State ex rel. Boatmen's Nat. Bank of St. Louis v. Webster Groves General Sewer Dist. No. 1 of St. Louis County

• Citation: 37 S.W.2d 905,327 Mo. 594
• Decision Date: 07 April 1931
• Docket Number: 30660
• Parties: The State ex rel. Boatmen's National Bank of St. Louis v. Webster Groves General Sewer District No. 1 of St. Louis County, Board of Supervisors of said District, Secretary-Treasurer of Board of Supervisors, Collector of Revenue of St. Louis County, and Carl H. Holekamp, F. C. E. Kuhlmann and Edward G. Curtis As Members of Board of Supervisors, F. C. E. Kuhlmann as Secretary-Treasurer, and Willis Benson as Collector of Revenue
• Court: United States State Supreme Court of Missouri

37 S.W.2d 905

327 Mo. 594

The State ex rel. Boatmen's National Bank of St. Louis v. Webster Groves General Sewer District No. 1 of St. Louis County, Board of Supervisors of said District, Secretary-Treasurer of Board of Supervisors, Collector of Revenue of St. Louis County, and Carl H. Holekamp, F. C. E. Kuhlmann and Edward G. Curtis As Members of Board of Supervisors, F. C. E. Kuhlmann as Secretary-Treasurer, and Willis Benson as Collector of Revenue

No. 30660

Supreme Court of Missouri

April 7, 1931

Rehearing Overruled April 7, 1931.

Peremptory writ awarded.

B. H Charles, Jourdan & English and Charles Claflin Allen, Jr. for relator.

(1) Respondents cannot raise both issues of law and of fact going to the entire case at the same time. State v. Bright, 224 Mo. 514; Donahue v. Bragg, 49 Mo.App. 273. The office of the return is to raise issues of fact and not of law. Respondents cannot use the return as a demurrer, and parts of the return attempting to raise or argue issues of law should be stricken. State v. Bright, 224 Mo. 514; Long v. Towl, 41 Mo. 398; Taber v. Wilson, 34 Mo.App. 89. (2) Respondents may not attack the corporate existence of the district in this case, and the allegations seeking to raise that issue are immaterial. Black v. Early, 208 Mo. 281; State ex rel. v. Hunt, 199 S.W. 944; State ex inf. v. Curtis, 319 Mo. 316; Kayser v. Bremen, 16 Mo. 88; Burnham v. Rogers, 167 Mo. 17; St. Louis v. Shields, 62 Mo. 247; Supervisors v. Thompson, 61 F. 914. (3) Mere pendency of an injunction suit by taxpayers against the supervisors of this district or of other districts and respondents' "opinion" that the levy of the tax should be deferred until the litigation has been concluded are no defense to this mandamus. State v. Hackmann, 305 Mo. 685, 267 S.W. 608; State v. Sale, 153 Mo.App. 273. (4) Mandamus is the appropriate remedy of relator to compel the levy of a tax to pay its warrants. Sheridan v. Fleming, 93 Mo. 321; State v. Nelson, 310 Mo. 526; State v. Rainey, 74 Mo. 229; State v. Holt County, 135 Mo. 533. (5) Under the facts the duty to levy the tax is mandatory, not discretionary. Rex v. Barlow, 2 Stalk. 609; Mason v. Fearson, 9 How. 248; Supervisors v. United States, 4 Wall. 435. (6) Abuse of discretionary power may be corrected and its proper and lawful exercise compelled by mandamus. State ex rel. v. Public Schools, 134 Mo. 297; State v. Lafayette County, 41 Mo. 222; State v. Bourne, 151 Mo.App. 104. (7) The statute does not limit the time of the levy of the preliminary tax to immediately after organization, but contemplates the incurring of preliminary expenses and issue of warrants therefor prior to the levy and collection of the preliminary tax. Laws 1927, p. 443, sec. 7; Laws 1927, p. 455, sec. 21. (8) Respondents' exceptions based on the claim that the district is not a corporation amount to a collateral attack on its corporate existence which cannot be made. (9) The purchase by relator of the warrants was not ultra vires. Morris v. National Bank, 142 F. 25; Seward v. National Bank, 27 F.2d 224; Danforth v. National Bank of Elizabeth, 48 F. 27; National Bank of Commerce v. Francis, 246 S.W. 326. The defense of ultra vires is not available to respondents because (a) It can only be raised by the United States. Union National Bank v. Matthews, 25 L.Ed. 188; National Bank of Genesee v. Whitney, 26 L.Ed. 443; Thornton v. Exchange Natl. Bank, 71 Mo. 221. (b) It was not pleaded. German Savings Institution v. Jacoby, 97 Mo. 617. (10) The contract between relator and the Webster Groves District is not void. Laws 1927, p. 439 et seq. (11) This action is not on the contract, but to compel the performance of a duty to levy the tax, imposed on respondents, by law. (12) Under the admitted facts in this case no demand was necessary at all, as it was useless, the board having shown its intention not to make the levy at all events. State ex rel. v. Kansas City, 259 S.W. 1045; State ex rel. v. Wilson, 158 Mo.App. 105. (13) The findings of fact of the Commissioner are supported by the evidence, and not contrary thereto. The findings proposed by the respondents in their exceptions are not supported by the evidence. Musser v. Johnson, 42 Mo. 74; St. Louis Public Schools v. Risley, 28 Mo. 415; Town of Weyanwega v. Ayling, 25 L.Ed. 470; Manchester Bank v. Harrington, 199 S.W. 242. (14) All the testimony offered by respondents was incompetent or immaterial, and they are not entitled to any findings of fact based thereon. State v. Medical Society, 295 Mo. 144; State ex rel. v. Grinstead, 282 S.W. 714; Manchester Bank v. Harrington, 199 S.W. 242.

