192 P. 437 | Cal. | 1920
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *662 The plaintiff in this action sought to restrain by injunction the defendants, Lewis and Hunt, respectively auditor and treasurer of the county of Los Angeles, from auditing and paying a demand purporting to have been allowed by the supervisors of said county in favor of the defendant Gibbon for services claimed to have been rendered by him in the promotion and organization of "Los Angeles County Water Works District No. 3." Following an order sustaining a general demurrer to the plaintiff's complaint without leave to amend, judgment was rendered and entered for the defendants, from which the plaintiff has appealed.
Briefly stated, the pleaded facts of the plaintiff's case, in so far as they are pertinent to a discussion and decision of the points presented on the appeal, are these: Los Angeles County Water Works District No. 3 was duly created by the board of supervisor's of said county on November 16, 1914, and ever since has been in existence and operation under and by virtue of the provisions of an act entitled, "An act to *663 provide for the formation, management and dissolution of county irrigation districts" etc. (Stats. 1913, p. 785.) The plaintiff was at all times involved in the subject matter of the action a resident taxpayer within said waterworks district and was the owner of certain designated property of the alleged value of $16,750, situated therein, which was subject not only to the lien and encumbrance of the district's bonds, but also to the lien and encumbrance of any and all taxes and assessments which might, from time to time, be levied for the maintenance of the district. The defendant Thomas E. Gibbon, an attorney at law, presented, on or about the sixth day of June, 1916, to the board of supervisors of the county of Los Angeles, a demand against the district which, as shown by an "amended claim" set forth in the body of plaintiff's complaint, was in the sum of ten thousand dollars. The claim was "for services rendered to Los Angeles County Irrigation District No, 3. (1) Negotiating and deciding upon the plans and specifications for the main distributing pipelines for said district as to size of pipe, method of construction, length of pipe and particularly the cost to be borne by said district of the Franklin Canyon, Glendale, and Chatsworth main lines, which plans were necessary to ascertain the probable cost to the district of the proposed distributing system. Also negotiating and deciding whether the said district should include in its plans and specifications a portion of the cost of the Chatsworth reservoir. (2) Advice to freeholders concerning all matters arising by reason of the proposed organization of said district. (3) Checking and passing upon the description of external boundaries of said district and on the cost of same. (4) Preparation of the petition for the organization of said district and the issuance of bonds thereby." The board of supervisors on the 8th of January, 1917, by resolution purported to approve and allow said demand to the extent of and for the sum of five thousand dollars, and ordered a warrant to be drawn upon the defendant Walter A. Lewis, as county auditor, requiring him to approve and allow said demand in the sum of five thousand dollars, and, by the same resolution and order, directed the defendant John N. Hunt, as county treasurer, to pay said demand to the extent of the sum allowed thereon out of the funds of the district. *664
The plaintiff's complaint by appropriate allegations proceeded upon the theory that the demand of defendant Gibbon was not based upon the rendition to the district of any services contemplated by the legislative enactment permitting the formation of irrigation districts; that, inasmuch as none of the services which were made the basis of the demand are provided for in said legislative enactment, or elsewhere, the same are not and cannot be made a legal charge against the district; that, therefore, the purported and partial allowance of said claim was and is wholly illegal and void and of no effect. The plaintiff instituted the action on his own behalf and upon behalf of all of the residents, taxpayers, and freeholders within the district. The defendants' demurrers were general and based solely upon the ground of the insufficiency of the facts pleaded in the plaintiff's complaint to state a cause of action, and they were apparently sustained by the court below primarily upon the theory that the services upon which defendant claimed compensation were services rendered to the water district, or at least provided for by the act under which the district was organized, and that, therefore the allowance of the claim by the board of supervisors of Los Angeles County was a matter within its jurisdiction, and also upon the ground that, when passing upon and allowing the claim, said board was acting in a quasi-judicial capacity and, as a consequence, its judgment of approval and allowance of the claim could not be reviewed and disturbed by a court of law.
The demurrers were not well taken and should have been overruled. [1] It is conceded at the outset, as indeed it must be, that the plaintiff, as a taxpayer of and resident within the district, has the legal right to invoke the remedy of injunction to restrain the expenditure of the funds of the district if it can be said that such expenditure finds no sanction in the law, [2] and the case coming here as it does upon a judgment rendered upon an order sustaining demurrers to the plaintiff's complaint, the question of the legality of the claim, as well as the legality of its allowance by the board of supervisors, must be determined by the consideration of the scope and effect of the allegations of the complaint. The complaint specifically and affirmatively alleges, among other things, that the services claimed to have been rendered to the district by the defendant Gibbon, and *665 which constituted the basis of his demand against the district, were not the services provided for or contemplated by the legislative enactment (Stats. 1913, p. 785), permitting and providing for the organization of the district; that said Gibbon did not in fact perform or render any services in connection with the district subsequent to its formation or at any time when it had a legal existence; that said defendant did not in fact perform any services for said district or for the use and benefit of said district. These allegations of the complaint are fortified by the recitals of the demand made upon the district by the defendant Gibbon, which was incorporated in the complaint. These recitals make manifest that the services rendered by the defendant Gibbon and for which the board allowed him compensation in the sum of five thousand dollars were performed at a time when the district was but a proposition — incipient and inchoate — and that the precise nature of said services consisted in the furnishing of aid in connection with the preparation and filing of the petition for the formation of the district. Consequently the complaint sufficiently shows, as against a general demurrer, that such services were performed at a time prior to the formal formation of the district into an organized and existing corporate legal entity.
