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Vol. II.)

GARRISON v. THE MAYOR OF NEW YORK.

[No. 4.

lines of the street, so as to widen and straighten it, and to cause certificates and maps of the location of the new lines to be filed in certain public offices of the city, and declared that such certificates and maps should be final and conclusive as to the extent and boundaries of the proposed improvement; and that the part of Broadway thus laid out and established should be one of the public streets of the city, in like manner and with the same effect as if it had been so laid out on the plan of the city under an act passed in 1807, entitled “An act relative to improvements touching the laying out of streets and roads in the city of New York, and for other purposes.” It also provided that any part of the street not embraced within the new lines should be closed, and that the acts of the legislature in force relating to the opening, widening, and improving of streets in the city should apply to that part of Broadway thus laid out, and to proceedings under the act so far as they were applicable.

And the act required the corporation council, when the commissioners had filed their maps and certificates, to take the proper steps on behalf of the city to acquire title to the lands needed, and for that purpose to apply to the supreme court, at any special term thereof, for the appointment of commissioners of estimate and assessment, who were authorized to assess upon the city such part of the expenses of the improvement as in their opinion would be just and equitable, not exceeding one third of the whole, and to designate in their report, which was to be made within eight months after their appointment, the time for the opening of the street.

The commissioners thus appointed were required to make a just and equitable estimate and assessment of the loss and damage, if any, over and above the benefit and advantage, or of the benefit and advantage, if any, over and above the loss and damage, as the case might be, to the respective owners, lessees, occupants, or owners, and persons entitled to or interested in the lands and premises required, or affected by the proceedings, the assessment for benefit and advantage to be confined within certain designated limits.

The act further provided that all awards to the city should be placed by the chamberlain (the treasurer of the city) to the credit of the sinking fund, and that all other awards should be paid by him to the parties entitled thereto.

Under this act the measures authorized were taken, and three commissioners of estimate and assessment were appointed by the supreme court, who made a report of their proceedings, which was confirmed by order of the court on the 28th of December, 1870.

The report included, among numerous other awards, an award of $40,000 to the plaintiff, as his damages for taking a portion of a leasehold estate held by him on Broadway, and it fixed the time for the actual opening of the new street at the 31st of December, 1870.

On the 27th of February, 1871, nearly two months after the confirmation of the report, the legislature passed an act authorizing an appeal from the order of confirmation on behalf of the city to be taken at any time within four months from the date of its entry. The act also provided that within this period, notwithstanding the pendency of the appeal, a motion might be made on behalf of the city to any justice of the supreme court, at a special term or chambers, to vacate the order ; and

Vol. II.)

[No. 4.

GARRISON v. THE MAYOR OF New YORK.

made it the duty of the court or justice to hear the same, and declared that if it should appear that there was any error, mistake, or irregularity, or illegal act in the proceedings at any stage, or that the assessments for benefit, or the awards for damage, or either of them, had been unfair and unjust, or inequitable and oppressive, as respects the city or any person affected thereby, the court or justice should vacate the order of confirmation, which should then be void, and refer the matter back to new commissioners, who should proceed to amend and correct the report, or to make a new assessment, in whole or in part, as the court or justice should direct.

Under this act, upon notice to the parties interested, a motion was made on behalf of the city at a special term of the supreme court to vacate the order. Upon this motion affidavits were read and the parties were heard by counsel. The court vacated the order of confirmation, and appointed new commissioners to amend and correct the report and make a new award of damage and assessment. In its order vacating the confirmation, and as a basis for the order, the court declared that it appeared that there had been error, mistake, irregularity, and illegal acts in the proceedings, and that the assessments for benefit and the award for damages had been unfair, unjust, inequitable, and oppressive, as respects the city and others.

The present action is brought to recover the award of $40,000 made to the plaintiff by the report of the first commissioners, the plaintiff alleging in his complaint the ownership of the leasehold estate taken, the proceedings for the estimate and assessment of damages, and the confirmation of the report by the supreme court on the 28th of December, 1870, and insisting that by force of the act of the legislature, and the laws therein referred to, the proceedings were final and conclusive, and that the fee of the property had vested in the city, and the right to the payment of the award had vested in the plaintiff.

In answer to this action the city set up the proceedings by which the award was vacated, and insisted that the title to the premises mentioned had not vested in the city, and that the right to the amount awarded had not vested in the plaintiff.

