
    Barnum, Supervisor, v. Board of Sup’rs of Sullivan County.
    
      (Supreme Court, General Term, Third Department.
    
    November 30, 1891.)
    Railroad Aid Bonds—Application of Taxes.
    Laws 1869, c. 907, § 4, as amended by Laws 1871, c. 283, provides that all taxes, except road and school taxes, collected in any town on the assessed valuation of any railroad therein, in aid of whose construction the town has issued bonds, shall be paid over to the treasurer of the county, and invested by him in prescribed securities, to be held as a sinking fund for the redemption of such railroad aid bonds. Held that, where new bonds have been issued for the purpose of paying off the original bonds and coupons, the town is entitled to the same application of taxes in respect of the new issue.
    Appeal from special term, Sullivan county. Affirmed.
    Action by Charles Barnum, as supervisor of the town of Thompson, against the board of supervisors of Sullivan county. There was a judgment for plaintiff, and defendant appeals.
    Argued before Learned, P. J., and Landon, J.
    
      John F. Anderson, (Lewis F. Carr, of counsel,) for appellant. T. F. Bush, for respondent.
   Learned, P. J.

This case is similar to that of Kilbourne v. Board, 16 N. Y. Supp. 507, (decided at this term.) It will not be necessary to consider any of the questions decided in that case. Another question, however, is raised, viz., whether the bonds of the town of Thompson, which are here involved, are such that the provisions of chapter 907, Laws 1869, as amended by chapter 283, Laws 1871, apply to them. The town of Thompson issued bonds in 1869 to aid the Monticello & Port Jarvis Railroad Company, and such bonds were exchanged for stock of that company. The case of Horton v. Town of Thompson, 71 N. Y. 513, was an action on one of these bonds. The court of appeals, by a vote of four to three, held that the bond was void, and reversed the decision of the general term. 7 Hun, 452. This doctrine was, however, in 1880, emphatically overruled by the supreme court of the United States in Thompson v. Perrine, 103 U. S. 806, and again in Same v. Same, 106 U. S. 589, 1 Sup. Ct. Rep. 564, 568. Thereupon, as the town of Thompson was thus declared to be liable on these bonds, an act was passed in 1883 (chapter 226) authorizing the town to issue bonds and pay judgments and debts. Bonds were accordingly issued, and with the avails the judgments and original issue of bonds were all paid off. The issue of bonds under the act of 1883 is now outstanding, and it is in respect to that issue that the remedy is sought in this action. It is expressed in that act that the new issue is for the purpose of paying off bonds issued in aid of the Monticello & Port Jarvis Railroad Company, and judgments and coupons of said bonds. This act of the legislature, accepted by the town, is an acknowledgment of the validity of the original bonds, and of the error in the decision of the court of appeals. It can no longer be claimed that the original bonds were at any time invalid. The bonds which were considered in Strough v. Board, 119 N. Y. 212, 23 N. E. Rep. 552, had a history somewhat similar. In People v. Sawyer, 52 N. Y. 296, the court of appeals reversed the action of the county judge in his proceedings to bond the town of Orleans. In Orleans v. Platt, 99 U. S. 676, however, the supreme court of the United States held that the bonds issued under the proceedings before the county judge were valid, and in the Strough Case, ubi supra, the court of appeals gave the remedy in respect to those bonds which is now asked for.

The only question, then, which need be considered, is whether the renewal of the debt by the issue of new bonds under the act of 1883 gives the town of Thompson the same right in regard to the application of these taxes which was had in the Strough Case and others. The provision of the statute (chapter 283, Laws 1871) important to. consider is: “All taxes, * * * or so much thereof as may be necessary, in any town, village, or city, on the assessed valuation of any railroad in said town, village, or city, for which said town,” etc., “has issued, or shall issue, bonds to aid in the construction of said railroad, shall be paid,” etc. The object of this is plain. The town has incurred a debt to build a railroad. It has thus increased the taxable property in the town; it is reasonable that the taxes on this increase shall go towards deEraying the debt of the town. Clark v. Sheldon, 106 N. Y. 104, 12 N. E. Rep. 341. Bow, the object to be accomplished is just as reasonable, and the end is just as much aimed at, when the debt of the town is renewed as when it remains in its original form. The object is to relieve the town in part from the burden which it has assumed for the public benefit. And the town is under the same burden after it has renewed the debt as before. This view was taken in Van Tassel v. Derrenbacher, (Sup.) 10 N. Y. Supp. 145, although not there necessary for the decision, and it is plainly sound. It is the general tendency of our law to consider obligations as renewals, rather than new debts, when such is practically their character, and where no conflicting rights are involved. Very likely, in the present case, the new issue of bonds was sold to persons other than the holders of the old, and so, too, the old bonds might lia.ve been transferred to others than the original holders. But that would make no difference as between the town and the county; the town still remains indebted, and the tax on the railroad property is still appropriated to the debt. The learned justice held that these taxes could not be applied to the costs in the judgments which were paid by the new issue of bonds, but that the amount of the recovery in this case would not be sufficient to pay the original debt. So that the question whether the costs could be paid from these taxes does not arise. The judgment should be affirmed, with costs.  