Dowler v. State ex rel. Prunty

• Decision Date: 02 February 1937
• Docket Number: Case Number: 22617
• Citation: 1937 OK 72,66 P.2d 1081,179 Okla. 532
• Parties: DOWLER et al. v. STATE ex rel. PRUNTY et al.
• Court: Oklahoma Supreme Court

1937 OK 72

66 P.2d 1081

179 Okla. 532

DOWLER et al. v. STATE ex rel. PRUNTY et al.

Case Number: 22617

Supreme Court of Oklahoma

Decided: February 2, 1937

Syllabus

¶0 1. MUNICIPAL CORPORATIONS - Right to Maintain Taxpayer's Action - "Taxpayer" Defined.

A person chargeable with an ad valorem tax, or who owns taxable property within the taxing jurisdiction involved, is a taxpayer within the meaning of sections 5964 and 5965, O. S. 1931.

2. SAME - Sufficiency of Notice and Demand to Be Given Public Officials as Prerequisite to Suit.

Section 5965, O. S. 1931, contains no technical requirements as to the form of the notice and demand to be given before bringing suit by a taxpayer, and a written notice and demand which challenges the attention of the public officers receiving same to an irregularity of expenditure or to an illegal or fraudulent contract or disbursement of public moneys, and demanding suit, is sufficient thereunder, in the absence of an affirmative showing that the substantial rights of the defendants have been prejudiced by reason of some fault or omission in such notice and demand.

3. SAME - Action by Taxpayer in Name of State - Costs - Deposit of Money in Lieu of Cost Bond.

A suit brought in the name of the state by a taxpayer under sections 5964 and 5965, O. S. 1931, may be brought and maintained without giving a bond as security for costs, where money is deposited for such costs. The same is prosecuted, however, not at the cost of the state, nor cost free, but at the cost of the taxpayer, in the first instance, and is governed by chapter 2, art. 20, O. S. 1931, relating to costs in civil cases.

4. APPEAL AND ERROR - PLEADING - Discretion of Trial in Overruling Motion to Separately State and Number Causes of Action.

The ruling of the trial court in overruling a motion to separately state and number several alleged causes of action will not constitute grounds of reversal of a judgment, in the absence of a showing of abuse of discretion which resulted prejudicially to the party complaining.

5. COUNTIES - MUNICIPAL CORPORATIONS - Statutory Restriction on Disbursement of Funds.

By virtue of section 5948, O. S. 1931, all public funds of any county or any subdivision thereof shall be disbursed only in the payment of legal warrants, bonds or interest coupons.

6. SAME - VALIDITY OF GENERAL FUND WARRANTS - Prerequisite Appropriation by County Excise Board.

A general fund warrant cannot be legally issued or paid by a county or municipal subdivision thereof, except in pursuance of a specific appropriation previously made for the specific purpose of the county excise board of such county.

7. SAME - Considerations Determining Whether Claim May Be Legally Approved and Warrant Issued.

When the proper officers of a county or municipal subdivision thereof are called upon to approve or allow any claim, otherwise valid, against any fund for current expense, or against the general fund of the county or subdivision, they may look only to the estimate made and approved by the excise board of the county, and to the amount of debts already contracted against the various items of such appropriations and the warrants already issued against the same during such fiscal year, to determine whether they may approve the claim and issue a general fund warrant therefor. The fact that such general fund may have assets or cash on hand, in excess of the estimate made and approved by the excise board, does not change this rule, and it matters not from what source such assets may have been derived.

8. MUNICIPAL CORPORATIONS - Appropriation Pursuant to Annual Financial Statement and Estimate of Needs Held to Render Income Received From Municipally-Owned Utility at Once an Asset of General Fund Without Further Transfer.

When a city, owning and operating a public utility, includes in its annual financial statement and estimated needs an estimate of the anticipated income from its utility as a part of its estimated income from sources other than ad valorem taxation, and also includes therein an estimate of the needs for expenses of the operation of such utility, and seeks and obtains an appropriation of the sum needed for such operation, and in making this and the other appropriation made the estimated income of the utility is taken into consideration, then the rule is that the actual income of the utility, when received by the city in that fiscal year, becomes at once an asset of the general fund of the city without any necessity for further transfer of such income to the general fund.

9. SAME - Claim Allowed and General Fund Warrant issued in Excess of Appropriations by Excise Board Held None the Less Illegal Because of Purported Transfer by City Officials of Income From Municipally-Owned Utility to General Fund.

