County as corporation.— A county is not a corporation " within the meaning of this section. Thus, chapter 428, Laws of 1885, validating the claim of Cayuga county for expenses incurred by it in the prosecution of certain criminal acts is not violative of this provision. Cayuga County v. State, (1897) 153 N. Y. 279, 47 N. E. 288.

Discharge of moral obligation as gift.— The rule formerly obtained that the legislature was not confined in its appropriations of state funds in favor of individuals to cases wherein a demand valid in law existed against the state, but that it could recognize and allow claims founded in equity, gratitude, or charity. That doctrine was abrogated in 1875 by the adoption of this section. The legislature is now no longer competent to appropriate state funds to charity, save where specifically allowed to do so by the constitution; nor can it in any case justify an appropriation to private purposes on considerations of gratitude. It is, however, well settled that the legislature can direct the payment of claims founded in equity and justice, even though they would not be enforceable in a court of law if the state were not immune from suit. Lehigh Val. R. Co. v. Canal Board, (1912) 204 N. Y. 471, 97 N. E. 964, Ann. Cas. 1913C 1228, affirming 146 App. Div. 151, 130 N. Y. §. 978; Cayuga County v. State, (1897) 153 N. Y. 279, 47 N. E. 288; Exempt Firemen's Benev. Fund v. Roome, (1883) 93 N. Y. 313, 45 Am. Rep. 217, affirming 29 Hun 391; Wheeler v. State, (1904) 97 App. Div. 276, 90 N. Y. S. 18. See also O'Hara v. State, (1889) 112 N. Y. 146, 19 N. E. 659, 8 A. S. R. 726, 2 L. R. A. 603; Cole v. State, (1886) 102 N. Y. 48, 6 N. E. 277; People v. Miller, (1903) 85 App. Div. 145, 83 N. Y. S. 559, affirmed (1905) 181 N. Y. 439, 74 N. E. 477; American Bank Note Co. v. State, (1901) 64 App. Div. 223, 71 N. Y. S. 1049. Thus, the statute (Laws of 1903, ch. 147) providing for the construction of the Barge canal is not unconstitutional because the state therein assumed for itself the cost and expense of raising and rebuilding bridges previously erected by railroad corporations over streams canalized, where the raising and rebuilding of the bridges is necessitated by the improvements made in such streams for the canal. Lehigh Val. R. Co. v. Canal Board, (1912) 204 N. Y. 471, 97 N. E. 964, affirming 146 App. Div. 151, 130 N. Y. S. 978. The legislature is competent to allow a purchaser of state lands compensation for a failure of the state's title to a portion of the lands purchased by him, even though the patent issued on the sale contained a stipulation that it should "in no wise operate as a warranty of title.” Wheeler v. State, (1904) 97 App. Div. 276, 90 N. Y. S. 18. Similarly, acts (ch. 64, Laws of 1877; ch. 89, Laws of 1879) appropriating public funds to the use of retired volunteer firemen in the city of New York are not open to criticism as making appropriations in violation of this section, although the volunteer fire department of that city had been supplanted by a paid organization styled the Metropolitan Fire Department. Those funds are granted in lieu of certain exemptions and grants made to induce membership in the volunteer fire department. Good faith demands their continuation or the allowance of an equivalent. "The constitutional provision was not intended and should not be construed to make impossible the performance of an honorable obligation founded upon a public service, invited by the state, adopted as its agency for doing its work, and induced by exemptions and rewards which good faith and justice require should last so long as the occasion demands." Exempt Firemen's Benev. Fund v. Roome, (1883) 93 N. Y. 313, 45 Am. Rep. 217, affirming 29 Hun 391. In that case the court said: "It is strenuously contended that, however the payment might be construed while the firemen were a public body and doing a public duty, the appropriation became purely a gift when made after the service ended, and when there was no legal or equitable obligation operating upon the state. It is true that no promise to continue the appropriation had been given, and the state was at liberty to withhold it; but that does not alter the inherent character of the payment when made. If a merchant fails in business and compromises with his creditors for a part only of their debts, or

is discharged in bankruptcy with a small dividend, and thereafter being fortunate and becoming rich, calls his old creditors together, and gives to each principal and interest of the discharged balance, he does what he is not obliged to do, what neither law nor equity could compel, but he does not make a gift or dispense a charity. A purely moral obligation rests upon him, which he may or may not heed, but if he does, it characterizes his act, and makes that an honest payment of an honest debt which otherwise would have been a charity and a gift. So the state, in continuing the appropriation to the firemen when their services were no longer required, recognized an honorable obligation founded upon their past services and the injuries and suffering which those had occasioned." See Art. 3, §§ 19, 20, and Art. 8, § 10, as to validation of moral claim.

