
    Arthur K. O’Hara, Resp’t, v. The State of New York, App’lt.
    
      (Court of Appeals,
    
    
      Filed January 15, 1889.)
    
    1. Constitutional law—Laws 1886, chap. 473—Constitution of New York, art. 8, § 19, and art. 7, § 14—Quarantine.
    The provision of Laws 1886, chapter 473, that “the board of claims is hereby authorized to re-hear, audit and determine the claims of * * * A. K. O’Hara & Co., * * * for work and services done and performed by them for the state, under the directions of the quarantine officials, and to award to them * * * such sums as, upon due proof before said board, shall be a reasonable compensation therefor,” does not violate either section 19, article 3, or section 14, article 7, of the constitution of New York state. Danforth, J., dissenting.
    3. Same — Legislature has power to supply defect in pre-existing legislation, thereby making a claim against the state valid.
    When individuals voluntarily furnish property or render valuable services to the state, at the request of state officers, for state purposes, but1 with the expectation of payment for the same, the legislature has- power to ratify the acts of such officers, although previously unauthorized, ■ and create a legal liability on the part of the state to pay for such property and services enforceable in its tribunals. , The act of the legislature in supplying defects or omissions in pre-existing legislation, wherever a liability may be predicated against the state, is not the audit of a claim nor an allowance thereof. Danforth, J., dissenting.
    3. Same—New York constitution, art. 7, § 14—Effect of.
    The provision in the constitution, article 7, section 14, exempting existing claims from being barred by lapse of time, which have been duly presented within the time allowed by law and prosecuted diligently thereafter, applied! only to claims existing at the time of the adoption of the amendment, in 1874, and- did not embrace future cases which were clearly covered by the first paragraph of the section.
    
      4. Same—Statute of limitation. ,
    In the case of an imperfect claim or obligation, which is unenforceable by reason of some vice or defect therein which may be cured or waived by the debtor, the right of action arises at the time the claim becomes purged of the vice by the action of the debtor, and not before The statute of limitations commences to run only after the cause of action has accrued. The fact that the statute has run against an imperfect obligation does not prevent the debtor from creating a new obligation, founded on that which has outlawed.
    Appeal from an award of the board of claims, made in favor of the plaintiff.
    
      Chas. F. Tabor, attorney-general, for app’lt; William, B. Buggies, for resp’t.
   Ruger, Ch. J.

This is an appeal by the state from an award made by the board of claims for services rendered and materials furnished at the request of the quarantine officials, by the claimant in the years 1875 and 1876, in re-" pairing and fitting up vessels and property used in quarantine affairs in the harbor of New York.

There can be no question but that the maintenance of the quarantine station in that harbor is of great public benefit and importance; nor but that the legitimate expenditures, therefor are a public necessity justifying their incurrence and payment by the state. The organization of the quarantine system was created by the state for the benefit of the people; is under its control; its officers are' appointed by it, and it has uniformly provided, in some form or another, for their compensation and for the procurement of the supplies necessary to its efficient operation, and it was-the moral duty of the state to see that their agents properly discharged their obligations to the persons employed by them in the service, of the state.

The services and materials in question were rendered and furnished at the request of the state officials, and compensation therefore was honestly earned by the claimant along, time since, and it is a reproach to the state that satisfaction of them should have been postponed so long by controversies among the state officials as.to the department responsible for their payment.

The board of claims have found that in the years mentioned the claimant performed services and furnished materials in the repair of the quarantine steamers and other property of the state, under the direction of the quarantine official, of the value and for the amount .named by them in. the award appealed from. The undisputed evidence showed that the claimant, originally supposing the health officer to-be liable for his claim, sued him in a state court and was defeated upon the ground that that officer had incurred no personal liability by reason of the rendition of such services, and that the claim therefor was against the state.