A claim allowed by city officials against the general fund of such city, and a general fund warrant issued thereon and paid out of such general fund in excess of appropriations made and approved by the excise board, is none the less illegal and unauthorized because such city officials may, by book entries or resolutions, have purported to transfer or place to the credit of such general fund the income, or what they term "profits," from the operation of a municipally-owned public utility. Funds which become a part of the assets of the general fund of a county or subdivision thereof, regardless of the source, may not be expended for any purpose, nor can a general fund warrant be legally drawn against such funds, until an estimate made and approved or an appropriation therefor is made by the excise board of such county.

10. SAME - Taxpayer's Action Against Officers to Recover Statutory Penalty for Illegal Expenditure of Funds in Buying Land for Park or Airport - Subsequent Election Authorizing Expenditure for Improvements Held no Defense.

In a suit to recover from officers of a city the statutory penalty for the unauthorized and illegal expenditure of public funds in the purchase of real estate for park or airport, which expenditure was illegal and unauthorized for lack of appropriation therefor, such officers may not plead as a defense a subsequent election at which the taxpaying voters authorized the expenditure of other public funds in the improving of such real estate.

11. SAME - Act Relating to Airports Held not to Validate Expenditures Illegal for Lack of Appropriation.

There is nothing in section 1, chapter 238, S. L. 1929, purporting to legalize or validate any prior expenditures of the public funds of a city which were unauthorized and illegal for lack of appropriation therefor, or for being in excess of the appropriations.

12. SAME - Legislature Without Power to Take Away Taxpayer's Cause of Action After Suit Commenced.

After suit has been commenced on a cause of action arising under the provisions of sections 5964 and 5965, O. S. 1931, the Legislature has no power to take away such cause of action, being specifically prohibited from so doing by the provisions of section 52, article 5, of the Constitution.

13. SAME - Burden of Proof on Taxpayer in Action Against One not Officer of Municipality.

In an action for the penalty imposed by section 5964, O. S. 1931, against one not an officer of the municipality, the burden is on the plaintiff to show that the party receiving the money had notice that the contract under which it was paid, or the payment itself, was unlawful, fraudulent, or void.

14. SAME.

In an action by a creditor of a municipal corporation, the burden is on him to show that all provisions of the law were complied with before his contract was entered into, and it is not material that he had no notice of the failure to comply with the statutes; but an action for a penalty under section 5964, O. S. 1931, against one not an officer of the municipality cannot be sustained, unless the defendant had notice of the vice in the contract under which the money is paid.

15. SAME - Evidence in Taxpayer's Action field to Sustain Judgment as Against City Officials but not as Against Creditor Receiving Illegal Warrant.

Record examined, and held, that the evidence herein is sufficient to sustain a finding that a sufficient number of signers of the notice and demand provided for under section 5965, O. S. 1931, were resident taxpayers and that the form of the notice and demand given is sufficient within the meaning of the statute; that the acts of the city officials in approving claims and issuing general fund warrants in excess of appropriations, or without an appropriation, were not ratified by a vote of the people, nor by the Legislature; and that there is no evidence to show knowledge of the facts necessary to render the defendant Dowler liable under section 5964, O. S. 1931.

Appeal from District Court, Kay County; Claud Duval, Judge.

Action by F.O. Prunty, taxpayer, in the name of the State, against M.M. Lively, Max M. Fife, and A.L. Hess, city commissioners, and H.M. Dowler and the Blackwell Zinc Company, and the City of Blackwell, to recover penalty for wrongful and unauthorized expenditure of public funds. From a judgment against three city commissioners and H.M. Dowler, the said defendants appeal. Affirmed as to defendants city commissioners, and reversed as to defendant H.M. Dowler.

J.E. Curran, Peyton E. Brown, and John S. Burger, for plaintiffs in error.

Sargent & Ross, Simons, McKnight, Simons, Mitchell, & McKnight, for defendants in error.

Arthur B. Honnold, Paul Avis, I.J. Underwood, and O.L. Lupardus, amici curiae.

WELCH, J.

¶1 This action was instituted under sections 5964 and 5965, O. S. 1931, which sections authorize suit by a taxpayer to recover double the amount of money wrongfully expended by public officials from the public funds. Judgment was had below against the defendants M.M. Lively, Max M. Fife, and A.L. Hess, city commissioners of the city of Blackwell, and against the defendant H.M. Dowler.

¶2 The facts are, in substance, that Dowler was the record owner of approximately 160 acres of real...