author: GOODE, Special Judge WALKER, J.

text:
    THE STATE ex rel. WILLIAM G. KELLY et al. v. GEORGE E. HACKMANN, State Auditor.
    In Banc,
    August 6, 1918.
    1. CONTRACT WITH STATE: Proof of Existence: Finding by Legislature. A finding by the Legislature of a fact upon which the right to enact a law depends is not to be further inquired into by the courts. So where an appropriation act appropriated a definite sum of money to private persons “in full payment of their claim against the State of Missouri for the plan submitted to the Board of Fund Commissioners for the sale of State Capitol bonds,” and a contract for such a plan could under the statute have been made on behalf of the State with said board, it will be taken as true that an agreement was made between said persons and said board, under which the claim arose. And even if the court were to reserve the right to make an independent finding on the question of fact on the ground that the constitutionality of the act depends on a question of fact, the prior finding of the Legislature that such fact did exist would be treated as prima-facie true.

      Held, by WALKER, J., dissenting, with whom BOND, C. J., and WOODSON, X, concur, that the plan alleged to have been submitted was rendered voluntarily, with no .implied or express obligation on the part of the board to pay therefor, if the services tendered were not accepted, and the Constitution prohibits the Legislature to appropriate money for a mere submitted plan.
    2. -: Presumption of Validity: Judicial Question. The courts will -presume that the Legislature passed upon the validity of an agreement made by the board which was empowered to make it on behalf of the State, before it appropriated 'money to pay the obligation which it expressed, unless it is 'deemed a clear violation of the Constitution; but, nevertheless, the validity of the agreement is a judicial question, and the act making the appropriation to pay the claim will not be upheld if the agreement is one that the Constitution makes null and void.
    3. - — : Fund Commissioners: Power to Contract. Section 11900, Revised Statutes 1909, which authorized and empowered the Board of Fund Commissioners “to enter into contracts, and to refund any part of the bonded indebtedness of the State,” when read in connection with Section 11890, which authorized them to “perform all such acts and things as may be required of them by law,” and the amendment of 1913 to Section 11900, which “authorized and empowered” said board “to enter into contracts and to refund,” did not restrict their duties to refunding bonds, but authorized them to make contracts for the sale of Capitol bonds authorized by the Act of March 16, 1911.

      Held, by WALKER, X. dissenting, with whom BOND, C. X, and WOODSON, X, concur, that neither said statutes nor any other invested the board with authority to contract to pay for a plan to sell bonds voluntarily submitted to it and never accepted.
    4. -: Necessary Incidents of Power. In view of the inhibition of the Constitution (Sec. 24, art. 4) that the General Assembly shall have no power “to pay or to authorize the payment of any claim hereafter created against the State . . . under any agreement or contract made without express authority of law,” the power of the Board of Fund Commissioners to enter into a contract relating to the sale of the State’s bonds must be strictly construed, and no such broad meaning of the word “necessity” as “convenient” and “proper” is to be tolerated; but as the board was given express authority to sell the Capitol bonds and power to enter into contracts, they were also given, as necessary to the exercise of such power, the further power to enter into an agreement with private citizens to submit to them a plan to sell the bonds; and as the Legislature in an appropriation act recites that such plan was submitted, the apt appropriating money to pay for the service rendered is not without express authority of law. Held, by WALKER, X, dissenting, with whom BOND. C. X, and
    WOODSON, X, concur, that no appropriation act derives any operative force from its own terms alone, but something more, ' usually some statute, is necessary to authorize the withdrawal of money from the public treasury; and as the statute authorized the board to sell the bonds at th,e best advantage and required the proceeds to be applied exclusively to the building of a new capítol, furnishing the same and the acquirement of additional ground for a site, and the Constitution prohibits the Legislature to appropriate money in “payment of any claim . . . under any contract made without express authority of law,” the Board of Fund Commissioners had no power to enter into a contract to pay for a plan to sell the bonds, and the General Assembly had no power to appropriate money to pay for a plan for their sale, voluntarily submitted by private persons and never accepted by the board, and no-such power can be implied from the restricted language used, nor did any public necessity for the contract or the plan exist, and it is only when the public interest is involved that a necessity, as an incident to the power granted, can be said to exist.
    5. -: Capitol Building Fund: Restricted Use. The Capitol Building Fund having been increased from other sources than the proceeds of the Capitol bonds to an amount more than sufficient to discharge the obligation of a contract for a plan for selling the bonds, it cannot be held, as a fact, that an appropriation to pay-said obligation is a diversion of the proceeds of the bonds, whose proceeds were by statute devoted to erecting a capitol, furnishing it and buying additional ground for a site; nor can. it be held, as a matter of law, that the use of the proceeds to pay said obligation would be a diversion of them, since such payment was a necessary expense of floating' the loan and therefore not an unlawful use of the proceeds. [WALKFR, J.. BOND, C. J., and WOODSON, J., dissenting.]
    6. -: Grant to an Individual: Constitutional Inhibition. The restriction of Section 46 of Article 4 of the Constitution inhibiting the Legislature from granting public money to an individual, is laid upon gratuitous grants. It does not prohibit payment for services rendered the State; for instance, it does not prohibit the Legislature to appropriate money to pay private citizens for a plan submitted to the Board of Fund Commissioners to sell a large issue of bonds.
    7. -: Certification of Claim. The State Capitol Commission was not entrusted with the sale of Capitol bonds, nor did it have anything to do with claims or demands incident to their sale, and consequently it was not necessary that it allow or certify a claim by private persons for a plan to sell the bonds submitted to the Board of Fund Commissioners,
    8. JUDGMENT: Allowance in Excess of Demand. Where the Legislature appropriated $25,000 to pay relator’s demand, and they agreed with the Governor, prior to bis approval of the act, to reduce their demand to $20,000, and they asked for a writ to compel the State Auditor to issue them a warrant for $20,00p, and from a judgment against them in the circuit court they appeal, it would be inconsistent with the theory on which the case was tried and submitted in that court, for the Supreme Court to allow them $25,000.
    Appeal from Cole Circuit Court. — Hon. J. G. Slate, Judge.
    Reversed and remanded.

      George Kingsley, Reed & Harvey for appellants.
    (1) Courts reluctantly declare unconstitutional any legislative enactment. State ex rel. v. Gordon, 245 Mo. 35; State v. Smith., 233 Mo. 2-64; State v. Railway, 242 Mo. 354. (2) The contention of the State Auditor that all the moneys in the Capitol Building Fund constitute a trust fund for the construction of the Capitol, the furnishing and equipment thereof, and that a warrant against the same cannot be drawn in favor of relators, and .that attempt to do so would constitute an illegal diversion of the fund, is without merit. Church v. Hadley, 240 Mo. 692. (3) Section 59 is not in contravention of Section 20 of Article 10 of the Constitution. Church v. Hadley, 240 Mo. 692. (4) The contention of the State Auditor that the act of appropriation to relators is in contravention of Sections 46 and 48 of Article 4 of the Constitution is without merit. Ex parte Renfrow, 112 Mo. 591; Cuteher v. Crawford, 105 Ga. 180; Waterloo v. Shanahan, 128 N. Y. 345; Stevenson v. Colgan, 91 Cal. 649; Kadderly v. Portland, 44 Ore. 120; Davis v. Gaines, 48 Ark. 370; Hanson v. Hodges, 160 S. W. (Ark.) 395; In re Senate Resolution, 54 Colo. 270; Oklahoma City v. Shields, 22 Okla. 305; Lavin v. Bacon, 14 S. D. 405; Farquharson v. Yeargin, 24 Wash. 549; Lusher v. Sitz, 4 W. Va. 11; DeCamp v. Eveland, 19 Barb. 81. (5) The undisputed facts in the case and the findings of fact by the trial judge completely demolish the defense that there is no money available in the Capitol Building-Fund with which to pay relators, and that any payment thereof impairs the obligations of contracts between the State of Missouri and Kelly & Kelly and other persons.