Thereupon, in 1878,- he filed, his claim against the-state before the board of audit, and after a hearing thereof before such board, it rendered a decision holding that the state was not liable therefor, but that the health officer was, and, therefore, refused to make an award in his favor, and dismissed the claim. Applications were thereafter made, on behalf of the claimant, to each successive legislature for relief in every year, including that of 1885, and excepting that of 1880, with unavailing effect. In 1886, however, an act was passed, being the law under which the board of claims based its authority to make the award in question, which is as follows :

“The board of claims is hereby authorized to rehear, audit-and determine the claitris of A. K. O’Hara & Co., for work and services done and performed by them for the state under the directions of the quarantine officials, and to award to them such sums as upon due proof before said board shall be a reasonable compensation therefor.”

It is now claimed by'the attorney-general for the state that this act' violates section 19, article 3; arid 'section 14, article 7,, of the constitution, and is, therefore, unconstitu - tional and void.

The provisions of the constitution. are .as follows : Article 3, section 19:- “ The legislature shall neither audit nor allow any private claim or account against the.state, but may appropriate money to pay such claims as.shall have been audited and allowed according to law.”

Article 7, section 14 : Neither the. legislature, canal board, canal appraisers, nor any person, or persons, acting in behalf df the state, shall audit, allow or pay any claim which, as between citizens of the state, would be barred by lapse of time. The limitation of existing claims shall begin to run from the adoption of this section ; .but this provision shall not be construed to revive claims already barred by existing statutes, nor to repeal any statute fixing the time within which claims shall be presented or allowed, nor shall it extend to any claims duly presented within the time allowed by law and prosecuted with due diligence from the time of such presentment. But if the. claimant shall be under legal disability, the claim may be presented within .two years after such disability is removed.”

It was held by us in Cole v. The State of New York (102 N. Y., 54; 1 N. Y. State Rep., 354), that an act of the legislature recognizing meritorious services, rendered to the state without previous authority of law, and authorizing . the board of claims to hear claims for compensation therefor and award such sum as they might think proper and just, was neither an audit or allowance of a claim against the state within the meaning of section 19, article 3 of the constitution. We think our decision in that case disposes of the objection to the act under consideration. A brief reference to the history of this claim seems to show that it comes within the principle laid down in that case.

Under chapter 444 of the Laws of 1876, the board of audit was organized and was authorized to hear all private claims and accounts against the state (except such as are now heard by the canal appraisers),, and to determine the justice and amount thereof, and to allow such sums as it shall consider should equitably be paid by the state..

The hearing of the claim in question by that board in 1878 was had under this law, and no other tribunal then existed or was thereafter created by the state competent to hear and determine such a claim until 1883, more than six years after the service had been rendered, and that tribunal was authorized to hear, only such claims as should arise within two years previous to the time of filing the claim before it. The board of audit had no power to re-open and rehear claims once determined by it, and no appeal lay from its decisions except those provided by chapter 211, Laws of 1881, which were confined to awards made subsequent to-January 1st, 1879, and did not reach the award made upon the claim of the respondents. Their decision upon the-claim, therefore, was final and conclusive between the parties, and determined the fact that for the services in question no legal claim then existed against the state on behalf of the claimants. That determination necessarily proceeded upon the ground that the persons upon whose request the services were rendered, had no authority to bind the state, and, therefore, that no legal cause of action existed against it. It was undoubtedly within the province of the legislature, originally to have provided for the rendition of these services and the purchase of materials for the use and benefit of the quarantine station, and it is equally clear that it could, by subsequent legislation, ratify and approve any act performed for the benefit of the state, which it had original authority to legislate and provide for Brown v. Mayor, etc., 63 N. Y., 240; People v. Denison, 80 id., 656; People v. Stephens, 71 id., 529.