Orla M. Hill, Thomas P. Moore, John E. Mooney, Sam D. Hodgdon and George Barnett for respondents.

(1) Respondents' return does not improperly raise both issues of law and of fact. State ex rel. v. Lafayette County Court, 41 Mo. 545; State ex rel. v. Ry. Co., 114 Mo. 283. (2) Respondents' return properly submits issues both of law and of fact. State ex rel. v. Ry Co., 114 Mo. 283. (3) The respondents do not make an attack upon the existence of a corporation organized by a court of competent jurisdiction, but on the contrary, the attack is aimed at a void order, made by the court utterly without jurisdiction. All the cases cited by relator concede the jurisdiction of the court making the order. (4) The act (Laws 1927, p. 439) was not in effect May 16, 1927, when respondent district was organized. The law did not go into effect until ninety days after the adjournment of the Legislature; the emergency clause was not effective. State ex rel. v. Tel. Co., 292 S.W. 1037; State ex rel. v. County Court, 300 S.W. 1066; Hollowell v. Schuyler Co., 18 S.W.2d 498; State ex rel. v. Thompson, 19 S.W.2d 642; State ex rel v. Maitland, 246 S.W. 267; State ex rel. v. Sullivan, 224 S.W. 327; Fahey v. Hackmann, 237 S.W. 752; State ex rel. v. Becker, 233 S.W. 641. (5) The warrants were purchased under and by virtue of the contract entered into June 1, 1928, by the relator and the respondent district, and that contract was against public policy and was void: (a) Because the contract and the consequent purchase of warrants by relator amounted to a loan to the respondent district and the supervisors of said district were without power or authority in law to contract a loan for the purpose of defraying preliminary expenses. (b) Because the contract provided an arrangement to defer the levy of a preliminary tax when the statute provides that the preliminary tax may be levied "as soon as" the supervisors are appointed and qualified, but makes no provision for a deferred levy. (c) Because the contract imposes upon the taxpayers the burden of an interest charge contrary to law. (d) Because the contract undertakes to control the future exercise of discretion on the part of the supervisors and successor supervisors. (e) Because the contract provided for the incurring of a present indebtedness without the present levy of tax to discharge the same, contrary to law. (f) Because the contract amounted to an anticipation of funds to be raised by taxation without the levy of any tax. (g) Because said contract undertakes to control the exercise of future discretion of supervisors as to where public funds should be deposited. (h) Because the contract undertakes to preclude the right of future supervisors to contract for interest on deposits as provided by Section 21 of the statute under which the district purports to have been organized. Mandamus will not compel the performance of a void contract, or the doing of an illegal act. State v. Longfellow, 169 Mo. 109; State v. Hudson, 126 S.W. 733; State v. Becker, 9 S.W.2d 153. Supervisors' power to levy tax "as soon as qualified." They have no present power. Squaw Creek Drainage Dist. v. Hopper, 245 S.W. 1092. Relator is not entitled to relief because it does not come into court with clean hands. State ex rel. v. Jackson County Medical Society, 295 Mo. 144. (i) Because the relator national bank was without power to purchase the warrants in question or to contract the purchase thereof. Its acts in such respect were in violation of law. Bank v. Johnson, 104 U.S. 276; McGee on Banks & Banking (3 Ed.) 428, sec. 237; Nat. Bank v. Matthews, 98 U.S. 621; Nat. Bank v. Whitney, 112 U.S. 405. (j) Because the relator was a party to a so-called "gentlemen's agreement" the purpose of which was to control the sale of bonds to be issued by St. Louis County sewer districts by engaging in contracts for the purchase of warrants and bonds, which contracts are void, as against public policy, and said relator as a national bank had no power to engage in said contracts. (6) Mandamus will not lie because the levy of a preliminary tax is the exercise of a discretion of public officials. The law specifically invests the supervisors with the discretion to determine whether a preliminary tax should be levied. Laws 1927, pp. 439-465, sec. 7; State ex rel. v. Westhues, 9 S.W.2d 612; State ex rel. v. Dauson, 12 S.W.2d 462; State ex rel. v. Scott Co. Court, 197 S.W. 347. (a) Because litigation was pending in said district and other districts of St. Louis County, Missouri, wherein the constitutionality of the law under which said district was organized was questioned. (b) Because the district in question had been organized in less than ninety days after the passage of said statute and the effectiveness of the emergency clause in said law has not yet been judicially determined. Laws 1927, p. 439. (c) Because the levy at this time would work irreparable injury to taxpayers in said district in the event it should eventually be determined that said district had not been legally incorporated. (d) The relator does not have a clear right to the writ. State v. Becker, 237 S.W. 117; State v. Hackmann, 265 S.W. 532; State v. Thompson, 293...