      Franlc W. McAllister, Attorney-General and John T. Gose, Assistant Attorney-General for respondent.
    (1) In the extraordinary remedy of mandamus the following may be said to be elementary: (a) The writ is never granted in doubtful eases; (b) relator must establish his clear legal right; (c) where the underlying proceedings are unauthorized or illegal, the writ will be denied; (d) the writ will never issue where the act commanded would result in the violation of a constitutional provision. High, Extraordinary Remedies, p. 12; 26 Cyc. 150, 151; 19 Am. & Eng. Ency. Law (2 Ed.), 725; State ex rel. v. Thomas, 245 Mo. 71; State ex rel, v. .Appling, 191 Mo. App. 592. (2) A fund set aside by direct vote, of the people for certain specific purposes is in the nature of a. trust fund and cannot, by the General Assembly, be applied to any other purpose than that for which' it was created, except by the consent of the people.- In re Statehouse Fund, 19 R. I. 391; In re Statehouse Fund, 20 R. I. 707; Graham v. Horton, 6 Kan. 353; Trustees v. Bailey, 81 Am. Dec. 194; State ex rel. v. Cardozo, 28 Am. Rep. 274. (3) The act is violative of Section 20 of Article 10 of the Constitution. The Capitol Building Fund consists of moneys arising from a loan, debt or liability, and can only be applied to the purposes for which they were obtained, or to repay the indebtedness. The Legislature could not touch the fund for any other purpose. “Moneys arising from any loan, debt or liability contracted by the State shall be applied to the purposes for which they were obtained, or to the repayment of such debt or liability, and not otherwise.” Sec. 20, art. 10, Mo. Const. (4) The act is in violation of Sections 48 and 46 of Article 4, Constitution of Missouri. There was no express authority of law for a- contract or ¿greement with the Fund Commissioners for the submission of á plan, consequently the Legislature had no power to pass the act in question. Sec. 48. art. 4, Mo. Const.; State ex rel. v. Walker, 85 Mo. 47. The alleged contract or agreement being null and void, there was no liability created against the State, and the .act of the Legislature was in effect a mere grant or gift to an individual. Sec. 46, art. 4, Mo. Const. (5) The act violates the obligations of State contracts. No state shall pass any law impairing the obligation of' a contract. Sec. 10, art. 1, U. S. Constitution. No law impairing the obligation of contracts can be passed by the General Assembly. Sec. 15, art. 2, Mo. Constitution. “The obligation of a contract is found in the terms in which the contract is expressed. ” Barlow v. Gregory, 31 Conn. 265. Existing laws which touch and affect the subject matter of a contract are as much a part of the contract as if they were expressly written therein; 6 Ruling Case Law, sec. 243, par. 855; Armour Packing Co. v. United States, 209 U. S. 56; 14 L. R. A. (N. S.) 400; Kessler v. Clayes, 147 Mo. App. 95; McCracker v. Haward, 2 How. (43 U. S.) 611. Constitutional provisions which, deny to the' state the power to pass laws impairing the obligation of contracts apply as well to contracts made by the state as to those made by individuals. Dartmouth College v. Woodward, 4 Wheat, 519; Cooley’s Const. Limitations (6 Ed.), sec. 329; New Jersey v. Wilson, 7 Cranch, 164;. Fletcher v. Peck, 6 Cranch, 135; Hartman v. Greenhow, 102 U. S. 672.
   GOODE, Special Judge

An alternative writ of mandamus was issued June 12,1917, by the judge of the circuit court of Cole County, commanding the respondent, as State Auditor, to sign and deliver to the relators, Kelly & Kelly, a warrant for twenty thousand dollars upon the Capitol Building Fund of the State, or to show cause in term time, for refusing. The writ was granted upon.a petition containing these averments: The petitioners were partners under the style of Kelly & Kelly; the sum of twenty thousand dollars was appropriated to them out of the Capitol Building Fund by the General Assembly at its last session to pay money due petitioners by the State of Missouri; said appropriation was part of the General Appropriation Act and was approved by the Governor; prior to his approval petitioners agreed with him to reduce their claim to twenty thousand dollars; petitioners were and are willing to accept the State Auditor’s warrant for that sum in satisfaction of the appropriation, had so advised him and had demanded that he issue a warrant in petitioner’s favor in accordance with the terms of the appropriation, but he had refused.

The item of the General Appropriation Act of April 11, 1917, on which this proceeding is based, reads:

“There is hereby appropriated out of the State Treasury chargeable to the Capitol Building Fund the sum of twenty-five thousand dollars for the relief of Kelly & Kelly of Kansas City, Missouri, in full payment q£ their claim against the State of Missouri for the plan submitted to the Board of Fund Commissioners for the sale of State Capitol bonds.” [Laws 1917, p. 21, sec. 59.]

That part of the Appropriation Act is the only evidence in this case of an agreement between relators and the State and of what the agreement was.

In his return to the writ the State Auditor set forth ten reasons why he had not issued the warrant in question and should not.be compelled to issue it. They were in substance as follows:

A denial that the appropriation was to pay money due to the relators from the State, or that there was any money in the Capitol Building Fund to pay a warrant for the appropriation;

Averments that the Cápitol Building Fund was in the nature of a trust fund, set apart by a vote of the people for these specific purposes, first, to build a new State Capitol; second, ’ to furnish and equip it; third, to purchase any additional premises that might be needed as a site for the Capitol; that, therefore, the Legislature was without power to divert any part of the Capitol Building Fund to other purposes;

That as the Capitol Building Fund consisted of money derived from a liability contracted by the State, for the three purposes aforesaid, it could not be appropriated for any other than those, purposes, or to repay the debt of the State, without violating Section 20 of Article 10 of the State Constitution. This section of the State Constitution provides, in effect, against the use of any money arising from a loan, debt or liability contracted by the State, for any purposes other than that for which the debt was contracted, or for the repayment of the debt;

That the appropriation for relators was contrary to the provisions of Section 48 of Article 4 of the Constitution, which reads: “The General Assembly shall have no power .to grant, or to authorize any county or municipal authority to grant any extra compensation, fee or allowance to a public officer, agent, servant or contractor, after service has heen rendered or a contract has been entered into and performed in whole or in part, nor pay nor authorize the payment of any claim hereafter created against the State, or any county or municipality of the State, under any agreement or contract made without express authority of law; and all such unauthorized agreements or contracts shall be null and void.”

That the appropriation amounted to a grant to the relators of public money, in violation of the inhibition of Section 46, Article 4, of the State Constitution;

That the appropriation impaired the obligation of contracts previously made by the State, for the construction and furnishing of the Capitol, and finally,

Averments to the effect that the claim of relators for which the appropriation was made, did not arise under a contract made with the State Capitol Commission Board, nor was the relators’ demand allowed and certified by said board, in conformity to the act creating the board. [Laws 1911, p. 108 et seq.]

A replication in the form of a general denial of the return was filed.

At the hearing in the circuit court it was admitted there was then in the Capitol Building Fund $707,844.87; that said fund (i. e. the amount then in it and what had been in it)consisted of the proceeds of the sale of bonds of the State authorized by act of the General Assembly (see Laws 1911, pp. 406-417), together with funds placed in it under Section 16-A. of the Act of the General Assembly relative to contingent and incidental expenses for years 1915-1916 (Laws 1915, p. 9). It was admitted the additional sum of $27,500 had been transferred to the Cápitol Building F'und pursuant to said Section 16-A (Laws 1915, p. 9) and that $21,000 derived from the rent and sale of buildings on the Capitol grounds had been added. There were admissions relative td submitting to the popular vote the Act of March 16, 1911 (Laws 1911, pp. 416-417), providing for contracting a liability of the State through an issue of bonds to a maximum of three and a half million dollars, to provide means to build a capítol, furnish and equip it and purchase additional premises for it; that the act of submission was approved March 24, 1911 (Laws 1911, pp. 250-254); and that the bond issue, for the purposes mentioned, received a two-thirds majority of the voters voting at the election.

Evidence was put in by the respondent to show contracts the State was under for building the Capitol and the amount of the State’s liability under them; also that other contracts would be necessary in the future in order to complete, light and furnish the Capitol.

The trial court found that when the Appropriation Act was approved and at the time of the hearing, there was enough money in the Capitol Building Fund to pay a warrant for $20,000 in favor of relators, and that, too, without impairing the obligation of any contract in existence when the appropriation was approved or when the cause was heard.

The alternative writ was quashed in the circuit court and relators appealed.

By way of further explanation we state that the issue/ of State bonds to construct, furnish and equip a new capítol building was authorized by an Act of the General Assembly approved March 6, 1911. (Laws 1911, p. 416). That act provided for the contracting of a liability of the State by an issue of bonds, not to exceed three and one-half millipn dollars, for a submission of this act to a vote of the people as required by Section 44, Article 4, of the State Constitution, prescribed the denominations of the bonds, mode' of authenticating them, and further provided as follows: “Said bends, when so prepared and executed under the supervision of the State Board of Fund Commissioners, shall be sold to the best advantage by said board, but not for less than par. The proceeds of said sale or sales shall constitute a fund to be designated as the Capitol Building Fund, and shall be applied exclusively to the building of a new state capítol at the present seat of government of the State, including the furnishing and other equipment of said building and the purchase by the State of additional capitol premises adjoining those now owned by the State;” and further that “contract or contracts for expenditures to carry out the purposes of this act in excess of said three and one-half millions of dollars, with interest collected thereon, shall, to tbe amount of said excess, be illegal and void and forever non-payable.” An act submitting the foregoing act to a popular vote was approved March 24, 1911 (Laws 1911, p. 250).

