178 Ind. 503 | Ind. | 1912
Lead Opinion
This was an action in the name of the State of Indiana, brought by 'William B. Hedge, and three other taxpayers of Jackson township, Boone county, as relators, against appellants William H. Miller, a former trustee of the township, and Thomas E. Young and eleven other sureties on his bond, and against the civil and school townships of Jackson, for the recovery of funds alleged- to have been misappropriated. The complaint, filed April 7,1909, was in two paragraphs.
In the first paragraph it is alleged, among other things, that at the November, 1904, election Miller was elected trustee of Jackson township, and executed his bond, in the penalty of $20,000, payable to the State of Indiana, with Thomas E. Young, and eleven other appellants as sureties thereon; that appellant Miller served as trustee of the township from January 1, 1905, to January 1,1909, when he was succeeded as such officer by Emery Graves. The first paragraph alleges fourteen specific breaches of the bond, containing itemized specifications of funds disbursed by the trustee, all of which, it is alleged, were paid out by the trustee', without any appropriation therefor ever having been made by the township advisory board, and without any authority therefor from the board; and it is alleged that the trustee, in his various settlements and reports, took credit for such expenditures against the various funds specified, as follows: (1) from the road fund, for bridge and culvert repair, $2,678; (2) from special school fund, for fuel for schoolhouses, $3,495.99; (3) from the township fund, for trustee’s salary for three years, $1,866.85; (4) from township fund, for office rent and storage of township property, $281; (5) from special school fund, for fire insurance, $415.50; (6) from special school fund, for hauling children to school, $5,225.85; (7) from special school, township and road funds, without any notice to bidders, for school furniture, fixtures, school and road supplies, $7,418.97; (8) from special school fund, $1,757, for
In relation to the fourteenth breach, it is alleged that there came into the hands of Miller, as trustee, public funds of the aggregate amount of $100,760.06, distributed among the several funds as follows: Township fund, $5,499.82; tuition fund, $32,416.81; road fund, $8,025.26; special school fund, $54,818.17; that from the total received he turned over to his successor $1,922.62, and expended the balance for various purposes; that of said balance, so expended, only the sum of $3,514 was disbursed in pursuance of appropriations made by the township advisory board, and the remainder, to wit, the aggregate sum of $95,323.44, was paid out by Miller without any appropriation having been made by the advisory board for the disbursements made, and without any authority from the advisory board for such disbursements.
The complaint alleges that the relators are, and were during the last five years, residents and taxpayers of the township ; that on March 5, 1909, the relators made a demand, in writing, on the township trustee and members of the township advisory board that suit be instituted on Miller’s bond for the recovery of the above-named funds; that no suit was instituted, and more than thirty days have elapsed since the notice was given, and for that reason this complaint is filed by the relators for the use and benefit of the civil and school
The second paragraph of the complaint is the same as the first concerning the election of the trustee, the execution of his bond, and the demand on his successor and the advisory board for instituting suit. Seven distinct breaches of the bond are alleged, as follows: (1) Miller paid to himself, out of the. township fund, during his term, $90.85 for car fare and traveling expenses; (2) that he paid to himself, from the township fund, $185 for office rent, sheltering township property and election supplies, and from the special school fund he paid himself $30 for shedding school wagons; (3) that in 1905 and 1906 he took the enumeration of school children, and charged therefor as a part of his salary the sum of $40 each year, and paid himself therefor, and notwithstanding such payment, he paid to one Young, for the same services, the sum of $60, and took credit therefor; (4) that Miller and one Gardner were partners in the drug and notion business during Miller’s term of office; that said partnership sold to the trustee various- school supplies, aggregating in value $309.66, without any notice to bidders for such supplies, and without written contract therefor, and the firm was paid the above amount out of the special school fund, and Miller took credit therefor in his settlement; (5) that the trustee, without public notice or letting, privately contracted for school supplies, furniture and fixtures, repairs to schoolhouses, etc., and paid therefor the aggregate sum of $11,208.89 from the special school fund; (6) that Miller paid from the same fund $1,751.25 for installing a heating plant in a school building, on a contract let without notice or competitive bidding; (7) that in 1908 he paid $1,454.67 for fuel from the special school fund, in excess of the amount authorized by the advisory board to be expended; that the fuel was not needed, and in fact was not used in 1908; that the fuel was purchased without authority from the advisory board and without notice to bidders.
