Opinion
No. 6,410.
Submitted February 20, 1929.
Decided March 28, 1929.
Counties — Public Printing — Payment of Illegal Claims — Right of County to Sue for Excess Paid — Action of County Commissioners on Claims — When Conclusive — Fraud — Blank Forms — Rate Printer may Charge for Number Less Than Minimum Prescribed by Law. Counties — Illegal Claims — Failure of Taxpayer to Appeal from Order of Allowance No Bar to Action by County Attorney to Recover Money Illegally Paid. 1. Failure of a taxpayer to appeal to the district court from an order of the board of county commissioners allowing a claim against the county under the authority given him by section 4610, Revised Codes 1921, does not limit the right of the county attorney to sue in the name of the county to recover moneys illegally paid under section 4821. Same — County Printing Contract — Allowance of Claims Beyond Rates Fixed by Law Illegal. 2. Section 4482, Revised Codes 1921, authorizing the board of county commissioners to contract for county printing does not authorize it to increase the rates therein prescribed; it, by fixing the maximum rates, by fair implication prohibits the payment of anything in excess thereof; therefore any claims allowed beyond the rates fixed are not legally chargeable against the county and may be recovered in an action by the county attorney in behalf of the county. Payment — Rule That Money Paid Voluntarily may not be Recovered Back not Applicable to Unauthorized Payment by Public Officer. 3. The general rule that money voluntarily paid may not be recovered, has no application to an unauthorized payment made by a public officer. Counties — Action of Board of County Commissioners in Allowing Claims Conclusive, When. 4. The board of county commissioners is a quasi-judicial body and its action in examining, settling and allowing claims against the county, in the absence of fraud, is conclusive even though it be erroneous; therefore where it allows charges for public printing in excess of the contract price but less than the maximum rate fixed by law, the county may not recover the excess as an illegal charge. Fraud — When Person not Warranted in Relying on Fraudulent Representations. 5. One of the essential elements of actionable fraud is that the person to whom alleged false representations were made had a right to rely thereon; therefore where it appears that one claiming to have been deceived has investigated for himself or had the means at hand to ascertain the truth of statements made, his reliance thereon, affords him no ground of complaint. Counties — Printing Contract — Recovery of Money Paid Illegally — Fraud in Presentation of Claims — County may not Charge Fraud in View of Duty of Commissioners to Examine Claims. 6. Under the last above rule, held, that since under subdivision 12 of section 4465, Revised Codes 1921, the board of county commissioners is authorized to examine, settle and allow all claims against the county, its failure to ascertain whether charges made under a county printing contract were in accordance therewith deprives the county of the right to charge that claims filed for work done under the contract were fraudulent. Same — Printer may Charge Full Rate for Less Number of Blanks Than Minimum Fixed by Law. 7. Held, that under section 4482, Revised Codes 1921, a publisher may under his contract with a county for county printing, properly charge the full rate for printing blank forms for a less number than the minimum fixed by the section as the basis rate, and is not required to charge only a proportionate part of the price fixed therein.
Appeal from District Court, Carbon County, in the Thirteenth Judicial District; A.J. Horsky, a Judge of the First District, presiding.
Mr. L.A. Foot, Attorney General, Mr. E.P. Conwell and Mr. John G. Skinner, for Appellant, submitted a brief; Mr. L.V. Ketter, Assistant Attorney General, and Mr. Skinner argued the cause orally.
Mr. S.C. Merriman and Mr. C.C. Rowan, for Respondent, submitted a brief and argued the cause orally.
The principal argument of the defendant is that the county commissioners acted within jurisdiction in allowing these claims. Our contention is that the board only had the right and only had the jurisdiction to allow claims that were legally chargeable against the county, and no others. It would appear from the authorities following that if the money in question was illegally paid, it was in excess of the jurisdiction of the board, and this plaintiff can recover. The case of Norfolk County v. Cook, 211 Mass. 390, Ann. Cas. 1913B, 650, 97 N.E. 778, holds that an unauthorized payment may be recovered. This case involves payment by county under a mistake of fact and law, and the court holds that the county can recover the money back. (See, also, 7 R.C.L., p. 964; 15 C.J. 662, note 35; Frederick v. Douglas County, 96 Wis. 411, 71 N.W. 798.)
