Cochran County v. West Audit Co.

• Decision Date: 29 February 1928
• Docket Number: (No. 2973.)
• Citation: 10 S.W.2d 229
• Parties: COCHRAN COUNTY v. WEST AUDIT CO.<SMALL><SUP>*</SUP></SMALL> et al.
• Court: Texas Court of Appeals

10 S.W.2d 229

COCHRAN COUNTY v. WEST AUDIT CO.^* et al.

(No. 2973.)

Court of Civil Appeals of Texas. Amarillo.

February 29, 1928.

Rehearing Denied March 21, 1928.

Appeal from District Court, Lubbock County; Clark M. Mullican, Judge.

Action for mandamus by the West Audit Company against the First National Bank of Lubbock, Tex., in which defendant impleaded Cochran County and another as defendants. From the judgment, defendant county appeals. Reformed and affirmed.

Bean & Klett, of Lubbock, for appellant.

Lockhart & Garrard, F. D. Brown, Wilson & Randal, and J. I. Kilpatrick, all of Lubbock, for appellees.

JACKSON, J.

This suit was instituted in the district court of Lubbock county, Tex., by the plaintiff, West Audit Company, a corporation, against the First National Bank of Lubbock, Tex., defendant.

Plaintiff alleges that the defendant is a banking corporation and is the depository of and has in its possession funds and money belonging to Cochran county, and as such depository is bound and obligated to pay out of such funds the checks and vouchers drawn thereon by the county treasurer of said county; that about November 19, 1926, Cochran county issued five warrants or vouchers of said county, against the general fund thereof, payable to plaintiff, each in the sum of $1,000; that after said warrants were issued and delivered, they were surrendered to the county treasurer, who canceled them and issued to plaintiff, in lieu thereof, five checks dated November 19, 1926, drawn on the defendant bank, and payable out of the general funds of the county; that on the date of the issuance and delivery of said checks, the defendant did not have sufficient funds of the county to pay said checks, and plaintiff held them until there were funds in said depository sufficient to pay the checks or a part thereof; that on February 24, 1927, the defendant had on hand to the credit of the general fund of the county a sufficient sum to pay $2,000, and on said date the plaintiff presented checks Nos. 776 and 777 for payment, which were refused; that said bank, as depository, has on hand a sufficient sum to the credit of the county to pay all of said checks, and its refusal to pay the checks presented was without authority, and plaintiff is entitled and sues for a writ of mandamus compelling said defendant to pay all of said checks, or so many thereof as the fund it holds, as depository, will satisfy and discharge.

The defendant bank answered, admitting that it was and is the depository of Cochran county, but says that on or about November 26, 1926, the county treasurer of Cochran county instructed it not to pay said checks; that at the time of their presentation for payment, it had, as depository of Cochran county, the sum of $1,421.51, which was insufficient to pay the checks presented; that at the time of answering, it had on hand as depository of said county the sum of $1,442.26; that it has no interest in this suit, holds the money as depository or stakeholder, and tenders into court the money it has, less reasonable attorney's fees claimed for answering in this suit, which it alleges to be $500. The bank alleges that both plaintiff and Cochran county, acting through its treasurer, Mrs. Addie Spickard, are claiming the funds held by it as depository of Cochran county, and it impleads both Cochran county and its treasurer, and asks for its attorney's fees.

Cochran county answered:

That it was the owner of the money held by the bank, as its depository, and that said sum is a part of its general fund and neither the bank nor the plaintiff have any right thereto, or any part thereof. That the five checks sued on by plaintiff, each in the sum of $1,000 issued by the treasurer of the county, were, at the date of the issuance thereof, and still are, void and unenforceable. That on October 11, 1926, the commissioners' court of Cochran county, without complying with articles 1641 and 2368 of R. C. S. 1925, entered on its minutes an order reading:

"Motion by Commissioner Shipman and seconded by Commissioner Bennett that we get West and West to audit the county books. Motion carried."