It is contended by appellants that an action at law on the bond of a municipal officer cannot be maintained by a taxpayer of a municipality, because such action must be brought by the party interested (§253 Burns 1908, §253 R. S. 1881), and that the township advisory board act of 1899 (Acts 1899 p. 150, §9590 et seq. Burns 1908) does not authorize a suit in equity by a taxpayer against a trustee after the expiration of his term.- It is appellants’ theory that §6 of the act which authorizes a suit by a taxpayer must be construed as giving such right only where the advisory board refuses to bring a suit against a trustee while in office. So much of §6 as is applicable here reads as follows: “And any payment of any debt not so authorized from the public funds of such township shall be recoverable upon the bond of the trustee in a suit, which it is hereby made the duty of said [advisory] board to institute and prosecute in the name of the state, for the use of the township. * * * And if the board, on the written demand of any taxpayer, fails for thirty (30) days to bring suit, then such, or any other taxpayer may bring the same, in the name of the state, for the use of the township. ’ ’
An answer of general denial was filed by all appellants. Appellant sureties filed a separate answer to all the complaint, excepting the third, fourth and ninth breaches of the bond averred in the first paragraph, and the first, second, third and fourth breaches averred in the second paragraph. In this answer it is averred that Miller disbursed the several sums as alleged in the complaint, at the times, to the persons, and in the amounts, as therein alleged; that all of said expenditures were made for the use and benefit of the township, and for property, sendees, articles and supplies which were necessary, suitable and proper therefor, and the same were received, retained, used and enjoyed by the relators and other taxpayers of the township; that the expenditures were severally made with the knowledge of said taxpayers and without any objection on the part of any one of them, and with the knowledge and with the authority and advice of the advisory board; that said property, services, articles and supplies so received and used Avere of the full value paid therefor; that each of said payments was made by the trustee in good faith, Avitliout fraudulent intent on his part, and receipts were taken therefor; that no part thereof was retained by the trustee, or repaid to him, or to any person for him.
It is further averred that, during his term, the trustee, not less than thirty nor more than forty days before the first Tuesday in September of each year, made out a statement of the several estimates of the proposed annual expenditures, and the rates of taxation proposed for levy against the property of the toAvnship for the several funds, and posted and
The answer further alleges that during the trustee’s term it became necessary at various times to borrow money to meet necessary expenditures in providing schoolhouses and furnishing the same, and purchasing necessary supplies, and paying existing debts, and money was borrowed for such purposes, and was expended for the purposes for which it was borrowed, and all his actions with reference thereto, and which are set out in the complaint, were authorized and approved at' the time by the advisory hoard. It is also averred that at each annual January meeting of the ad visory hoard the trustee presented to the hoard his complete annual report, which contained each item of expenditure made, accompanied by corresponding verified receipts of persons who received the several payments, in which the article or service paid for was specifically stated; that the several sums receipted for were the exact sums received by the persons executing the vouchers, and no part thereof was retained by, or refunded to the
In acting on allowances of claims against the township, the advisory board acts in an administrative capacity. It has no power to approve expenditures by the trustee on claims for services or supplies which the law does not authorize, and the approval by the board of an unlawful expenditure of public funds by the trustee can in no manner invest such expenditure with the sanction of the law. Board, etc., v. Heaston (1896), 144 Ind. 583, 41 N. E. 457, 43 N. E. 651, 55 Am. St. 192; Daily v. Board, etc. (1905), 165 Ind. 99, 74 N. E. 977; Indiana Trust Co. v. Jefferson Tp. (1906), 37 Ind. App. 424, 77 N. E. 63.
The answer does not aver that the advisory board, in response to the estimates of the trustee, submitted at the annual meeting of the board, made any appropriation, but. on the other hand, must be construed as alleging that it did verbally concur in the trustee’s estimates, and did, in writing, make a levy for the various funds for the ensuing year.
The principal question involved here, however, is that of the right to recover from the trustee an amount equal to the expenditures made by him for services and things on contracts which might have been legal had there been a proper appropriation therefor made by the board, or had the contracts been let to bidders after the giving of the statutory notice, but which, for lack of compliance with such legal requirements, are, by the terms of the statute, declared void.