"Where a board of county commissioners allows an illegal demand against the county, the county though entitled to appeal therefrom, may recover from the claimant the amount paid to him. ( Campbell County v. Overby, 20 S.D. 640, 108 N.W. 247; Vindicator Printing Co. v. State, 68 Ohio St. 362, 67 N.E. 733.)" ( Maurer v. Gage County, 72 Neb. 441, 100 N.W. 1026; Honey v. Board of Commrs. of Jewell County, 65 Kan. 428, 70 P. 333; Board of Commrs. of Huntington County v. Buchanan, 21 Ind. App. 178, 51 N.E. 939; Pacific County v. Harbor Pub. Co., 88 Wn. 562, 153 P. 360; Norfolk County v. Cook, 211 Mass. 390, Ann. Cas. 1913B, 650, 97 N.E. 778; McDonald's Admx. v. Franklin County, 125 Ky. 205, 100 S.W. 861; People v. McCord, 143 Ill. App. 28; Board of Commrs. of Clear Creek County v. McLean, 50 Colo. 602, 115 P. 525.)
Since the board of county commissioners is a quasi-judicial body, its action upon the allowance of a claim is, in the absence of an appeal as permitted by statute, res adjudicata, in the absence of fraud, and a court has no jurisdiction over such matters. ( Santa Cruz Co. v. McPherson, 133 Cal. 282, 65 P. 574; McFarland v. McCowen, 98 Cal. 329, 33 P. 113; Board of Commrs. v. Leonard, 3 Colo. App. 576, 34 P. 583; Reclamation District v. Lodval Bros., 42 Cal.App. 271, 183 P. 598, 603; Cope v. Flannery, 70 Cal.App. 738, 234 P. 845; Nickerson v. San Bernardino County, 179 Cal. 518, 177 P. 465; Wayne County v. Reynolds, 126 Mich. 231, 86 Am. St. Rep. 541, 85 N.W. 574.)
If the complaint alleged that the board of commissioners, during the time involved, had paid out more money for printing and supplies than was permitted under the Codes, it is possible the complaint might state a cause of action. Since it does not do this, it does not state a cause of action upon any theory. ( McFarland v. McCowen, supra; McBride v. Newlin, 129 Cal. 36, 61 P. 577; Alameda County v. Evers, 136 Cal. 132, 68 P. 475, 476; Contra Costa Water Co. v. Breed, 139 Cal. 432, 73 P. 189.)
The money was not paid without authority of law. Appellant clearly states that this action is based upon section 4821. Therefore the vital question is: What is meant by the term "without authority of law?" We call the court's attention to the fact that this section is penal in its nature, and under the oft-stated rule of this court, should be strictly construed against the party seeking to invoke it. The California court has expressly defined the term "without authority of law" as used in their statute identical with the one involved herein. They say: "Money paid `without authority of law' means money paid out by the board of supervisors upon claims based upon a subject matter not within the scope of the powers of the board. In other words, it is the application of the moneys of the county to a purpose not within the general powers of the board. But the power of a board of supervisors to construct bridges, to build and lay out roads, to secure easements in the form of rights of way for public travel, are matters within the jurisdiction of the board of supervisors." ( Sacramento County v. Southern P. Co., 127 Cal. 217, 59 P. 568, 570.)
Since the Montana statute is identical with that of California, and since the California courts have said that money paid without authority of law means paid out upon a subject matter not within the scope of the powers of the board, and since our statute expressly confers the power on the board to audit and pay the bills in question, there is no question but that this action does not lie. (See, also, Santa Cruz County v. McPherson, 133 Cal. 282, 65 P. 574, 575; Riverside County v. Yawman Erbe Mfg. Co., 3 Cal.App. 691, 86 P. 900, 901; Calaveras County v. Poe, 167 Cal. 519, 140 P. 23; Santa Barbara County v. Janssens, 177 Cal. 114, L.R.A. 1918C, 558, 169 P. 1025.)
Plaintiff evidently attempts to allege fraud, but we submit that it has not sufficiently pleaded fraud. One of the essential elements of fraud is that the party relying upon the alleged false statement had a right to rely thereon. (26 C.J. 1062, 1142, 1149; 12 Cal. Jur. 724; Gale v. Mundy, 289 Ill. 142, 124 N.E. 390; Boulden v. Stillwell, 100 Md. 543, 1 L.R.A. (n.s.) 258, 60 A. 609; Hetland v. Bilstad, 140 Iowa, 411, 118 N.W. 422; Bostwick v. Mutual Life Ins. Co., 116 Wis. 392, 67 L.R.A. 705, 89 N.W. 538, 92 N.W. 246; Jacobsen v. Whitely, 138 Wis. 434, 120 N.W. 285; Kaiser v. Nummerdor, 120 Wis. 234, 97 N.W. 932.)
"Where a duty rests upon plaintiff to know the facts which he avers were misrepresented he should make a showing which negatives any negligence upon his part in relying upon the representations, such for example as that investigation was prevented or rendered extremely difficult." (12 Cal. Jur. 812; Heller v. Dyerville Mfg. Co., 116 Cal. 127, 47 P. 1016.) The law presumes that a public official performs his duty. (Sec. 10606, Rev. Codes 1921.) The law requires the board to audit these claims. (Sec. 4465, Id.) Therefore, it must be presumed that they have not only allowed the claims, but have audited them, that is, have checked them and found them to be in accordance with the contract as interpreted by them or as modified.