Withastate The proposition mainly relied on by respondent as a defense is, that the appropriation to pay the claim of relators violated that clause of the State Constitution quoted above, which forbids the General Assembly to pay or authorize the payment of a claim created against the State under any agreement or contract made without express authority of law, and declares all such unauthorized agreements and contracts shall be null and void. The claim of relators is of a -kind that could only accrue from ’ a contract, and whatever may have been the contract out of which the claim arose, it must have been made between the: relators and the State acting through the Board of Fund Commissioners, as it is apparent from the recital in the Appropriation Act that the purpose of the particular item was to pay relators for a plan for the sale of the State Capitol bonds, submitted by them to that board. Moreover, if a contract of the kind in question was possible, it could only have been made with the said board, which was the body of officials charged with the task of selling the bonds, by the act that authorized them: ,.

There are two inquiries to be answered in determining whether or not the claim of relators was created against the State under a valid agreement. First, is there proof in the record that an agreement was entered into by the relators with the Board of Fund Commissioners for the former to submit a plan to sell the bonds? Second, if there is, did the board possess express authority of law to make the agreement, or was it a mere nullity for lack of authority?

In eases where the courts have reserved the right to make an independent finding of facts when the constitutionality of a statute turned upon, a question of fact, the prior finding of the Legislature was treated as prima-facie true. [N. Pac. Ry. v. N. Dakota, 216 U. S. 579; Judson, Interstate Commerce (3 Ed.), p. 224.] And there is abundant authority in this State and elsewhere for holding that a finding by the Legislature of the existence of a fact upon which the right to enact a law depended, is not to be further inquired of by the courts. [Ex parte Renfrow, 112 Mo. 591; and cases cited in opinion.] So we will take it as true that an agreement was made between the State and relators under which their claim arose. We should presume, too, that the Legislature passed upon the validity of the agreement before making the appropriation in controversy. Nevertheless, that question remains judicial, the legislative decision being so far respected that the act passed to pay the claim based on the contract, will be upheld by the court, unless deemed to be a clear violation of the Constitution. The constitutionality of statutes, other than those of a political character, must be judicially determined, when called into, question in litigation, as has been often decided in cases like the present. [State ex rel. v. Walker, 85 Mo. 41; State ex rel. v. Dierkes, 214 Mo. 578, 587.]

Proceeding to the inquiry whether it was possible for the-contract in controversy to have been made by express authority of law, we note that the Board of Fund Commissioners is composed of the Governor, Auditor, Treasurer and Attorney-General, and that it is part of the Treasury Department, created by an act of the Legislature approved March 25, 1891. [Laws 1891, p. 16.] This act, as amended in a few particulars, constitutes. the 3rd Article of Chapter 121 of Revised Statutes of 1909. One amendment was made to provide a plan to-.refund the State Capitol bonds (Laws 19.13, p. 772); but we do not consider the change thus made as controlling the decision of the point in this case which arises on the act. The 13th section of the Law as it was passed in 1891 and which is now Section 11900, Revised Statutes 1909, reads as follows:.

' “The Board of Fund Commissioners are hereby authorized and empowered to enter into contracts, and to refund any part of the bonded indebtedness of the State, whenever they can do so to the advantage of the State in reducing the rate of interest of the outstanding State bonds, and to this end they are authorized and empowered to cause new bonds to be prepared, issued, sold or exchanged for outstanding bonds of such denominations, dates and rate of interest as they may deem proper, payable at such times and places, principal and interest, as they may agree upon as being to the best interests of the State: Provided, always, that the rate of interest of said bonds to be issued shall not exceed three per centum per annum, and that such ‘refunding bonds’ fall due, or become redeemable at the pleasure of the State, at such dates as will permit the redemption or payment, at par, of at least two hundred and fifty thousand dollars of the bonded debt of the State every year, until all of the bonds of the State are paid off. All bonds or State certifications of indebtedness hereater issued by this State under the direction of the Board of Fund Commissioners shall be signed by the Governor, countersigned by the Secretary of State, with the great seal of the State attached, and the coupons for interest shall have a facsimile of the State Treasurer’s signature engraved thereon. The bond shall be registered by the State Auditor, to which he shall certify on each bond, and authenticate such registration by his signature and his official seal attached.”

That section was altered, as stated, in 1913, by inserting certain provisions about the State Capitol bonds. The question is whether the clause authorizing the Board of Fund Commissioners to enter into contracts, conferred on the board the right to mate contracts regarding any duty that might be committed to them by law, or only regarding the refunding of State bonds. Most of the section relates to refunding, but in a prior section (now See. 11890, R. S. 1909) it was provided that the Fund Commissioners should do “and perfom all such acts and things as may be required of them by law,” and various duties other than refunding duties were required of them; and in fact, they were charged with a supervisory control over the Treasury Department. The first clause of the 13th section (now Sec. 11900), which empowered the Fund Commissioners to enter into contracts, instead of reading that the board was authorized and empowered to enter into contracts to refund, etc., reads that they are “authorized and empowered to enter into contracts and to refund,” etc. The only reason for thinking the right to contract was given solely to enable the board to discharge their refunding duty is, that the right was given in the same part of the act that provided for those duties. But the Legislature contemplated from the first that the ■board should perform other duties, and duties which, as may be seen by reading the act, would call for agreements; for instance, the selection of a bank as fiscal agent for the State (3 R. S. 1909, sec. 11894). If it is held that the power of the commissioners to contract, given in the 13th section, was meant to apply only in refunding cases, then on the maxim that the mention of one thing inferentially excludes others, it could be argued that the commissioners were without power to make contracts, whatever the necessity for them, as to any other task that might be imposed on them by law. The reasonable construction of the act is tjiat the Legislature intended to vest this body of officials with authority to enter into contracts according to their judgment, not regarding any public matter whatsoever, but regarding any that might be entrusted to their management — to enter into such contracts as would enable them to perform, not only their refunding duties, but their other duties as well. As the selling of the Capitol bonds was given in charge to the Board of Fund Commissioners, it follows that the contract in question, entered into in connection with the effort to sell, was made by express authority of law, unless the right of the Fund Commissioners to contract in the particular matter was withdrawn by later statutes; and there is .none claimed to have that effect, except those that provide for the Capitol bond loan; particularly the clause requiring the bonds to be sold for not less than par.

In the case of Church v. Hadley, 240 Mo. 680, decided in 1911, this court, without passing upon the effect of said Section 11900, Eevised Statutes 1909, held the Fund Commissioners had express authority to contract for help to sell the Capitol bonds, by reason of these facts: first, that their efforts .to sell without help had demonstrated it was impossible to do so; second, the urgency of the need to sell in order that the State’s archives might be safely housed. The 'two opinions in the case were both concurred in by a majority of the court, and the gist of them was that an emergency existed which created a necessity for help in selling the bonds, “and that such necessity is within the intendment of the statutes,” namely, the statutes which authorized the bonds. The decision was based both on an interpretation of those statutes and on adjudications in other states wherein the right of officials to agree to pay a commission for the sale of public securities was held to have been conferred by laws authorizing them to sell. [Armstrong v. Village of Fort Edward, 159 N. Y. 315; Mayor, etc. v. Sands, 105 N. Y. 210; Manitou v. First National Bank, 37 Colo. 344; State v. West Duluth Land Co., 75 Minn. 456.] It would be difficult to sustain the proposition that at common law, an agent appointed to sell property, as the Fund Commissioners were, was empowered merely by virtue of his appointment, to bind his principal by contracts with third persons to help him sell, even if it should turn out that he could not sell without help. [2 Cor. Jur., p. 595, and note 13; 9 Cor. Jur. p. 519, and note 95; Mechem, Agency, sec. 357; Atlee v. Fink, 75 Mo. 100; Carroll v. Tucker, 2 N. Y. Misc. 397.] Nor did the decision in Church v. Hadley announce as a rule of general application, that agents might do this; but, instead, took pains to declare that the decision stood on all the facts of the particular case (1. c. 706). The exact question determined therein was as to the right of the Fund Commissioners to agree to pay a broker’s commission for sale of the bonds, whereas here the question is of their right to contract for a plan to sell the bonds. In our judgment, the difference between the two agreements does not call for a different rule of decision in the present case, inasmuch as both agreements were expedients resorted to by the Fund Commissioners as necessary, in their judgment, to enable them to perform their duty to sell the bonds — the identical issue of bonds and the same conditions existing in each instance.