In 1904, the advisory board made appropriations for expenditures in 1905. In 1905, 1906 and 1907, the advisory board wholly failed to make any appropriation whatever for teachers’ salaries, or any other purpose. Each year, how
On the other hand, appellants contend that where, as here, there is no charge of fraud on the part of the trustee, and where the services rendered and things supplied were necessary for the use of the taxpayers of the township, and were received and used or retained by them, and were of the full value paid therefor, a court of equity will deny a recovery.
While the above rule may, in some instances, work a hardship on claimants against the township, it was evidently
Another example of relief extended by a court of equity to persons who, in good conscience, are entitled thereto, because of situations resulting from part performance of void contracts is found where oral agreements have been made in real estate transactions. Pomeroy, Eq. Jurisp. (3rd ed.) §103. The question here involved has never been directly presented to this court.
In Daily v. Board, etc. (1905), 165 Ind. 99, 74 N. E. 977, a board of commissioners brought an action against a county assessor for the recovery of a sum of money paid him, as salary, in violation of a statute. In the course of the opinion
Flowers v. Logan County (1910), 138 Ky. 59, 127 S. W. 512, 137 Am. St. 347, was an action by the county against an officer thereof for the recovery of public funds expended in a manner contrary to a statute. No fraud was charged, and the county received the benefit of the expenditures in question. In holding that the county was not entitled to recover, the court said: “We held in Boyd County v. Arthur [(1904), 118 Ky. 932, 82 S. W. 613] that the attempted delegation of power of the court and jurisdiction over the public roads by the fiscal court to its several members was contrary to the statute, and on appeal by the county judge we held that the orders should be reversed and set aside; furthermore, we held that injunction would lie to prevent the irregular application of the public money. We are yet as firmly of the opinion there expressed as when it was written. Further observation has confirmed the unwisdom, the impolicy, the illegality of the course pursued by those fiscal courts. But where the fiscal court and the taxpayers have stood by for many years and allowed the public money to be expended by that kind of proceeding, and it has actually been applied to the purposes for which it was raised and appropriated, it is quite a different question whether
We think the reasoning is sound in both the Wisconsin and Kentucky cases. Appellees have failed to cite a,ny authority which supports their contention, and we have been unable to find any. The clause in §9597, supra, relied on by appellees, when considered with reference to the other provisions of the act, cannot justify their contention.
It is inconceivable that it was the legislative intent to promote official integrity by granting to the taxpayers letters of reprisal authorizing them to prey on the earnings of the
All the appellants filed an answer in two paragraphs. The first was a general denial, and in the second the same facts were alleged as were set up in the separate answer of the sureties, but it differs from that answer in that it was addressed to the entire complaint.
Whether or not, under some extraordinary emergency, a trustee might supply a temporary necessity, and thereby create a township liability, is not presented here for decision. No such emergency is pleaded. McNay v. Town of Lowell
The cause was tried on the issue formed by the general denial. There was a special finding of facts, and conclusions of law stated thereon. The facts found were substantially as alleged in the separate answers of the sureties.
The court overruled appellants’ motion for a new trial, which, among other things, alleged that the amount of recovery was too large. In this action the court erred. On the facts found, the judgment was excessive.
Appellants’ brief was filed January 20, 1911. An act approved March 7, 1911 (Acts 1911 p. 693), entitled “An act for the relief of township trustees in certain cases,” is cited in appellants’ brief as affording a defense to appellants. Judgment was rendered in this cause long before the act in question was passed.
Judgment reversed, with instructions to grant a new trial, and overrule the demurrer to the separate answer of the sureties, and for further proceedings not inconsistent with this opinion.
Concurrence Opinion
Concurring Opinion.
I concur in all that is said in the prevailing opinion on the subject of adherence to the requirements of the township advisory board act, and the necessity therefor as sound and healthful, and it is for the reason that the lines on which the prevailing opinion travels must of necessity emasculate that statute, that I am impelled to state my reasons for concurrence in the reversal of the judgment, but on entirely different grounds.
