality of private corporations is not prohibited by the Constitution, but the giving away of the money either of the State or of its counties or other local divisions to individuals or private corporations, except for the designated purposes for which each is authorized to provide, is forbidden.
These observations apply to money raised in localities by the ordinary process of taxation of the inhabitants or property of the locality, to defray the local expenses. There may be cases of funds collected by local authorities for fines, penalties or licenses, under the authority of the State, which would belong to the State unless given by law to the locality. (1 R.S., chap. 9, art. 1, title 1.) But the fund now in question is of the first-mentioned class. It was authorized to be raised by the levy and collection of a tax upon the taxable property of the city and county of New York at the same time and in the same manner as the contingent charges and expenses of the said city and county were levied and collected, and it was directed to be paid over to the plaintiff. The payments thus directed to be made were put upon the footing of city and county charges and expenses, and the right so to treat them has its foundation in the before-cited act of 1868, which empowers the magistrates and the commissioners of charities and corrections to commit and transfer orphans and friendless children to the charge of the plaintiff, and in section 11 of article 8 of the Constitution, which exempts from the prohibition against giving county or city money to private corporations, such provisions for the support of the poor of the locality as may be authorized by law. Having the authority to commit to the charge of the plaintiff the specified class of the poor, it was no more than just that the city should make a reasonable contribution to the expenses of the plaintiff to enable it to perform the duty authorized to be assigned to it; and we, therefore, are of opinion that the act of 1871 does not fall within the prohibition of article 8, section 10 of the Constitution, and was not abrogated by the adoption of that section in 1874.
The learned counsel for the city does not argue in support of the position taken by the General Term of the court below, but, on the contrary, concedes that the money in question was not money of the State. He contends, however, that it was city money, and that the appropriation of it to the plaintiff was a gift of city money prohibited by section 11 of article 8 of the Constitution. He expressly concedes, for the purposes on this appeal, the power of the city to make provision for the support of its poor through the medium of a private corporation, but denies that the appropriation in question was a provision for the support of city or county poor, because the money was given to the plaintiff "to be applied to the purposes and objects of said corporation," and these included other purposes besides the support of city or county poor, viz., the education of the children of poor clergymen, and other children whom the trustees might deem it expedient to receive.
We do not think this objection necessarily fatal. The main corporate purpose was to support orphans and other friendless children, and by the act of 1868 the magistrates and commissioners of charities of the city were empowered to place destitute children in the care of the plaintiff, and we think that the legislature had power to authorize the city to provide for the burden assumed by the plaintiff and that which might be cast upon it under the act of 1868 by a payment of a gross annual sum, instead of keeping a separate account of the expense of supporting each child who might be committed or transferred, under that act, or of each destitute child, living in the city, who might be received by the plaintiff and who otherwise would have become a county charge. It was a matter of legislative discretion to determine how the expense of these children should be provided for, or how the plaintiff should be compensated for bearing the part of the public burden which it assumed. The gross compensation, when paid to the plaintiff, would necessarily become its property and applicable to its general corporate purposes, and we do not think it essential to the validity of such an appropriation of city money, that the corporation to whom the payment is authorized should be one whose corporate powers are restricted to the receipt and support of city or county poor.
This action is brought to recover the annual payment of $5,000 for each of the years 1875, 1876, 1877, 1878, and 1879. As to the years 1878 and 1879, we think that the court below was right in holding that this action could not be maintained, the money not having been raised by tax during those years. If the plaintiff had any remedy for those years, it must be sought in some different form. But in the years 1875, 1876, and 1877 the money was raised and is presumably in the treasury to meet the appropriation thereof in favor of the plaintiff made by the act of 1871.
During the years 1875 and 1876 it appears that the plaintiff wholly suspended its operations, and did not receive and was not in a condition to receive or care for any of the destitute children authorized to be received by it or to be committed to its charge. On this ground we think the court was justified in disallowing the claim for those years. A payment of the fund to the plaintiff while it was in that condition, would have been without any equivalent, and a simple gift of the money to the institution, which would come within the constitutional prohibition, whether the money be regarded as State, or city or county money.
But during the year 1877, it appears that the plaintiff resumed its operations. There is testimony to the effect that in that year it raised funds by private subscriptions, rented a house, and filled it with children; that the magistrates of the city made commitments of children to the institution, and that the children committed to it had been taken care of ever since.
On the first trial of this action before VAN BRUNT, J., and a jury, the court directed a verdict for the plaintiff for $5,000, the amount of the appropriation for 1877. On appeal to the General Term that judgment was reversed on the ground that the act of 1871 was in effect a gift of money of the State. On the second trial the court directed a verdict for the defendant. For the reasons stated, we think that a recovery for the appropriation of 1877 could have been sustained, and that the direction to render a verdict for the defendant was erroneous.
The respondent seeks to sustain the direction on the ground that the duties performed in 1877 were not performed by the plaintiff, but by persons who had usurped the office of trustees of the plaintiff, and who were thereafter adjudged, in a proceeding by the State by quo warranto, not entitled to the office of trustees.
The testimony before referred to established prima facie that the operations of 1877, beginning in March of that year, were those of the plaintiff. The plaintiff in this action ratifies and adopts them, and claims the benefit of them, and all that appears in the case to the contrary is an admission of the plaintiff's counsel that an action of quo warranto was brought on behalf of the present trustees, claiming to be the lawful officers elected by the institution, against those who were elected in March, 1877, and that the plaintiffs succeeded in that action on the claim made by them.
All that this admission discloses is that the operations carried on in 1877 were performed in the name and behalf of the plaintiff by persons claiming to be its duly elected trustees, but that afterward, on a contest as to the election, the present incumbents prevailed. These facts are not sufficient to render invalid the acts done by those in control of the corporation pending the contest, or to preclude the plaintiff in its corporate capacity from claiming the benefit of those acts.
The judgment should be reversed and a new trial ordered, costs to abide the event.
All concur.
Judgment reversed.