The argument is pressed at this point that in Church v. Hadley, the court was not dealing with an appropriation to pay a claim against the State, and was neither bound to nor did consider the provision of Section 48, Article 4, of the State Constitution, which forbids the payment of any claim against the State created under a contract made without express authority of law. It is true, there was no discussion in the opinion of that clause of the Constitution, but the court carefully inquired as to the authority of the Fund Commissioners to agree for the help of brokers, and found such authority was part of the express grant of power to the commissioners to sell the bonds. It is appropriate to refer here to cases which support that doctrine by analogy and to others which support it by judgments directly in point. It will be conceded that the power of officials charged with a ministerial duty are strictly construed and that such broad meanings of the word necessary (namely, “convenient” or “proper”) as have been adopted in ascertaining from grants to legislative bodies what powers passed by implication as necessary to the effective use of those mentioned (M’Culloch v. Maryland, 4 Wheat. 316) have not been accepted (Mechem, Public Officers, secs. 511, 522; State v. Bank of Missouri, 45 Mo. 528, 538; Whiteside v. United States, 93 U. S. 247, 257). But tried by the strict meaning of “necessary,” some powers not mentioned will pass by a grant, just as an appurtenant easement will go with a conveyance of an estate though not mentioned in the deed. [Kent v. Waite, 10 Pick. 138.] A statutory appropriation of funds to a Highway Commissioner, wherewith to build roads, expressly carried the right to. purchase materials and tools for use in building, though nothing was said in the statute about purchases for that purpose, whereas they were directed to be made for the repair of roads. This was decided in construing a constitutional clause like the one in hand. [Townsend v. Gash, 267 Ill. 578.] And dealing with the same provision, 'it was held that supervisiors charged to inspect the hooks and accounts of county officers were expressly given.the right to hire an expert accountant, for the reason that, as they were not experts, it was impossible otherwise for them to-perform their task. [Harris v. Gibbins, 114 Cal. 418.] Supervisors appointed to examine and allow accounts are thereby empowered to reject accounts, and a commission to erect a public building' carries the right- to engage for labor and material. [People v. Supervisors, 9 Wend. 508; Danolds v. State, 89 N. Y. 361] Implied or incidental powers like those examples, can be derived from an express grant without extending the word “necessary” beyond its usual meaning of an indispensable condition or requisite; and, as- the implied powers are considered to have been embraced in the grant, without ignoring the meaning of “express” in the law as the antithesis of “implied.”

In the light of the foregoing arguments and. precedents, we think the constitutional provision in question was not adopted with the intention to abrogate the doctrine of the common law that incidental powers may accompany the grant of an express power, as necessary to the exercise of the latter; but to enforce the .rule of strict construction in determining what agreements public agents and officials are given the-right to make, in connection with the performance of some duty imposed on them, when such subsidiary- agreements are not mentioned in the law imposing the duty.

Moreover, though the court in Church v. Hadley did not determine the effect of the constitutional provision in hand, fipon the right-of the Fund Commissioners to contract for help in selling the bonds, it did‘¡determine, as- said before,, that they had the right to do this by virtue of the statute• which directed them to sell; and the court having so determined, it follows, of course, that an appropriation to pay for the assistance thus procured would not be unconstitutional, on the ground that the contract was made without express authority of law.

The second and third answers in the return present, in two phases, the proposition that the Capitol Building Fund consists of the proceeds of the Capitol bonds, which proceeds had been devoted by the statutes authorizing the bonds to the threefold purpose of erecting a State capitol, furnishing and equipping it and buying premises to enlarge the site; that the loan had been ratified by the voters of the State upon the condition that the proceeds of it should be thus used, and therefore a diversion of any portion of the proceeds to another use would be unlawful. In support of this proposition as a general rule of law, independent- of any constitutional inhibition, several decisions are cited, and as enforceing the same rule, a clause of the Missouri State Constitution. [In re State House Fund, 19 R. I. 391, 20 R. I. 707; Graham v. Horton, 6 Kan. 1. c. 353; Trustees v. Bailey, 81 Am. Dec. 194; Mo. Constitution, art. 10, sec. 20.] There are two answers to this contention, one of fact, the other of law. The evidence in the, record, and indeed the admission of the parties, show that the Capitol Building Fund, against which the appropriation for relators was made, has been increased from other sources than the proceeds of the - Capitol bonds, to an amount more than sufficient to discharge the appropriation. Besides, the effect of the decision in Church v. Hadley is that one. of. the purposes in.contemplation- when the Capitol loan was made, was payment of the necessary expense of floating the loan out of its proceeds, and therefore such payment would not be an unlawful use of the proceeds.

Tbe language in which the General Assembly made the appropriation answers the contention that it was a grant of public money within, the inhibition of Section 46 of Article 4 of the Constitution. The appropriation purports to be made to pay a claim of relators against the State for a plan submitted to the Board of Fund Commissioners to sell the bonds; that is, to pay for a service rendered the State, and one for which, so far as the last cited section of the Constitution is concerned, the Legislature might pay as lawfully as any other. The restriction of the Constitution is laid upon gratuitous grants of public money. [Stevenson v. Colgan, 91 Cal. 649.]

The defense that the Auditor had no right to issue the warrant in question, because the State Capitol Commission Board had not allowed or certified relator’s claim, calls for an' interpretation of the act that provided for said board and defined it's duties and the correlative duties of the State Auditor (Laws 1911, p. 108). The powers and duties of the board as given in the act relate to the acquisition of Capitol premises, selection of a place for the Capitol itself, contracts for its construction, and allowing and certifying to the Auditor bills in connection with those duties. The State Capitol Commission Board were not entrusted with the sale of the Capitol bonds, nor had they anything to do with claims or demands incident to their sale. Whatever expense might be incurred lawfully by the Fund Commissioners in selling, could be paid under a proper appropriation act, without previous action by the Capitol Commission Board.

The defenses of respondent that there was no money in the Capitol Building Fund to .pay relators’ claim, and that to pay it would impair the obligations of contracts made by the State, are answered by the findings of the trial court, which are supported by the evidence.

The demand of the relators made in their brief for relief to the amount of $25,000 cannot be allowed in the face of their agreement with the .Governor to accept $20,000, and their petition for a writ to comPe^ the issuance of a warrant for the latter amount. This case is here on appeal, and it W011pi[ pg inconsistent with the theory on which it was tried and submitted below, to treat it as a proceeding to recover more than they originally demanded.

The judgment is reversed and the cause is remanded with direction to the circuit court to reinsert it -in the docket and issue a peremptory writ of mandamus to the respondent to issue, a warrant in favor of relators in the sum of $20,000.

Faris, Williams and Graves, JJ., concur; Walker J., dissents in separate opinion, in which Bond, C. J., and Woodson, J., concur.

WALKER, J.

(dissenting) — I do not concur in the majority opinion. The Appropriation Act the validity of' which we are called upon to determine in this case,, is as follows:

“Sec. 59. Relief of Kelly and Kelly. There is hereby appropriated out of the State. Treasury chargeable to the Capitol Building Fund the sum of twenty-five thousand dollars for the relief of Kelly & Kelly of Kansas City, Missouri, in full payment-of their claim against the State of Missouri for the plan submitted to the Board of Fund Commissioners for the sale of State Capitol bonds.”

. It is not inappropriate to state generally, preliminary to a discussion of the facts in- this particular case, that no appropriation act under our system of laws' derives any operative force from its own terms alone. As we will demonstrate, something more is necessary to authorize the withdrawal of funds from the public treasury than a mere arbitrary declaration of the General Assembly for that purpose. This-being true, we must look to other than this act itself in determining its validity. A confusion in terms may be avoided by keeping in mind that the appropriation will be referred to as “the act,” and the law it.designates as creating the fund from which the appropriation is sought to be made, as “the statute.” To this statute we must look in determining the validity of the act. The pertinent parts of this statute necessary to the determination of the matter at issue are embraced in a few words. It confers power upon the Board of Fund Commissioners to sell the bonds therein provided for at the best advantage, but for not less than par. The proceeds arising therefrom are designated as the “Capitol Building Fund,” to be applied exclusively to the building of a new State Capitol at the present seat of government of the' State, including the furnishing and other equipment of said building. [Sec. 1, Laws 1911, pp. 250, 416.] The effect of the act is to appropriate a portion of the Capitol Building Fund to the payment of the claim designated therein. In the absence of a constitutional limitation, this would be sufficient to set the seal of legality upon an act of this character, because the Legislature is supreme within its own appointed sphere. This being true, the presumptive validity of its acts not only uniformly obtains, but continues until their invalidity is shown beyond a reasonable doubt. This rule of noninterference of the judiciary with legislative action, in harmony with the spirit and purpose of our institutions, has found frequent expression in our reports-Notably in the following cases: State ex rel. v. Aloe, 152 Mo. 1. c. 477; Edwards v. Lesueur, 132 Mo. 1. c. 430; State ex rel. v. Wofford, 121 Mo. 1. c. 68; State ex rel. v. Renfrow, 112 Mo. 1. c. 594; Deal v. Mississippi Co., 107 Mo. 1. c. 468. The rule as announced in these cases and many others of like tenor is clear and definite, leaving no room for controversy. In none of these cases, however, was the validity of an appropriation act involved. Such acts are hedged abqut with constitutional limitations with which the Legislature must comply to render them valid. When, therefore, an act of this character is submitted for judicial analysis, the presumption as to its validity will obtain at first view, as in the case of other enactments, but it should be scrutinized to determine if it conforms to the express requirements of the Constitution. Such scrutiny in nowise interferes with the authorized freedom of legislative action, hut is nothing more than the legitimate exercise of an affirmative duty enjoined upon the judiciary — a duty imminently imperative where, as here, it is evident from the face of the act that its purpose is to appropriate part of a public fund created for a specific purpose, to the payment of a. private claim. Furthermore, the fund from which this appropriation seeks payment was not created by the ordinary p?rrcesses of taxation, burdensome at best, but under a statute which required the approval of the electorate to render it operative. The will of the people directly expressed as well as that of their representatives is therefore embodied in the statute. This statute creates a burden imposed solely on account of the exigency occasioned by a great public calamity; and in this creation it is not to be presumed, in view of the restrictions of the Constitution, that it was intended that the fund arising from a compliance with its conditions should be expended other than in accordance with its well defined terms. In a case of this character there is no room for presumptions. The restrictive limitations of the Constitution, therefore, necessary to be observed ón construing the statute creating the Capitol Building Fund and, as a consequence, its application to the act of appropriation, demand our considerate examination.

