Jackson County v. Fayman

• Decision Date: 21 December 1931
• Docket Number: 29699
• Citation: 44 S.W.2d 849,329 Mo. 423
• Parties: County of Jackson, Appellant, v. J. H. Fayman and Massachusetts Bonding & Insurance Company
• Court: Missouri Supreme Court

44 S.W.2d 849

329 Mo. 423

County of Jackson, Appellant, v. J. H. Fayman and Massachusetts Bonding & Insurance Company

No. 29699

Supreme Court of Missouri

December 21, 1931

Appeal from Jackson Circuit Court; Hon. Ben Terte, Judge.

Reversed and remanded.

Fred A. Boxley, Rufus Burrus and Elmer B. Hodges for appellant.

(1) There was before the court evidence from which the jury might have found that the warrant was procured by fraud. Mosby v. Commission Co., 91 Mo.App. 500. (2) There was before the court undisputed evidence showing that the warrant was illegally issued. Sec. 10736, R. S. 1919; Hillside Securities Co. v. Minter, 300 Mo. 380. (3) Under such circumstances the county court had the right to cancel the warrant and to order the county treasurer not to pay it, even though it did not have the warrant in its physical possession. Sec. 36, Art. VI, Missouri Constitution; State ex rel. Buckner v. McElroy, 309 Mo. 595; Secs 9560, 9561, 9570, R. S. 1919; Sears v. Stone County, 105 Mo. 236; State ex rel. v. Diemer, 255 Mo. 336; State ex rel. v. Hill, 272 Mo. 206; Wilson v Knox County, 132 Mo. 387; Phelps County v Bishop, 46 Mo. 68. (4) In disbursing funds the county treasurer acts merely as a ministerial officer under the direction of the county court; and on the rescission of the order issuing the warrant, he loses his power to pay it. State ex rel. v. Williams, 232 Mo. 56; State ex rel. v. Adams, 161 Mo. 349; Harrison County v. Ogden, 165 Iowa 325, 145 N.W. 687; Frankl v. Bailey, 50 P. 188.

William B. Bostian and Madden, Freeman & Madden for respondents.

(1) Fayman, as county treasurer, was a ministerial officer and had no option except to pay the warrant. The duty of resisting payment devolved upon the county court and its counsellor, who had four years within which to test its validity in a court of competent jurisdiction. State ex rel. v. Adams, 161 Mo. 164; State ex rel. v. Nelson, 310 Mo. 534. (2) The attempted cancellation of the warrant was a nullity. (a) The order was based on an unenforceable and illegal agreement of compromise. Sec. 2962, R. S. 1929; Carter v. Reynolds, 315 Mo. 1233; State ex rel. v. Grinstead, 314 Mo. 55; Woodfolk v. Randolph Co., 83 Mo. 506; Andrews v. Ripley Co., 181 Mo. 46; Morrow v. Pike Co., 189 Mo. 624. (b) The county court had no jurisdiction of the warrant or the parties or the subject-matter of enforcing a specific performance of the alleged contract. (c) The county court had no jurisdiction to cancel the warrant at a term subsequent to the one wherein it was issued. State ex rel. v. Treasurer of Callaway County, 3 Mo. 228; State ex rel. v. Adams, 161 Mo. 349; State ex rel. v. Nolen, 310 Mo. 526.

Sturgis, C. Ferguson and Hyde, CC., concur.

