Lovejoy v. Inhabitants of Foxcroft

• Decision Date: 24 February 1898
• Citation: 40 A. 141,91 Me. 367
• Parties: LOVEJOY v. INHABITANTS OF FOXCROFT. GRIFFITH v. SAME. DUNHAM v. SAME. GOULD v. SAME. EMERSON v. SAME.
• Court: Maine Supreme Court

40 A. 141

91 Me. 367

LOVEJOY

v. INHABITANTS OF FOXCROFT.

GRIFFITH v. SAME. DUNHAM

v. SAME.

GOULD

v. SAME.

EMERSON

v. SAME.

Supreme Judicial Court of Maine.

Feb. 24, 1898.

(Official.)

Report from supreme Judicial court, Piscataquis county.

Several actions by Hartwell Lovejoy, David Griffith, executor, Henry A. Dunham, Susie E. Gould, and Annie B. Emerson, against the inhabitants of Foxcroft. On report. Judgments for plaintiffs.

These were all actions upon promissory notes given by the treasurer of the defendant town, and in its name, and all of the same general form. The note in the first action was in the following form:

"$300. Foxcroft, Feb. 15, 1883. For value received, we, the inhabitants of the town of Foxcroft, by Elias J. Hale, treasurer thereof, duly authorized by vote of said town to hire money, promise to pay Hartwell Lovejoy, or order, three hundred dollars on demand, and interest at four per cent. Payable at the treasurer's office in Foxcroft. Elias J. Hale, Treasurer of Foxcroft."

Indorsements:

"Foxcroft, Feb. 17th, 1887. Rec'd four years' int., $48.00.

"Foxcroft, Feb. 27th, 1890. Rec'd four years' int., $36.00."

Plea, general issue. The defendants also filed a brief statement, in which they set up the statute of limitations as a further defense.

Frank E. Guernsey, for plaintiff Lovejoy.

A. M. Robinson, H. J. Cross, and Frank E. Guernsey, for plaintiffs Griffith and Gould. J.

B. Peaks, for plaintiffs Dunham and Emerson.

W. E. Parsons and H. Hudson, for defendants.

EMERY, J. These are actions at law by which the several plaintiffs seek to recover judgments against the town of Foxcroft for money delivered to its treasurer, Elias O. Hale, at his Instance, and supposed to have been thereby loaned to, and hired by, the town itself. The character of some of the arguments for the plaintiffs impels us at the outset to again emphasize the often-stated difference between a town and an individual or corporation, in respect to its pecuniary duties and liabilities.

Towns in Maine, as in the other New England states, are territorial divisions into which the territory of the state is divided by the legislature for political purposes, for the more convenient and effectual administration of certain functions of political government. The inhabitants of the particular territory are made a political agency, and particular duties and liabilities for purposes of administration are imposed upon them even without their consent. They are not a voluntary association. They cannot escape the duties and burdens Imposed, except by a removal of themselves and their property from the town territory. It is clear that such agencies are subject to such duties and liabilities only as are expressly or by necessary implication imposed upon them by the legislature to effectuate the purpose of their creation. The powers of a town over the inhabitants and property within its territory are correspondingly limited to such as are necessary for the efficient discharge of those duties and liabilities; and even these limited powers are to be exercised upon the citizen and his property only with such precautions and in such manner as may be prescribed by the state. Any effort to exercise any of these powers in any other way would be nugatory. The citizen—the taxpayer—can ignore any action or attempted action not strictly in accordance with the course prescribed. In the case of New England towns, especially, the Interests and immunities of the citizen are and must be scrupulously guarded, since his private property can be taken upon a judgment against his town. Such a severe liability requires that the powers and proceedings of towns in New England, at least, should be construed with great strictness in his favor.

It follows that a town cannot assess or borrow money except for purposes strictly within the line of its duty. It can effectually act, even in such cases, only in legal town meeting, called, notified, and held in the manner prescribed by law. The particular subject-matter upon which action is called for must be distinctly specified in the notice. If any prescribed step is omitted, the inhabitants, and hence the town itself, are not bound by the result. Whoever deals with a town or its officers must bear in mind these bulwarks about the property of the inhabitants of the town, and make sure beforehand, not only that the proposed contract is clearly within the legal powers of the town, but also that such power is exercised in the legal mode.