■ Section 48 of Article 4 of the Constitution, so far as same is applicable to the matter at issue, is as follows:

“The General Assembly shall have no power to pay or authorize the payment of any claim hereafter created against the State, under any contract made without express authority of law; and all such unauthorized agreernents or contracts shall be null and void.”

This provision is mandatory and like any other constitutional provision of like nature (St. Joe Ry. Co. v. Shambaugh, 106 Mo. 1. c. 571) it inserts itself into all appropriation acts, and a compliance with its mandate is a prerequisite to- their validity. What are the terms, therefore, of the statute upon which this act must rely for its legality? Their repetition will bnt serve to emphasize their explicit purpose. They are that the Board of Fund Commissioners shall sell the bonds “from which the fund is to be created for not less than par,” and that “the proceeds of said sale or sales shall constitute a fund to be designated as the Capitol Building Fund, and shall be applied exclusively to the building of a new state capitol at the present seat of government of the State, including the furnishing and other equipment of said building and the purchase by the State of additional capitol premises adjoining those now owned by the State.” ' [Sec. 1, Laws 1911, p. 416.] This is the statute in its own words, omitting therefrom certain subsequent provisions which even with the longing eyes of private acquisition cannot with any regard for the acknowledged meaning of words be construed as having any pertinence to the matter at issue. We submit that the language of this statute contains nothing which can 'be construed’ as authorizing this appropriation even under the most latitudinary construction; but such a construction, the ultimate result of which is a reliance upon implied power, will not suffice to give legal life to the attempt made by this act, to divert a portion of this fund from the evident purpose of its creation. This for the reason of the unequivocal language of the Constitution, which prohibits any appropriation in the absence of an express provision of law authorizing the same. The language .thus employed is neither finical nor redundant, but expresses in clear and forcible words the purpose of the framers of the organic law. The word “express” is employed in the limitation to exclude any power that might be sought to be exercised by implication. This is evident not only from the meaning of the word itself, but from its connection and the purpose intended to be effected by the adoption of this restriction. The reason of the law is the life of the law. This rule applies to constitutions as well as to statutes; and while this constitutional provision needs no gloss, a reference to the numerous acts showing the indiscriminate, appropriation of public money before the adoption of the present Constitution, will historically and indubitably demonstrate the reasons, not only for this limitation as well as others upon legislative action in this regard, but that the words employed in expressing it have been carefully chosen and were used-with a well defined purpose. This being true, if we keep in view the purpose intended to be accomplished by the framers of the Constitution in this limitation, and we read the words according .to their plain unmistakable meaning, the conclusion is inevitable that the power to make this appropriation, under the statute, did not exist.

A contrary conclusion finds no support in either the reasoning or the conclusion reached in Church v. Hadley, 240 Mo. 680. The argument is that case while recognizing the supremacy of the General Assembly in its own field as one of the co-ordinate branches of the government, nowhere holds that the courts may not with discriminating care and a quickened conscience, especially where the interests of the State are concerned, examine every act of the appropriation of public money submitted for their review to determine its validity. In so doing- they but comply with a sworn duty, and in no respect do they interfere with legislative supremacy, which in this class of cases does not exist until after the acts have received judicial approval, if submitted for that purpose. The Church-Hadley case did not involve the construction of an appropriation act, and hence the provision of the Constitution (Sec. 48, Art. 4) affirmatively restricting legislation of this character was neither considered nor construed. The ruling in that case conferring power upon the Board of Fund Commissioners to pay a commission for the sale of the the Capitol Fund bonds was based upon- public necessity, and properly so, and not upon any power to be inferred from the language of the statute. Confined to the. latter, no rule of construction would have authorized the holding of such a power by implication. A recital of the facts in the Church-Hadley case will demonstrate the wisdom and correctness of the conclusion reached therein, and hy differentiation show that a like conclusion is not authorized in the ease at bar. The proceeding was by injunction to restrain the Board of Fund Commissioners from paying a commission for the sale of Capitol Fund bonds, which, if granted, would have resulted in paralyzing all previous acts of the G-eneral Assembly and of the people to repair the loss occasioned by the burning of the State Capitol. The only act remaining unperformed to secure the necessary funds to repair the loss was the conversion of the bonds into cash. It was conceded that while the power of sale was conferred upon the board, it was unreasonable to conclude that its members could unaided accomplish this end. The court held, therefore, that the statute being full and . complete in all other respects, and the State being confronted not only with great loss, but a serious interference with its functions unless the bonds were promptly sold, the board would not be restrained from effecting their sale in any manner it deemed most feasible, and if in its wisdom, it found it necessary to pay a commission to brokers to effect the sale, that this might be done. The decisive ruling in the case, therefore, whatever other matters may appear arguendo, is this (p. 707): that “the power to pay a commission springs only from an emergency creating such necessity, - and that such necessity is within the intendment of the statute.” Five of the judges concurred in this conclusion, Valliant and Brown, JJ., not voting. Thus it will be seen that the ruling was based upon necessity, and not upon a power created by implication, and cannot be considered a precedent in the case at bár. The latter ■ 'cannot be sustained upon the doctrine of necessity, because this can only be invoked when the public interest is involved. It cannot be urged as a moral claim, because the plan alleged to have been submitted was rendered voluntarily with no implied or express obligation on the part of the board to pay therefor, if the services tendered were not accepted. It cannot be urged on legal grounds, because the board was without any authority to contract for such an offer, and as a consequence the claim forms no basis for a right of action, if the State could be sued. A claim of _ this character is contrary to usage, custom and business experience, of all of which we are authorized to take judicial notice. No enterprise of moment, whether it be the sale of public securities or an employment of a fiscal or industrial character, is ever inaugurated, especially by a state or subordinate municipality, in which competitive propositions for undertaking same are not required to be submitted. Heretofore, demands for compensation in such cases have been limited to those who, being employed, had rendered service. This claim is, therefore, a novelty even in the ever extending field of business activity, the moving impulse of which is to set a price on everything.

Liberal as our Legislatures have been in the appropriation of public money, the approval of a claim for an offer to perform a service for the State has heretofore been unheard of. Certain it is, that no claim such as this, in the very teeth of the Constitution, has received the sanction of the courts. Given judicial approval, it will set the pace for a most pernicious practice, and hereafter, not one, but all of the unsuccessful bidders for state employment, will seek legislative intervention to secure compensation, not for services rendered, but for plans proffered.

This claim, therefore, is not only unauthorized, but unconscionable, and it should not be approvéd.

Bond, G. J., and Woodson, J., concur in this opinion.


source: Caselaw Access Project

author: WOODSON, J.

license: Public Domain

text:
    AUGUSTA M. ZINKE v. KNIGHTS OF THE MACCABEES OF THE WORLD, Appellant.
    In Banc,
    September 7, 1918.
    1. ACCORD AND SATISFACTION: Fart Payment: Receipt in FuU: Consideration: Doubt as to Amount Due. A part payment of a debt unquestionably due will not discharge the entire debt, even though receipted in full and based upon an understanding or agreement that it is payment in full, for there is no consideration to support the agreement. But where there is an honest doubt between the parties as to the amount due, and after due consideration the creditor yields to the debtor’s views and accepts what the debtor concedes to be due and gives a receipt in full, and there is no fraud or other ground for equitable relief, the settlement is binding, for the reason that it comes within the principle of .accord and satisfaction.
    2. -: -: Consideration: Receipt Not Necessary. To make a settlement binding on the creditor as an accord and satisfaction; neither a receipt in full nor even an agreement to accept a part for the whole is necessary, if the creditor knows there is reasonable doubt as to the amount due and accepts the part tendered in full satisfaction.

      Certiorari.

    Writ quashed.

      B. P. (& C. B. Williams for petitioner.

      Durham, and Durham for respondent.
   WOODSON, J.

Augusta M. Zinke brought a suit against tbe Knights of the Maccabees of the World to recover $421.60, the balance alleged to be due her on a benefit certificate issued by it on the life of Ferdinand Gr. Zinke, her husband. She recovered judgment for the amount sued for, and the defendant appealed the cause to the St. Louis Court of Appeals, which affirmed the judgment of the circuit court.