Payment to state agency for public service. The constitution permits "the acceptance of public moneys or public property by a private corporation for educational or like purposes under contract with the state to render certain services," in connection therewith. People v. Brooklyn Cooperage Co., (1907) 187 N. Y. 142, 79 N. E. 866, affirming 114 App. Div. 723, 100 N. Y. S. 19; Exempt Firemen's Benev. Fund v. Roome, (1883) 93 N. Y. 313, 45 Am. Rep. 217, affirming 29 Hun 391. See also Fox v. Mohawk, etc., Humane Soc., (1901) 165 N. Y. 517, 59 N. E. 353, 80 A. S. R. 767, 51 L. R. A. 681, affirming 25 App. Div. 26, 48 N. Y. S. 625. Thus, a statute (ch. 122, Laws of 1898) authorizing the state, upon the acceptance by Cornell University of the provisions made therein, to acquire certain forest lands in the name of the university, vesting the title to those lands in that institution for a period of thirty years, and empowering it, during such period, to use the lands for the purpose of conducting experiments in forestry with a view to obtaining and imparting information concerning the scientific management of forests, is not violative of this section. The university, in conducting the forestry experiments, is a subordinate governmental agency, discharging under contract a public function looking to the conservation of the forests of the state. The legislature may properly allow it compensation for those services. People v. Brooklyn Cooperage Co., (1907) 187 N Y. 142, 79 N. E. 866, affirming 114 App. Div. 723, 100 N. Y. S. 19. Similarly, a volunteer fire department is a subordinate governmental agency, discharging a public function. An appropriation of money in its support is not a gift within the intent of this section. Exempt Firemen's Benev. Fund v. Roome, (1883) 93 N. Y. 313, 45 Am. Rep. 217, affirming 29 Hun 391. Apparently, however, except in certain exceptional cases, the legislature may not invest a private corporation or association with governmental powers affecting the life, liberty and property of the citizens of the state, and thereby justify an appropriation of public money to such corporation or association. Stating that conclusion, Mr. Judge Cullen, speaking for the court in Fox v. Mohawk, etc., Humane Soc., (1901) 165 N. Y. 517, 59 N. E. 353, 80 A. S. R. 767, 51 L. R. A. 681, affirming 25 App. Div. 26, 48 N. Y. S. 625, said: "If it were necessary for the disposition of this case, agreeing with the view of the learned appellate division, I certainly should deny the right of the legislature to vest in private associations or corporations authority and power affecting the life, liberty and property of the citizens, except that of eminent domain, to be exercised for a public purpose and the management and control of reformatory institutions to which persons may be committed by the judicial or other public authorities. There may be other exceptions, but they do not occur to me. Of course, the state or any of its subdivisions may employ individuals or corporations to do work or render service for it; but the distinction between a public officer and a public employee or contractor is plain and well recognized."

Reimbursement of expense incident to public project. Sections 62-66 of the Railroad Law authorizing the public service commission to compel a railroad to eliminate dangerous grade crossings and imposing a proportion of the cost thereof upon the state and the village wherein the change is

Art. VIII, § 10

Municipal Aid and Indebtedness

made, are not obnoxious to this section. Matter of New York Cent., etc., R. Co., (1910) 136 App. Div. 760, 121 N. Y. S. 524; Matter of Boston, etc., R. Co. (1901) 64 App. Div. 257, 72 N. Y. S. 32, affirmed (1902) 170 N. Y. 619, 63 N. E. 1115. Similarly, the Barge Canal Act (ch. 147, Laws of 1903) is not unconstitutional in allowing reimbursement to railroads for expenses incurred in accommodating their bridges to the necessities of the canal directed to be constructed by that act. Lehigh Val. R. Co. v. Canal Board, (1911) 146 App. Div. 151, 130 N. Y. S. 978.

Increase in wage of laborers.- Statutes regulating the wages or personnel of those employed on public works, are not invalid hereunder because of the circumstance that, either directly or indirectly, they enhance the cost of works undertaken by the state. The enhancement in cost caused by such regulations is not a gift of state funds. People v. Crane, (1915) 214 N. Y. 154, 108 N. E. 427, Ann. Cas. 1915B 1254, reversing 165 App. Div. 449, 150 N. Y. S. 933; People v. Metz, (1908) 193 N. Y. 148, 85 N. E. 1070, 24 L. R. A. (N. S.) 201, reversing 126 App. Div. 912, 110 N. Y. S. 1141; Ryan v. New York, (1904) 177 N. Y. 271, 69 N. E. 599, affirming 78 App. Div. 134, 79 N. Y. S. 599. Thus the exclusion under the Labor Law of aliens from employment on public works is not a violation of this section on the theory that discrimination between citizens and aliens may increase the cost of public works by limiting the supply of labor. "The money that goes to laborers on public works is not given or loaned in aid of individuals within the meaning of these provisions. It is paid for service rendered. That is the direct and primary purpose of the payment. The primary and direct purpose being legal, the payment does not become illegal because a collateral and secondary purpose may be to protect a large class of the community against the peril of pauperism. In the long run, the payment may be found to have lessened the public burdens rather than to have increased them." People v. Crane, (1915) 214 N. Y. 154, 108 N. E. 427, Ann. Cas. 1915B 1254, reversing 165 App. Div. 449, 150 N. Y. S. 933. See further as to this point § 10 of this article.