This action was brought by the county attorney of Carbon county, pursuant to the provisions of section 4821, Revised Codes of 1921, to recover public moneys alleged to have been illegally paid to defendant for county printing and supplies furnished the county.
It appears from the allegations of the amended complaint that on the eighteenth day of December, 1920, the board of county commissioners contracted with the "Picket Journal" (owned and published by Charles H. Draper, defendant herein) to do and perform the county printing and furnish all blanks, blank books, stationery, etc., at an agreed price based upon the rates fixed by statute, less specific discounts depending upon the class of printing and supplies furnished, for a period of two years commencing December 13, 1920; that on December 4, 1922, the board entered into a similar contract for a like period commencing January 1, 1923; that on December 18, 1924, another and similar contract was entered into for two years commencing January 1, 1925. It is alleged that, acting under and pursuant to the several contracts, defendant, from time to time, performed printing, and furnished supplies to the county; that at frequent intervals he filed duly verified claims against the county, all of which were allowed by the board, warrants being drawn and paid; that each and all of the claims set forth and described in the exhibits attached to, and made a part of, the complaint were allowed and paid without authority of law, in that they were false, fraudulent, fictitious, and untrue and in excess of the contract price and the rate fixed by section 4482, Revised Codes of 1921, and that the claims were not accounts legally chargeable against the county. Plaintiff demanded judgment for the amounts alleged to have been paid in excess of the contract and statutory price, together with twenty-five per cent damages for the use thereof. The complaint contains three separate causes of action; each contract is made the basis of a separate cause. A general and special demurrer was filed to each cause of action and sustained by the court. Plaintiff refused to further amend, and judgment was accordingly entered for defendant. This appeal is from the judgment.
Counsel contend that, since it appears from the allegations of the complaint that the board had authority to examine, settle, and allow the claims, and no appeal therefrom was taken, as authorized by section 4610, Revised Codes of 1921, the court had no jurisdiction over the claims and the subject matter of the action.
Section 4482, supra, makes it the duty of the board to contract with some newspaper published within the county, for all printing and supplies of the character involved in this action for which the county is chargeable, and enumerates the maximum rates. The board has jurisdiction and power, under subdivision 12 of section 4465, Revised Codes of 1921, "to examine, settle, and allow all accounts legally chargeable against the county except salaries of officers, and order warrants to be drawn on the county treasurer therefor, and provide for the issuing of the same." When any taxpayer is not satisfied with any allowance made by the board, he may appeal to the district court. (Sec. 4610, supra.) If the board, without authority of law, orders any money paid for any purpose, and such money has been paid, it is the duty of the county attorney to institute an action in the name of the county against such person or persons to recover the money so paid, and twenty-five per cent damages for the use thereof. (Sec. 4821, supra.)
The fact that a taxpayer did not appeal to the district court [1] from the orders made by the board allowing the claims, as authorized by section 4610, supra, does not limit the right of the county attorney to sue, in the name of the county, to recover the moneys illegally paid. ( Greeley v. Cascade County, 22 Mont. 580, 57 P. 274; Albers v. Barnett, 53 Mont. 71, 161 P. 521; Ada County v. Gess, 4 Idaho, 611, 43 P. 71; Pacific County v. Harbor Pub. Co., 88 Wn. 562, 153 P. 360; McDonald's Admx. v. County, 125 Ky. 205, 100 S.W. 861; 15 C.J. 662.)
Counsel for respondent insist that the board having authority to examine, settle, and allow the claims in suit, its determination thereof is conclusive.
While it is alleged that all the claims set forth in the [2] complaint are in excess of both the contract and statutory price, it appears that only a portion of the charges are in excess of the statutory rate, and others are in excess of the contract price, but less than the statutory rate.
As to moneys paid by the county on claims filed by defendant, allowed and approved by the board, if the charges were in excess of the rates provided by section 4482, we are of opinion that plaintiff would be entitled to recover to the amount of the excess. The authority of the board in that regard is written in section 4482, and under that section it is without authority to increase the rates prescribed. The statute having fixed the minimum rate, by fair implication prohibits the payment of anything in excess of that allowance. Any payments made at a higher rate than those fixed by law, to the extent of the excess, were upon claims not "legally chargeable against the county," and were made "without authority of law." ( State v. Young, 134 Iowa, 505, 13 Ann. Cas. 345, 110 N.W. 292; Allegheny County v. Grier, 179 Pa. 639, 36 A. 353; Ellis v. Board of State Auditors, 107 Mich. 528, 65 N.W. 577; County of Norfork v. Cook, 211 Mass. 390, Ann. Cas. 1913B, 650, 97 N.E. 778; Richardson v. State, 66 Ohio St. 108, 63 N.E. 593; Endion Imp. Co. v. Telegram Co., 104 Wis. 432, 80 N.W. 732; Board of Commrs. of Huntington County v. Heaston, 144 Ind. 583, 55 Am. St. Rep. 192, 41 N.E. 457, 43 N.E. 651; People v. Sutherland, 207 N.Y. 22, 100 N.E. 440.)
