People ex rel. Gilon v. Coler

Ingraham, J.: The relator was and for many years had been the head of the bureau for the collection of assessments and arrears of taxes and water rents of the city of New York, and was removed on the 31st. day of December, 1901, by the then comptroller of the city of — 249 — New York. He was an honorably discharged soldier of the Union army during the war of the Rebellion and instituted this proceeding to review the action of the comptroller in removing him from office. He alleges in his petition that on the 24th day of December, 1901, the comptroller charged him with “ incompetency, misconduct, carelessness and gross mismanagement in the affairs of the said bureau,” and caused to be served upon him a notice setting forth the said charges and specifications relating to the same, and notified him that the said charges would be heard and tried before the comptroller at his office on the 26th day of December, 1901, and that at a time and place an opportunity would be afforded the relator to answer the said charges; that testimony was taken by the comptroller on the 26th, 27tli and 28th days of December, 1901, in relation to the said charges and specifications, and that the said Bird S. Coler, as such comptroller, on the 30th day of December, 1901, removed, or assumed to remove, the petitioner from his said office. One of the charges against the relator was that between the 1st day of January, 1898, and the 1st day of July, 1901, “you permitted certain subordinates in your office who were subject to your control and under your direction, to officiate in capacities in which they were not entitled to act or to which they were not appointed, to wit, that you permitted one Charles P. Chipp to act as Interest Clerk, Cashier and Recording Clerk, by reason whereof opportunities were afforded to the said Chipp to misappropriate various sums of money and which he did misappropriate, the exact amount of which is not at present ascertainable. In this connection you are accused of gross mismanagement and lack of business capacity in not having the Interest Clerk and his assistants, the Cashier and his assistants and the Recording Clerk and his assistants, act as check upon each other, and in not conducting your bureau in a proper, systematic manner.” The relator filed an answer to this charge, in which he does not deny that Chipp did act as interest clerk, cashier and recording clerk, by reason whereof he misappropriated various sums of money, but in justification of this action he alleges that Chipp had been for many years an assistant collector of assessments in the bureau; that as such it was the duty of the said Chipp to look after the details of the work of the bureau; that when not engaged as — 250 — recording cleric he did the work of the interest clerk and the cashier during the period when said interest clerk and cashier were absent from the office during the luncheon hour, and also during their absence from the office by reason of sickness or otherwise; and that in order that the business of the office should be prosecuted it became necessary' during the absence of either the recording clerk, the interest clerk, or cashier, for some one to take their places, and that there was no one in the office who was so familiar with the various duties of the different clerks and employees as the said Chipp; that the said Chipp had been in the office of the clerk of arrears for a great many years prior to the appointment of the relator as collector of assessments, and during all that period he had, so far as the relator knew or could ascertain, been a diligent and faithful clerk and worthy of all confidence; and he denies that there was any gross mismanagement or lack of business capacity in his conduct of the department, or in his permitting the assistant collector of assessments, the said Chipp, to act as interest clerk, cashier or recording clerk. Upon this charge with others the comptroller found the relator guilty and removed him from office. In his return to the writ the comptroller returned the testimony taken before him. It therein appears that there was a defalcation of a large sum of the city’s money by Chipp, an assistant of the relator in the bureau of which he was the head. The fact of such a defalcation by Chipp seems to have been conceded upon the hearing before the comptroller, as it was by the answer to the charges made by the relator, and that, I think, accounts for the fact that definite proof was not made as to the exact amount of the defalcation or the exact method by which Chipp succeeded in appropriating the money of the city of blew York. In examining this testimony we must bear in mind that the comptroller was examining into charges of mismanagement, carelessness and incompetency against the head of a bureau of -his department, and that both of those officers and many of the witnesses that were examined were employees in the department and familiar with the method of conducting the business and the details of the work that was done in the bureau of which the relator was the head. The Civil Service Law (Laws of 1899, chap. 370, § 21) provides — 251 — that “No person holding a position by appointment or employment * "" " in the several cities * * * who is an honorably discharged soldier, sailor or marine, having served as such in the Union army or navy during the war of the Bebellion . * * * shall be removed from such position or employment except for incompetency or misconduct shown after a hearing, upon due notice, upon stated charges and with the right to such employee or appointee to a review by a writ of certiorari.” Under this statute, as was said in the case of People ex rel. Mayor v. Nichols (79 