This action is instituted by taxpayers in the name of the State on their own relation, after the expiration of the term of office of a township trustee, and the induction of his successor into office, and after thirty days’ notice to the incumbent trustee and the advisory board, and their failure to institute a suit against the former trustee and his bondsmen “in the name of the State, to recover each of the aforesaid sums for the use of said township,” the funds specified in the notice being various funds of the civil and school townships. The sufficiency of the complaint is challenged by demurrers, both on the ground of the complaint not stating facts sufficient to constitute a cause of action, which challenge the right of the relators to sue, and whether they sue in their individual, or in a representative capacity (Kinsley v. Kinsley [1898], 150 Ind. 67, 49 N. E. 819; Farris v. Jones [1887], 112 Ind. 498, 14 N. E. 484; Sinker v. Floyd [1885], 104 Ind. 291, 4 N. E. 10; Wilson v. Galey [1885], 103 Ind. 257, 2 N. E. 736; Pence v. Aughe [1885], 101 Ind. 317; Toner v. Wagner [1902], 158 Ind. 447, 63 N. E. 859);
The position of appellants is that §6 of the township reform act (Acts 1899 p. 150, §9595 Burns 1908) only authorizes an advisory board or taxpayer to sue during the term of office of a trustee, for the reason that he cannot sue himself, if in default, or if a successor or advisory board refuses to sue after notice, a taxpayer may, but that in such case he does not sue on his own relation, but that the suit must be in the name of the State for the use of the civil or school township, as the case may be, or if he could sue as an individual, it could not be a suit at law on the bond, but a suit in equity in analogy to bills in equity by shareholders in a corporation,, to conserve its funds.
The original act of 1899 (Acts 1899 p. 150, §9590 et seq. Burns 1908) arose out of a wide-spread demand, if not a necessity, for such legislation, and is as important now as when enacted. By §4 of said act (§9593 Burns 1908) an annual meeting of the township advisory board is provided for, at which the trustee is required to furnish a detailed and itemized statement in writing of his estimated expenditure on every account for the ensuing year. The advisory board is authorized to appropriate "for any purpose a sum not greater than that estimated in the item therefor, except by the unanimous vote of the board, and not otherwise, an appropriation may be made for an item not contained in any estimate, or for a greater amount than that named in any item of an estimate. ’ ’ This section clearly contemplates appropriations from funds on hand, or funds which will be realized, and available from the tax levies, without creating a debt or deficit.
By §8 of said act, as amended in 1901 (Acts 1901 p. 415, §9597 Burns 1908), it is provided that "the expenditure of any fund, in whole or in part, to any account for which it was not appropriated by said board, shall be deemed by the
If, will thus be seen that §8 is closely related to and supplements §4, in requiring appropriations from available funds only, in order to authorize payment, and declaring the result, the liability, if the requirement is not observed.
"We next come to §6 of said act, as amended in 1901 (Acts 1901 p. 415, §9595 Burns 1908). As originally enacted it dealt wholly with proceedings, emergencies and requirements, not covered by the annual meetings, and expenditures not included in the “existing estimates and levy.”
If the emergency is found to exist, after notice to all, an appropriation may doubtless be made if 'there are funds available, but the subject oE the section, as well as its object specifically, is the borrowing of money to meet emergencies, and creating a debt.
Then follows a provision that “in no event shall a debt of the township, not embraced in the annual estimates fixed and allowed, be created without such special authority, and any payment of such unauthorized debt from the public funds shall be recoverable upon the bond of the trustee in a suit, which it is hereby made the duty of said Board to institute and prosecute in the name of the State for the use of said toivnship. And said Board is hereby empowered to appropriate, and the township trustee shall pay out of the township funds a reasonable sum for attorneys’ fees for such purpose. And if the Board on a written demand of any taxpayer, fails for thirty (30) days to bring such suit, then such or any other tax payer may bring the same, in the name of the State, for the use of the Township.” (Our italics throughout this opinion.)
The act of borrowing segregates that debt from the annual apijropriations, and all others, and the statute requires a levy at the next annual session “to cover and pay the debt so created.”
If the provisions of §9597, supra, could have any relevancy to the fund created by a loan under §9595, supra, it would be in the diversion of the fund to some other purpose. The suit, however, is grounded on said §9595, and as that is the theory of the complaint, it must be good on that theory. Oölitic Stone Co. v. Ridge (1908), 169 Ind. 639, 83 N. E. 246, and cases cited; Mescall v. Tully (1883), 91 Ind. 96.
