State v. Dickerman
| Decision Date | 10 June 1895 |
| Citation | 40 P. 698,16 Mont. 278 |
| Parties | STATE ex rel. NORTHWESTERN NAT. BANK OF GREAT FALLS v. DICKERMAN, County Treasurer. |
| Court | Montana Supreme Court |
Appeal from district court, Cascade county; C. H. Benton, Judge.
Application for mandamus, upon the relation of Northwestern National Bank of Great Falls, against Arthur E. Dickerman, county treasurer of Cascade county, to compel defendant to pay a certain warrant. There was a judgment for the relator. Defendant appeals. Affirmed.
A. J Shores, for appellant.
B. P Carpenter and Lyter & Greene, for respondent.
PEMBERTON C.J. (after stating the facts).
The appellant contends that the warrant in controversy is not in legal form. This contention is based upon the fact that the warrant is signed by the chairman and clerk of the board of trustees of the school district in their official capacity and not by all or a majority of the trustees. It is not disputed that the trustees properly audited the claim for which this warrant was issued. For the purpose of raising funds, and for the issuing and sale of bonds to raise funds for the building of schoolhouses, etc., each school district is declared by the law of this state to be a body corporate. Comp. St. div. 5, § 1953. Throughout the school law the trustees are designated the "Board of School Trustees." Section 1951 provides that, when bonds are issued by a school district, "they shall bear the signature of the chairman of the board of trustees, and shall be countersigned by the clerk." From a consideration of the school law of the state, we are of opinion that the warrant is in such form as is contemplated in such cases. We are unable to see that the defendant could have been in any way liable to injury by paying the warrant on account of the form thereof.
The appellant assigns as error the order of the court striking out those parts of his answer noted in the statement. The portions of the answer stricken out set out with great particularity, and at great length, the entire history of the bonds in the sum of $80,000, issued by the trustees of the district, the sale thereof to relator, as noted in the statement, the contract of the relator to advance money to the trustees for the purpose of building schoolhouses, the contract with the builders for the erection of a schoolhouse, the drawing of warrants in payment for labor and material employed and used in the construction of said schoolhouse, the payment of said warrants by the treasurer with funds advanced by relator, the doubts that existed as to the validity of the bonds, the institution and result of the suit to test the validity thereof, and the issuing of new bonds by said district in the sum of $90,000 in lieu of those which were declared to be invalid. But in all this showing we are unable to discover any allegations of fact establishing or tending to establish bad faith or fraud on the part of the trustees and the relator in any of these transactions. There does not appear a single allegation in the answer stricken out that is inconsistent with good faith and fair dealing between the trustees and the relator. It is true that defendant alleged in his answer, which was stricken out, on information and belief, that relator procured and induced the trustees to sell it these bonds at private sale, for the purpose of procuring them at a less price than other investors would have paid for the same if valid, for the purpose of defrauding the district. But this allegation, on information and belief, must be construed in the light of the other allegations in the pleadings. It is not denied that these bonds were first advertised for public sale; that the bids were all rejected, as shown by defendant's answer. It is further shown by the answer stricken out that relator, in its private bid for these bonds, agreed to take them at par, with an added premium of $6,833.33. These allegations of the answer are absolutely contradictory of and inconsistent with the allegation of fraud made therein on information and belief. We see no error in the action of the court in this regard.
The appellant contends that the school district did not become indebted to or liable to repay the relator the money advanced by it to pay warrants issued for the construction of a school building in said district under the contract entered into with relator. This contention proceeds, and is sought to be maintained, upon the theory that the trustees had no authority in law to enter into such contract with relator that said contract is for that reason void, and, being void, the relator is not entitled to recover the amount advanced thereunder. The doctrine here contended for by appellant is fully discussed, and a great many authorities collected, in Brown v. City of Atchison, 39 Kan. 37, 17 P. 465. In this case the court says: "From the authorities we think the following principle may be educed: Where a contract has been entered into in good faith between a corporation, public or private, and an individual person, and the contract is void in whole or in part, because of a want of power on the part of the corporation to make it or enter into it in the manner in which the corporation enters into it, but the contract is not immoral, inequitable, or unjust, and the contract is performed in whole or in part by and on the part of one of the parties, and the other party receives benefits by reason of such performance over and above any equivalent rendered in return, and these benefits are such as one party may lawfully render and the other party lawfully receive, the party receiving such benefits will be required to do equity towards the other party, by either rescinding the contract and placing the other party in statue quo, or by accounting to the other party for all benefits received for which no equivalent has been rendered in return; and all this should be done as nearly in accordance with the terms of the contract as the law and equity will permit." In Morawetz on Private Corporations (section 689) this doctrine is thus stated: "After a contract entered into by a corporation has been performed by either of the contracting parties, the fact that the making of the contract involved an unauthorized exercise of corporate power on the part of the company will not constitute a defense to an action brought by the party having performed the contract to recover compensation for a breach of the contract...
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