Wenk v. City of New York, 171 N.Y. 607 (1902)
A taxpayer of a municipality has standing to sue to prevent illegal official acts or waste of municipal property, even if the official committing the act is not acting in bad faith, and the taxpayer does not reside in the specific area affected by the act.
Summary
A taxpayer brought suit against the City of New York and its comptroller to annul leases of marsh lands originally made by the town of Jamaica before its incorporation into New York City. The plaintiff alleged the leases were procured through collusion and fraud by the former town officials. The Court of Appeals held that the taxpayer had standing to bring the suit under a statute allowing taxpayers to sue to prevent illegal official acts or waste of municipal property. It clarified that the suit could be brought against current officials (like the comptroller) to prevent illegal acts, even if they were not the original wrongdoers and emphasized that residency within the specific affected area was not required for standing.
Facts
The town of Jamaica, prior to its incorporation into New York City, leased approximately 3,000 acres of marsh land to Alonzo E. Smith. It was alleged that Frederick W. Dunton, chairman of the town board, orchestrated the lease through a collusive scheme involving the United States Land & Improvement Company, Limited, and the Co-operative Society of New Jersey, placing control of the lands in his hands. A subsequent lease of the same land, to begin after the expiration of the first lease, was made to William H. Boynton. The plaintiff, a taxpayer in the City of New York, brought suit to annul these leases, alleging fraud, collusion, and inadequate rents, claiming they constituted waste of the city’s assets. Dunton controlled both the improvement company and the co-operative society.
Procedural History
The lower courts sustained a demurrer to the complaint, filed by the defendant, United States Land and Improvement Company, holding that the complaint did not state facts sufficient to constitute a cause of action. The Appellate Division certified the question of the complaint’s sufficiency to the Court of Appeals. The Court of Appeals reversed the lower courts’ decisions.
Issue(s)
Whether a taxpayer of the City of New York has standing to bring an action under Chapter 301 of the Laws of 1892 to annul leases made by the former town of Jamaica and to restrain the city comptroller from collecting rentals under those leases, based on allegations of fraud and collusion by the former town officials.
Holding
Yes, because the statute authorizes actions against municipal officers to prevent illegal acts or waste, and this includes actions against current officials to prevent the continuation of illegal acts, even if those officials were not the original wrongdoers. Also, residency in the specific affected area is not a prerequisite for taxpayer standing.
Court’s Reasoning
The Court reasoned that the statute (Chapter 301, Laws of 1892) allows actions against municipal officers to prevent illegal acts or waste. The Court rejected the argument that the suit must be brought solely against the original wrongdoers. The statute applied to officials “acting or who have acted,” meaning it extended to current officials whose actions perpetuated the alleged illegality. In this case, the comptroller’s collection of rents under the allegedly fraudulent leases would constitute an illegal act, even if the comptroller was unaware of the fraud. The Court emphasized the importance of preventing waste of municipal assets, stating that under the complaint’s allegations, “we must assume that the leases are invalid and illegal. In these conditions it is obvious that the proper parties defendant are not the defunct officers of the defunct town of Jamaica, but the proper official of the city of New York, which is the present owner of the land.” The court also held that residency within the specific geographic area affected by the leases was not required for standing; residency and taxpayer status within the City of New York were sufficient. The Court noted that it was only addressing the pleading stage, and the actual evidence presented might alter the case’s outcome.