N. Y. 588), which has been made applicable to a proceeding under this act in the case of People ex rel. Fallon v. Wright (7 App. Div. 185 ; affd. by the Court of Appeals in 150 N. Y. 444), “ The proceeding * * * must be instituted upon specific charges sufficient in their nature to warrant the removal, and then, unless admitted, be proven to be true. * * * It follows, therefore, that the proceeding is judicial in its character.” And Mr. Justiee Barrett, in citing this, says : “ These observations * * * should not only be followed but emphasized in a case where, should an action be brought, the burden of establishing the charges to the satisfaction of a jury is by the statute thrown upon the official who makes the removal. The question then is, has the relator been removed for sufficient cause after a fair and legal hearing % ” In considering the sufficiency of the charges against the relator and the proof to sustain it, it is proper to consider the nature of the duties imposed upon the relator and the comptroller, and the nature of the specific charge. Upon the department of finance of the city of New York, the head of which is the comptroller, is imposed the duty of receiving and paying out each year an enormous amount of money, aggregating upwards of $100,000,000. Various bureaus in the department are charged, some with the receipt and others with the disbursing of this money ; and to insure an honest and faithful discharge of these duties, it is certainly essential that the head of the depai’tment should have a large discretion in the appointment or removal of the heads of the various bureaus upon whom he must in a large measure depend in protecting the city. If a defalcation takes place in one of the bureaus of this department, at the head of which is an officer having charge of the bureau and controlling the subordinate officers who are there to perform the duties of the bureau, it is most essential that the head of a bureau receiving and — 252 — paying out money should be held responsible for the imposition of such checks as will prevent the. subordinates from stealing the city’s money. There seems to be no question but that the relator in charge of this bureau had the control and management of his office and the subordinates of the bureau, and it was his duty to establish a system under which a defalcation could not go on for a long period of time without detection. It may be that with the utmost care and attention on the part of the head of a bureau of this character a defalcation cannot be prevented, but where the attention of the head of the bureau has been called to the fact that the system established was such that it was possible for an employee to appropriate the money of the city it was the duty of the head of the bureau to see to it that the system was changed and the necessary checks imposed. We have in this case the conceded fact that an assistant collector of taxes and assessments in the relator’s bureau had for years been allowed to steal from the city a large sum of money. The deputy collector in this bureau testified that between January 1, 1894, and December 30 or 31, 1900, payments were credited upon the tax rolls of the bureau of over $30,000 which had no corresponding entry in the cash books to indicate that the money ever went to the credit of the city, and this evidence was not denied. We start, therefore, with the conceded fact that in this bureau there had been during the period the relator was at the head of it a defalcation of over $30,000, and that it appeared upon the books of the bureau over which the relator had control, in the entries made by one subordinate, that payments were credited upon the tax rolls in this sum of $30,000, which had no corresponding entries in the cash books to indicate that the money ever went- into the treasury of the city. It seems, also, to have been conceded that the person responsible for this defalcation was one Charles P. Cliipp, who occupied the position of assistant collector of assessments and clerk of arrears. In such an office as this it is apparent that if the same officer was allowed to make out the tax bills and make the entry in the book which discharged the property from the lien of the tax or assessment, and also acted at the same time as the officer who received the money and made the entries in the cash books in which was entered the money received, an opportunity was afforded that officer to — 253 — enter a tax as paid in the tax books, thus discharging the property from, the lien, make no entry of money received in the cash books and appropriate the money paid. The defalcation then could only be discovered by a comparison of the book containing the entry that discharged the lien of the tax or assessment and the cash book which contained the entries of the money that had been paid to the city. To allow in such an .office the same person to have charge of all these departments, making the entries in both of these books and receiving the money, would be a failure of the head of the bureau to observe and enforce the rules which were necessary to protect the city. There is no claim but that there was a sufficient number of employees in this bureau to provide a separate clerk for each of these departments and a separate cashier to receive the money. It was proved by the same witness that since his appointment on March 16, 1898, he had observed Chipp, the defaulter, acting as interest clerk, entering the tax bills on the cash sheet during the lunch hour, and in the absence of the cashier receiving the cash at the window and posting the amounts received. The witness testified that he had called the relator’s attention to this condition, and received a reply that he would