Ray Cnty. ex rel. Common Sch. Fund v. Bentley

• Decision Date: 31 January 1872
• Citation: 49 Mo. 236
• Parties: RAY COUNTY, TO THE USE OF THE COMMON SCHOOL FUND, Appellant, v. SAMUEL J. BENTLEY, WILLIAM T. EASTER AND ADAM J. BARR, Respondents.
• Court: Missouri Supreme Court

49 Mo. 236

RAY COUNTY, TO THE USE OF THE COMMON SCHOOL FUND, Appellant,

v.SAMUEL J. BENTLEY, WILLIAM T. EASTER AND ADAM J. BARR, Respondents.

Supreme Court of Missouri.

January Term, 1872.

Appeal from Lafayette Court of Common Pleas.

Geo. W. Dunn, John W. Shortwell, and J. W. & J. E. Black, for appellant.

I. Ray county is a public corporation, and possesses no other powers than those defined in the law. (Ang. & Ames Corp. 9, § 14; id. 19, § 23; id. 20, § 24.)

II. The power of Ray county to act as trustee of the school funds of said county is created by statute, and her duties are distinctly defined therein and cannot be exceeded. (Wagn. Stat. 868, § 8; id. 870, §§ 18-20; id. 1261, § 90; id. 1259, §§ 79-83, 86-7; Hann. & St. Jo. R.R. Co. v. Marion County, 36 Mo. 294; Copp v. St. Louis County, 36 Mo. 383.)

III. Ray county is not authorized by law to purchase real estate for the protection of the school fund, and her power to purchase property is clearly defined and cannot be extended by implication. (Wagn. Stat. 403, §§ 7-9; id. 406, §§ 27-31; Chambers et al. v. City of St. Louis, 29 Mo. 543; 2 Kent's Com. 279-80; Ang. & Ames Corp., § 111.)

IV. The purchase by Ray county, of mortgaged premises for the benefit of the school fund of said county, was null and void, did not operate as a payment of the bonds sued on, and was properly set aside by the County Court. (44 Mo. 547; Jackson v. Hartwell, 8 Johns. 422.)

V. The management of the school fund by Ray county is for the public good, and appellant is not liable in any manner for the conduct of her agents. (Murtaugh v. The City of St. Louis, 44 Mo. 479, and cases therein referred to.)

VI. Laches do not attach to Ray county in the management of the school fund of said county, and the liability of the surety is in no manner affected or changed by reason of depreciation or damage to mortgaged premises. (7 Mo. 194; 15 Mo. 604.)

H. B. Johnson, for appellant.

I. Counties can exercise no powers except such as are expressly or impliedly delegated to them by the legislative power of the State. (Barton County v. Walser, 47 Mo. 189; Booth v. Town of Woodbury, 22 Conn. 118; Alley v. Inhabitants, etc., 53 Me. 446.) They take no powers by implication except those necessary to carry out those expressly granted. (Leavenworth v. Norton, 1 Kan. 432; Parker v. Baker, 1 Clark's Ch. 223; Kyle v. Malin, 8 Ind. 34; Ex parte Bennett, 30 Ala. 461; Hooper v. Emory, 14 Me. 375.) They are mere quasi corporations invested with corporate powers sub modo, and for a few specified purposes, but deficient in many of the powers incident to the general character of corporations. (Goodnow v. Commissioners, etc., 11 Minn. 31; Louisville, etc., R.R. Co. v. County Court, etc., 1 Sweed, 637.)

II. The power to purchase land, as is alleged to have been done by the county of Ray, is nowhere expressly granted, and cannot be implied as incident to the power to sell. (Chambers v. City of St. Louis, 29 Mo. 543; Russell v. Topping, 5 McLean, 194; Jackson v. Hartwell, 8 Johns. 422.) And a corporation cannot by a subsequent ratification make good the act of an agent which it has no authority to authorize to be done. (Downing v. Mount Washington R.R. Co., 40 N. H. 230; Hodges v. City of Buffalo, 3 Denio, 110.)

III. The management of the school fund by the counties is for the public good, and they are not liable for the nonfeasance or malfeasance of its officers and servants. (Murtaugh v. The City of St. Louis, 44 Mo. 79.)

IV. The County Courts, in the management of the school fund, do not represent the county, but are the agents of the State. (Marion County v. Moffett, 15 Mo. 604.) And any act done by the agent in excess of his authority cannot bind the principal.

V. Neither a failure on the part of the County Court to take real estate security, nor the permitting such real estate, if taken as security, to be depreciated in value, will release the personal security. The State is not affected by the laches of her agents. (Marion County v. Moffett, supra;United States v. Kirkpatrick, 9 Wheat. 720; United States v. Vanzandt, 11 Wheat. 184.)

Wallace & Mitchell, and Doniphan & Garner, for respondents.