To this plea the plaintiff demurred, on the ground that the act of February 27, 1871, was repugnant to the Constitution of the United States, in that it impairs the obligation of a contract, and to the Constitution of the state, in that it undertakes to divest a vested right contrary to the law of the land and without due process of law.

The court overruled the demurrer, sustained the plea as a bar to the action, and gave judgment for the defendant. To reverse that judgment the case is brought to this court, and here the plaintiff renews the same objections urged on the demurrer in the court below. As a basis for his argument in their support, he assumes that under the statute of the state relating to the opening and improvement of streets in the city of New York, passed in 1813, and which is one of the laws referred to in the act of 1869, and made applicable to the improvement authorized, the proceedings of the commissioners, when their report was confirmed by the supreme court, were so far final and conclusive of the right of the city to the property, and of the plaintiff to the award, that neither were subject to any legislative or judicial interference.

(No. 4.

Vol. II.]

GARRISON v. The MAYOR OF New York.

The same positions here urged were relied upon in the supreme court and the court of appeals of the state on the appeal from the order vacating the confirmation taken by one of the parties to whom an award had been rendered. In the matter of widening Broadway, 61 Barb. 483, and 49 N. Y. Rep. 150.

And in both courts it was held that the provision in the statute of 1813, which declares that the report of the commissioners of estimate and assessment, when confirmed by the court, shall be “ final and conclusive,” only meant that no appeal should lie from the order to a higher court, and that it did not preclude an application to the court to vacate the order for mistake, irregularity, or fraud in the proceedings; that the supreme court had power to hear such motions in ordinary cases of judgments and orders in suits there pending, and that no reason existed against the possession or exercise of the power in cases of this character. The provision in question, said the court of appeals, “ plainly never intended to give a vested interest in a mistake and irregularity, or fraud, whereby important rights of property were acquired or lost. It had reference simply to an appeal upon the merits, and is satisfied with that. All judgments are liable to be set aside for fraud, mistake, or irregularity, and a vested interest therein is subject to that liability."

The supreme court held that the act of 1871 was constitutional. The court of appeals held that, independent of the act and without passing upon its validity, the supreme court had authority to set aside the order upon the grounds stated.

If the views of either of these courts be correct, they dispose of the questions in this case. And the construction of the statute of the state by the court of appeals, and its decision as to the powers of the supreme court of the state to correct or set aside its own judgments, upon application within reasonable time, for mistake, irregularity, or fraud, are conclusive upon us.

There is, therefore, no case presented in which it can be justly contended that a contract has been impaired. It may be doubted whether a judgment not founded upon an agreement, express or implied, is a contract within the meaning of the constitutional prohibition. It is sometimes called by text writers a contract of record, because it establishes a legal obligation to pay the amount recovered, and, by fiction of law, where there is a legal obligation to pay, a promise to pay is implied. It is upon this principle, says Chitty, that an action in form ex contractu will lie on a judgment of a court of record. Chitty on Contracts, Perkins's edition, page 87. But it is not perceived how this fiction can convert the result of a proceeding not founded upon an agreement express or implied, but upon a transaction wanting the assent of the parties, into a contract within the meaning of the clause of the federal Constitution which forbids any legislation impairing its obligation. The purpose of the constitutional prohibition was the maintenance of good faith in the stipulations of parties against any state interference. If no assent be given to a transaction no faith is pledged in respect to it, and there would seem in such case to be no room for the operation of the prohibition.

In the proceeding to condemn the property of the plaintiff for a public

Vol. II.]

Garrison v. The MAYOR OF New YORK.

[No. 4.

street, there was nothing in the nature of a contract between him and the city. The state, in virtue of her right of eminent domain, had authorized the city to take his property for à public purpose, upon making to him just compensation. All that the Constitution or justice required was, that a just compensation should be made to him, and his property would then be taken whether or not he assented to the measure.

The proceeding to ascertain the benefits or losses which will accrue to the owner of property when taken for public use, and thus the compensation to be made to him, is in the nature of an inquest on the part of the state, and is necessarily under her control. It is her duty to see that the estimates made are just, not merely to the individual whose property is taken, but to the public which is to pay for it. And she can to that end vacate or authorize the vacation of any inquest taken by her direction, to ascertain particular facts for her guidance, where the proceeding has been irregularly or fraudulently conducted, or in which error has intervened, and order a new inquest, provided such methods of procedure be observed as will secure a fair hearing from the parties interested in the property. Nor do we perceive how this power of the state can be affected by the fact that she makes the finding of the commissioners upon the inquest subject to the approval of one of her courts. That is but one of the modes which she may adopt to prevent error and imposition in the proceedings. There is certainly nothing in the fact that an appeal is not allowed from the action of the court in such cases, which precludes a resort to other methods for the correction of the finding where irregularity, mistake, or fraud has intervened.