Dual compensation for single public service.—A newspaper designated as a state paper under chapter 248 of the Laws of 1863, as amended, and also designated as a county paper pursuant to chapter 686 of the Laws of 1892, as amended, for the purpose of publishing the Session Laws, is not entitled to compensation for publishing the laws under both designations where, as a matter of fact, there was but a single publication. Compensation under both designations in such a case would fall within the prohibition of this section and of section 10 of this article. People v. Journal Co., (1913) 158 App. Div. 326, 143 N. Y. S. 389.

Compensation for property taken by state. Since owners of property abutting a street have an easement therein which under the provisions of the state and federal constitutions cannot be invaded unless compensation is made, an act (Laws of 1901, ch. 729) authorizing the Court of Claims to award damages, to be paid by the state, to the owners of property abutting on Fourth avenue in the city of New York, for injuries caused by a change effected by the state in the grade of a viaduct in that avenue, is not unconstitutional hereunder. Sander v. State, (1903) 182 N. Y. 400, 75 N. E. 234, reversing 90 App. Div. 618, 85 N. Y. S. 1146.

§ 10. Counties, cities and towns not to give or loan money or credit; limitation of indebtedness.

No county, city, town or village shall hereafter give any money or property, or loan its money or credit to or in aid of any individual, association or corporation, or become directly or indirectly

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Art. VIII, § 10

the owner of stock in, or bonds of, any association or corporation; nor shall any such county, city, town or village be allowed to incur any indebtedness except for county, city, town or village purposes. This section shall not prevent such county, city, town or village from making such provision for the aid or support of its poor as may be authorized by law. No county or city shall be allowed to become indebted for any purpose or in any manner to an amount which, including existing indebtedness, shall exceed ten per centum of the assessed valuation of the real estate of such county or city subject to taxation, as it appeared by the assessment rolls of said county or city on the last assessment for State or county taxes prior to the incurring of such indebtedness; and all indebtedness in excess of such limitation, except such as now may exist, shall be absolutely void, except as herein otherwise provided. No county or city whose present indebtedness exceeds ten per centum of the assessed valuation of its real estate subject to taxation, shall be allowed to become indebted in any further amount until such indebtedness shall be reduced within such limit. This section shall not be construed to prevent the issuing of certificates of indebtedness or revenue bonds issued in anticipation of the collection of taxes for amounts actually contained, or to be contained in the taxes for the year when such certificates or revenue bonds are issued and payable out of such taxes; nor to prevent the city of New York from issuing bonds to be redeemed out of the tax levy for the year next succeeding the year of their issue, provided that the amount of such bonds which may be issued in any one year in excess of the limitations herein contained shall not exceed one-tenth of one per centum of the assessed valuation of the real estate of said city subject to taxation. Nor shall this section be construed to prevent the issue of bonds to provide for the supply of water; but the term of the bonds issued to provide the supply of water, in excess of the limitation of indebtedness fixed herein, shall not exceed twenty years, and a sinking fund shall be created on the issuing of the said bonds for their redemption, by raising annually a sum which will produce an amount equal to the sum of the principal and interest of said bonds at their maturity. All certificates of indebtedness or revenue bonds issued in anticipation of the collection of taxes, which are not retired within five years after their date of issue, and bonds issued to provide for the supply of water, and any debt

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hereafter incurred by any portion or part of a city if there shall be any such debt, shall be included in ascertaining the power of the city to become otherwise indebted; except that debts incurred by the city of New York after the first day of January, nineteen hundred and four, and debts incurred by any city of the second class after the first day of January, nineteen hundred and eight, and debts incurred by any city of the third class after the first day of January, nineteen hundred and ten, to provide for the supply of water, shall not be so included; and except further that any debt hereafter incurred by the city of New York for a public improvement owned or to be owned by the city, which yields to the city current net revenue, after making any necessary allowance for repairs and maintenance for which the city is liable, in excess of the interest on said debt and of the annual instalments necessary for its amortization may be excluded in ascertaining the power of said city to become otherwise indebted, provided that a sinking fund for its amortization shall have been established and maintained and that the indebtedness shall not be so excluded during any period of time when the revenue aforesaid shall not be sufficient to equal the said interest and amortization instalments, and except further that any indebtedness heretofore incurred by the city of New York for any rapid transit or dock investment may be so excluded proportionately to the extent to which the current net revenue received by said city therefrom shall meet the interest and amortization instalments thereof, provided that any increase in the debt incurring power of the city of New York which shall result from the exclusion of debts heretofore incurred shall be available only for the acquisition or construction of properties to be used for rapid transit or dock purposes. The Legislature shall prescribe the method by which and the terms and conditions under which the amount of any debt to be so excluded shall be determined, and no such debt shall be excluded except in accordance with the determination so prescribed. The Legislature may in its discretion confer appropriate jurisdiction on the Appellate Division of the Supreme Court in the first judicial department for the purpose of determining the amount of any debt to be so excluded. No indebtedness of a city valid at the time of its inception shall thereafter become invalid by reason of the operation of any of the provisions of this section. Whenever the boundaries of any city are the same as those of a