I. Ray county is a quasi corporation, and has not only the powers expressly granted, but such as are necessary to carry out the granted powers. (Ang. & Ames Corp. 163, § 173; 2 Kent's Com. 277-9; Hann. & St. Jo. R.R. Co. v. Marion County, 36 Mo. 294, 303-4.) The County Court is the agent of Ray county, and all the acts of the agent within the scope of its authority, express or implied, are binding on the county; and the purchase, by the clerk, of the mortgaged property was binding on the county and the court. (33 Mo. 361; 29 Mo. 71; 28 Mo. 589; Ang. & Ames Corp., § 160.)

II. By virtue of “the care and management” of the school

funds imposed on them by law, and from the whole tenor of the school statute, Ray County Court became trustees of the county school fund, and were bound to use all lawful means to collect and restore amounts owing to that fund. Hence they are authorized, if necessary in their judgment to secure the funds and prevent the loss and sacrifice of real estate on which they are secured, to buy in the lands in trust for the county. (Hann. & St. Jo. R.R. Co. v. Marion County, supra;Chambers v. City of St. Louis, 29 Mo. 576; Ang. & Ames Corp., § 156; 2 Kent's Com. 280; 12 Mass. 546.)

III. The County Court of Ray county having ordered the sale of said property under said mortgage, and having caused the same to be bid off for the county, at the full amount of the debt secured by the mortgage, with interests and costs, thereby elected to take the mortgaged property for the debt, and the mortgage was thereby satisfied, both at law and in equity; and it was the duty of the County Court to have required of the sheriff a deed for said lands to the county, for the use of the respective townships whose school funds were secured by the mortgage. And the order of the County Court purporting to set aside the sale, and assuming to order a re-sale under the mortgage, was a nullity.

IV. By the act of the Ray County Court, acting for the county, in assuming to set aside the sale to the county and ordering a re-sale of the premises, defendant Barr, as surety for the mortgage debt, was prejudiced, both by the continued waste and depreciation in the value of the mortgaged premises, to the full benefits of which he was entitled, and by the additional interest accruing on said mortgage debt between the first and second sale; his hands were tied, and his right of action against the principal debtors suspended, whereby he was released and discharged from liability for said debt, even if such mortgage is considered as remaining in force. (McCune v. Belt et al., 38 Mo. 281, 292, and cases cited; id. 293; Ferguson v. Turner, 7 Mo. 497; Taylor v. Jeter, 23 Mo. 244, 250; Bank of Steubenville v. Leavitt & Carroll, 2 Am. Lead. Cas. 376; 1 Sto. Eq., § 327 et seq.; see also Rice v. Newton, 19 Mo. 363.)WAGNER, Judge, delivered the opinion of the court.

The material question that arises in this case regards the action of the court in sustaining the motion to strike out the replication. It appears from the record that Bently and Easter as principals, and Barr as surety, executed to the county of Ray their bond in consideration of a loan of school money. Bently and Easter also made and executed a mortgage on real estate, with the usual statutory power of sale, to secure the payment of the debt. Default being made in the payment of the principal and interest, the County Court of Ray county ordered the mortgaged premises to be sold, and, when the same was put up, authorized the county clerk to bid thereon.

The clerk bid the amount of the principal and the interest on the debt, and the property was struck off to him for the county on whose behalf he assumed to act. Immediately afterward the court, being of the opinion that it had no power to purchase the property in the name of the county, set aside the order of sale, and ordered the sheriff to proceed and re-sell.

At the second sale, Barr, the surety, bid in the property at a price considerably less than the amount of the debt and interest, and this action was brought to recover the residue.

The answer of the defendants stated that the property was sold, and that the plaintiff bid in the same for the full amount of the principal and interest, and alleged that that was a complete satisfaction of the debt.

The replication averred as new matter the proceedings of the County Court in setting aside the first sale, the re-sale by the sheriff and the purchase by Barr, when the property was re-sold. This replication, on motion, was stricken out.

The essential question raised by the replication, and which must be determined in this case, is whether the court possessed the power to buy in the land in the name of and for the use of the county. The money for which the debt was contracted and the mortgage was made belonged to the school fund, and was not the property of the county.

The statute provides that the County Courts, respectively, shall have the care and management of the school funds of the several townships within their jurisdiction, and that they shall cause accounts thereof to be stated and kept, so as to exhibit the funds of each township separately and the disposition thereof. Provision is also made for loaning out the school fund, and it is required that its payment shall be secured by the borrower giving a mortgage on unencumbered real estate, with a bond and additional personal security. The mortgage taken must be in the ordinary form of a conveyance in fee, and must recite the bond and contain the condition that if default shall be made in the payment of the principal or interest, or any part thereof, at the time when they shall severally become due and payable, then the sheriff of the county, upon giving notice, may proceed without suit to sell the mortgaged premises or any part thereof,...