Lee v. Coleman, Civil 4634

• Decision Date: 11 June 1945
• Docket Number: Civil 4634
• Citation: 63 Ariz. 45,159 P.2d 603
• Parties: A. H. LEE and JAMES S. SHREEVE, Appellants, v. P. T. COLEMAN, Appellee
• Court: Arizona Supreme Court

159 P.2d 603

63 Ariz. 45

A. H. LEE and JAMES S. SHREEVE, Appellants, v. P. T. COLEMAN, Appellee

Civil No. 4634

Supreme Court of Arizona

June 11, 1945

APPEAL from a judgment of the Superior Court of the County of Apache. Wm. G. Hall, Judge.

Judgment reversed and remanded with directions.

Mr. J Smith Gibbons, for Appellants.

Mr. M V. Gibbons, for Appellee.

LaPrade J. Stanford, C. J., concurs. Faulkner, Superior Judge (dissenting).Note: Justice MORGAN having disqualified, the Honorable J. W. FAULKNER, Judge of the Superior Court of Mohave County, was called to sit in his stead.

OPINION

LaPrade, J.

The appellee P. T. Coleman instituted an action in the lower court to recover a money judgment from the appellants Lee and Shreeve for and on behalf of the County of Apache. The defendants below were then or had been supervisors of Apache County. The action was brought by the plaintiff in his capacity as a taxpayer under the provisions of Sections 17-325 and 17-326, Arizona Code Annotated 1939. In addition to the appellants, a Mr. R. F. Lilley and a Mr. D. T. Benchoff were also named as defendants. These two last-named individuals had been members of the board of supervisors during a portion of the time involved in the proceedings. At the conclusion of the trial, judgment was ordered for the defendants Lilley and Benchoff, from which judgment no appeal was taken.

As a predicate for plaintiff's right to institute the action in his capacity as a taxpayer for and on behalf of the county, plaintiff served a demand on the county attorney to bring the action. His demand, in part, reads as follows:

"I request hereby that you file suit for the collection of all money paid out, without authority of law, by order of the County Board of Supervisors, against the party receiving said money and the Supervisors who ordered the disbursement of said funds, and their respective Bonding Companies; which unlawful expenditures are more particularly described as follows, to wit:

"1. All monies paid to James Shreeve for mileage, subsistence and railroad fare from June 6, 1935, to date, and especially those expenditures listed on pages 49 to 50 of the State Examiner's Audit Report of Apache County, covering the period of June 1st, 1935, to June 30, 1938.

. . .

"8. All monies paid to A. H. Lee for traveling expenses, subsistence and railroad fare from June 1, to 1935 to date ---.

"Very truly yours,

"P. T. Coleman."

The authority to serve this demand is found in Sections 17-325 and 17-326 referred to above. These two sections at the time the action was instituted read as follows:

"17-325. Liability for money illegally paid -- Action. -- Whenever a board of supervisors shall, without authority of law, order any money paid out of the county treasury for any purpose, such supervisors and the party in whose favor such order was made, shall be liable for such money with legal interest, and twenty (20) per cent additional on such money. The county attorney of such county shall institute an action in the name of his county against such supervisors and others liable, to enjoin the payment of such money, or if the same has been paid, to recover it with legal interest, and twenty (20) per cent additional thereon, to be paid into the county treasury to the credit of the fund from which the allowance was made. The board may not dismiss, compromise or in any way control such action, and no bond shall be required of a county in such action, or to obtain an injunction, or on appeal."

"17-326. Action by taxpayer. -- If any county attorney for twenty (20) days after written request made by a taxpayer of the county, fail to institute such action then any taxpayer of such county may bring such action in his own name and at his own cost, with the same effect as if brought by the county attorney; provided the person instituting such action shall execute a bond with two (2) or more sureties, made payable to the defendant conditioned that if the plaintiff fails to prosecute such action with diligence and to effect, that the plaintiff will pay all damages sustained by the defendant by reason of such action and all costs incurred therein. If such taxpayer prevail in such action the court shall allow such taxpayer costs and a reasonable attorney fee not to exceed forty (40) per cent of the amount recovered or saved to the county."