The language of the act itself is plain, and needs no construction. It is, Avhether the suit is brought by the advisory board or by a taxpayer, it shall be brought “in the name of the State, for the use of the township.” Ve perceive no reason for a suit at the instance of the advisory board, except against a trustee while in office, because of the payment of a debt not authorized to be created under that section. We say this, because it will not be presumed that the officer will sue himself while in office, and because the statute provides that the advisory board shall, or on its failure a taxpayer may, bring the suit. But giving the clause of the statute the broadest application, and treating it as broad enough to authorize a suit for the illegal disbursement of any fund during the term of office, we still have the reason for. the suit being brought by the advisory board, or by a taxpayer on failure of the former, but in such case, how shall it be brought? The statute points out how it shall be brought. It may not be brought on the relation of a taxpayer under §253 Burns 1908, §253 R. S. 1881, providing that “actions upon official bonds, payable to the State, shall be brought in the name of the State of Indiana, upon the relation of. the party interested, ’ ’ for the reason that a taxpayer is not ‘ ‘ a party interested, ’ ’ within the meaning of the
True, it is there said that the suit was properly brought by Stuart as a taxpayer relator, and Zuelly v. Casper (1903), 160 Ind. 455, 67 N. E. 103, 63 L. R. A. 133, and Kimball v. Board, etc. (1904), 32 Ind. App. 377, 66 N. E. 1023, are cited in support of the proposition. In the first place, in the Zuelly ease the action was not on the bond, and not as relators, but as individual taxpayers, in behalf of the county ; and in the second place, in the case of the same parties as relators, in a suit not on the bond (State, ex rel., v. Casper [1903], 160 Ind. 490, 67 N. E. 185), it was held that they could not maintain a suit as relators, but might do so in their own names, and that as the State had no interest, it was not a proper plaintiff, and the complaint was not aided by the taxpayers being joined as relators. In the Kim-ball case, certain citizens of Franklin county brought suit for the recovery of money allowed and paid through inadvertence of the commissioners, for the use of the county, and retained from the fund recovered by their efforts the expense of the litigation, and the board brought suit
It will thus be observed that neither of those eases is authority on the proposition that a taxpayer may bring a suit on his own relation on the bond of a public officer under §253, supra. If they decide anything on that subject, it is that he may not do so. Section 5962 Burns 1908, Acts 1899 p. 343, §45, provides in case of payments of money out of the county treasury, suit may be brought “in the name of the Slate of Indiana, on the relation of the hoard of commissioners,” or on its failure upon thirty days’ notice, and failure of the board of commissioners to sue, ‘ ‘ any citizen or taxpayer # * * may * * * institute such suit in the name of the State of Indiana, on his own relation for the benefit of the county. ’ ’ There is express authority for suits on relation of citizens or taxpayers, but the cases cited are not authority for so doing, and it is not by virtue of §253, supra, in relation to suits on official bonds, but by virtue of said act.
Again, by §6010 Burns 1908, Acts 1897 p. 187, §6, any citizen or taxpayer, after sixty days’ demand on the board of commissioners “may in his own name upon giving bond for the costs, prosecute and maintain for the use and benefit of such county the proper suit for the recovery of any illegal, unwarranted or unauthorized allowance made by such board,” etc. But when we come to the statute under consideration, we have an entirely different, and specific declaration as to who may bring such suits, with respect to township funds, and how, and the fact of the difference in the statutes is not without force, when we reflect on the difference in the provisions, and on the further fact that the township advisory board act is the later statute.
After the expiration of the term of office of a trustee, the presumption is that his successor will bring the proper suit. But it is claimed that the presumption is overcome
Conceding for the purpose of a remedy, that there ought to be a right to bring a suit, and that a case is thereby made authorizing a taxpayer to maintain a suit on the bond, the .question is, how shall be bring it ?
By parity of reasoning, he cannot bring a suit at law on his own relation under §253, supra, because he is not “a party interested.” The State is not interested, and he has no individual interest, and he may not bring a suit on the bond on his own relation, for that reason, but above and beyond all, the statute points out just how he may bring it,' and that is “in the name of the State for the use of the Township. ’ ’
In this ease, the allegation is that “they file this suit for the use and benefit of the said Civil and School Townships of Jackson, both of which are made defendants, that a recovery may be had in their favor.”
"We have had a statute since 1865 (§6664 Burns 1908, §4534 R. S. 1881) providing that “suits brought on behalf of the schools of any township, town or city, shall be brought in the name of the State of Indiana for the use of ■such township, town, or city”—the same language used in the statute before us. And in this case, funds of both the school township and the civil township are alleged to have been paid out in large sums, in violation of the law.
