
    Matter of the Application of William Walsh v. William F. Richards, as County Treasurer of Oneida County.
    (County Court, Oneida County,
    February, 1898.)
    1. Taxation — Taxes received from a railroad must be applied tó town bonds issued in its aid — Insufficient defenses.
    The provisions of the Municipal Law (Laws of 1892, chap. 685, § 12) absolutely compel á county treasurer to apply taxes, which have been received by him and by his predecessors' from the property of a railroad situate in a town, to the purchase of town bonds which have been issued in aid of its construction or to the creation .of a sinking fund ^ in the manner prescribed by statute; and an application by a taxpayer of the town, to compel such action upon the part of a county treasurer, cannot be successfully resisted by an answer which alleges that the granting of the application will necessitate a new apportionment sheet which cannot be made and filed within the time required by law; that the county treasurer, upon his entry in office, found no such sinking fund; -that the .town has not paid over to him the proportion of its taxes proper for the purposes of the application; that no such claim upon him has ever been made before, and that he has no funds for the purpose sought.
    
      2: Same — Presumption that the county treasurer has funds.
    Where the accounts of a county treasurer’s office show that, during a period of five' years, the balance of the general fund has exceeded the amount paid by the railroad company for town taxes, a presumption arises that.the fund is still in the hands of the county treasurer and hence it must be applied as the statute directs.
    ■ Application pursuant to section 12 of the Municipal -Law; to compel the county treasurer of Oneida county to apply so. much of the taxes received by him and his predecessors collected on the assessed valuation of the Dtica, Chenango & Susquehanna Valley R. R. Co. and its successor, the D-, L. & W. R. R. Co., in the town of Bridgewater, as shall be.necessary to take up certain bonds, issued by -said town to aid in the construction of said railroad, and in the purchase of such bonds or in the purchase of such other bonds, authorized by said act, as may be necessary to create a sinking fund for the redemption and payment of said town bonds. .
    The petition alleges that from 1891 to 1896, inclusive, the board of supervisors levied taxes on the lands of said railroad company in said town to the amount of $2,578.10, which were paid by said company.. That the bonds issued by said town to aid in the construction of said railroad are outstanding to the amount of at least $1,'500, and interest from March, 1890. That taxes so levied and paid by said company have been paid to said county treasurer and his successor to an amount exceeding said sum of $1,500 and interest as aforesaid, and exclusive of school district and highway taxes. That said taxes or moneys, so levied upon and paid by said railroads upon their lands in said town, have not been used in the purchase of such bonds, or any of them, or invested, in any way as a sinking fund, but have been used and paid out in the regular course of business upon the debts, charges and claims due from the county to its general creditors.
    The answer contains no denial of any allegation of the petition, but expressly admits such as are matters of public record, and by way of avoidance alleges that, since the service of the order to show cause herein, the board of supervisors have determined the amount of taxes to be levied and fixed the ratio and apportionment. That in many instances the taxes have been extended and that granting the prayer of the petition would prolong the session of the board and work great hardship upon the members. That thereby a new apportionment sheet would be made necessary and that the time, fixed by law to file the apportionment sheet in the county treasurer’s office is December 20,- 1897. That said work could not be accomplished by that time and .a failure to comply with the law in that, respect might invalidate the entire tax levy. The answer further alleges that when the present county treasurer entered upon the duties of his office he found no “railroad sinking fund ” upon the books of said office; that the town of Bridge-water and its supervisor and collector of taxes have failed to comply with the provisions of the act- under which relief is sought, in that they failed to turn over- their proper proportion of said taxes. The answer further alleges that no proper claim has been made upon the county treasurer in any of said years or while said moneys were in his possession, and that the only claim ■ ever made upon him has been made within a few days and too late for any adequate remedy. That none of said funds are now in the county treasurer’s ■hands.
    The answer further alleges that several other towns are similarly situated and that they could ask for similar relief upon like notice and thus indefinitely prolong the session of the board of supervisors.
    Upon the argument the attorneys for the parties stipulated that the journals of the hoard'of supervisors of Oneida county for the years 1888 to 1896, inclusive, he deemed in evidence in this proceeding.
    Geo. C. Morehouse, for petitioner.
    J. K. O’Connor, opposed.
   Dunmore, J.