It is well settled that a private corporation cannot be held liable for the acts of its promoters, nor be obligated by their conduct and contracts, in the absence of charter provisions providing therefor or of an adoption of such conduct or contracts by the corporation after it comes into existence. (Mitchell v. Patterson,
This then brings us to a consideration of the provisions of the act under which the water district involved here was authorized and created. The act under which said water district was created provides that the petition, which may and which must, of course, be presented to the board of supervisors for the formation of the district, shall contain the name and boundaries of the proposed district, a general description of the desired improvements, the construction, installation, etc., of the waterworks, and "an estimate of the cost of the proposed improvements and of the incidental expenses in connection therewith." Following the presentation of a sufficient petition for the purpose stated, the act authorizes the board of supervisors to proceed and provide by ordinance or resolution for the holding of a special election at which there shall be submitted to the qualified voters of the proposed district "the proposition of *668
forming such district and incurring a debt by the issuance of bonds of such district for the purposes set forth in said petition." The ordinance or resolution calling such special election must also recite "the objects and purposes for which the proposed indebtedness is to be incurred, the estimated cost of the proposed improvement, the amount of the principal of the indebtedness to be incurred therefor," etc. [4] There is nothing in these provisions of the act which empowers the board of supervisors to contract and pay for legal or other services rendered to the freeholders of the proposed district in the preparation and procurement of the petition for the ultimate creation of the district, or which authorizes the board to pay for legal or other services rendered to such freeholders in the preliminary promotion of the district. [5] Fairly construed, the provision of the act requiring the petition for the creation of the district to contain "an estimate of the cost of the proposed improvements and of the incidental expenses in connection therewith" has reference, as do the required provisions of the ordinance calling the election, wholly to such expenses as are generally and incidentally necessary to the construction and the maintenance and operation of the plant and business of the proposed district after it has actually come into being as a legal entity. The language of the requirement of the act that the petition shall contain an "estimate of the cost of the proposed improvements and of the incidental expenses in connection therewith" does not in and of itself, nor when read in conjunction with other provisions of the act, indicate, as counsel for respondents contend, that the legislature intended that the district when finally formed should pay the cost of legal advice and the expenses of preparing plans and specifications, or any other expenses incidental to the mere promotion of the district. As employed in the act, the word "incidental" must be taken in its usual and ordinary meaning and, therefore, as having reference to something which is subordinate to and dependent upon and follows the existence of another and principal thing. (Webster's Dictionary; McFarlan Co. v. Potter,
[6] It follows inevitably from this interpretation that the statute under which the district involved herein was organized *671 did not bind the district to pay the expenses incurred by promoters in connection with the preparation and filing of the petition for the formation of the district. Furthermore, not only were the acts of the promoters in incurring such expenses not binding upon the corporation in and of themselves, but those acts could not be adopted by the corporation after it came into existence, for, as previously stated, the statute specifies and limits the purposes for which the funds of the district may be expended, and such specification is totally devoid of any provision for the payment from said funds of expenses in connection with the petition for organization. [7] Payment of these expenses from the funds of the district is therefore ultra vires as to the district, and an act or contract which the corporation is not legally permitted to perform cannot be ratified or adopted by such corporation, whether the corporation be private or municipal. (1 Fletcher's Cyclopedia of Corporations, sec. 153; 3 McQuillin on Municipal Corporations, secs. 1255, 1256.) The claim of defendant Gibbon was consequently not a legal charge against the district.
It will be noted that the water district in question is referred to constantly throughout the act authorizing its creation as a "county" water district and, in this behalf, it will be further noted that the board of supervisors is made the governing body of the district after the district is created, and that the funds of the district are deposited in the county treasury to the especial account of the district and the disbursement thereof is under the control of the board of supervisors. [8] It will thus be observed that the management of the district is, to some extent at least, a county affair and, therefore, in the absence of more specific provision in the act, the same general rules and regulations which govern the board of supervisors in acting upon claims against the county proper must cover and control the allowance of claims against the district. The board of supervisors has jurisdiction to allow only such accounts as are "legally chargeable against the county" (Pol. Code, sec. 4041), and, therefore, in dealing with claims against a water district, it can have jurisdiction only to examine, settle, and allow accounts "legally chargeable" against the district. [9] A court of law is not precluded from reviewing an *672
allowance by a board of supervisors for the purpose of ascertaining whether the allowance of the claim was within the jurisdiction of such board. It may be conceded "that when passing upon the correctness of the claim in controversy the board of supervisors was sitting and acting as aquasi-judicial body, and that therefore its conclusion that such claim should be allowed and paid was an adjudication which . . . would ordinarily be final and conclusive. . . ." (Jacks
v. Taylor,
Concluding, as we do, that the claim in question was not a legal charge against the district and therefore was beyond the jurisdiction of the board of supervisors in allowing claims against the district, it will be unnecessary for us to discuss the question as to whether or not the complaint, in the face of a general demurrer, sufficiently alleges that the claim was not presented to the board within the time required by law.
The judgment is reversed.
Lawlor, J., Olney, J., Shaw, J., Wilbur, J., Sloane, J., and Angellotti, C. J., concurred.
Rehearing denied.
All the Justices concurred.