Harris v. Langford
| Decision Date | 28 March 1919 |
| Citation | 211 S.W. 19,277 Mo. 527 |
| Parties | L. HARRIS et al., Appellants, v. JAMES K. LANGFORD et al |
| Court | Missouri Supreme Court |
Appeal from Ripley Circuit Court. -- Hon. J. P. Foard, Judge.
Reversed and remanded (with directions).
Abington & Phillips for appellants.
(1) It was the duty of the county court in awarding the custody of the $ 29,000 drainage district fund to select as its custodian the banking corporation, association or individual banker whose bid would constitute the largest offer for the payment of interest for said fund. Laws 1915, p. 270, sec 5607; Secs. 3805 et seq., Laws 1915, p. 249. (2) It was the duty of the county court in selecting a depositary for these funds to obey the mandatory provisions of the statute which provides that the funds of said drainage district shall be deposited at the highest obtainable interest in some bank or trust company of Missouri. Laws 1915, p. 271, sec. 5607; Denny v. Jefferson County, 272 Mo. 436; State ex rel. v. Bourne, 151 Mo.App. 104; State ex rel. v LaFayette Co. Court, 41 Mo. 222; State ex rel. v Public Schools, 134 Mo. 306; State ex rel. v. Adcock, 206 Mo. 556. (3) The county court in handling the affairs and finances of the county cannot be governed by mere whim or caprice; to the contrary thereof, they act in handling the affairs of the county as trustees of an express trust; their duties are defined by law, which they should follow in performing their official acts. Denny v. Jefferson County, 199 S.W. 250; 39 Cyc. 393; Axman v. Smith, 156 Mo. 290. (4) The county court in selecting a depositary for the other funds of the county is required to obtain the highest rate of interest possible on daily balances. The statute provides just how the court shall proceed in its effort to obtain the highest rate of interest possible for the deposit of county funds. R. S. 1909, secs. 3803, 3804; Laws 1915, p. 249, sec. 3805. (5) The undisputed evidence is that if the county court in the instant case had accepted bids for the custody of this fund, it would have received a higher rate of interest than what it did get by arbitrarily awarding the custody of the funds to the Doniphan State Bank. This being true, it was the duty of the trial court to set the judgment of the county court aside and its failure to do so is error. Laws 1915, p. 271.
Chas. B. Butler for respondents.
(1) The county court is presumed to have done its duty in awarding the funds, and the burden of proving otherwise rests upon plaintiffs and has not been done in this case. State ex rel. v. Flemming, 147 Mo. 10; Martin v. Stoller, 107 Mo. 317; State ex rel. v. Fort, 180 Mo. 108. (2) The court must under the statutes exercise its reasonable discretionary powers. It did exercise a reasonable discretion and secured more than the market value in interest for these funds at the time they were let. State ex rel. v. Fort, 180 Mo. 108; State ex rel. v. Hawkins, 130 Mo.App. 41. (3) The courts will not direct inferior courts how to exercise their discretion or what judgment to render, when they are vested by law with discretionary powers, and will not disturb their findings unless gross abuse is apparent. Regan v. Iron Co., 226 Mo. 79; Barrett v. Stoddard Co., 246 Mo. 510; State ex rel. v. Township Board, 188 Mo.App. 266; State ex rel. v. Dreyers, 183 Mo.App. 486; Denny v. Jefferson County, 272 Mo. 436. (4) The demurrer to the petition should have been sustained. The petition shows on its face that the contract made by the court was not a county contract and such as could be inquired into by the circuit court upon the petition of fifty resident taxpaying citizens of the county. Sec. 3729, R. S. 1909. (5) The county court were duly authorized in any way they saw fit to select a depositary. They did not have to give notice and receive sealed bids. The only thing they were required to do was to obtain the highest obtainable interest for these funds. Sec. 5607, p. 270, Laws 1915.