After taking the proper preliminary steps the petitioner applied to this court for a writ of certiorari directed to the Court of Appeals, which was duly issued, and in due time return was properly made thereto.

No point is made upon the pleadings, so they will be put aside.

The facts are fairly stated by the Court of Appeals in the opinion written by it, which we here copy:

“Plaintiff instituted this action before a justice of the peace by filing a statement in which' she claimed that she was beneficiary in a benefit certificate issued on the life of her husband, Ferdinand G. Zinke, in the .sum of $1000; that the insured departed this life during the time that said benefit certificate was in force, and that the association paid plaintiff the sum of $578.40, leaving a balance of $421.60 due plaintiff, which balance had been previously' demanded and payment refused: "From a judgment in favor of plaintiff in the justice court the defendant' appealed. On a trial de novo in the circuit court before a judge and jury a judgment was entered in favor of plaintiff and against the defendant in the sum of $421.60, and defendant in due course appealed.

“It is admitted that the defendant, Knights of the Maccabees of the World, is a corporation, successor to the Supreme Tent, Knights of the Maccabees of the World, ánd is a fraternal benefit association organized under the laws of the State of Michigan and authorized to do business in the State of Missouri; that the defendant had issued, on the life of Ferdinand G. Zinke, its policy No. 20,410, and that at his death one' assessment on the membership, not exceeding in amount the sum of $1000, was to be paid- thereunder as a benefit to plaintiff, Augusta M. Zinke, wife of the insured, upon satisfactory proof of his death and the surrender of the said certificate; that one assessment on the membership of the defendant company at the time of the death of Ferdinand G. Zinke would have amounted to more than the sum of $1000. The application of the insured for membership in the defendant order contained the following :

“ ‘I also agree that should Í commit suicide., in contravention of the laws of said Supreme Tent, whether sfme or insane at the time, that this contract shall be null and void and of no binding force upon said Supreme Tent.

“ ‘This application and the laws of said Supreme Tent now in force or that may hereafter be adopted, together with my certificate of membership, are made the. contract between myself and the said Supreme Tent, and I for myself and my beneficiary agree to conform to and be governed thereby.’

“Section 379 of the by-laws of the defendant in force and effect at the time of the decease of the insured, provides that:

’ “ 'No benefit shall be paid on account of the death of a member who shall die by his own hand, whether sane or insane; provided, however, that the beneficiary named in the life benefit certificate, or the person legally entitled to the benefit, shall receive an amount equal to twice the amount contributed to the Life Benefit Fund by the member during his lifetime, but not in excess of the face of the certificate. ’ ,

“There is no controversy but that Ferdinand Gr. Zinke, the insured, paid the defendant association in monthly rates on said certificate up to the time of his death $289.20; that at the time of his death his dues to the association were paid, and that he was in good standing; that on or about the 5th day of June, 1913, some time after the death of the insured, the defendant association paid to Augusta M. Zinke, the plaintiff, the sum of $573.40, being twice the amount of the monthly rates contributed to the Life Benefit Fund by, Ferdinand G. Zinke during his lifetime.

“The record shows that the insured died on the 31st of March, 1913, and that the beneficiary, plaintiff herein, furnished the defendant preliminary proofs of death, consisting of her own affidavit, the affidavit of the attending physician, the verdict of the coroner’s jury, affidavits taken at the coroner’s inquest, and the sworn statement of the officers of the subordinate lodge of which the insured was a member. Each of these papers gave the cause of the death of the insured as-suicide. The affidavit of the beneficiary contained the following: 'Date of death, — March 31, 1913;’ 'Remote cause of death? Had trouble with his .head for about six weeks;’ ‘Immediate cause of death? ' Not of sound mind, suicide.’ The defendant association upon receiving the preliminary proofs of death issued its check, payable to the beneficiary, in the sum of $578.40, which is admitted to be double the amount the insured had paid in during his lifetime. This check, together with the receipt prepared by the defendant association, was sent forward to the officers of the local lodge, which it appears was customary, with instructions to turn the same over to the plaintiff upon the execution of the receipt.

“It appears that plaintiff did not accept the check immediately, but consulted the officers of the local lodge and her attorney, and took the matter under advisement for some days. Plaintiff’s attorney advised her ‘that if it should be found by a' trier of the fact that suicide was the' cause of her husband’s death, that amount was all that was due under the policy. I advised her further that if he had not committed suicide, the full amount, namely, $1,000, would be coming to-her; also advised-her concerning the necessary steps that it would take in order to test that question in the courts. I tried to put the whole facts and all the circumstances before her for her decision as to whether or not she would accept the amount offered, or fight for the full amount of the policy, $1,000.’

“It further appears that there was no communication between the plaintiff and the defendant, from the date that defendant company mailed the check for $578,40, together with receipt attached, to the officers of the local lodge. The receipt which plaintiff executed at the time she accepted the check, is as follows:

“ ‘Received from the Knights of the Maccabees of the World the sum of $578.40, that being twice the amount of monthly rates contributed to the life Benefit . Fund of Ferdinand Gf. Zinke, late a member of Tent No. 116, State or Province of Missouri, and the full amount for which the association is liable under its laws governing suicide claims. Warrant No. 34275.

“ ‘Augusta M. Zinke,

“ ‘Widow and Beneficiary of Ferdinand Gr. Zinke.’

“Plaintiff signed' the above receipt on the 7th day of June, 1913, and thereafter, on the 21st day of July, 1913, wrote a letter in German to the defendant, of which! letter the record states a correct translation to he as follows:

“ ‘Gentlemen of the Macabees:

“ ‘I ask again if the Gentlemen of the Maccabees will p’ay the. rest of $400, which I can claim under the Missouri law; if not, I will go to the courts. Why can rich people receive their money, where the husband shot himself, and have received their money of $8,000, and a poor woman, who is without any help, shall be cheated? As my husband was already at the edge of the grave; that which he did, he did without knowledge, as he was always afraid of death.

“ ‘Respectfully

“ ‘Widow, Augusta M. Zinke/

“On August 4, 1913, the defendant, through the Supreme Record Keeper, mailed the following answer in reply to plaintiff’s letter.

“ ‘Mrs. Augusta M. Zinke,

St. Louis, Mo.

“ ‘Dear Madam:

“ ‘Your letter of July 21st, in relation to your husband’s benefit insurance, has been received and in reply permit us to'say that at the time your husband joined the Knights of'the Maccabees of the World, the laws provided that in case of death by suicide, whether sane or insane, his beneficiary should be entitled to receive twice the amount he had contributed to the. Life Benefit Fund. This was paid you in April, last. There is nothing more you’re due under the laws of the State of Missouri, or under the laws of the K. O. T. M. or under any other laws. Your husband was a member of an association, acting together for the purpose, of providing life benefits or insurance at the least possible cost; and among other things, they agreed that if any of them should commit suicide, his beneficiary should receive twice the amount he had contributed to the Life Benefit Fund, but in no case to exceed the amount of the certificate. We have no knowledge of what you are talking about, some rich man’s beneficiary getting $8000, and if she did, or did not, it would not have, any bearing in a case like this. She or he might have been entitled to it. The management would very much prefer that your husband had died in some other way so they could have paid it all. They have no interest in it except to carry out the agreements made by the members themselves.

“ ‘Respectfully yours,

“ ‘L. E. Sisler,

“ ‘Supreme R. K.’

“It is admitted that the plaintiff gave notice to the defendant prior to the institution of this suit; that the plaintiff did and would deny that the insured, Ferdinand G-. Zinke, deceased, committed suicide, anfl that she claimed her - statement in the original proof of death was erroneous and the result of mistake and misapprehension.”

Counsel for the petitioner contend that the opinion ■of'the Court.of Appeals is contrary and repugnant to the following cases-: Scott v. Realty Co., 241 Mo. 112; McCormick v. City of St. Louis, 166 Mo. 315; Pollman Coal Co. v. City of St. Louis, 145 Mo. 651.

In addition to the facts stated, counsel for Mrs. Zinke introduced evidence tending to prove that she never stated to the notary or to- anyone else that her husband committed suicide; also that he died of brain or heart, troubles. The company, upon'the other hand introduced evidence tending to show she did state that her husband committed suicide, and that that was the cause of his death.

I. In our opinion the Court of Appeals has failed to follow the law as announced by this court in the cases cited. There can be no denial of the fact that a part payment of a debt unquestionably due will not discharge the entire debt, even though receipted in full, though based upon an understanding or agreement to that effect, for the reason that there is no consideration to support, the agreement. But as was held by the cases cited, where there is an honest doubt between the parties as to the amount due, and after due consideration the creditor yields to the debtor’s views and agrees to and accepts the amount which the latter concedes to be due and gives a receipt in full, and there is no fraud or other ground for equitable relief, the settlement is binding, for the reason that it comes within the principle of accord and satisfaction.

