Warren v. Stanton County

• Decision Date: 06 October 1944
• Docket Number: 31767.
• Citation: 15 N.W.2d 757,145 Neb. 220
• Parties: WARREN v. STANTON COUNTY.
• Court: Nebraska Supreme Court

15 N.W.2d 757

145 Neb. 220

WARREN v. STANTON COUNTY.

No. 31767.

Supreme Court of Nebraska

October 6, 1944

Syllabus by the Court.

1. County authorities are, by section 5, art. VIII of the Constitution, prohibited from assessing taxes the aggregate of which shall exceed 50 cents per $100 actual valuation as determined by the assessment rolls, except for the payment of indebtedness existing at the time of the adoption of the constitutional provision, unless authorized to do so by a vote of the people.

2. By section 26-116, Comp.St.1929, it is unlawful for the county board of any county to issue warrants for any amount exceeding the aggregate of eighty-five per cent of the amount levied by tax for the current year, except there be money in the treasury to the credit of the proper fund for the payment of the same.

3. By the terms of the same section it is unlawful for the county board to issue any certificate of indebtedness in any form in payment of any account or claim or to make contracts for or incur indebtedness in any form in payment of any account or claim, or to make contracts for or to incur indebtedness against the county in excess of the tax levy for county expense during the current year.

4. Also by the same section a county is prohibited from making any expenditure and the county board is prohibited from contracting for indebtedness to be paid out of the funds of the county in excess of the amount levied for the particular fund.

5. By the terms of section 26-118, Comp.St.1929, where warrants have been issued in violation of section 26-116 Comp.St.1929, the county shall not be liable therefor, but action may be had against the county board or any member thereof.

6. An ultra vires contract of a municipal corporation is one which the corporation has no power to make under any circumstances or for any purpose.

7. Warrants issued by a county in excess of the limitation fixed by law are void, and no action may be maintained therefor and their payment may be enjoined.

8. The statute of limitations does not begin to run against county warrants until after it appears that taxes levied to create a fund for the payment of the warrants have failed and will continue to fail to produce payments to the fund, or until there is sufficient money in the fund upon which they are drawn, or the proper officers have had opportunity to provide funds to pay them and have refused or neglected to do so.

9. The doctrine of estoppel cannot be applied as against a county to validate a contract which it had no power to make or where it was made in express violation of a prohibitory law.

10. When a writ of mandamus was denied because it was not a proper remedy, the judgment rendered cannot be properly pleaded as res adjudicata.

11. It is a general rule with respect to domestic judgments that they cannot be collaterally impeached by the parties for collusion or fraud not going to the jurisdiction and that consent judgments are as conclusive on collateral attack as judgments rendered after a trial.

12. There is a recognized exception to the general rule in cases involving public interests where the public was a party by representation only. In such cases the persons represented may show fraud or collusion in obtaining the judgment.

13. If the judgment was collusive or by the consent of an officer as to a matter with respect to which he had no authority to bind the public, and it was not a decision by the court after a hearing on the merits, it does not afford a basis for a plea of res adjudicata as against the public interest involved.

YEAGER and CHAPPELL, JJ., dissenting.

Robert R. Moodie, of West Point, and Walter D. James, of McCook, for appellant.

Crofoot Fraser, Connolly & Stryker, of Omaha, Abbott, Dunlap & Abbott, of Fremont, and Gross & Crawford, of Omaha, for appellee.

Heard before SIMMONS, C.J., PAINE, CARTER, MESSMORE, YEAGER, and CHAPPELL, JJ.

CARTER Justice.

This is an action by Mervyn J. Warren, plaintiff, against the county of Stanton, defendant, to recover a judgment on 193 warrants issued by the county to the Standard Bridge Company and registered for nonpayment in the years of 1921 and 1922. The trial court allowed a recovery on the theory that defendant was estopped to assert the defenses pleaded. The county appeals.