Until the property is actually taken, and the compensation is made or provided, the power of the sta te over the matter is not ended. Any declaration in the statute that the title will vest at a particular time, must be construed in subordination to the Constitution, which requires, except in cases of emergency admitting of no delay, the payment of the compensation, or provision for its payment, to precede the taking, or, at least, to be concurrent with it. The statute of 1818 would also seem so far to modify the act of 1813 as to require a formal acceptance of the land on the part of the corporation before the title can vest. Strang v. New York Rubber Co. 1 Sweeny, 86, 87.

The objection to the act of 1871, that it impairs the vested rights of the plaintiff, and is, therefore, repugnant to the Constitution of the state, is already disposed of by what we have said upon the first objection. There is no such vested right in a judgment, in the party in whose favor it is rendered, as to preclude its reëxamination and vacation in the ordinary modes provided by law, even though an appeal from it may not be allowed ; and the award of the commissioners, even when approved by the court, possesses no greater sanctity.

Judgment affirmed.

Vol. II.)

Citizens' SAVINGS, ETC., AssoCIATION v. City of TOPEKA.

[No. 4.

MUNICIPAL BONDS. - MANUFACTURING ENTERPRISE NOT A PUBLIC

PURPOSE.

CITIZENS' SAVINGS, ETC., ASSOCIATION v. CITY OF TOPEKA.

1. A statute which authorizes towns to contract debts or other obligations payable in money implies the duty to levy taxes to pay them, unless some other fund or source of

payment is provided. 2. If there is no power in the legislature which passed such a statute to authorize the

levy of taxes in aid of the purpose for which the obligation is to be contracted, the

statute is void, and so are the bonds or other forms of contract based on the statute. 3. There is no such thing in the theory of our governments, state and national, as un

limited power in any of their branches. The executive, the legislative, and the judi

cial departments are all of limited and defined powers. 4. There are limitations of such powers which arise out of the essential nature of all

free governments. Implied reservations of individual rights, without which the social compact could not exist, and which are respected by all governments entitled to

the name. 5. Among these is the limitation of the right of taxation, that it can only be used in aid

of a public object, - an object which is within the purpose for which governments

are established. 6. It cannot, therefore, be exercised in aid of enterprises strictly private, for the benefit

of individuals, though in a remote or collateral way the local public may be ben

efited thereby. 7. Though the line which distinguishes the public use for which taxes may be assessed

from the private use for which they may not is not always easy to discern, yet it is the duty of the courts, where the case falls clearly within the latter class, to interpose when properly called on for the protection of the rights of the citizen, and aid to prevent his private property from being unlawfully appropriated to the use of

others. 8. A statute which authorizes a town to issue its bonds in the aid of the manufacturing

enterprises of individuals is void, because the taxes necessary to pay the bonds would, if collected, be a transfer of the property of individuals to aid in the projects of gain

and profit of others, and not for the public use, in the proper sense of that term. 9. And in a suit brought on such bonds, or the interest coupons attached thereon, the

circuit court properly declared them void.

MR. JUSTICE MILLER delivered the opinion of the court.

The plaintiffs in error brought their action in the circuit court for the District of Nebraska, on coupons for interest attached to bonds of the city of Topeka.

The bonds on their face purported to be payable to the King Wrought Iron Bridge Manufacturing and Iron Works Company, of Topeka, to aid and encourage that company in establishing and operating bridge shops in said city of Topeka, under and in pursuance of section twenty-six of an act of the Legislature of the State of Kansas, entitled "An act to incorporate cities of the second class, approved February 29, 1872;" also another act to authorize cities and counties to issue bonds for the purpose of building bridges, aiding railroads, water power, or other works of internal improvement, approved March 2, 1872.

The city issued one hundred of these bonds for a thousand dollars each as a donation, and so it is stated in the declaration, to encourage that company in its design of establishing a manufactory of iron bridges in that city.

The declaration also alleges that the interest coupons first due were

corpther act to authoriding railroads 2, 1872.. for a thousan

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