see Chipp and stop it; that, notwithstanding this notice, Chipp continued to receive the money and make entries in regard to it; that witness attempted to stop it, told Chipp that he must not do it, and that Chipp’s reply was that he was helping out Mott, the recording clerk, who was behind in his work. The witness further testified: “ I told him if Mott was behind in his work I would get him an assistant to help him out; ” that Chipp acted in the capacity of interest clerk, cashier and recording clerk almost daily; that the system in vogue in the office by which the interest clerk, cashier or receiving clerk acted as a check upon each other was that they were different persons ; that the cashier was there to take the money that came into the office after the interest had been added on the tax bills, and he entered it in a cash book he had for this purpose, and then it was expected that a different person would do the posting; that the attention of the relator was called to the fact that Chipp was doing the business of recording clerk, but, notwithstanding the fact that the relator’s attention was called to this, he made no efforts, so far as appears, to change the system. — 254 — The bookkeeper of the bureau also testified that Chipp frequently computed interest, and also received cash and receipted bills during the absence of the cashier or the interest clerk; that he also acted as cashier while the cashier was present at the office, on an average of once or twice a week, perhaps oftener ; that he had seen the relator present when Chipp was acting as cashier, when the cashier and assistant' cashier were both present, and this was corroborated by other testimony as the method by which Chipp was enabled to steal this large sum of money from the city. Keleher, the deputy collector, also testified that he had told the relator that, on every occasion that he had to take his key out and open the case where the cash books were, Chipp, for some reason or other, was around the witness; that “ he would turn over an old record or something to see what I was doing,-” and the witness then told the relator that he (Chipp) should stop posting; that he need form a collusion with no one to commit a fraud; to which the relator replied that he would see Chipp about it; that subsequently he noticed Chipp doing the same thing. Here we have direct evidence of the fact that the relator was told of the suspicion which the action of Chipp had aroused in the mind of his deputy;' told that he was receiving the money and also posting the payment, which would enable him without collusion with any one to steal the money received; that he had acted in a suspicious way whenever the witness had gone to the cash book, as though he wished to know what the witness was doing with the cash book, and yet no precaution was taken and nothing was done to stop a custom of which the relator was expressly informed by his subordinate and enabled Chipp to do just what lie did — rob the city. It seems to me that this was ample evidence to sustain the finding that the relator was guilty of such careless conduct in the discharge of his duty as the head of this bureau as justified the comptroller in removing him. The city had been robbed of a large amount of money, which was rendered possible by the fact that a subordinate in the relator’s office had been allowed to act both as cashier and bookkeeper, to receive the money and make all the entries in relation to its receipt. Of this the relator had notice, and, although the head ef the bureau, with power to prescribe the duties of his subordinates and to enforce the necessary checks and regulations, — 255 — he took no precautions to protect the city. If there is to be any responsibility for the proper conduct and management of a city office, involving, as this did, the receipt of large sums of money, and if the city is to be protected from defalcations of this character, the heads of the bureaus who have charge of the receipt of the money on behalf of the city must certainly be held responsible both for their own acts and for the acts of their subordinates; and to say that the comptroller of the city of Hew York cannot remove a subordinate in his department, whether the head of a bureau or not, who, by carelessness and the refusal to adopt the ordinary business precautions, after his attention has been called to the situation, allows the city to be robbed, would seem to me to take away the one safeguard necessary to protect the public’s money. From the conceded facts and the testimony of these witnesses to which attention has been called, I think the comptroller was justified in saying that an officer in charge of a bureau who had acted as it was shown the relator had acted was guilty of such misconduct and carelessness in the discharge of his duties as would make it unsafe to continue him in that position, and for that reason I think the action of the comptroller should be affirmed. I think the record shows that the relator had a fair trial. He was allowed to cross-examine the witnesses produced to sustain the charges ; to call all the witnesses he desired to call; to make a full statement to the comptroller in his defense; and he was represented by counsel; and upon this whole record it seems to me that there was ample proof to sustain the charge of carelessness by the relator in the performance of the duties of his office which justified the comptroller in refusing longer to keep him in this responsible position, where the greatest care and attention were necessary to protect the city. The proceeding should be affirmed and the writ dismissed, with costs. Van Brunt, P. J., and Laughlin, J., concurred; Patterson and Hatch, JJ., dissented.