The record shows that in the years 1919, 1920, 1921 and 1922, floods, high water and other causes required the replacement of many bridges in Stanton county. The county thereupon entered into numerous 'unit price' contracts for the construction and repair of a large number of bridges with one Robert Z. Drake, doing business as the Standard Bridge Company. The total contract price for the bridges constructed and repaired under the contracts thus made amounted to $617,607.77. During the period in which the work was being done the county levied taxes for all bridge purposes in the amount of $140,594.84, and the amount collected on these levies was paid on the indebtedness. In addition thereto, a levy of $34,311.69 was made in 1921 for what was designated an 'Old Indebtedness Fund.' The money collected on this levy was used largely as partial payments on the indebtedness created by the foregoing bridge contracts.

During the progress of the work Drake presented five claims to the county broard as follows: August 19, 1920, $104,137.23; June 22, 1921, $87,623.72; July 14, 1921, $180,336.75; January 24, 1922, $150,341.64; and September 16, 1922, $95,168.43. The first four claims were allowed and the amounts due thereon for which there was no money in the treasury for their payment were evidenced by warrants. A total of 1,089 warrants were issued, 247 warrants totaling $174,097.70 were drawn against the Bridge Fund and 842 warrants totaling $364,933.98 were drawn against the Old Indebtedness Fund. All warrants were registered in 1921 and 1922.

The fifth claim was disallowed by the county board and Drake appealed to the district court where judgment was entered thereon for $75,168.43. This judgment was subsequently paid in full. The present action was brought to recover the amount due on the unpaid warrants given in payment of the first four claims filed.

The record further shows that each year, after the issuance and registration of the warrants against the Bridge Fund to and including 1938, levies were made and taxes collected for the payment of these warrants. In this manner all except 62 warrants in the amount of $77,765.90, including interest, were paid. Likewise, annual levies were made for the Old Indebtedness Fund to and including 1937 for the payment of outstanding warrants on that fund. In this manner all except 131 warrants in the amount of $161,358.33, including interest, were paid. The judgment entered by the trial court against the county of Stanton was for these amounts.

It is the contention of the county that the action is barred by the statute of limitations, that the warrants sued upon were issued in violation and in excess of the power of the county to issue warrants, that the contracts upon which the claims were based and the warrants issued were ultra vires, that the warrants were issued in violation of section 5, art. VIII of the Constitution of Nebraska, and that a judgment in a former action was res adjudicata of the validity of the warrants in question.

The plaintiff by way of reply denied the allegations of the answer and alleged that the defendant is estopped to assert that the warrants sued upon were issued in violation and excess of the powers of the county to issue such warrants, that the issuance of such warrants was not in fact in violation and in excess of such power, that defendant is estopped to assert that the warrants were issued in violation of section 5, art. VIII of the Constitution, that the issuance of such warrants was not in fact a violation of any constitutional provision, and that a judgment procured in an action in the district court court for Stanton county, Nebraska, wherein the Standard Bridge Company was plaintiff and the defendant, here, with others were defendants, constituted an adjudication of the validity of the warrants and is res adjudicata of all defenses pleaded by the defendant in the present suit.

With reference to the statute of limitations, the record shows that annual levies were made for the Old Indebtedness Fund to and including 1937. The record does not affirmatively establish a failure to levy taxes for the payment of registered warrants drawn on the Bridge Fund prior to August 1, 1936. Consequently, we find from the evidence that there was a failure for the first time to make a levy to pay registered warrants drawn on the Old Indebtedness Fund on August 1, 1938, and that the first failure to levy taxes to pay registered warrants drawn on the Bridge Fund was on August 1, 1936. This action was commenced on July 31, 1941. The applicable rule is that the statute of limitations does not begin to run against county warrants until after it appears that the taxes levied to create a fund for the payment of the warrants have failed and will continue to fail to produce funds for the payment of the warrants. Daniels v City of Gering, 130 Neb. 443, 265 N.W. 416. In Rogers v. City of Omaha, 82 Neb. 118, 117 N.W. 119, the rule is stated as follows: 'The statute of limitations does not commence to run against warrants issued by a municipal corporation, payable out of a special fund to be created, until such fund has in fact been created, and there is sufficient money in the fund with which to pay the warrants.' See, also, Bacon v. Dawes County, 66 Neb. 191, 92 N.W. 313. It is evident that the creation of a fund for the payment of these warrants failed when no levy was made in 1938 as to one and in 1936 as to the other. The...