The complaint contains four causes of action; two against Shreeve, and two against Lee. Judgment was recovered on each of the counts, including an additional award for attorney fees. No award was made of the 20 per cent penalty provided for in Section 17-325. We are not able to discover from the record why the additional 20 per cent was not allowed. The complaint alleged that Lee and Shreeve were the recipients of certain monies alleged to belong to the county and which had been, without authority of law, paid to them. Recovery was also sought against the other supervisors who were not the recipients of the money but who, it was claimed, had approved and ordered the money paid out. The evidence showed that the claims had been audited and allowed by the county recorder by the authority of Section 17-324, Arizona Code Annotated 1939. It was for this reason that judgment was rendered in favor of the several supervisors who were not charged as being recipients of any money and whose liability was predicated upon the charge that they had ordered the money paid out. The several causes of action were founded upon the issuance and payment to Shreeve or Lee of some 105 individual warrants. The basis for the issuance of the warrants was claims for reimbursement for monies alleged to have been expended by appellants for travel and subsistence in the prosecution of the county's business.

The grounds on which plaintiff based his cause of action were:

(1) That the claims were not legal claims against the County of Apache.

(2) That the monies were illegally paid out of the county treasury without authority of law.

(3) That there was no authority in law for the payment of the claims.

(4) That the payments were not provided for in the proper annual budgets.

For the fiscal year ended June 30, 1936, the supervisors adopted a budget which contained the following items: "Travel Expense in the Board of Supervisors' Office -- $ 1,000. Roads and Bridges -- $ 3,500." For the fiscal year ended June 30, 1937, the following items appear in the budget: "Travel, Office, and Miscellaneous Expenses in the Office of the Board of Supervisors -- $ 1,200. Road Fund -- $ 9,400." This last item was broken down and contained an item designated "Administration and Transfers -- $ 1,000." For the fiscal year ended June 30, 1938, the budget contained the following item under the designation: "Board of Supervisors, Travel, Office, and Miscellaneous -- $ 1,800." Under the road budget there was an item for "Administration and Transfers -- $ 900." For the fiscal year ended June 30, 1939, under the budget for the board of supervisors, there appeared an item: "Miscellaneous, Travel, and Office Expense -- $ 2,000." For the road fund there was an item set up of $ 20,699, with no itemization. For the fiscal year ended June 30, 1940, under the subdivision for the board of supervisors, there was set up an item: "Board of Supervisors, Office, Travel, and Miscellaneous -- $ 2,000." For the road fund there was set up $ 20,800, without any itemization.

The evidence disclosed that Shreeve and Lee had incurred expenses in traveling about the county caring for county roads and bridges. Some of the claims grew out of travel and subsistence expense incurred in attending conferences with other boards of supervisors throughout the state, with State Highway officials, and U. S. Forest officials charged with the maintenance and construction of highways on government-owned forest lands. When they traveled in this behalf, they presented the claims referred to in the four causes of action, which after approval were drawn against and paid from the county road fund rather than against the travel and expense item which had been set up in the budget of the board of supervisors. The gist of plaintiff's complaint is that the expenditures itemized in the complaint and for which warrants were drawn and paid were illegal for the sole and only reason that they were not paid out of the fund expressly budgeted and labeled as "Travel Expenses of Supervisors," but were allowed and paid out of the fund labeled "Road Fund."

It is contended by the appellants that for each of the fiscal years there were sufficient monies budgeted in the supervisors' travel account to have paid the claims had they been drawn and charged to the supervisors' travel account. A minute analysis of the claims may disclose that in at least one fiscal year there was not a sufficient sum of money in the supervisors' travel account to have paid all of the claims for travel and subsistence that were actually paid.

We will now consider the various assignments of error and contentions of the appellants. Appellants' first assignment of error is that the plaintiff had no authority to institute the action, and that as a consequence the court was without jurisdiction to hear and determine the case. Appellants' second assignment of error asserts that no proper demand was made upon the county attorney as a predicate for plaintiff's right as a taxpayer to institute the action. We shall dispose of these two assignments together. To do this we must have recourse to several of the code sections relating to the duties of the board of supervisors, presentation, allowance, and payment of claims against the county.

Section 17-316, Arizona Code Annotated 1939, states:

"No payment shall be made from the treasury of the county except...