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Opinion of the Court, per WRIGHT, J.
eration, even by the board of trustees of the company, and if so given up, a receiver of the company's effects may recover it from such maker. The first mentioned decision is said to have been affirmed in this court, but whether so or not, it is clearly correct, both on principle and authority. A surrender without consideration, and in violation of law, of one of these notes given for premiums in advance (the object of them being the better security of dealers with the company), being a fraud upon its creditors and parties insuring in it, a receiver of its effects, in case of insolvency, may treat such surrender as void, and recover the amount of the security.
I am of the opinion, therefore, that the plaintiff, as receiver of this insolvent corporation, was entitled to recover the amount of the defendant's note. The exceptions having any materiality, were to the refusal to nonsuit, and the direction of a verdict by the judge. If the view taken of the case be the correct one, the nonsuit was properly denied; and as the facts were undisputed, leaving no question for the jury,
the direction of the verdict was not error.
The judgment of the Supreme Court should be affirmed. POTTER and Brown absent; CAMPBELL takes no part. Judgment affirmed.
Statement of case.
33 309 127 581
THE HARLEM Gaslight COMPANY, Respondent, v. The
MAYOR, &c., OF NEW YORK, Appellants.
When a lawful contract has been made with a municipal corporation, and it has
been fulfilled by the creditor, he is entitled by implication of law to a reason. able compensation, in the absence of any specific agreement as to price or
rate of payment.
York, is within the authority of the municipal corporation.
facturer who is in the enjoyment of a practical legislative monopoly, the case is
886, § 38.) A contract prescribing the rate of compensation for the use of gas during a
particular year, is not in its nature an agreement running from year to year, and cannot be held to fix the measure of compensation for subsequent use.
The plaintiff has for many years provided the gas, with which the streets and public buildings have been lighted in that part of the city of New York north of the center of 69th street. The rates at which it was furnished were never fixed by express contract, except for the year preceding the 9th of July, 1859.
From that time, until the month of August, 1864, the bills of the company were rendered and paid from month to month, at the rates designated in that writien agreement.
On the 24th of August, 1864, the company gave notice in writing to the municipal authorities, that the cost of manufacturing gas had more than doubled, and that on and after the first of the ensuing month, it would charge the city at the rate of $50 per annum for lighting each of the street lamps north of the center of 79th street.
There were 3,129 of these lighted in the month of September; and the gas therefor was furnished by the company, and is conceded to have been worth the sum of $13,037.50, being at the rate of $50 a year for each lamp.
During the month of September no formal action was taken on the subject by the common council. The lamps,
Statement of case.
howeyer, were lighted under the authority of previous resolutions and ordinances, and by the direction of the superintendent of lamps and gas.
Subsequently the company was served with a resolution adopted by the common council, for lighting Eighth avenue from 84th to 125th street with gas from the mains of the plaintiff.
The company rendered its bill against the city for the amount furnished in the month of September, together with the tax imposed upon the plaintiff by the United States revenue law for the gas so furnished and consumed, amounting in all to the sum of $13,758.53; and the city comptroller refused to pay it on due presentment and demand.
The company was incorporated in 1855, under the provisions of the act to authorize the formation of gaslight companies, “ for the purpose of manufacturing and supplying gas for lighting the streets, and the public and private buildings, &c., in all that part of the city lying north of the center line of 79th street.
The act of 1848, provides, among other things, that “any corporation formed under this act shall have full
power make and sell, and to furnish such quantities of gas as may be required in the city, &c., for lighting the streets, &c.; and to lay conductors through the streets, &c., with the consent of the municipal authorities. (3 Edmonds’ Statutes at Large, 849.).
On the 25th of April, 1855, the common council gave the requisite consent, on condition that the plaintiff should comply with the terms prescribed in the resolutions. These requirements were fulfilled; and the company furnished the gas, the lamps belonging to the city, and being erected pursuant to resolutions passed, from time to time, by the cominon council.
In 1857, and ever since that time, the duty of superintending the lighting of the public streets has been charged on the bureau of lamps and gas, and the superintendent of lamps and gas,
who is the chief officer of that bureau, is required to take charge of and superintend the construction and lighting of the public lamps.
Arguments for Appellants.
Every year since 1855, on the representations of the common council of the amount necessary for lighting the streets with gas, certified by the appropriate head of department, the legislature has authorized such amount to be raised.
In the spring of 1864, the amount thus applied for and certified was $430,427; and the sum of $420,000 was, by authority of the legislature, raised by taxation, and appropriated to this purpose by ordinance of the common council.
At the time the demand was made upon the comptroller, there remained of the appropriation unexpended, more than sufficient to satisfy the amount in question.
The corporation resisted the claim on two grounds:
1. That there can be no recovery, as the contract was one for supplies exceeding $250 in value, and not having been concluded in accordance with the requirements of the statute, it was therefore illegal and void. (1 Laws of 1857, p. 886, $ 38.)
2. That if otherwise, there was an implied contract between the parties, running from year to year, by which the gas was to be furnished at the rates fixed by the written contract, which by its terms expired on the 9th of July, 1859.
The questions at issue were submitted on an agreed case pursuant to the 372d section of the Code. The Superior Court at General Term directed judgment for the plaintiff for the value of the gas furnished, and for the amount of the revenue tax imposed on the plaintiff by the government. From that judgment the defendants appealed to this court. William F. Allen, for the appellants. I. The question intended to be submitted is, as to the amount to which the plaintiff is entitled for the supply of gas to the public lamps north of 79th street, for the month of September, 1864.
The plaintiff claims at the rate of $50 per annum for each lamp, as upon a quantum valebat, while the defendants insist that the compensation should be at the rate of $28.30 per annum for each lamp, as prescribed by the contract of July 9, 1858. To entitle the plaintiff to a judgment for the
Arguments for Appellants.
amount claimed, a valid contract for the payment of the sum claimed must be established, either express or implied. It is not pretended that any express contract for the payment of the $50 per lamp exists, but the circumstances are relied upon as raising an implied promise to pay that sum.
II. It will not be contended that, in the absence of any restriction or limitation of the corporate powers or legislative restraint upon the officers and agents of a corporation, contracts may not be implied against corporations as against natural persons. But whenever the organic law of the corporation or the statutes of the State prescribe the mode and manner in which contracts shall be made, and prohibit and declare void all contracts not made in pursuance with the requirements of law, such contracts are only valid as comply with the statutes, and no claim for services, materials or other thing furnished, except under a contract so made, will give a cause of action against the corporation. (Brady v. The Mayor, &c., 2 Bosw., 173; S. C., affirmed, 20 N. Y., 312; Appleby v. The Same, 15 How., 428; McSpedon v. Mayor, 7 Bosw., 601.)
No ratification or confirmation of the contract by any or all the corporate authorities, or acceptance of benefits under it, will bind the corporation, if the statute has not been complied with.
III. The charter of the city of New York and the several acts amending the same are public acts, and every citizen is presumed to know them, and is chargeable with knowledge of every provision affecting his dealings with the city; and if the subject matter of the contract is within a provision of law, the individual must see that the forms of law are apparently complied with. The subject matter of this claim is the supply of gas, amounting to more than $250 in the aggregate and more than $250 for a single night. The plaintiff had, on the 9th of July, 1858, entered into a contract, which was duly, that is, after a compliance with the require ment of law, made for the supply of gas to the city. There was then, in this case, actual notice and knowledge of the provisions of law relating to contracts for supplies.