This application is made under section 12 of the Municipal Law (Banks’ 9th ed., Vol. 1, p. 585). That part of which is material to this application reads as follows:

“If a town, village or city has outstanding' unpaid bonds, issued, or substituted for bonds issued, to aid in the construction of a railroad therein,"so much of all taxes as shall be necessary to take up such bonds,- except school district and highway taxes, collected on the assessed valuation of such railroad in such municipal ' corporation, shall be. paid over to the treasurer of the county in which the municipal corporation is located. Such treasurer shall purchase with such moneys of any town, village or city, such bonds, when they can be purchased at or below par, and shall immediately cancel them in the presence of the county judge. If such bonds cannot be purchased at or below par, such treasurer shall invest such money in the bonds of the United States, of .the state of Hew.York, or of any town or' village or city of such state, issued pursuant to law; and shall hold such bonds as a. sinking fund for the redemption and payment of such outstanding railroad aid bonds. If a county treasurer shall unreasonably neglect to comply with this section, any taxpayer of the town, village or city having so issued its bonds may apply to the county judge ' of the county in which such municipal corporation is situated, for a3i order compellÍ3Íg such treasurer to execute the provisions of this section.”

This act has been frequently construed by the courts and the objections raised by the answer are I think covered by the decision in Matter of Clark v. Sheldon, 106 N. Y. 104, in which the court said: “It is no answer for the treasurer to say that if he should set aside these taxes for a sinldng fu3ni;,:rther.e -wóuldbe a deficiency in' other funds, and that he may not have money enough to pay the obligations of the county to the.state and to the county oficiáis -and county creditors.- He;has -no right to-.usé the-money, produced by these taxes, to discharge any of these 'obligations. The law has appropriated it for a specific purpose, and it is his duty to apply it to that purpose.”

Upon the second appeal of the same case to the Court of Appeals (134 N. Y. 333), it was held that " all taxes except school and road taxes collected in any town on the assessed valuation of any railroad for which said town has issued or shall issue bonds, shall be paid over to the treasurer of the county in which said town lies. And it is made the duty of the treasurer with such taxes to purchase the bonds of said town, or to otherwise invest the same and hold the investment as a sinking fund for the ultimate redemption and payment of said bonds. In case any county treasurer shall unreasonably refuse or neglect to comply with the provisions of the act, any taxpayer of the town is authorized to apply by petition to the county judge for an order compelling said treasurer to execute the law, and it is made the duty of the county judge in a proper case to grant such an order. It is plain that neither the town, or the county within which it lies, nor any officer or citizen thereof, have any power or authority over the disposition of the taxes mentioned in the act that come into the treasurer’s hands. The county treasurer in his relation to these taxes is not the agent of the county or the town. The supervisors have no jurisdiction over- the fund, and cannot legislate concerning it nor direct or control the action of the County treasurer with reference to it. Meither can the town through its officers or its town meeting change the direction of the fund, or cause it to be applied to any purpose except that named in the law, and any taxpayer has a right as against the town and all other taxpayers therein to have -the fund applied to the purposes stated and to institute proceedings to that end. If at the commencement of such proceedings such taxes are in the hands of the county treasurer, no power exists to relieve him from the performance of the duty devolved upon him except in the legislature of the state, and consequently it cannot be a defense for him to say that he has paid the taxes over to any officer of the town or that the town has had the benefit of it in its application to town purposes.”

The case of Spaulding v. Arnold, 125 N. Y. 194, was a similar proceeding against the county treasurer of Miagara county. Mine years’ taxes were involved. It appeared that at all times during the nine years the balance remaining in the general funds in the county treasurer’s hands had exceeded the amount of the railroad taxes in question.