It cannot be questioned, "we think, but that when individuals voluntarily furnish property or render valuable services to the state at the request of state officers for state purposes, but with the expectation of payment for the same, the legislature may ratify the acts of such officers, although previously unauthorized, and create a ' legal liability on the part of the state to pay for such property and services enforceable in its tribunals. The act of the legislature in supplying defects or omissions in pre-existing legislation wherever a liability may be predicated against the state, is cléarly not the audit of a claim, neither is it an allowance thereof. The power of auditing and allowing is expressly referred to the tribunal authorized to hear and determine such claims, and they may allow or reject them as in their judgment and discretion seems just.

This, we understand, to be the decision in the Cole Case, and we think it is founded on correct principles. As was there -said, the exercise of such a power by the legislature does not, in any just or reasonable sense, conflict with the provisions of the constitution prohibiting it from auditing or allowing private claims or accounts against the state. -It has undoubted power to authorize state officers and agents to contract debts, under certgin circumstances, against the state, and, as we have before said, it can legalize such as have been theretofore illegally contracted, by a subsequent exercise of its legitimate legislative power. It may create tribunals to hear and determine cases between •the state and individuals, and it may by law enlarge the authority of existing tribunals to hear the same. In all this it neither audits or allows claims,, or authorizes their payment.' It simply provides a tribunal before which the state may be prosecuted, and enacts that a limitation upon the authority of the tribunal shall not apply to certain obligations. Such a limitation is created by and may, therefore, be removed by legislative authority.

It would certainly be very strange and would subject the state to great loss and damage if, in cases of emergency, and when legislative authority could not be previously obtained to authorize the same, that its servants should be powerless to obtain labor and materials necessary to save it from the destruction of its property and be compelled to lose advances made in reliance upon the' justice and honor of the state, and believing that they would be subsequently reimbursed for expenditures made for its benefit.

. It cannot, we think, be said that the section in question was intended to disable the state from paying for property or valuable services received by it from individuals, because they were furnished under the stress of an imminent necessity without previous authority of law. Although such acts constituted no legal claim against the state, and could not be enforced in an action at law, they formed- in justice and right irresistible claims upon the honor of the state and are, we think, within the power of the legislature to legalize, and, when authorized and approved by legal tribunals, within its power to provide for and pay. We conclude, therefore, that no constitutional objection to the act in question exists against it as a legitimate exercise of the power of the legislature.

A more serious question arises over the prohibition imposed upon the board of claims against auditing or allowing claims which, as between individuals, would be barred by lapse of time. Would this claim .have been so barred as between citizens of the state at the time this statute was passed ? If it would, then it must come within the prohibition of the constitutional provision.

. We are of the opinion that it is not saved therefrom by the proviso in the constitution exempting existing claims which have been duly presented within the time allowed by law and prosecuted diligently thereafter. We think that proviso, by its express terms, applied only to claims existing at the time of the adoption of the amendment, in 18'74, and did not embrace future cases which were clearly covered by -the first paragraph of the section. That paragraph stands alone and states the rule to be applied to all claims subsequently arising. The claim in question, having accrued after the adotion of the amendment, must be determined by the rule of limitation which obtains “between citizens,’’ as specified in the first paragraph. .

It is not clear, precisely what the framers of the amendment intended by this phrase; because there is but little-analogy between the position of the state in reference to the prosecution of claims against it, and the condition of a. citizen, subject at all times and in numerous tribunals, to be brought into court and prosecuted for his liabilities. The state can be prosecuted, in a legal sense, only by its-own consent, and after it has created a tribunal to hear and decide claims against it.

It would be manifestly unjust to allow an honest claim against the state, to be defeated on account of its omission to provide a tribunal where it might be prosecuted. Hanger v. Abbott, 6 Wall., 532.

In view of this condition, it was held by this court in Corkings v. State (99 N. Y., 491), that presentation to and prosecution of claims before the legislature, in the absence-of other tribunals competent to hear them, would be sufficient to save them from the bar presented by the constitutional amendment against existing claims.

