Bank of Chatsworth v. Hagedorn Construction Co.

162 Ga. 488 | Ga. | 1926

Hill, J.

(After stating the foregoing facts.) This case was here on a former occasion. Bank of Chatsworth v. Hagedorn Construction Co., supra. It was here on petition and demurrer; and a majority of this court held that the petition set out a cause of action for mandamus in order to compel the Bank of Chatsworth to pay a certain warrant for $17,750, drawn on the bank by the board of supervisors of roads and revenues of Murray County. It was there held that the bank “became a quasi-public officer of the county in the handling of the moneys of the county, or at least a corporation owing duties to the public.” It was also held that “When it is sought to enforce payment of a county warrant for a claim which has been audited and allowed, a mandamus absolute will be refused, if it appears that there are no funds available to pay the same; but the lack of funds with which to pay such warrant, not appearing from the allegations of the petition for mandamus, is a matter of defense, and the presence of such funds need not be alleged in the petition. Qusere, whether mandamus will lie against the depository bank, if it should appear that it had misapplied all of the funds of the county on which the warrant was drawn, and for this reason was without funds to pay the same.” The record in this case is very voluminous, and a great many questions are raised in the record by demurrers to the answer, exceptions to the sustaining of certain exceptions of fact and law by the trial judge in the court below, and otherwise. The writer has taken much time and given much consideration to the many questions involved; and though the questions are stated in different ways, they all revolve around a few controlling questions. When the case went back to the trial court for a hearing on its merits, the defendant filed its answer in which it averred, among other things, that .it had paid out all of the money in its hands which had been deposited with it for a specific purpose, except a very small amount ($89.35), which was insufficient to meet the demands of the warrant ($17,750) which had been issued to the plaintiff, and which, so far as the record shows, was regular upon its face. The auditor to whom the case was referred, and who heard evidence, found as a matter of law that mandamus would not lie in a' case like the present. The trial judge sustained the exception of law on this point to the ruling of the auditor, and granted a mandamus absolute. There were other rulings by the trial court favorable to the defendant, and a cross-bill of exceptions was filed by the plaintiff to certain of these rulings, which need not be referred to, in the view we take of this ease. (1) If the defendant paid certain of the warrants for purposes other than for road and bridge purposes out of the road-bond fund, could the defendant plead such actual payments as a defense by showing that by reason of such payments the road-bond fund had been exhausted so as to prevent the issuance of a mandamus absolute ? (2) Will a mandamus absolute issue, commanding the defendant bank to do what is not within its power by voluntarily putting it out of its power to perform a duty imposed upon it by law, even though it may become liable in damages for so doing?

The office of county treasurer of Murray County was abolished by the act of the legislature of 1915 (Ga. L. 1915, p. 319). By the act of 1916 (Ga. L. 1916, p. 479), the ordinary of Murray County performed the duties of treasurer. The legislature in 1919 (Ga. L. 1919, p. 706) passed an act providing that the money belonging to the County of Murray should be placed under the control of the board of supervisors of roads and revenues, and requiring that the board should select a county depository for such funds. Under this act it was provided that the county funds should be deposited in some solvent bank that would pay the highest rate of interest on daily balances, and required such bank which might be selected as the depository to give a good and sufficient bond to indemnify the county against loss; and also required the bank to keep the accounts of the county, receive anpay out the money of the county on proper vouchers approved by the board of supervisors of roads and revenues, without any charge or expense to the county. The Bank of Chatsworth was selected by the board of supervisors for the purposes above named. This court, in Bank of Chatsworth v. Hagedorn Construction Co., supra, with reference to the contention that the Cohutta Banking Co. was the duly constituted county depository, said: “Conceding that we should indulge this general presumption, then we must likewise indulge the special presumption that the supervisors had either selected the Bank of Chatsworth as the depository of all county funds, or had selected it as the depository of these county road moneys. As to these road funds, we indulge the presumption that the Bank of Chatsworth received them under an implied contract to handle them as the depository of the county pro tanto at least; and the terms of the local act providing for the selection of such depository form a part and parcel of the implied contract, as they do of the express contract set out in exhibit A. To indulge a contrary presumption would impute to the supervisors a violation of duty, and to the bank a participation therein.” We are of the opinion, under the facts in the record, that the Bank of Chats-worth became the county depository under the act of 1919, supra, which required that such depository “shall keep the accounts of the county, receive and pay out the moneys of the county on proper vouchers approved by the board of supervisors of roads and revenues of said county.” 156 Ga. 358, supra. The record shows that the Bank of Chatsworth received the sum of approximately $11,648.68 more than it has shown by vouchers that it has paid out on legal warrants drawn on the road-bond-fund, except a small stated amount which it claims to have on hand. We are of the opinion, therefore, regardless of whether a bank could be required by mandamus to pay out money when it is shown that it has not such an amount within its power, custody, or control, that to the above extent the trial judge was authorized to issue a mandamus absolute against the bank for whatever amount it is shown that the bank has received, and which it has failed to show by proper vouchers that it has paid out for proper road and bridge purposes.