The case of Hadley v. State, ex rel. (1879), 66 Ind. 271, is directly in point. The reporter has taken liberties in entitling the cause, which are not warranted. It might seem from the title that the cause was instituted by a relator, but an examination of the original record, as well as the language of the opinion, discloses, that the action was “The State of Indiana for the use of the School City of Eichmond,” and was based on §6664, supra.
In State, ex rel., v. Wilson (1888), 113 Ind. 501, 15 N. E.
It is pointed out in that case that it was held in Johnson v. Harris (1834), 3 Blackf. 387, 26 Am. Dec. 424, that a township trustee could not sue bn the bond of his predecessor, but it is held that, under the general statute, he is entitled to sue as a beneficiary and a party in interest.
The distinction between the two corporate entities, the civil township and the school township, has been so often declared that it is unnecessary to cite authorities, or do more than to point out that as to school matters the suit must be brought against or by the school corporation, or for its use, and as to other matters, against or by or for the use of the civil township, and as the statute is specific (§6664, supra) that suits brought on behalf of the schools shall be brought “in the name of the State of Indiana for the use of such [school] township, town, or city, ’ ’ and the language of the act in question is practically the same. That must be taken to be the manner in wrhich, at least as to the school funds, and by the force of the statute, and under the conditions here presented, suits in behalf of the civil township must be brought, because of the plaintiffs not being within the general statute as relators, and to the same effect is State, ex rel., v. Karr (1906), 37 Ind. App. 120, 76 N. E. 780.
A suit brought on the relation of a taxpayer is not a suit in the name of the State of Indiana, for the use of the township, and as to school funds, an action on relation of a taxpayer is unauthorized, and even if as to the civil township a suit will lie on the relation of a taxpayer under some conditions, the conditions are not here, and such a suit as is
The difference is a marked one, and its purpose is not far to seek. As a relator, a taxpayer is liable for costs, while under this statute, by'a suit in the name of the State, there is no liability for costs, and there is the broadest invitation to taxpayers to investigate as such, without incurring liability for costs.
Under §6010, supra, applicable to counties, taxpayers are not let in to prosecute suits in their own names, without giving bonds for costs, thus discouraging the taxpayer, while §5962, supra, a later act, authorizes an allowance for bringing and prosecuting suits, thus encouraging investigation, without incurring liability, and the act in question is still later, and extends further encouragement, by requiring suits in the name of the State.
• In my judgment the suit cannot be maintained by appellees as relators in any event under this statute, either as to civil or school corporations, and they cannot maintain suit on the bond as relators, under the general statute, for lack of such interest as that statute means and intends. Whether suit might be brought in equity by taxpayers in analogy to bills in equity by shareholders of a corporation, we do not determine. It is sufficient to say that, under this statute, whether the provision for suit by an advisory board or taxpayer applies only to the fund borrowed under §9595', supra, or to any fund under the general provision of §9597, supra, it must be brought in the name of the State, for the use of the proper and interested corporation.
As no suit can be maintained by them as relators as to the school township funds, and if it could be maintained as relators as to the civil township funds, one of two things must be true: either that it is an action' wholly by the civil township, or that it is an action by them as relators for the civil township, and as individuals as to the school township, and
The complaint makes no claim of payment of any debt for borrowed money, or warrant or bond issued for construction of any sehoolhouse, which, was not authorized by the advisory board under §9595, supra. This is the more apparent because, by the complaint, it is sought to charge the trustee not only for moneys not appropriated, but for the expenditure of moneys paid for supplies, material and labor, without taking bids for such supplies and work. A ease is therefore not made under that section, and the suit cannot be maintained under that section, which is the theory of this complaint
Even under §9596 Burns 1908, Acts 1899 p. 150, §7, a suit cannot be maintained as to the school township by taxpayers as relators, and as to the civil township, it must be in the name of the State for the use of the township. I am wholly unable to concur in the views of the prevailing opinion, in the application of equity rules to a strictly legal question, under an express prohibition of the statute, on the ground of the contract being executed. There may be defined distinctions between executed and executory contracts, but I am unable to see the application of the doctrine to the case of an absolutely prohibited and unlawful thing by statute.
It is expressly provided in §9597, supra, that “the expenditure of any fund, in whole or in part, to any account for which it was not appropriated by said board, shall be deemed by the board as a balance of such fund unexpended and in the hands of the trustee, for which he shall be liable on his bond.”