We are therefore compelled to consider the naked question whether, as between individuals, this claim would have been barred by the lapse of time, according to the general law of the state, when the statute was passed. In the consideration of that question, it must be taken as an established fact in the case, that prior to the passage of chapter 472, Laws of 1886, no legal claims, enforceable in any. court, existed against the state for the demand in question. That, question was adjudicated in 1878, by the board of audit, in favor of the state. By the legislation of 1886, the authority of the quarantine officials, to contract for the services and materials in question on the part of the state, was adopted, and approved by the legislature, and the claim for compensation therefor, then had for the first time a legal existence against the state. When then did a cause of action arise therefor in favor of the claimant against the state l Obviously not until the legislative recognition. The language of the act of 1886, 'by clear implication recognizes the authority of the quarantine officials to contract for the services and materials in question, and acknowledges the liaability of the state therefor, and the claim in question then had its origin.

It is conceded by the appellant that the award of the board of audit, was not such an adjudication as would bar the claim presented to the board of claims, and it would seem to follow therefrom, that in the opinion of the appellant, the statute would not commence to run against the latter claim until its legislative recognition.

It is undoubtedly true that the statutes of limitation are equally effectual in ordinary cases against equitable and invalid claims as well as valid and legal ones; but we think in the case of an imperfect claim or obligation which is. unenforceable by reason of some vice or defect therein which may be cured or waived by the debtor, that a right of action thereon arises at the timé the claim becomes purged of the vice by the action of the debtor and not before. The statute of limitations commences to run only after a cause of action has accraed, and it does not follow that because the statute has run against an impérfect obligation that the debtor may not create a new obligation although founded on one which has outlawed.

In the case of an individual contracting with a pretended agent, who sues the supposed principal for an alleged breach of contract and has been defeated upon the ground of want of authority in the agent to make the contract, such an adjudication wTould not defeat an action brought-upon the same contract legalized by a subsequent ratification, even though the liability upon the original contract had in the meanwhile become outlawed. • The imperfect obligation imposed by the original contract would have been perfected by the ratification and the cause of.action, although supported by the moral consideration afforded by the contract, would have been legally completed and made enforceable by the ratification alone.

Suppose the quarantine officials had purchased lands on the harbor of New York for quarantine purposes without authority, and the state had afterwards refused to pay for them but, after the statute had run against such claim, should by legislative action authorize and direct such officials to take possession of such lands and appropriate-them to the use of the state, can anyone doubt but that a. cause of action would then arise against the state for the--value of such lands ? We think not.

It was said by Rapallo, J., in the Cole Case: “As a. general rule money expended or services rendered by one individual .for the benefit of another, do not create a legal liability on the part of the person benefited to make compensation. But a law which should provide that in every such case if the party benefited ratifies the acts of the other and accepts the benefits, he should be liable, would be free from objection, so far at all events as it should apply to future transactions. When the legislature is dealing with the imperfect obligation arising from such a state of facts, it seems to us it does not transcend its powers by passing a law affording a remedy even in respect to past tranactions, where the state adopts the act and is the party to -make the-compensation.”

The case of McDougall v. The State (109 N. Y., 80; 14 N. Y. State Rep., 791) is not in conflict with any veiws herein presented. That claim arose upon a cause of action for damages i tort accruing in 1869. Liability for claims of this chara r was assumed by the- state by chapter 321 of the Laws of 1870, and authority given to the canal appraisers to hear and determine them. It was saved as an existing claim from the operation of the amendment to the constitution in 1874 by the provision exempting claims duly presented and diligently prosecuted. It was held, although it had been duly presented, it had not been diligently prosecuted thereafter and was therefore barred by the statute of limitations.

We think the value of the materials furnished by the claimant in the performance of the services referred to in the act constituted a part of the claim and were fairly within the spirit of the provision authorizing the hearing by the board of claims.

We are therefore of the opinion that the award appealed from should be affirmed.

All concur except Danforts, J., dissenting.  