OPINION

STURGIS

Jackson County brought this suit against J. H Fayman, county treasurer of that county, and the surety on his official bond to recover the amount of a certain county warrant alleged to have been wrongfully paid by such treasurer from county road funds after an order not to do so. The county warrant which is alleged to have been wrongfully paid by defendant as county treasurer was issued by plaintiff to W. A. Ross in part payment for construction of a public road in Jackson County under a contract with the county. The petition alleges that the issuance of the warrant in question was procured by false representations as to the amount and character of the work performed by Ross in constructing this public road; that Ross had already been paid all that was due him for the road construction work and therefore the warrant in question was without consideration and was issued in payment for work not performed. It is further alleged that later, but before said warrant was paid by defendant, the county court on investigation discovered the falsity of the claim and that Ross had already been paid all and more than was justly due him under said road contract; that thereupon the county court, by order duly made and served on defendant, cancelled and annulled said county warrant and directed defendant as treasurer not to pay the same. The defendant disregarded this last mentioned order and paid said county warrant to Ross out of the county road funds amounting, with interest, to about $ 23,000. Plaintiff also alleged that shortly after this county warrant was issued to Ross and before its payment, it brought a suit against Ross and the sureties on his road contract bond to recover the excess payment which Ross had received over and above what was justly due him on said contract, which suit was compromised, settled and dismissed on an agreement reached by the attorneys representing the respective parties, and which settlement agreement included the surrender and cancellation of the county warrant now in question. It is claimed by defendant (not a party to that suit or the settlement, but merely reflecting Ross's contention) that this compromise was never fully consummated, but was tentative only, and that Ross had a right, as he did do, to withdraw his offer of compromise. It was shown, however, that the matter of compromise and settlement of the controversy between Jackson County and Ross as to whether Ross had been overpaid for the road work done by him had progressed so far that the following writing was executed and signed by the attorneys representing the respective parties litigant, to-wit:

"MEMORANDUM

"The general arrangement in re compromise between Jackson County and the Messrs. Ross is as follows:

"(1) Outstanding 1920 Special Road & Bridge Fund warrant, aggregating upwards of $ 20,000, including interest, to be surrendered for cancellation.

"(2) Full formal release and final settlement agreement to be executed and approved. This is to cover all roads and work."

This attempted compromise settlement was made sometime in 1922 before the order of the county court cancelling and annulling the county warrant in question was made in December of that year.

The answer in this case was a general denial, and set up an affirmative defense, but as no evidence was offered by defendant, this defense went out of the case. The court gave a peremptory instruction at the close of the case to find for defendant, and judgment went accordingly.

This case did not break in the trial court on the binding effect of the compromise agreement mentioned, made in the case then pending. While the case then pending to recover the claimed overpayment by the county to Ross, which over-payment included the amount covered by the county warrant now in controversy, was dismissed by the county on the faith of this compromise settlement, yet the defendant Ross withdrew from and refused to carry out the compromise agreement, of which fact the plaintiff had notice before dismissing the suit and its doing so was purely voluntary. Ross offered to proceed with the trial of that case, refused to surrender the county warrant in controversy for cancellation, and then and now insists that such warrant is valid and represents a valid indebtedness to him.

In the view which the trial court took of the case, the binding effect of this attempted compromise settlement was left undetermined and we have mentioned it largely to show the conditions and status of affairs with reference to this disputed warrant at the time the county court in December, 1922, made its order cancelling the warrant and ordering the defendant county treasurer not to pay the same. At the time of making such order the county court had not only investigated and caused the then highway engineer to measure and ascertain the amount of work done by Ross under his road contract, and brought suit to recover the excess paid to him for such road work, but the county court had before it the memorandum of agreement for the compromise settlement which, if carried out, would have the effect of a surrender and physical cancellation of this warrant.

The defendant county treasurer then, as now, and doubtless at the insistence of Ross's attorneys and after much hesitation, took the position that the county court, after having issued this county warrant, and that term of court having passed, had no authority to make an order cancelling and declaring void this county warrant on the ground that same had been issued on false representations as to the consideration thereof, and that it was his duty to pay the warrant when funds came into his hands with which to do so regardless of such countermanding order of the county court. It should be noted that the warrant in question was not paid at once, but was protested for want of funds when first presented; that the order of the county court cancelling and annulling the warrant was not made till a year after its issuance and that such warrant was not actually paid till some four years later. During this interval one county counsellor of Jackson County took the position, and so advised the defendant, that the order of the county court recalling and annulling this warrant was valid and binding and advised defendant not to pay the same; and a later county counsellor took a different view, at least to the extent that it was defendant's duty "to pay this warrant on presentation unless the warrant was illegal or fraudulently issued." This county counsellor then suggested that defendant take a good and sufficient surety bond to protect himself and Jackson County and that "upon the execution of such a bond that you pay this warrant." The defendant acted on this suggestion, took a bond to protect himself against loss, and paid the warrant. It is not shown who furnished this bond, but presumably the contractor, Ross, did so.

The trial court heard plaintiff's evidence which showed the contract entered into by Jackson County with defendant, W. A Ross, for the construction of a...