The expenditures alleged to have been made by the trustee in this case were alleged to be made either without appropri
Under such circumstances the provision that such expenditure shall be deemed “a balance of such fund unexpended and in the hands of the trustee, for which he shall be liable on his bond,” that is, shall be liable therefor' on his bond, the same as if it had not been expended, and he had failed to account for and pay it over to his successor, the statute clearly fixes this liability.
In the prevailing opinion it is held that even if the trustee makes expenditures, without appropriation by, or not authorized by the advisory board, he may defend on his bond, if he shows that the public money was expended on a contract with one legally authorized to enter into it, and that the expenditure was made for a subject in itself lawful, and that whatever was paid was necessary, and of a value equal to the expenditure, and was received and used or retained by the township, and that the transaction was without fraud. The holding is not based on the act of 1911, for the relief of township trustees (Acts 1911 p. 693), but what is termed relief extended by a court of equity. This holding is in direct conflict with the provisions of §9597, supra, That act provides that such expenditures shall be “deemed a balance of such fund unexpended in the hands of the trustee.”
The provision expressly excludes the defense that the alleged illegal expenditures were proper ones, because the public moneys were paid out on account of a public purpose, and for which the advisory board had made no appropriation, or for work done or supplies furnished contrary to express statutes. But should the provision of the statute work a hardship to individuals, that by no means warrants the violation of a plain and emphatic provision thereof.
The liberty of the citizen, and his security in all his rights, depend, in a large degree, on the rigid adherence to the provisions of the Constitution and the laws, and their faithful.
To say that if a contract has been entered into, or has been entered into and performed, between a contractor and a township trustee, the contractor may not recover, and is without remedy, but that if the trustee has paid the contractor, he is entitled to credit, will destroy the statute.
It is said in Magniac v. Thomson (1853), 56 U. S. 281, 299, 14 L. Ed. 696: ‘ ‘ That wherever the rights or the situation of the parties are clearly defined and established by law, equity has no power to change or unsettle those rights or that situation, but in all such instances.the maxim equitas sequüur legwm is strictly applicable. # * * Equity may be invoked to aid in the completion of a just but imperfect legal title, or to prevent the successful assertion of an unconseientious and incomplete legal advantage; but to abrogate or to assail a perfect and independent legal right, it can have no pretension. In all such instances, equity must follow, or in other words, be subordinate to the law.”
In Hart v. City of New York (1911), 201 N. Y. 45, 55, 94 N. E. 219, it is said: “It is, however, urged that the principles which have been stated and referred to do not apply to an executed contract where the municipality does receive and is enjoying the benefit of the work done or materials furnished under the contract. It is very clear that such is not the law applicable to the facts presented here. This is not a case where there has been mere irregularity in letting the contract, but is a ease where, if I am correct, the municipal authorities have attempted to let a contract which was not only not authorized, but which was in violation of the law and ordinances which govern them and which was utterly and jurisdictionally illegal. The action is explicitly based on contract and not brought to recover on a quantum meruit, and I regard it as well settled that it cannot be maintained simply because the contract has been executed, some of the decisions here cited having reference even to actions based on a quantum meruit.” Citing cases.
I am unable to see the application of eases arising under statutes somewhat similar to our own, but in which our own has gone far beyond those statutes, of the cases cited in the prevailing opinion.
In Flowers v. Logan County (1910), 138 Ky. 59, 127 S. W. 512, 13 Am. St. 347, it was said: ‘ ‘ The vice in the proceeding was not in doing something not authorized by, or forbidden by the law, but was doing that which was allowed, in a manner not authorized by law. ’ ’
In the case of Riverside County v. Yawman & Erbe Mfg. Co. (1906), 3 Cal. App. 691, 86 Pac. 900, it was held that the section of the statute sought to be invoked did not contemplate recovery of property which a public corporation had received and retained, and that “the right there sought to be conferred was to recover money paid without authority of law.”
There is a marked distinction between cases in which an act is simply unauthorized, or an authorized act is done in an unauthorized manner, and one in which the thing is absolutely prohibited by a positive statute, and in which statute there is also a positive mandate against credit being given to the officer, and a like mandate as to bringing suit for its recovery if credit is claimed or has been given the officer, and that distinction runs through all the cases, including those cited and relied on in the prevailing opinion, as I read them. Many of the cases founded on equitable estoppel are those of municipal corporations, as distinguishable from public corporations, such as counties and townships, as arms of the state government, and others have arisen without that distinction being noted, or in exceptional cases, and without noting the distinction between acts prohibited by statute or in violation of public policy and those not so prohibited. Moss v. Sugar Ridge Tp. (1903), 161 Ind. 417, 425, 68 N. E. 896; Schipper v. City of Aurora (1889), 121 Ind. 154, 22 N. E. 878, 6 L. R. A. 318.