The Court of Appeals held that as the. balance of money in the county treasurer’s hands at all times exceeded the amount of railroad taxes involved, the presumption was that said railroad taxes were still in the county treasurer’s hands. Certainly,” the court says, “ we never should indulge in the presumption,- without proof, that the moneys have in fact been used for some purpose other . than that commanded by the statute. To use ■ the moneys for any other purpose would be to misappropriate them, and proof of such .misappropriation would have to be made before the fact could be found. * * * We think as the evidence stands, it is entirely proper to assume that the general fund contains these moneys. * * * The funds thus paid into the county treasury having remained therein from the time' of such payments up to the present moment, there has been a continuing duty resting upon the, county treasurer to make the application provided for by the statute, and this duty continues up to the moment he discharges it by making the application which the statute commands. * * "* It is not necessary that the particular moneys paid by the railroad company should be identified. * * * Here the county treasurer has been paid certain sums of money which, he has not used, and which are still subject to his disposal in a legal and proper manner. The court,, under the statute, may-make an order that he shall dispose of the money in the manner therein prescribed, and an action is not, under these facts, the proper means of 'redress. Heither is it important that the present defendant did not receive all the moneys directly from the railroad company. The other county treasurers, his ■ predecessors in ¡office, received the moneys eos-officio, and> failing to do with them, as the statute required, they paid them over tó their successors in office at the expiration of their respective terms, and. the defendant now holds them by virtue of bis position as county treasurer.” The order directing the county treasurer to purchase bonds to the amount of the taxes or invest that amount in a sinking fund was,' therefore, affirmed.

The above adjudications so ■ clearly point out the way that in view of the facts conceded to exist in this proceeding, it is hardly possible td go astray. The. petitioner is a taxpayer of the town of Bridgewater, and 'its present supervisor. I find no statute which makes any of the county funds, in this county a special .fund or which requires the county moneys to .be subdivided according to the purpose to which any portion is to be applied. • The present system of bookkeeping was adopted by the county treasurer at the "request of the board of supervisors in 1867 (Journal, 1867, p. 31), and seems to have been followed since that time. I find no statute authorizing or requiring the board of supervisors to prescribe any particular method. All of the county moneys of this county raised by general taxation, therefore, belong to and form a part of the general, fund.

An examination of the Journals of the Board of Supervisors in evidence shows that at all times during the years 1891 to 1896, inclusive, the balance of the general fund in the county treasurer’s hands has exceeded the sum of $2,578.10, the amount of money paid to the county treasurer during that period by the railroad in question as taxes levied upon lands in said town of Bridgewater. Hnder the authority of Spaulding v. Arnold, it must be presumed that that fund is still in his hands and must be applied as the statute directs. It appears that on March 1, 1890, there was a bonded debt of the town of Bridgewater, issued in aid of said railroad, to the amount of $1,500, which, with interest, amounts to upwards of $2,060.43. The Oneida county treasurer received from said railroad company from 1891 to 1896, inclusive, in taxes paid by said railroad company, assessed upon its property in said town, the sum of $2,060.43, exclusive of the town’s share of said taxes.

I am, therefore, of the opinio'n that the county treasurer should be directed to purchase bonds of the town of Bridgewater, issued by said town, to aid in the construction of the Htica, Chenango & Susquehanna "Valley Railroad, to the amount of two thousand sixty dollars and forty-three cents ($2,060.43), provided the same can be purchased at or below par, and cancel the same as required by law. If the same- cannot be purchased at or below par, said county treasurer should be directed to invest said sum in the bonds of the Hnited States, of the state of Hew York, or of any town or village or city of said state issued pursuant to law, and hold such bonds as a sinldng fund for the redemption and payment of such outstanding railroad bonds. An order may be prepared accordingly.

Ordered accordingly.  