209 N.W. 638 | Minn. | 1926
In a pending judicial ditch proceeding in Grant county the engineer in charge presented bills for his services and expenses including the services of his assistants and the court audited and allowed the same. Thereafter and pursuant thereto the county auditor issued warrants for the amounts. The claims were correct in amount for work actually performed and expenses incurred. Plaintiffs in good faith purchased the warrants at par, the warrants aggregating $1,746.25 and they were assigned to the plaintiffs. The defense was that the district court was without jurisdiction to audit and allow the bills because the provision of the statute assuming to give such authority was unconstitutional.
1. G.S. 1913, § 5571 (L. 1911, p. 557, c. 384, § 11), provided that all fees per diem, compensation and expenses provided in the drainage act should be, in case of a judicial ditch, audited and allowed by the district court having charge thereof. Because this statute did not provide notice to the county of the hearing on the application to the court to audit and allow bills for such expense, this court in State v. District Court,
In the Gove case (
Of course in the absence of personal appearance there must be a preliminary service of summons or process as a prerequisite to the *461
court's right to hear a controversy. Bardwell v. Collins,
We conclude that the statute is unconstitutional as announced in the first Gove case (
2. In the absence of a valid provision for auditing such claims, we see no reason why such claimant should not be permitted to recover *462 in an ordinary action the amount due, honestly incurred. The county as an agency of the state must not repudiate its contractual obligations nor those which the legislature has seen fit to impose and it presumably is protected by the petitioners and their sureties.
The warrants owned by plaintiffs are not negotiable in the sense that the holder gets them free from the defenses available to the debtor against the original payee. Scott County v. Advance-Rumley T. Co. 288 F. 739, 36 A.L.R. 937. All such defenses are available as against the purchasers thereof. Ordinarily they make a prima facie case of liability. They have no greater effect. They are not negotiable under the law merchant. The transferee takes them subject to all defenses which existed against them in the hands of the payee. Wall v. Monroe,
In this case the county could show any defense it might have. But it concedes and the court has found that the engineer's claims were correct in amount and for services and expenses actually given and incurred. It has no defense other than the claim that the law authorizing the auditing and allowance was unconstitutional. Assuming this, though we have upon the facts in this case decided to the contrary, the defense would relate exclusively to the warrants as such. If we were to say such warrants were invalid for that reason we would nevertheless have to recognize them together with plaintiffs' purchase thereof for par as a complete assignment of claimant's demands against the county and upon the stipulated facts in this case and the facts as found by the court plaintiff as such assignee should recover. This is not because the indorsement passes the legal title of the warrants but because in equity the indorsement will be deemed to be an assignment of the original debt to which the warrants relate. It is sufficient authority for the assignee to receive the money. The warrants are not intended to constitute a new debt or evidence of a new debt. They are merely the means prescribed by law for drawing the money from the county. The record fails to show a single reason why the county should not pay the meritorious claims on which the warrants are based. The *463 debt is an honest one. The county in the capacity in which it is here acting received the value thereof. The ground of recovery upon this theory need not rest upon any of the various theories indicated in the decisions in appellant's brief relating to liability of municipalities for benefits received under invalid contracts. In this case, still assuming the auditing statute was unconstitutional, there was no invalid contract. The engineer had a valid contract by virtue of his appointment, expressly authorized by law, and his acceptance. Upon the facts herein he, in the absence of plaintiffs, should recover. Plaintiffs for the purpose of this action take his place. Defendant should pay in the performance of the engineer's contract regardless of the technical invalidity of the warrants had they been issued without authority of law.
Reversed with directions to enter judgment for plaintiffs.