Will mandamus lie against the depository bank if it should appear that it was without sufficient funds to pay the warrant drawn against it? The courts in outside jurisdictions seem to be about equally divided on the question as to the effect of a lack of funds with which to pay the warrant sought, upon the right of the holder of a claim to compel by' mandamus the payment of the warrant. One group of courts takes the position that without funds, out of which he can. demand payment, the warrant would be useless to the relator, and therefore that he is not entitled to the writ. Other courts take the opposite view, and hold that the lack of funds is immaterial. L. R. A. 1916D, 334, note; and see, to the same effect, 18 R. C. L. 227, § 151, and cit. But whatever the rule may be in outside jurisdictions, this court has decided, in Aaron v. German, 114 Ga. 587 (40 S. E. 713), as follows: “One who has failed to comply with a duty imposed upon him by law, of paying over to another a particular fund to the custody of which the latter is entitled, is liable to account to him, not only for such part of the fund as the former has retained in his hands, but also for any portion thereof of which he may have made an illegal disposition.” In delivering the opinion of the court in the Aaron case, Judge Lumpkin said, among other things; “The mandamus absolute, if granted at all, should have covered the whole amount for which German was. accountable, and not merely the balance which he retained in his hands after making an unauthorized disposition of the greater portion of the fund he had collected.” And in the case of Hutcheson v. Manson, 131 Ga. 264, 267 (62 S. E. 189), it was said: “So the simple question made by the answer of the ordinary was, whether mandamus would lie to compel him to pay the orders of the petitioner for insolvent costs, when the funds from which these orders should have been paid had been all disbursed by the defendant in violation of the law, and hence were not in his possession or within his control. In some jurisdictions inability upon the part of a public officer to pay or turn over funds which have come into his hands, to the person to whom it is his official duty to pay or deliver them, has been held sufficient to prevent his being required by mandamus to do so, even though his inability has been caused by his having paid out or disbursed such funds in violation of his duty under the law. In other jurisdictions a contrary rule has been enforced. The question in this State, however, can not now be considered an open one. . . Under that decision [Aaron v. German, supra], it is clear that the fact that the ordinary did not have in his possession or control the funds which he had collected from the hire of the misdemeanor convicts, from which to pay petitioner’s orders for insolvent costs, as solicitor of the city court, was no reason for denying a mandamus absolute, when it appeared that the ordinary had himself disbursed such fund in violation of the law. Consequently the case falls squarely under the ruling made in Aaron v. German, and the judgment overruling the demurrer to the defendant’s answer must be reversed.” The record in the instant ease shows that a warrant, regular upon its face, and signed by the secretary of the board of supervisors of roads and revenues of Murray County, was presented to the Bank of Ohatsworth for payment in the sum of $17,750, which the bank declined to pay, on the ground that it had paid out all of the funds in its hands on warrants drawn by the clerk of the board of supervisors for various purposes, which it is contended were not authorized by law to be drawn against this road fund; and the contention of the bank is that after paying out these various amounts there is in its hands the sum of only $89.35, which is insufficient to pay the warrant presented to it. The record shows that no vouchers at all were introduced to show that the bank had paid out, as it alleges, the sum of $11,648.68.

