Thompson v. Town of Elton

• Decision Date: 19 March 1901
• Citation: 85 N.W. 425,109 Wis. 589
• Parties: THOMPSON v. TOWN OF ELTON.
• Court: Wisconsin Supreme Court

109 Wis. 589

85 N.W. 425

THOMPSON

v.TOWN OF ELTON.

Supreme Court of Wisconsin.

March 19, 1901.

Appeal from circuit court, Langlade county; John Goodland, Judge.

Action by Robert Thompson against the town of Elton. From a judgment for plaintiff, defendant appeals. Affirmed.

Action for money had and received, the following facts being stated in the complaint as constituting plaintiff's cause of action, formal parts omitted: June 18, 1894, the chairman and clerk of the defendant town, for the purpose of obtaining for it from Frances E. Babcock a loan of $3,000, represented to her that they were duly authorized by such town to obtain such a loan on five years time at 8 per cent. interest per annum, payable annually, and that the money when obtained would be used for proper and legitimate town purposes. Said Frances E. Babcock believed such representations to accord with the truth, and, relying thereon, loaned $3,000 to defendant, and delivered the same to the chairman of its board of supervisors. Thereafter such chairman turned the money over to the town treasurer and it became a part of the public money of the town. Thereafter such money was used for legitimate town purposes, so that defendant had the full benefit thereof. The chairman and clerk of defendant agreed in its behalf that the money should be repaid at the end of five years from June 18, 1894, with interest at the rate of 8 per cent. per annum payable annually. Defendant has neglected and refused to pay said loan, or any part thereof, or the interest thereon except interest to June 18, 1896, and $49.04 of the interest due July 6, 1897. The town has repeatedly ratified such loan and the use thereof. Prior to June 18, 1899, the county of which defendant is a part, pursuant to action taken by its county board, paid defendant $928 to be used in discharge of said loan so far as the same would go for that purpose. Instead of its being so used, it was diverted from the purpose intended, but was used for legitimate town purposes, so that defendant had the full benefit thereof. Before March 24, 1900, the claim against defendant on account of the facts stated was for value duly assigned to plaintiff, who is the owner and holder thereof. After such assignment, plaintiff duly filed a verified claim with the defendant, to be placed before its auditing board as required by law. Thereafter an annual town meeting of the town was held, and more than 10 days elapsed subsequent to such meeting before the commencement of this action. Favorable action as to plaintiff's claim was neither taken by the board of audit of the town nor the electors at such town meeting.

The defendant demurred on the ground that the facts stated were insufficient to constitute a cause of action. The demurrer was overruled. This appeal is from the order entered on such decision.M. J. Wallrich, C. F. Dillett, Sanborn, Luse, Powell & Ellis, and A. L. Sanborn, for appellant.

J. C. Kerwin, for respondent.

MARSHALL, J. (after stating the facts).

It is considered that this case is ruled against appellant by Paul v. City of Kenosha, 22 Wis. 266,Smith v. Board, 44 Wis. 686,Brodhead v. City of Milwaukee, 19 Wis. 624, and Lafebre v. Board, 81 Wis. 660, 51 N. W. 952,--particularly by the first and last of such cases. The principle of those cases is that municipalities are bound by moral obligations, as well as individuals, and that where, in case of the latter, such an obligation will give rise to a legal liability, it may have the same effect as to a municipality; that if a municipality obtains money of a person by an illegal sale of property to him, or an illegal contract of some kind, not expressly prohibited by law nor tainted by moral turpitude so that courts on grounds of public policy will not recognize it or the relations growing out of it, to grant relief, and such person acts in good faith in parting with his money, believing the same to be for the benefit of the municipality, and the latter uses the money for its legal and legitimate purposes, to that extent the law will imply a promise to return the same, upon which an action for money had and received will lie. “Justitia nemini neganda est,” applies even to a person dealing with a public corporation. Whether that doctrine is a safe rule in public affairs, and will successfully stand the test of experience, may well be doubted. There might be a wide difference of opinion about it if the matter were open for consideration as an original question. The courts in other states are by no means in harmony in regard to it. However, it has been too long the law of this state to be changed by mere judicial action. The way is open for the legislature to deal with the subject at any time. From the fact that the law as declared by the court has stood without any attempt by the legislature to change it for over 30 years, we must presume that it accords with the public will.

Counsel for appellant contend that this case can be distinguished from Paul v. City of Kenosha, which is to some extent true as to the facts, though in no essential particular, it is believed. But certainly there is no difference between the two in principle. In this case the money was obtained by the officers of appellant, assuming to act in its behalf and having the appearance of authority, to be used for lawful town purposes, and it was so used. In the Paul Case the money was obtained of the individual in the same way, as a consideration for the sale of bonds previously made for another purpose, issued therefor, and thereafter acquired by the municipality. The reissue of the bonds was illegal, though, as supposed, for a legitimate purpose; and the money was used for such purpose, though the bonds were as worthless as so much waste paper. No reason is...