On May 18, 1916, a petition was filed in the circuit court of Ripley County, Missouri, by more than fifty individuals, as plaintiffs, claiming to be resident, solvent and responsible tax-paying citizens of Drainage District Number 3, in Ripley County aforesaid, against defendants Langford, Harper and Glore, as justices of the county court of said county, defendant McClain, as treasurer of said county, and defendant Doniphan State Bank, a Missouri corporation doing a banking business in said county. The petition charges the members of the county court aforesaid with making an illegal agreement with the Doniphan State Bank, on May 2, 1916, by the terms of which $ 29,000, realized from the sale of bonds belonging to Drainage District No. 3 in said county, was to be deposited with said Doniphan State Bank, in consideration of four per cent to be paid by said bank on daily balances, payable monthly.
The petition further alleges that said county court, by an order entered of record, directed McClain, as treasurer of said county, to turn over the proceeds of the sale of said bonds to said bank, and unless restrained from so doing he will turn over the same to said Doniphan State Bank.
It is further averred that there was, on the above dates, three other equally solvent and available banking corporations in said county; that said court, in violation of its duty, neglected and refused to advertise for bids for said funds; that it refused and neglected to take any other steps to secure, for the use and custody of said funds, the highest amount obtainable on daily balances, payable monthly, but upon the contrary, wrongfully, illegally and in violation of the interests of said drainage district and the taxpayers therein, selected said Doniphan State Bank as depositary for said fund; that there were other solvent banks, in said county, who could and would have, had they been offered an opportunity so to do, bid a higher per cent on daily balances, payable monthly, than that agreed to be paid by said Doniphan State Bank; that if offered an opportunity they will yet do so, etc.
The petition prays for a cancellation of said agreement or contract; that McClain, as treasurer, be enjoined from disposing of said funds, until the termination of this action; that the county court aforesaid be ordered to advertise for bids for the custody of the funds aforesaid, and that it be ordered to award said funds to the highest and best bidder in the manner directed by law and for general relief.
The petition was sworn to by plaintiff, L. Harris, in behalf of himself and co-plaintiffs.
Defendant McClain filed a separate answer, and after admitting most of the allegations in the petition to be true, denied that he will comply with the order of the county court aforesaid, or that he was about to do so. He alleges that he has complied with the law in selecting the Ripley County Bank -- a Missouri Corporation located in said county -- which is the present depositary of the funds of said county, as the depositary of the funds of said Drainage District No. 3; that he did so, because the Ripley County Bank offered to pay four and a half per centum on daily balances of said fund, whereas the Doniphan State Bank offered to pay only four per centum on daily balances of said fund. He prays for an order directing him to turn over said funds to said Ripley County Bank, etc.
The Doniphan State Bank filed its separate answer, admitting therein its incorporation; that Langford, Harper and Glore are county judges, as alleged; that McClain is county treasurer and ex-officio treasurer of said Drainage District No. 3. It denies every other allegation in the petition. It further alleges that on May 2, 1916, the county court aforesaid selected it as the depositary for said drainage fund; that it secured said fund by a surety bond, duly approved by the county court; that thereafter said McClain, as treasurer, etc., wilfully and unlawfully refused, and still refuses to permit it to have the custody of said funds; that said treasurer deposited said funds in a St. Louis bank, which gave no bond to secure the same. It alleges that the bonds, funds and taxes referred to in the petition belong to Drainage District No. 3, and not to Ripley County; that the persons named as plaintiffs have no interest therein; that they are not resident, solvent and responsible tax-paying citizens of Ripley County, and of Drainage District No. 3, within the meaning of Section 3729, Revised Statutes 1909; that the contract does not affect Ripley County, but only concerns the Drainage District aforesaid. It further denies any bad faith upon its part.
Defendants Langford and Harper filed their separate answer and admitted therein the incorporation of the bank; that they, with Glore constituted the county court; that McClain was treasurer of the county, etc. They denied every other allegation of the petition. They further allege that they selected the Doniphan State Bank for the depositary of the $ 29,000 aforesaid, as well as the taxes, sinking and interest funds hereafter to be collected by said drainage district; that they secured said funds by a surety bond, signed by a surety company, admitted to do business in Missouri; that said bond was duly approved by the county court aforesaid. They allege that they acted in good faith in respect to said matter; that McClain, as treasurer aforesaid, unlawfully and in disregard of his official duty, refused to deposit said funds with the Doniphan State Bank, or permit it to have the custody thereof, but deposited same with a bank in St. Louis, Missouri, without any bond to secure the same. The remainder of the answer is similar to that of defendant...
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