Denny v. Jefferson County

• Decision Date: 03 December 1917
• Citation: 199 S.W. 250,272 Mo. 436
• Parties: J. V. DENNY et al. v. JEFFERSON COUNTY et al., Appellants
• Court: Missouri Supreme Court

199 S.W. 250

272 Mo. 436

J. V. DENNY et al. v. JEFFERSON COUNTY et al., Appellants

Supreme Court of Missouri, First Division

December 3, 1917

Appeal from Jefferson Circuit Court. -- Hon. E. M. Dearing, Judge.

Reversed (in part) and remanded.

R. E Kleinschmidt, H. B. Irwin and Ernest A. Green for appellants.

(1) Every presumption is in favor of the county court acting from proper and right motives and the burden is upon the plaintiff to overthrow such presumption by a greater weight or preponderance of the evidence. Beardon v. Miller, 54 Mo.App. 201; State ex rel. v. Flemming, 147 Mo. 10; Martin v. Stoller, 107 Mo. 317; State v Brown, 75 Mo. 317; State ex rel. v. Weatherby, 45 Mo. 17; Agan v. Shannon, 103 Mo. 661. (2) Quo warranto would lie to declare a forfeiture of the Trust Company's charter for misuser and nonuser of its franchise, in doing a general banking business instead of a trust company business, in loaning money without real estate or collateral security and in paying no interest on daily balances. Secs. 1124, 2631, R. S. 1909; State ex inf. v. Oil Co., 218 Mo. 1; 32 Cyc. 427; State ex rel. v. Social Club, 169 Mo.App. 149; State ex inf. v. Jockey Club, 200 Mo. 51; State v. Trust Co., 144 Mo. 562. (3) The statute authorized the county court to exercise its reasonable discretionary powers. The county court did exercise a reasonable and wise dicretion and, under such circumstances, the court will not interfere by mandamus injunction, prohibition or in any other manner. State ex rel. v. Hawkins, 130 Mo.App. 41; State ex rel. v. Gregory, 83 Mo. 137; State ex rel. v. Fort, 180 Mo. 108; High on Extra. Leg. Rem., secs. 24, 92, 94; Mechem on Pub. Officers, sec. 991. (4) Where discretion is vested in a public officer the courts will not direct how it shall be executed or what conclusion or judgment shall be reached. State ex rel. v. Jones, 155 Mo. 576; State ex rel. v. McGrath, 91 Mo. 386; State ex rel. v. Francis, 95 Mo. 44; State ex rel. v. Harris, 176 S.W. 9. (5) The fact that the successful bidder must file a bond for the faithful performance of its duty does not deprive the county court of a discretionary power or preclude it from rejecting any bid, and the court may, in its discretion, make the award to the lowest bidder to avoid litigation. State ex rel. v. Hawkins, 130 Mo.App. 41; Commonwealth v. Smith, 92 Pa. 349; People v. Dorsheimer, 55 How. Pr. 118. (6) The circuit court has no authority to select a depositary. It can only direct the county court as to its duties in making the selection. State ex rel. v. Harris, 176 S.W. 9; Sec. 3805, R. S. 1909.

Clyde Williams for respondents.

(1) Powers and management and control of banks and trust companies. Secs. 1094, 1124, 1098, 1099, 1129, 1125, 1106, 1132, 1111, 1126, 1131, 3002, 3003, 3004, 3006, 9972, 10001, R. S. 1909; Laws 1911, p. 151; Bank v. Hill, 148 Mo. 380; Bank v. Leyser, 116 Mo. 51; Muth v. Trust Co., 88 Mo.App. 596; State ex rel. v. Trust Co., 144 Mo. 562; Stone v. Trust Co., 150 Mo.App. 331. (2) The duty of the county court in the selection of a depositary. Secs. 3729, 3803-3805, 3813, 10886, R. S. 1909; Reagan v. County Court, 226 Mo. 79; Barrett v. Stoddard County, 246 Mo. 501; State ex rel. v. Hawkins, 130 Mo.App. 41; State ex rel. v. Bourne, 151 Mo.App. 104; State ex rel. v. Public School, 134 Mo. 306; State ex rel. v. Adcock, 206 Mo. 556; State ex rel. v. Roach, 230 Mo. 446.

BROWN, C. Railey, C., concurs. Woodson, J., concurs in the result.

OPINION

BROWN, C.