It should not now, after three-quarters of a century of statehood, be necessary to cite statutes and decisions in support of the foregoing statement of the nature of the duties and liabilities of a town, and its consequent powers over the property of its citizens; but, for various descriptions of them, see Thorndike v. Inhabitants of Camden, 82 Me. 39, 19 Atl. 95. And cases there cited; Clark v. Inhabitants of Tremont, 83 Me. 426, 22 Atl. 378; Otis v. Stockton, 76 Me. 506; Hurd v. Inhabitants of St Albans, 81 Me. 343, 17 Atl. 168; Bessey v. Unity, 65 Me. 342; Faine v. Boston, 124 Mass. 486; Carter v. Cambridge and Brookline Bridge Prop'rs, 104 Mass. 236; Meriwether v. Garrett, 102 U. S. 472; Bloomfield v. Bank, 121 U. S. 121, 7 Sup. Ct. 865; Marsh v. Fulton, 10 Wall. 676.

It must be apparent, after consideration of the cases cited and of the other cases upon the subject, that a claim against a town cannot be supported and enforced solely upon the general principles of equity and good conscience applied to individuals and corporations. A town is never estopped from invoking the defense of ultra vires. Syracuse Water Co. v. City of Syracuse, 116 N. Y. 167, 22 N. E. 381.

The cases at bar, however, concern chiefly, if not solely, the power of a town to borrow money, and how that power must be exercised to bind the inhabitants of the town to answer therefor out of their individual property.

That a town, in the absence of statute or constitutional restriction, has power to borrow money for a legal town purpose, and within the limits of that purpose, without special statute authority, is now conceded. If money is needed for the performance of a town duty, and the state has not commanded an assessment of taxes for it, the majority of the inhabitants of a town, acting in a legal town meeting under a sufficient warrant, can bind all the inhabitants in determining to borrow part, and even all, of the money, rather than raise it at once from taxes. Clark v. School Dist, 3 R. I. 199; Baileyville v. Lowell, 20 Me. 178; Bank v. Stockton, 72 Me. 522; Brown v. Winterport, 79 Me. 305, 9 Atl. 844. But this power of a town to borrow money is strictly limited to money necessary for the discharge of its legal liabilities. It is limited in amount as well as in purpose; and it must be exercised by the town in town meeting upon proper warrant, and by vote either authorizing the act of borrowing beforehand, or afterwards ratifying the prior act. It is not enough that the money was paid to some town officer, and by him used in discharging some legal duty or liability of the town. A highway surveyor cannot borrow money, and expend it on the roads within his jurisdiction, and thereby bind the town to repay the money. There must be legal action in legal town meeting before the town becomes legally liable. Such is now the established law in this state. Otis v. Stockton, 76 Me. 506; Brown v. Winterport, 79 Me. 305, 9 Atl. 844; Hurd v. Inhabitants of St. Albans, 81 Me. 343, 17 Atl. 168. Such is also the law in Massachusetts, whence we derived our town system. Dickinson v. Conway, 12 Allen, 487; Bank v. Lowell, 109 Mass. 214; Agawam Bank v. South Hadley, 128 Mass. 503; Brown v. Inhabitants of Melrose, 155 Mass. 587, 30 N. E. 87. See, also, Bloomfield v. Bank, 121 U. S. 121, 7 Sup. Ct. 865.

The town treasurer is not the town's financial agent, and has no power whatever, as such, to bind the inhabitants of the town to repay money borrowed by him for the town, and used by him in discharging liabilities of the town. He has no more power than a highway surveyor in this respect, He is unlike the cashier of a bank or the treasurer of a trading corporation. He is simply a public officer charged by law, not by the town, with the duty of receiving and guarding the public money, and disbursing it upon lawful warrant. See cases last above cited, and also Abbott v. North Andover, 145 Mass. 484, 14 N. E. 754.

When, however, a town has the power to borrow money, it may borrow through an agent appointed for that purpose, and may appoint its treasurer such agent. The treasurer's power in such cases is strictly limited, in the first instance, to the power of the town, and, in the second instance, to the terms of the vote of the town meeting. A town cannot borrow upon the credit of its inhabitants more money than it actually needs for the specified purpose; and its agent, whether the treasurer or some other person, cannot borrow more money, nor for any other purpose, than is specified by the terms of the vote. When the need of the town is supplied, or the limit of the vote is reached, the power of the agent is exhausted, and he cannot bind the town further. All persons proposing to loan money upon the credit of a town should make sure of the town's authority,—of its agent's authority, —and that the authority of each is still in force, unexhausted, and applicable to the proposed loan. A few cases will illustrate the strictness of this rule. In Butterfield v. Melrose, 6 Allen, 187, it was held that the treasurer, under a vote authorizing him to borrow money, could not bind the town to pay commissions to a broker. In Lowell Five Cent Sav. Bank v. Inhabitants of Winchester, 8 Allen, 109, the treasurer was authorized by vote to borrow $2,000, and give the town's note therefor. He borrowed $2,000 of one party, and then took a certified copy of the vote to the bank, upon the strength of which the bank in good faith, without notice of...