Another question to be determined is, whether the defendant bank is chargeable in law with paying out the road-bond fund only on proper warrants duly approved by the board of supervisors of roads and revenues of the county for road and bridge purposes. The trial judge decided in effect this question in the affirmative, and we are of the opinion that he correctly so decided. The act of 1919 (Ga. L. 1919, p. 706, see. 3) provides that “the said bank selected as a depository shall keep the accounts of the county, receive and pay out the moneys of the county on proper vouchers approved by the board of supervisors of roads and revenues of said county, without charge or expense to the county,” etc. It is clear from the above wording of the act that the bank must pay out the money of the county on “proper vouchers.” The use of the words “proper vouchers” implies that the vouchers must be issued under some apparent authority, and also that they must be approved by the board of supervisors. It is manifest that the warrants, in order to be legal, must not only be “proper” and “approved” by the board of supervisors, but must be issued only for the purposes for which the money 'could be legally used. It appears from the record in this case that the road bonds were advertised, that the election was held which resulted in favor of .the bonds, that the bonds were issued and sold, and the proceeds thereof, the sum of $100,000, were to be used only for the purposes for which they were authorized to be issued. In the Civil Code (1910), § 440, .with reference to the notice to be given of an election on an issue of bonds, it is provided that “in said notice he shall specify what amount of bonds are to be issued, for what purpose, what interest they are to -bear, how much principal and interest to be paid annually, and when to be fully paid off.” It appears that the County of Murray issued and sold 100 bonds in the sum of $100,000, the purpose of the bonds issued being for the “widening, straightening, stumping, claying, cherting, and making permanent roads, and grading the public roads of said county and erecting the necessary bridges thereon.” We are of the opinion that the defendant is chargeable with notice of the purpose for which this money could be used; and that being so, it was the duty of the bank, as “quasi treasurer” and custodian of the proceeds of the sale of the bonds, to see that they were used for the above-stated purposes only; and if it permitted them to be used for other purposes, it was an illegal act on its part, and it is responsible therefor. The question arises whether money paid out of the road-bond fund for interest on the bonds was illegally paid. We are of the opinion that, with the exception of accrued interest which was paid by the purchaser of the bonds from the date of the bonds to the date of sale, the payment of such interest was illegal. Art. 7, see. 7, par. 2, of the constitution of Georgia (Civil Code of 1910, § 6564), provides that “any county, . . which shall incur any bonded indebtedness under the provisions of this constitution shall, at or before the time of so doing, provide for the assessment and collection of an annual tax sufficient in amount to pay the principal and interest of said debt within thirty years from the date of the incurring of said indebtedness.” See, in this connection, Woodall v. Adel, 122 Ga. 301 (3) (50 S. E. 103); Mayor &c. of Athens v. Hemerick, 89 Ga. 674 (16 S. E. 72); Oliver v. Elberton, 134 Ga. 64 (53 S. E. 15); Wilkins v. Waynesboro, 116 Ga. 359 (43 S. E. 767). It appears, therefore, that provision is made for the payment of principal and interest on bonds which have been issued for county purposes, and evidently it is not contemplated that it should be paid in a ease like the present from the road-bond funds.

Another question raised by the record is whether the act of 1917 (Ga. L, 1917, p. 375), creating the board of supervisors of roads and revenues of Murray County, confers upon them authority to employ counsel. That act in section 8 provides that the board shall appoint a secretary who 'shall receive $3 per day for each day of actual service; that said board shall audit all claims against the road funds, and cause the same to be paid, etc.; but there is no authority in that act, or the other acts recited, which confers upon the board the authority to employ counsel. The purposes for which a county may levy taxes are provided for in the code. The Civil Code (1910), § 508, confers the general power for levying certain taxes; and .§ 513 provides specifically the purposes for which taxes may be legally levied. There is no specific authority conferred here to levy a tax to pay counsel fees; but where a county is involved in “litigation,” counsel may be employed and paid out of the fund provided to pay “other lawful charges against the county.” See, in this connection, Humber v. Dixon, 147 Ga. 480 (94 S. E. 565); Ross v. Bibb County, 130 Ga. 585 (61 S. E. 465); DeVaughn v. Booten, 146 Ga. 836 (93 S. E. 629). These cases discuss the question as to what comprises the term “litigation” as used in the constitution of Georgia (Civil Code of 1910, § 6563), in connection with the power of taxation for that purpose. We are therefore of the opinion that payments made to the secretary of the board, except his per diem, and to reimburse him for advances made on road and bridge purposes, were illegal; and this is especially true where the evidence is lacking that the board of supervisors authorized him to perform said services, or to charge a fee in connection therewith. As already stated, the defendant was chargeable in law with notice of the specific purposes for which the road-bond fund had been created, and that it could only pay warrants which were regular on their face, and which were for road and bridge purposes. See, in this connection, American Trust & Banking Co. v. Boone, 103 Ga. 303, 304 (39 S. E. 183, 40 L. R. A. 350, 66 Am. St. R. 167).

Applying the principles above ruled to the facts of this case, we are of the opinion that the court did not err in reversing the finding of the auditor and in making the mandamus absolute, nor in overruling the motion for new trial.

Judgment affirmed on'the maim bill of exceptions; cross-bill dismissed.

All the Justices concur, except Atkinson and Gilbert, JJ., who dissent.