This is an injunction suit brought by 450 taxpaying citizens of Jefferson County to set aside an order of its county court designating the Bank of Hillsboro as depositary of the county funds, and to enjoin the county treasurer from depositing such funds or the district or capital school funds thereof in said bank under and by virtue of such order, and to require him to withdraw all such funds as may have by him been deposited in said bank, and to restrain the county court and judges thereof from further recognizing such order, and to require the court to accept the bid of the Jefferson Trust Company, or proceed under the statute to select some depositary of such funds.

The petition states that the county court caused due notice to be given that sealed proposals would be received by it at its May term, 1913, until noon of the first day of said term, from banking corporations, associations or individual bankers in said county, for the deposit of the county funds for the two years next ensuing after the date of such proposals, and that for the purpose of letting said funds the court divided them into two equal parts. That there were, on the date named in the notice, two bids accompanied by the deposit required by law, one from the Jefferson Trust Company, offering to pay three and one-fourth per cent per annum upon daily balances upon all the funds, and two and three-fourths per cent on one-half the funds should one-half be awarded it; also one bid from the Bank of Hillsboro offering to pay two per cent on daily balances for all the funds. That the county court selected the Bank of Hillsboro as the depositary. It states that the county court gave no consideration to the bids of the Jefferson Trust Company, and took an insufficient bond from the Bank of Hillsboro; that in making its award and approving the bond the court did not act in good faith and with due regard of the best interests of Jefferson County and was actuated and controlled by improper motives. That the injury is irreparable and no adequate remedy exists at law. All this is set out with much detail. The cause was tried on an amended answer which denies generally and specifically the allegations of the petition and states that the Bank of Hillsboro was selected because it was safer, sounder and more responsible and reliable than the Jefferson Trust Company, and that the selection of the Bank of Hillsboro as the depositary was in good faith, without partiality, prejudice or favoritism, and with due regard for the best interests and welfare of Jefferson County and its taxpayers. It also alleged that the Jefferson Trust Company, while incorporated as a trust company, was doing a general banking business, and was guilty of such misuser and non-user of its corporate franchises as to render it unsafe as a depositary of the public funds. The testimony showed that both corporations were of good reputation and solvent. The two judges of the county court who testified in the cause testified freely to those facts.

Certain business acts and practices on the part of the Trust Company were shown in evidence, which are alleged by appellants to be improper and in violation of its charter. These will be noticed under the proper heads in the opinion.

One of the county judges did not testify. The others were present and upon the stand and failed to testify that they knew or believed anything derogatory to the character and financial soundness of the Jefferson Trust Company. One of them testified that he came to the court, on the morning bids were received, ignorant as to who the bidders would be. He did not vote because the other judges voted for the Bank of Hillsboro. Had it been necessary he would have voted the same way. The Presiding Judge had been a stockholder, director and vice-president of the bank when he was elected as judge for the term beginning January 1, 1911, soon after which he sold his stock and resigned as vice-president and director. One of the reasons he gave for voting for the Bank of Hillsboro was that it had always taken care of the warrants when the money was not immediately available in the funds upon which they were drawn. Mr. Williams said that the Presiding Judge (Winer) had told him that he had promised Mr. Donnell, one of the directors of the Bank of Hillsboro, before the election, to give him the money. Judge Winer denied this by saying, "If Mr. Williams says so, I might have done it." Mr. Kidd testified that Judge Winer advised him not to take stock in the Jefferson Trust Company, saying, "It was a Republican scheme, and damned if they could fool him for a moment." George Russel testified that in speaking of his action in awarding the funds to the Bank of Hillsboro, Winer said: "If you ever expect the Republicans to elect you to office, you are left; they will never do it." Other similar statements were in evidence, none of which were denied by Judge Winer. Judge Kerckhoff, the other member of the court, although a defendant, did not testify. The district and capital school funds, not at the disposition of the county except to loan, amounted to $ 50,000. The findings and judgment of the court are as follows:

"Now this day come the parties, plaintiffs and defendants, both in person and by attorney, and submit this cause to the court upon the pleadings and proof adduced, and the court being fully advised doth find that at the May term, 1913, of the county court of Jefferson County, Missouri, said county court advertised for bids, as by law provided and required, for the deposit of all the funds belonging to said county for the purpose of selecting a county depositary; that as a result of said advertisement the Bank of Hillsboro, a banking corporation, filed its bids to become the depositary, and its bid was two per cent per annum on daily balances; that the Jefferson Trust Company, a corporation doing a general business, also bid to become the depositary for the funds of said county and its bid was three and one-quarter per cent per annum on daily balances; that no other bid or bids were made; that on the same day the bids were filed they were opened by the county court and the award was then and there let to the Bank of Hillsboro, the lowest bidder; that the Bank of Hillsboro was a solvent institution and...