But we have a clear and explicit statute, declaring the
But the fact that it was enacted is a legislative construction that the act will not bear the interpretation given to it by the prevailing opinion, as well as a declaration of the intention to preserve the act in its integrity by restricting it to past violations.
It seems to me a strange inconsistency to say that a party who has furnished the property which a township needs and retains, and in whom the equity is, if there be one, may not recover on the contract, or its value, while the trustee who has paid for it, in violation of the statute and his express duty, may be allowed for it. Under former decisions of this court, the contractor could not recover, and the statute is specific, that it should be “treated as money in his hands,” etc., a most sweeping declaration, and it was undoubtedly the purpose in the enactment of the act of 1911, supra, to provide relief for past transactions, as to which there otherwise could be no relief.
In Lee v. York School Tp. (1904), 163 Ind. 339, 71 N. E. 956, it was held, under a statute’ requiring contracts with teachers to be in writing, and declaring “that no action shall
In Boyd v. Black School Tp. (1890), 123 Ind. 1, 23 N. E. 862, decided under the act of 1881, in an action for supplies furnished a township trustee under that act, it ivas held that there could be no recovery on the contract, but a recovery was sustained on the ground of the receipt and retention of necessary supplies.
In Moss v. Sugar Ridge Tp., supra, under the act there in question, a recovery was denied for highway work, contracted by a trustee in violation of the statute. In that case the doctrine of the Boyd case and others was invoked, in which beneficial contracts had been made, but the court points out the distinction between cases of contracting in a manner not prohibited by the Constitution or the statute, and cases of express prohibition.
The court there said, on page 425: “Under our previous holdings it has been universally affirmed that contracts by municipal corporations which are either prohibited by statute, as in the case at bar, or which were in violation of public policy, could not result in creating an implied liability against such corporations. * * * A court, however, under the facts disclosed, must be controlled by the imperative demands of the law applicable thereto, and has no power to grant legal or equitable relief.” See, also, as presenting analogies, State, ex rel., v. Goldthait (1909), 172 Ind. 210, 87 N. E. 133, 19 Ann. Cas. 737; Sandage v. Studebaker Bros. Mfg. Co. (1895), 142 Ind. 148, 41 N. E. 380, 34 L. R. A. 363, 51 Am. St. 165; Boyd v. Mill Creek School Tp. (1890), 124 Ind. 193, 24 N. E. 661; Johns v. Town of Sheridan (1909), 44 Ind. App. 620, 89 N. E. 899; First Nat. Bank v. Van Buren School Tp. (1911), 47 Ind. App. 79, 93 N. E. 863; Independent School District, ex rel., v. Collins (1908), 15 Idaho 535, 98 Pac. 857, 128 Am. St. 76; McNay v. Town of Lowell (1908), 41 Ind. App. 627, 84 N. E. 778; Caldwell
Here we have a case of payment made in violation of an express statute, which fixes the status of all parties. The trustee can have no equities higher than he who furnishes material which is necessary and is used, and he is remediless, while the trustee, as it is held, may he relieved from the violation of the express law and his duty.
I am unable to comprehend the ground for, or the wisdom of such attempted distinction.
The judgment should he reversed, with instructions to sustain the demurrer to the complaint, and for further proceedings not inconsistent with this opinion.
Note.—Reported in 99 N. E. 102, 99 N. E. 111. See, also, under (1) 38 Cyc. 657; (2) 29 Cyc. 1448, 1463; (3) 36 Cyc. 1106; (4) 38 Cyc. 632; (5) 16 Cyc. 106, 107; (6) 29 Cyc. 1465; (7) 28 Cyc. 650; (8) 38 Cyc. 645; (9) 38 Cyc. 630, 632; (11) 1 Cyc. 737; (13) 38 Cyc. 645; (14) 38 Cyc. 637; (15) 38 Cyc. 638; (16) 38 Cyc. 658; (18) 29 Cyc. 1435; (19) 16 Cyc. 145; (22) 16 Cyc. 137; (23) 8 Cyc. 926. As to the acts for which sureties on official bonds are