The county then sets out an order of November 19th, allowing appellee's account for $10,000, and an order of November 22d, rescinding the allowance of said account. That on November 23, 1926, the commissioners' court passed and entered upon its minutes an order which reads:

"Be it ordered by said court that the contract of West Auditing Company be hereby entered into the minutes of said court and be as follows:

"The State of Texas, County of Cochran:

"Whereas, the County of Cochran, State of Texas, acting by and through its duly elected, qualified and sworn Commissioners' Court, desires a general audit of all of the financial business affairs of said county and of the various offices therein during the period covered by this contract; and

"Whereas, West Audit Company, a corporation, of Abilene, Texas, has made a proposition to said county to conduct said audit from time to time during the term of this contract as hereinafter set out:

"Now, Therefore, said County of Cochran, State of Texas, acting through said Commissioners' Court, first party, and said West Audit Company, second party, have this day entered into the following contract:

"Said first party does hereby employ said second party to make said audits annually during the period of this contract and said second party does hereby agree to make said audits in a careful pains-taking manner, furnishing to first party a complete and detailed statement of the result of such audits, said auditing to be begun on or about the first day of November.

"The term of this contract shall include the years 1924, 1925, 1926, 1927, and 1928, and the first part of same shall be begun on or about November 1st, 1926, and shall cover the period from the date of the organization of Cochran County to and including October 31st, 1926. The verification of records of the succeeding years to be begun on November 1st of each year beginning 1927, or as near that date as is practicable and to be completed as rapidly as is consistent with thorough and accurate auditing.

"As compensation for said work first party agrees to pay to second party at the rate of twenty-five dollars per day of each senior accountant who shall be employed by second party therefor, and at the rate of fifteen dollars per day for each junior accountant who shall so be employed, said second party to employ not exceeding two senior accountants in said work, the number to be so employed to be determined by second party. The said second party to employ not exceeding two junior accountants. And in addition to such compensation, first party is to pay the expense of each of said accountants while actually employed in said work.

"Executed in duplicate, each copy to be original, this the 8th day of November, 1926. County of Cochran, Texas, by J. D. Caldwell, County Judge, G. H. Mathews, Commissioner, Pre. 1, ____, Commissioner, Pre. 2, W. A. Herridge, Commissioner, Pre. 3, Lem Shipmen, Commissioner, Pre. 4. (First Party.) West Audit Company, by M. E. West. (Second Party.)

"Motion made by Commissioner Shipmen and seconded by Commissioner Mathews, to allow account filed by West Audit Company in amount of $10,000.00 for auditing County records to November 1, 1926, same being in the denomination of $1,000.00 each, and being dated November 19th, 1926."

That on December 20th thereafter, the commissioners' court passed and entered on the minutes of the court the following order:

"Whereas, there is doubt as to the final settlement of the claim of the West Audit Company and the issuance of the warrants and checks by the officers of the county therefor; therefore, it is the judgment of the court that certain outstanding checks of the county treasurer should be held up and not paid at this time, and the county treasurer is hereby instructed to have the bank to stop payment of said checks pending further orders of this court."

The county alleges that on November 19, 1926, the commissioners' court and plaintiff caused ten warrants of $1,000 each, numbered from 1215 to 1224, inclusive to be issued by the county clerk of Cochran county, payable to plaintiff, and on the same date, the plaintiff presented to the treasurer of the county five of such warrants, numbered 1215 to 1219, inclusive, and the treasurer issued and delivered to plaintiff the five checks sued on; that while said orders and the account of plaintiff purport to show that plaintiff had been engaged to audit the books of Cochran county and make a report thereof, in truth and in fact, no such report and order had been made and delivered, and that the checks sued on and the warrants upon which they were issued and warrants numbered 1220 to 1224, inclusive, now in the possession of plaintiff, and the purported contract between Cochran county and plaintiff, are all void and of no effect, because said warrants and checks were issued without consideration, in that, at the time of their issuance, plaintiff had not and has not to this date performed the services for said warrants and checks; that the commissioners' court was without authority to allow the account as presented until the service had been performed; that if it is mistaken as to its plea of failure of consideration, then it says that the checks and the warrants upon which they are based are void, because issued on the representation of plaintiff that it would, within a reasonable time audit the books of Cochran county, to and including December 31, 1926, which it has failed and refused to do; that the $10,000 purported to be allowed for the services of plaintiff in auditing the books of the county is out of proportion to the value of the services rendered, is unconscionable, and a fraud upon the taxpayers and the county, which was sparsely populated, as the reasonable value of the services contemplated in the contract could not have...