The receipt is not necessary, nor even the agreement to accept a part for the whole, where the creditor knows there is a reasonable doubt as to the amount due, and he accepts the part for the whole where the former is tendered in full 'satisfaction. Torrey v. Hardy, 196 S. W. 1100.

That there was a substantial doubt in the mind of the company as to the amount due Mrs. Zinke under the benefit certificate, there can be no doubt in the opinion of disinterested and fair-minded persons.

We are, therefore, of the opinion that the judgment of the Court of Appeals should be quashed, and it is so ordered.

Graves and Walker, JJ., concur; Faris, J., concurs in result; Bond, O. J., Blair and Williams, JJ., dissent.


author: BLAIR, P. J.

text:
    CITY OF UNIVERSITY CITY v. EDWARD G. SCHALL, Administrator of Estate of JAMES F. COYLE, Appellant.
    Division One,
    September 16, 1918.
    1. CITY TREASURER: Custodian of City’s Moneys: Agent of Council. It is not necessary to discuss Section 9371, Revised Statutes 1909, declaring that “the mayor and board of aldermen shall have the care, management and control of the city and its finances,” in view of the provisions of Section 9395, declaring that “the treasurer shall receive and safely keep all moneys, warrants, books, bonds and obligations entrusted to his care, and shall pay over all moneys, bonds and other obligations of the city on warrants or orders duly drawn, passed or ordered hy the board of aldermen,” and in view of a city ordinance declaring that the treasurer shall “pay over all moneys belonging to the City according to law,” and in view of the further fact that the money actually passed into his hands as treasurer. In such case he was not the agent of the mayor or hoard of aldermen, although they directed him to deposit the money with a certain trust company, subject to their control. The board has no power to interfere with the disposition of city funds which have passed into his hands as city treasurer, whatever its views of the statute may be, and could neither usurp his duties nor exonerate him from liability for city funds in his hands.
    2. -: -: -: Public Policy. Sound public policy" does not permit a city treasurer to take into his possession in his name as city treasurer funds of the city of which he is treasurer, hold them for years in an account kept in his name as city treasurer, and when called upon for a balance, relieve himself by showing that the mayor and board of aldermen attempted orally to confer upon him the character of agent, so that he might hold the fund for them and withhold it from himself in his character as treasurer.
    3. -: -: -: Shown by Oral Evidence. Whether or not the action of the board of aldermen in authorizing the city treasurer to act as their agent in depositing the city’s, moneys may be shown by oral evidence need not be determined, if the board by ordinance duly passed had no power to exonerate him from liability for city funds which actually came into his hands as city, treasurer.
    4. -:-: Special Deposit. The writing of the words “special deposit” upon the book of the bank in which a city fund was deposited by the city treasurer amounted to nothing under the circumstances of this case, in which there was no suggestion made that the fund was to be segregated from other moneys of the bank and kept intact as a special deposit.
    5. -:-: Exoneration by Council: Account Stated. The board of aldermen is powerless to exonerate a city treasurer from liability for the balance of a city fund deposited in a bank, where the amount of such balance is undisputed; and where there is no dispute as to the amount,' the reports of the treasurer and the report of an auditing committee which examined one of them does not constitute ah account stated.
    Appeal from St. Louis County Circuit Court. — Hon. John W. McElhinney, Judge.
    Affirmed.

      John A. Blevins for appellant.
    (1) Under the evidence it was a question for the jury as to whether the proceeds received from the sale of the bonds of tbe city were entrusted to tbe care and custody of Coyle, as treasurer. (2) Coyle was not responsible for any funds of the city not entrusted to bis care as treasurer. Sec. 9395, R. S. 1909; Sec. 8531, R. S. 1909; McMillen on Municipal Corp., sec. 539; Borgnis v. Falk Co., 147 Wis. 327; State v. Grann, 40 L. R. A. 690; United States v. Thomas, 12 Wall. 337. (3) Tbe mayor and board of aldermen bad tbe care, control and management of tbe fund in question. Sec. 9371, R. S. 1909. (4) The evidence offered by defendant to show tbe action of the mayor and board of aldermen with reference to tbe control of checks and proceeds of tbe sale of tbe bonds and tbe deposit in the Trust Company was competent and its rejection by the court was error. Sec. 9371, R. S. 1909. (5) Parol evidence was admissible to show the action of tbe mayor and board of aldermen with reference to tbe funds, and tbe exclusion of tbe evidence of tbe witnesses upon that question was error. 28 Cyc. 343; Dillon on Municipal Corp., see. 557; McQuillin on Municipal Corp., secs. 624 and 625; 17 Cyc. 506; Secs. 9320 and 9321, 'R. S. 1909. (6) Tbe evidence established the fact that tbe account between tbe parties bad been stated and settled and plaintiff could not, therefore, maintain this action. S.ec. 9368, R. S. 1909; City Ordinance No. 28;' 1 Cyc. 364, 367, 454; Lansing v. Woods, 57 Mich. 201; Union Bank v. Knapp, 3 Pick. 96; Allen, v. Nettles, 39 La. Ann. 788; Rawlins v. Rawlins, 102 Mo. 567; Kronenberger v. Binz, 56 Mo. 121; Note L. R. A. 1917-C, p. 447; Note 29 L. R. A. (N. S.) 334. (7) In any event, Coyle was only bailee of the city’s money and responsible for tbe failure to exercise reasonable care. Healdburg v. Mulligan, 33 L. R. A. (Colo.) 4(31; Borgins v. Falk Co., 147 Wis. 327; Wilson v. People Colorado, 22 L. R. A. (Colo.) 449. (8) Tbe Trust Company was solvent and tbe deposit of tbe money with said company was within tbe exercise of reasonable care. (9). Tbe deposit of tbe bond money was a special deposit by agreement with tbe Trust Company and tbe title never left tbe city. Merchants Natl. Bank v. School Dist., 36 C. C. A. 432, 947 Fed. 705; Marine Bank v. Fnlton Bank, 2 Wall. 256; Planters Bank v. Union Bank, 16 Wall. 483. (10) Coyle did not receive any of the proceeds of the sale of the bonds and he did not profit one cent from the transaction. The mayor and board of aldermen interfered and actually controlled the funds and by so doing, relieved Coyle of liability. (11) This is not a suit upon the treasurer’s bond. A different rule prevails where a suit is upon a bond given by a treasurer whereby he has obligated himself beyond that created by law. (12) The plaintiff city is estopped by its conduct and action and interference with the bond money to assert any claim against Coyle on account thereof. Edward v. Kirkwood, 147 Mo. App. 599; McQuillin on Municipal Corp., sees. 629, 1916 and 1083; 29 Cyc. 476.

      Rodgers & Koerner for respondent.
    r - (1) The custodian of public funds is liable for money committed to his keeping, and lost through failure of the bank in which deposited. R. S. 1909, sec. 9395; State ex rel v. Powell, 67 Mo. 395; State ex rel v. Moore, 74 Mo. 413; County of Mecklenburg v. Beales, 111 Ya. 691, 36 L. R. A. (N. S.) 287; 28 Cyc. 472; State to use, etc. v. Reed, 116 Tenn. 114. (2) Neither the mayor nor the board of aldermen of a municipality have any right to direct how, where, or in what manner funds in the hands of the treasurer shall be kept. R. S. 1909, secs. 9395, 9368, 9363; Butler Co. v. Boatmen’s Bank, 143 Mo. 27; Halbert v. State ex rel.,- 22 Ind. App. 125. The mayor and board of aldermen having no power in the premises, afiy direction they may have made was a nullity and it is no defense to the treasurer that he followed such direction. Inglish v. State ex- rel., 61 Ind..212; Halbert v. State ex rel, 22 Ind. App. 125. (3) The board of aldermen was required to keep a journal of its proceedings. R. S. 1909, sec. 9320. Hence, the action of the board can be proved only by its records. State v. Lawrence, 178 Mo. 374; Light & Water Co. v. Lebanon, 163 Mo. 254; Kane v. School Dish, 48 Mo. App. 414; Surveying Co. v. St. Louis, 68 Mo. App. 187. (4) The liability of the custodian of public funds is fixed by law. The bond given by him does not define his liability, but merely super-adds to his personal responsibility the security of his bondsmen. State to use v. Copeland, 96 Tenn. 326. (5) There is no element of estoppel in this case for the reason that Mr. Coyle had no right to act upon any representations the board of aldermen may have made to him. DeLashmutt v. Tettor, 261 Mo. 441. Furthermore, the board of aider-men had no right to make such representations,' and there is no evidence that any such representations were made. Wheeler v. Poplar Bluff, 149 Mo. 36. (6) A special deposit is one made with the understanding that the identical money deposited shall be returned to the depositor. Butcher v. Butler, 134 Mo. App. 61; Bouvier Law Dictionary, p. 3098. The fact that the fund here in question was deposited in an interest bearing account and that subsequently a “profit sharing” certificate was accepted for the amount due, conclusively shows that it was not intended as a special deposit.
   BLAIR, P. J.

