THE SUPERVISORS OF NEW YORK against TWEED

THE SUPERVISORS OF NEW YORK against TWEED. Supreme Court, First Department, First District; General Term, November, 1872. Parties.—Action.—Powers of Supervisors.— Action in Name of Supervisors.—Remedy for Breach of Public Trust. The board of supervisors of a county can maintain an action to recover moneys fraudulently drawn from the treasury of the county, by a public officer, by means of fictitious claims, and converted to his own use or misapplied. The case of the People v. Tweed (p. 25 of this vol.), questioned. Form of a complaint in such case,—Held, sufficient. Appeal from order overruling demurrer. This action was brought in the supreme court in the county of New York, by the board of supervisors of that county, against William M. Tweed, to recover from him the amount of fraudulent and excessive bills, which the complaint alleged he had, as president of the board of supervisors, procured the audit and payment of, and a share of which he had received. The transactions in question are the same for which an action was brought by the People in the supreme court, in the third district (see People v. Tweed, at p. 25 of this vol.); and the present action is one of those referred to in the complaint in that action (see p. 36, note), and which were there alleged to have been collusively brought by direction of the mayor. The complaint in the present action alleged that defendant was one of the supervisors ; and set forth the act of 1870, authorizing the issue of revenue bonds by the mayor, comptroller and president of the supervisors, to pay all claims which should be audited by them. It alleged that defendant, as supervisor and as president of the board, was a trustee of the property of the county; that disregarding his duty he corruptly combined with others to present fictitious claims, upon an agreement that a part of the sums collected should be paid to him ; that he procured the audit and allowance of such claims, certified, them without examination ; and that they were paid, and a part of the proceeds were received by him or some person for his use ; which moneys he was, as trustee, bound to pay over ; and that plaintiffs had sustained damages in the sum of ten million of dollars. Defendant demurred on the ground that plaintiffs had not legal capacity to sue ; that the complaint did not state facts sufficient to constitute a cause of action ; and that there was a defect of parties plaintiff or defendant in the omission of the mayor, aldermen and commonalty of the city. The demurrer was submitted on briefs at special term, before Barrett, J., who delivered the following opinion: Barrett, J.—Although not of counsel in these particular cases when at the bar, yet I was engaged in suits between other parties, having, if my memory serves me, a somewhat similar object. As a matter of taste, therefore, I should have preferred the consideration of these demurrers by another justice, and I have only consented to examine them even, upon the urgent request of all the counsel, in order to save the term and to expedite the parties in getting to the November general term. To aid in effecting the latter object, I must content myself with a brief statement of the results arrived at. The elaborate opinions of Justices Miller, Potter and Parker, pronounced at the general term of the third department, in the case of the people of the State against the same defendants (p. 25 of this vol.), have been fully considered with a view of ascertaining, first, whether that tribunal has in substance decided that the present action would not lie; and second, whether the solution of that question was necessary to its judgment. Each of these questions must be answered in the negative. The only question which it was necessary for that court to decide was whether the people of the State, through the attorney-general, could maintain the action before it. Such, too, was the opinion of the court. Miller, P. J., says that “it is of no consequence whether the county has the power to sue, if that right exists in the people. It is quite enough that the action can be maintained in the present form in the name of the People to uphold the complaint.” Potter, J., in his opinion, says, if it shall turn out that the State is unauthorized to bring this action against the wrongdoer alone, then this objection—that the board of supervisors had been omitted—is immaterial. If the attorney-general is not authorized to bring the action, then this objection also becomes immaterial, and the action must fail upon that ground. This brings the examination to the only question in the case—the right of the people to bring the action. For this reason the remarks of Potter, J., against, and those of Parker, J., in favor of the right of the board of supervisors to maintain the present action, were not essential to sustain the people’s complaint; and upon this question, therefore, the opinion of Parker, J., can scarcely be termed “dissenting.” Miller, P. J., sets out with the same general view as Potter, J., but closes by quoting an intimation of the chancellor in the Attorney-General v. Wilson, Craig. & P., 1, from which he concludes that there may, perhaps, be two rights of action which are not inconsistent. Thus it is evident that the court is not bound by any actual determination of the present question, nor even by a concurrent or overwhelming expression of opinion. That question, then, being an open one, it only remains to be said that I have attentively considered the elaborate briefs which have been presented, and that my judgment is entirely convinced, by the able and exhaustive argument of the learned counsel for the plaintiffs, that the board of supervisors has a right to bring the present actions, and that the present complaints are good upon their face and should be sustained upon demurrer. The demurrer must, therefore, be overruled, with costs, and with the usual leave to answer over upon payment of such costs. From the order entered on this decision, the defendant appealed. David Dudley Field, for defendant, appellant; Insisted that the people and county could not both sue, and relied on the opinion in the People v. Tweed, above referred to. Jonn K. Porter, Geo. Ticknor Curtis, and Richard O'Gorman, for plaintiffs, respondents. Compare People v. Albany & Susquehanna R. R. Co., 5 Lans., 25; reversing in part, 1 Lans., 308; S. C., 7 Abb. Pr. N. S., 275; and reasserting the doctrine of People v. Miner, 2 Lans., 396. As to whether both actions will lie, see Supervisors of Livingston v. White, 30 Barb., 72. The allegations of the complaint were in the following form: I. That during the year 1869, and up to April 27, 1870, the defendant was one of the supervisors of the county of New York, and president of said board. II. That on April 26,1870, by an act of the legislature of the State of New York, enacted on that day, it was enacted as follows: “All liabilities against the county of