Jackson Electric Ry. & Power Co. v. Adams

• Decision Date: 18 November 1901
• Citation: 79 Miss. 408,30 So. 694
• Parties: JACKSON ELECTRIC RAILWAY, LIGHT & POWER CO. v. WIRT ADAMS, STATE REVENUE AGENT
• Court: Mississippi Supreme Court

30 So. 694

79 Miss. 408

JACKSON ELECTRIC RAILWAY, LIGHT & POWER CO. v. WIRT ADAMS, STATE REVENUE AGENT

Supreme Court of Mississippi

November 18, 1901

FROM the circuit court of, first district, Hinds county. HON ROBERT POWELL, Judge.

Adams state revenue agent, appellee, was plaintiff in the court below; the railway, etc., company, appellant, was defendant there. There was a former appeal in this case (78 Miss. 887) when the judgment, sustaining the demurrer of the defendant the Jackson Electric Railway, Light & Power Company, to the plaintiff's declaration, was reversed and the cause remanded. On the second trial the defendant pleaded the matters of fact shown in the following opinion of the court and the plaintiff's demurrer to said plea having been sustained, and the defendant declining to plead further, judgment was rendered in favor of the plaintiff. The defendant thereupon appealed to the supreme court.

Affirmed.

Williamson, Wells & Croom, for the appellant.

Persons who have in any way advanced money to a corporation under color of the action of the corporate authorities, ought to be considered as creditors of the corporation at least to the extent of being placed in statu quo where this is possible. In practical effect, the grantees of the franchises made their deposit of $ 1,500 as they had agreed to do, and the municipality turned the money over to Howard.

The city of Jackson, by reason of this action upon the part of its municipal anthorities, procured from the assignors of the defendant the sum of $ 1,500 with which to pay C. W. Howard, and this, too, upon the representation, made at the time, that they had in their hands a like sum, which would be held and considered as the money of defendant, and would be repaid upon the completion of their contract. Subsequently defendant complied with all of its contractual obligations, which fact was recognized by the city of Jackson, as appears by this resolution of the mayor and board of aldermen in their record (pp. 21 and 22), and thereupon the mayor and board of aldermen turned over to defendant the said sum of $ 1,500, as they had agreed to do. By this action they did nothing more than to restore the statu quo. They had obtained from defendant the sum of $ 1,500 under color of their authority as representatives of the city, for which they had paid no consideration, and they returned the money, thus restoring all parties to the same situation as they occupied before the transaction was had.

We take it to be conceded that the state revenue agent cannot maintain this suit except upon a state of facts which would authorize a recovery, if the city of Jackson itself was the plaintiff. If it be conceded that the written contract, which appears in the record as made by the city, was ultra vires, the doctrine should not be so applied as to deny justice. To deny the validity of a contract and refuse to enforce it because of a lack of authority to make it, is very different from permitting one of the parties to accept and retain all the benefit of the transaction, while repudiating the obligation. Under the facts of this case it fully appears to the court that, if the defendant be required to pay the judgment which has been rendered against it, the city of Jackson will get from defendant the sum of $ 1,500 of its money without consideration--a confiscation of defendant's property as a penalty for his ignorance or mistake of law. Brown v. Atchinson, 39 Kan. 54; Schiffer v. Aurora, 121 Ind. 154.

By reason of the power conferred by § 2986 of the annotated code, the mayor and board of aldermen had full power to pay back to Howard the sum which was paid to him, and the mere incident that this was done in the manner set out in the plea cannot affect the merits of this case. It cannot but be manifest to the court that the judgment in this case, if allowed to stand, would result in putting into the treasury of the city $ 1,500 for which no consideration was ever given; a result which was never intended or desired by the municipality, and would be a confiscation of defendant's property on account of a technical error in making a record of the transaction on the minutes of the municipal board. On the other hand, it must be equally manifest to the court that to reverse the judgment would result in leaving both parties in statu quo, as if no transaction had been between them. The city of Jackson will not have lost a dollar. The public improvement sought to be obtained has been secured. The city has acted in good faith in endeavoring to restore the statu quo of the party performing the contract. It is a completed transaction in which right and justice have been attained, and presents a very different question to the one which would be presented if an action had been brought by either party on the written contract as it appears on the minutes. Hogg v. Greenville, 133 N.Y. 152.

The doctrine of ultra vires, which would prevent the enforcement of a contract, if enforcement was sought upon the contract, ought not to be so extended as to serve as an inducement to fraud. When the completed transaction shows that right has prevailed and that no loss has occurred, or can occur, by reason of the completed transaction, the doors of the court ought to be closed upon any effort which smacks of repudiation and bad faith. In the case of Penly v. Auburn, 85 Me. 278 (21 L. R. A., 657), the plaintiff's assignors had conveyed to the city as a consideration for a contract adjudged void as ultra vires. The court says: "The plaintiffs have been guilty of no fraud, and are not in fault. The land was conveyed, therefore, without consideration and should be returned." Citing: 123 Mass. 129; 107 U.S. 348; 118 U.S. 256. As was said in Brass Foundry & Machine Works v. Parke & Co., 115 Ind. 236: "When a corporation has received the money or property of an individual, under the color of authority, and has appropriated it to its necessary and beneficial use, it will not be heard to assert its want of power to pay the value of what it has received, and still retains." Dill v. Warehouse, 7 Mt., 438; Hitchcock v. Galveston, 96 U.S. 341. The legal principle herein contended for has been recognized and applied by our own court. Greenville Compress Co. v. Planters' Press., 70 Miss. 669. See also Penn. Co. v. Railroad Co., 118 U.S. 290; Davis v. Railroad Co., 131 Mass. 258; Pearce v. Railroad Co., 21 How., 441; In re Cook v. Foughal, L. R. (4 chy.), 748; Compress Co. v. Planters' Press., 70 Miss. 669; City of Natchez v. Mallery, 54 Miss. 499.

The doctrine of implied municipal liability applies to all cases where money or other property of a party is received under such circumstances that the general law, independent of express contract, imposes the obligation upon the city to do justice with respect to the same. If the city obtain money of another, by mistake without authority of law, it is her duty to refund it, not from any contract entered into by her on the subject, but from the general obligation to do justice, which binds all persons, whether natural or artificial.

If the city receives money or property which does not belong to her, it is her duty to restore it to the true owner. M. E. Church, South, v. Vicksburg, 50 Miss. 601.

Harper & Potter, for the appellee.

It is manifestly unnecessary and improper for this court to undertake to consider all the preliminary talk that led up to the written agreement, upon which agreement Messrs. Carnes & Corson and the defendant here must stand or fall. Fortunately this written agreement itself is made a part of the plea and will be found in the record. Upon it we rest our cause, and insist that it supports and sustains on its face every material allegation of our declaration.

By the very terms of this agreement the $ 1,500, which Messrs Carnes & Corson were to receive, was the precise $ 1,500 which the agreement states had been forfeited to the city by the Jackson Railroad & Light Company, another and distinct company. So, then, the written contract itself, signed...