James F. Coyle was treasurer of University City. Appellant is administrator of his estate. The city sued for a balance it alleges Coyle, as treasurer, owed it at the time of his death. The verdict was against the city. A new trial was granted, and the administrator appeals from that order.

The petition alleges the balance is $28,197. It is stipulated this has been reduced by payment of over $17,000 out-of the assets of the People’s Savings Trust Company. No point is made on the pleadings. One ground upon which the new trial was granted was that the verdict was “contrary to the law.”

There is no dispute that bonds for $100,000 were authorized, issued and sold, and that the checks for the proceeds were made out to James F. Coyle, Treasurer of University City; that he endorsed these cheeks for deposit with the People’s Savings Trust Company, and, in Ms own hand, made out the deposit slip used in that transaction; that the account was opened by the Trust Company in the name of James F. Coyle, as treasurer of the city, and always carried that way on its books; that the portion of the sum withdrawn, with the exception of’ one large item, was paid out on Coyle’s treasurer’s check'or paid on warrants issued.in the ordinary way and Coyle’s check subsequently made to cover the payment. The city does not question the propriety of any of these payments.

Appellant offered oral evidence tending to show that- the mayor and aldermen examined the statutes and concluded they had the right to control the fund; that they agreed they would do so; that they directed the deposit to be made in the Trust Company in Coyle’s name as treasurer; that the Trust Company offered interest as high as offered by any other and was located in University City; Coyle, the-may of and some of the aldermen were directors of the Trust Company. The city attorney and Coyle took to the Trust Company the checks representing the fund in question; the account was opened, as already stated, and the notation “special deposit” was placed upon the books in connection with the account. A little later the Trust Company issued and delivered to Coyle a pass book marked on cover “Mo. 165, People’s Savings Trust Co. By Mail Only. University City, St. Louis, Mo. In account with— Name, James F. Coyle, Treasurer — Town, University City, Mo.” In this book appear the deposits, withdrawals and balances. The heading over them is: “Book No. Mo. 165. People’s Savings Trust Co. In account with James F. Coyle, Treasurer University City, Mo.” This book and other evidence show that the proceeds of the bonds went into this account. On March 24, 1910, the balance was $61,793.16. On that date Coyle demanded the balance. The bank did not have it and Coyle accepted a certificate of deposit for $50,000. This left $11,793.16 in the account. Payments reduced the balance, and on December 3, 1910, Coyle surrendered his certificate of deposit, caused $10,000 to be placed in the account, and took another certificate of deposit for $40,000. Under like conditions similar transactions occurred. On May 25, 1911, the account showed a balance of' $4419.63, and Coyle had in his possession a certificate of deposit for $25,000. The body of the certificate read: “This certifies that Jas. P. Coyle, Treasurer of University City, Mo., has deposited in the People’s Savings Trust Company the sum of twenty-five thousand no/Dollars, payable 6 mos. after date on return of this profit sharing certificate of deposit, properly assigned. This certificate is entitled to share in the profits as provided,” etc., “This certificate is transferable only in person or by attorney upon the books of the company.” This was subject to a contract as to the method of computation and payment of profits. The certificates of deposit previously issued to Coyle were of like character. Payments out- of the fund were made on checks signed by Coyle and issued by him in payment of warrants ordered issued by the city council. Some payments seem to have been made by the Trust Company directly to the holder of the warrant. In such circumstances generally Coyle subsequently would issue his treasurer’s check to cover such payments. There may have been instances in which no check was issued for payments made on warrants.

The answer avers and the evidence shows that Coyle’s reports as city treasurer during the per'idd from January, 1910/to the expiration of his term, contain no reference to the $100,000 fund. They had reference to other funds of the city. The balance (aboht $2,900) shown by these reports Coyle had paid o've'r.to his successors. He paid dver no part of the $100,000 fund. His bond was for $5,000 and was executed prior to the issuance of the City bonds. The amount was fixed by ordinance.

It is established that the Trust Company placed the $100,000 deposit with its other funds and paid it out as stated and charged itself with interest'on the deposit and treated the deposit as it treated its ordinary deposits. The mayor was president of the Trust Company. The city attorney was connected with its legal department. Coyle was a director. The city clerk was its treasurer. Coyle made the deposit and knew, as a matter, of fact, all about the manner in which it was being managed. It never was treated as a special deposit. The Trust Company failed in 1911. Appellant’s brief presents several questions.

' I. It is contended the checks and money were never entrusted to Coyle’s care. It is not denied the checks were made out and delivered to him and endorsed by him and deposited for collection by him, and the account opened and carried by him, all in his name as city treasurer.

It is argued the evidence tends to show the mayor and board of aldermen took over the fund and Coyle acted as their agent in all these matters. Section 9371, Revised Statutes 1909, provides that “the mayor and board of aldermen . . . shall have the care, management and control of the city and its finances. ’ ’ This is relied upon to show that the board of aldermen had such care and control of the bond proceeds that they might retain custody of them to the exclusion of the treasurer. The question need not be discussed. Section 9395, Revised Statutes 1909, provides that “the treasurer shall receive and safely keep all moneys, warrants, books, bonds and obligations entrusted to his care, and shall pay over all moneys, bonds or other obligations of, the city on warrants or orders duly drawn, passed or ordered by the board of aldermen,” etc. The applicable city ordinance followed the language of the statute and provided that the treasurer should “pay over all moneys belonging to the city according to law. ” It is said the evidence tends to show the fund was not “entrusted” to Coyle’s care as treasurer, but that he held it as “agent” of the board of aldermen. As pointed out, appellant proved beyond dispute that the money was in Coyle’s possession and that all the checks and accounts show it stood in Ms name as city treasurer. In onr opinion, when he obtained such custody of the fund it was entrusted to his care in the statutory sense and he became responsible for it as treasurer. Concede the board might have retained the fund. It did not do so. It turned it over to Coyle, as treasurer, so far as all the records show. The board then had no power to select a depository for city funds of this character. It had no authority to interfere with Coyle’s disposition of funds in his hands as treasurer. It was his duty under the statute to care for funds entrusted to him and respond in case of loss. Whatever advice the board or its members gave him as to a place of deposit, he acted upon it at his peril. The board’s view as to its authority under the statute did not bind Coyle. It could neither usurp his duties nor exonerate him from liability for funds in his hands. If he saw fit to accede to a suggestion as to the place of deposit, whether made by the board or by its individual members, this cannot now be used to relieve him of responsibility which the law placed upon him in his official capacity. An ordinance regularly passed by the board and signed by the mayor could not have changed Coyle’s status once he secured possession of this city money as city treasurer. We hold that sound public policy does not permit a city treasurer, in circumstances such as appear here, to take into his possession in his name as city treasurer funds of the city of which he is treasurer, hold these for years in an account kept in his name as treasurer and, when called upon for a balance, relieve himself by showing that the mayor and board of aldermen attempted orally to confer upon him the character of agent so that he might hold the fund for them, and withhold it from himself in his character as treasurer. The easy evasion of liability a contrary holding would permit is sufficient answer to any argument in behalf of such a rule. It may be added that appellant’s evidence as epitomized above establishes the fact that whatever effort was made to constitute Coyle agent of the board or city, it conclusively appears the fund was not, in fact, confided to him in that capacity. The records put this beyond dispute.

II. The question whether oral evidence of the action of the board of aldermen can be offered in the absence of a record of such action in a case like this need not be determined. In our opinion, the board could not, even by ordinance duly passed, have exonerated Coyle from liability for city funds shown to have been actually in his hands as treasurer of the city.

III. The writing of the words “special deposit” upon the bank book is of slight consequence. Interest was to be paid and was paid on the account. The necessary implication was that the funds would employed by the Trust Company in the usual way. The account was to be and was a checking account in the sense that current obligations payable' out of the fund were to be paid and were paid out of it on checks and warrants in a customary way. No suggestion was made or thought of that the money was to be segregated from other moneys of the Trust Company and kept intact ■ as- a special deposit. The , deposit had no single attribute of a Special deposit. The writing of the words on the books amounted to nothing in view of the clear Understanding that the account should be dealt with as it was. Further, we think the evidence, as a matter of law, shows Coyle, as treasurer, placed the money in the bank. His liability is absolute, under the rule in this and most other states. [State ex rel. v. Powell, 67 Mo. 395; State ex rel. v. Moore, 74 Mo. 413; County of Mecklenberg v. Beales, 111 Va. 691, 36 L. R. A. (N. S.) 285.]

IV. The reports of the treasurer and the report of an auditing committee which examined one of them constituted no account stated. As the answer avers, these reports did not include the fund in the TrUst Company. There was no dispute about the portion of the fund expended and there is no such dispute now. There was no controversy about the fund. The board was powerless to exonerate Coyle by express action and, as a consequence, its action or lack' of action respecting the reports made eould not estop' or affect the city.

The trial court was right in granting a new trial on the ground that the verdict was contrary to law. The order is affirmed and the cause remanded. All concur.