New York, incurred previous to the passage of this act, shall be audited by the mayor, comptroller, and present president of the board of supervisors, and the amounts which shall be found to be due shall be provided for by the issue of revenue bonds of the county of New York, payable during the year 1871.” III. That by virtue of his official position as member of said board of supervisors, and as president of said board, on April 26, 1870, pursuant to the statute in such case made and provided, the said defendant became and was, at the days and times hereinafter named, a trustee of the property, funds and effects of said county of New York, and it was his duty faithfully and honestly to execute the duties and exercise the powers conferred upon him, and to use the utmost diligence to prevent waste and misappropriation of the public funds. IV. That the said defendant, disregarding and violating his duty in the premises, and corruptly contriving and intending to cheat and defraud the plaintiff, at about, or prior to the days and times mentioned in the schedule hereto annexed, did enter into a corrupt conspiracy and agreement with certain persons, whose names are mentioned in said schedule, and with certain other persons, whose names are unknown to the plaintiff, to cheat and defraud the plaintiff, in form and manner as follows, and otherwise. V. That, pursuant to said corrupt conspiracy and agreement, said persons above mentioned did assert, produce, and claim to be due to them from said county, sundry large sums of money, enumerated in the schedule hereto annexed, for divers work, labor, materials and commodities by them alleged to have been furnished to said county of New York, at the request and employment of the board of supervisors thereof. That the bills and claims so asserted and alleged by said persons were manifestly and grossly excessive and exorbitant, false and fraudulent, to the knowledge of said claimants and of the defendant, in the following particulars: That many of the charges so made were wholly false and fraudulent, and the works, materials and commodities named therein had never been furnished to said county of New York; that many other of the charges so asserted were excessive and exorbitant, and exceeded the market value of the articles enumerated more than tenfold. VI. That notwithstanding his knowledge of the false, fraudulent, excessive and exorbitant character of said claims, the defendant, pursuant to his conspiracy and agreement to cheat and defraud the plaintiff, and upon the understanding and agreement that a portion of the amounts paid from the treasury of the said county to the said claimants, upon said excessive fraudulent bills, should be paid to him, the said defendant did vote for and procure the audit and allowance of said bills by said board of supervisors, or by the mayor of the city of New York, the comptroller thereof and said defendant, acting under and pursuant to said section 4, chap. 382, of the Laws of 1870. VTL That said defendant, when acting with the mayor of the city of New York, and the comptroller thereof, under color of said section 4, chap. 382, of the Laws of 1870, did neglect to examine any of the bills and claims against the said county presented to said officers, and did certify the said claims, without any examination whatever, pursuant to his corrupt agreement and conspiracy with the claimants, as aforesaid. VIII. That afterwards, at the days and times mentioned in the schedule hereto annexed, the said bills, so allowed as aforesaid, were paid to the persons named in the said schedule from the treasury of the said county of New York, pursuant to the audit and allowance thereof, by the board of supervisors, or by the said mayor, comptroller, and the defendant, corruptly voted for, and procured, by the defendant as aforesaid, and a portion or share of the amount so paid was corruptly received by the defendant, or by some person for his use, pursuant to the conspiracy and agreement aforesaid. IX. That out of said extravagant, fraudulent and unlawful payments made as aforesaid, from the funds of the said county of New York, large sums of money, but of what amount plaintiffs are not certainly informed have by indirection, circuity, cover, connivance, and fraud, been paid to, and received by the defendant, and that as' trustee as aforesaid, he is bound to pay over all of said moneys to the plaintiffs, and is to them accountable in law and in equity for the same. X. That the plaintiffs have sustained damages in the premises in the sum of ten millions of dollars. XI. Wherefore, plaintiffs demand that the amount of such fraudulent and excessive bills over and above the true value of the goods and commodities in said bills and claims enumerated, which were actually furnished to said county, may be ascertained, and that they have judgment against said defendant for the excess of said amount paid over the value thereof, and that a discovery be had, under oath of the amount or portion of said payments received by the defendant, and that the said defendant be adjudged to hold the same and the proceeds thereof as the trustee of the plaintiffs, and compelled to restore the same to the plaintiffs, and that the plaintiffs be adjudged to be the lawful owner, and entitled to the possession of the same, or the proceeds thereof, in whose hands soever the same may have been transferred, and such other and further relief as to the court may seem just and equitable. [MAJORITY — Ingraham, P. J.] By the Court. Ingraham, P. J. [orally, after consultation.]—If we are to decide this case according to our own judgment, without regard to the decision in the case of the people against the same defendant, we have no difficulty in holding that the present action is well brought, and that the supervisors of the county have the right to sue for money alleged to have been taken from the county treasury, and misapplied. We consider the statute relating to boards of supervisors as authorizing such actions, and entertain no doubt as to the power of the plaintiffs to sue for moneys due to the county, which in the complaint was averred to be the property of the county. As to the decision of the court in the third department, in the action brought by the people, we cannot be bound by it, on this question, as the expression of that opinion was not necessary to the decision of that case, and especially as such decision was rendered by a divided court. Even the two judges who concurred in sustaining that action disagreed in the reasons which they assign for arriving at the same conclusion of law. In the complaint in that case, it was also averred that the suit of the supervisors was collusive, and that was admitted by the demurrer. Our decision therefore is, that this action may be maintained by the board of supervisors. The judgment of the court below must be sustained, and the demurrer overruled. Order accordingly. Present, Ingraham, P. J., Brady and Leonard, JJ.