Goodnow v. Commissioners of Ramsey Co.
| Decision Date | 01 January 1866 |
| Citation | 11 Minn. 12 |
| Parties | E. A. GOODNOW vs. THE BOARD OF COMMISSIONERS OF RAMSEY COUNTY. |
| Court | Minnesota Supreme Court |
1. The bonds and interest warrants in question were issued without authority. The act relative to the improvement in question provides in what manner the said work shall be paid for, to-wit: Act of May 23, 1857; Session Laws 1857, Extra Session, p. 301. This is the only authority vested in the county to make payment for the grading of the road, and such payment is required to be made in county orders. No authority is given the county to issue bonds, much less interest warrants, for this purpose. The law is well settled, that where a municipal corporation is empowered to perform an act, but required to perform such act in a particular manner prescribed, the mode or manner prescribed must be followed, or otherwise the act is void. Brady v. Mayor of New York, 2 Bosw. 173; 20 N. Y. 312; Bonesteel v. Mayor of New York, 22 N. Y. 162. Also general doctrine in Farmers' Loan and Trust Co. v. Carroll, 5 Barb. 649; Head & Amory v. Providence Insurance Co. 2 Cranch, 127; The Bank of Augusta v. Earle, 13 Pet. 519, 587; Thompson v. Schermerhorn, 6 N. Y. 92. The supreme court of this state has steadily held the same doctrine. Thus, where the charter of the City of St. Paul authorized the corporation to contract for street grading, but required the work to be let to the lowest bidder after giving due notice, it was held that unless the work was let in this manner, the contract would be void. Nash v. The City of St. Paul, 8 Minn. [172]. And so where a road was constructed under a special act, which provided that a statement of the expense, etc., should be filed with the proper boards of county commissioners, and that orders were to be drawn on the treasurers of the proper counties for the amounts required to be paid by such counties for the work, it was held that orders drawn prior to the filing of such statements were void. Thorne v. Washington Co. 7 Minn. [150]. A corporation which is confined in its expenditures to a particular fund, may not create a debt or borrow money beyond such fund without express authority. Regents of the University of the State of Minnesota v. Hart, 7 Minn. [73]. There is an obvious and substantial difference in county orders, and bonds drawing interest, and payable at a future time. The county orders do not draw interest nor entail a permanent debt on the county, as they are receivable at all times in payment of taxes, and are to be paid, as there are funds in the treasury, in the order of presentation. Minn. Stat. 160, ch. 7, § 42. By issuing bonds the county might place it out of its power to pay the debt for fifty years, which the statute evidently intended should be discharged as speedily as practicable. The county is also obligated by such bonds to pay interest, which would be avoided by issuing orders. In the present case the claim is really for interest, the suit being brought upon interest warrants, or coupons attached to the bonds. If the work had been paid for in orders, therefore, his claim for interest would not exist. That the act intends that this particular mode of payment must be pursued, is plain from its phraseology; the language is county orders, a species of security, or evidence of debt, well understood. The act also provides that these county orders shall be "subject to the same rules as other county orders issued by said county commissioners," that is to say, receivable in taxes, etc. See case of School District v. Thompson, 5 Minn. [280]. "Though the giving a note to pay a debt of the district in futuro, might seem to the district or trustees most convenient, the legislature has not thought fit to grant authority for such purpose." Id. 287. If the act of issuing the bonds was void, any attempted ratification by the county commissioners would be equally void. "If the corporation had no power to make, it of course could not ratify or confirm such a contract so as to become liable thereon." Nash v. City of St. Paul, 8 Minn. [172]; Brady v. Mayor of New York, 2 Bosw. 173; 20 N. Y. 312. So far from there being any legislative confirmation of these bonds, the legislature passed an act shortly after their issue, declaring, in effect, that these bonds were "illegally issued," and authorizing the county commissioners, in their discretion, to take up these illegal bonds at the rate of not over sixty per cent. upon the dollar. Sec. 11, Act of March 12, 1861, Laws of 1861, p. 259. This act seems to treat the entire proceeding under the former act as a nullity (except as to laying out and platting the road), and directs a new assessment of damages, etc. Second, it does not appear that the commissioners appointed to open the street gave the proper notice to the property owners; for which reason it is claimed that their proceeding was utterly void, and that they had no authority to contract for the grading. Sec. 3 of the act of May 23, 1857, provides, that "they shall thereupon cause a notice to be published once in each week, for at least three weeks, in two newspapers published in said county, that said plat has been deposited as aforesaid, and that they will meet at a time and place therein specified, to ascertain and assess the damages and recompense to be paid to the owners of lands required to be taken as aforesaid, and, at the same time, to determine what property will be benefited or injured by such improvement, and assess the damages and expenses thereof on the real estate of persons benefited." Laws of 1857, (Ex. Sess.) p. 399. This notice might be considered in the nature of the summons or citation to the parties interested; it was, undoubtedly, a most essential step in the proceedings, and its omission would render the act of the commissioners void for want of jurisdiction. Ullman v. Lion, 8 Minn. [381]; Thorne v. Washington Co. 7 Minn. [150]. The title to the land required for the road never became public property by reason of this defect, and the commissioners had no right to grade it, or contract for its grading, nor was the county liable to pay for it. The act of March 12, 1861, was passed undoubtedly in view of the illegality of this proceedure, and requires the proceeding to commence de novo. Laws of 1861, p. 298, etc.
Points and authorities for respondent: —
A county has the inherent power to incur a debt for a legitimate county purpose, and to issue evidences of such debt, including bonds and promissory notes. "A corporation, without any express power in its charter for that purpose, may make a negotiable promissory note or bill of exchange when not prohibited by law from doing so, provided such note or bill of exchange be given for a debt contracted in the course of its legitimate business." Halstead v. The Mayor, etc., of the City of New York, 5 Barb. 224; Chaska Co. v. The Board of Supervisors of Carver Co. 6 Minn. [204]. The improvement of the road in question was a legitimate county expense, in the absence of the special act referred to. Pub. Stat. 153, § 5. The special act providing for the issuance of county orders therefor, directly makes the road a county expense. The commissioners were not confined to the issuance of county orders for the work. County orders are a mere means for drawing money out of the county treasury and do not constitute a payment. The section of the law upon this subject was not inserted therein for the purpose of setting aside any particular fund for the payment of the improvement, but was so inserted for the purpose of having the performers of the work promptly paid. It was for the benefit not of the county, but of the contractors. It was the intention of the legislature by the law to compel the road to be built promptly at the county expense, which road the county had before the power, but not the inclination, to build. If the contractors chose to waive this benefit, and give the county a postponement of payment, the county should not be allowed to object. The bonds were simply evidence of a prolongation of the time of payment, virtually county orders on time. If the county had issued its orders for this debt, it could have issued bonds to raise money to pay them, or issue bonds to take up the orders; and it certainly should be allowed to do directly what it could so do indirectly. Pub. Stat. 159, § 38; 5 Iowa, 380, 383. Again, the county had a right to issue...
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