Our conclusion rests on the general principle that the county is not bound by the acts of the board when outside of or beyond the scope of its authority. Public moneys are but trust funds, and officers but trustees for their administration in the manner, and for the purposes, prescribed by statute. If payments have been made at a higher rate than fixed by law, as to the excess, defendant ought not, in equity and good conscience, be permitted to retain the same.
Counsel further contend, in effect, that the payments to [3] defendant were voluntarily made, and that the moneys cannot be recovered. The authorities hold, as a general proposition of law, that money voluntarily paid cannot be recovered; yet an exception to this rule is recognized in the case of an unauthorized payment by a public officer. ( County of Norfolk v. Cook, 211 Mass. 390, Ann. Cas. 1913B, 650, and note, 97 N.E. 778; 7 R.C.L. 964.)
As to those charges in excess of the contract price, but less [4] than the maximum rate fixed by law, we think a different rule applies. In this jurisdiction a board of county commissioners is a quasi-judicial body ( State ex rel. Lockwood v. Tyler, 64 Mont. 124, 208 P. 1081; State ex rel. Dolin v. Major, 58 Mont. 140, 192 P. 618), and its action in examining, settling, and allowing these claims, in the absence of fraud, is conclusive ( Santa Cruz County v. McPherson, 133 Cal. 282, 65 P. 574; Cope v. Flannery, 70 Cal.App. 738, 234 P. 845; County of Wayne v. Reynolds, 126 Mich. 231, 86 Am. St. Rep. 541, 85 N.W. 574; State v. Young, supra). Having power to act (sec. 4465, supra), the board had jurisdiction to decide, and, if it decided wrongly and error was committed in so doing, it did not usurp an unconferred jurisdiction. In other words, the authority to examine, settle, and allow in no manner depends on the nature of the decision to be rendered. The power to hear and determine necessarily carries with it the power which makes the determination binding, without reference to the question of whether it be right or wrong. If this were not so, the findings and conclusions of the board on matters which it has authority to decide would be of no value. There must be a time when controversies end, and, when the authority is expressly conferred upon the board, as here, the determination, even though erroneous, ought not to be assailed.
If, however, the approval of the claims was procured by fraud, the action of the board is not final and conclusive. ( Monroe County v. Brown, 118 Ark. 524, 177 S.W. 40; New York Catholic Protectory v. County, 212 N.Y. 311, 106 N.E. 80; El Dorado County v. Elstner, 18 Cal. 144; Powell etc. Co. v. County (C.C.A.), 274 Fed. 305; Fry v. State, 86 Tex. Cr. 73, 215 S.W. 560; Gross v. Board of Commrs. of Whitley County, 158 Ind. 531, 58 L.R.A. 394, 64 N.E. 25; Board of Commrs. of Vigo County v. Davis, 136 Ind. 503, 22 L.R.A. 515, 36 N.E. 141.)
Does the complaint allege fraud? It is alleged that "each and all and every of said claims so presented by said defendant * * * were, and are, false, fraudulent, fictitious and untrue; * * * that defendant knew that the charges and amounts were in excess of the contract price and in excess of the Code price * * * and that said defendant, at the time of filing said claims and at meetings of the board at the times when said claims were allowed by said board, appeared before said board and stated and told the said board that said claims and the prices charged and the amounts thereof, were in accordance with his said bid and contract; that the prices were true and correct, * * * all of which statements and said claims of said defendant were relied upon by the board * * * as true and correct, and the board supposed and verily believed the statements and representations with reference thereto were true and relied thereon, whereas in truth and in fact each and all and every of said statements * * * were false, fraudulent and untrue and so known to be by said defendant."
One of the essential elements of actionable fraud is that the [5, 6] person to whom the representations were made had a right to rely thereon. ( Lee v. Stockmen's Nat. Bank, 63 Mont. 262, 207 P. 623; Helena Adjustment Co. v. Claflin, 75 Mont. 317, 243 P. 1063; 26 C.J. 1062.) "When it appears that a party, who claims to have been deceived to his prejudice, has investigated for himself, or that the means were at hand to ascertain the truth * * * of any representations made to him, his reliance upon such representations, however false they may have been, affords no ground of complaint." ( Grindrod v. Anglo-American Bond Co., 34 Mont. 169, 85 P. 891; Helena Adjustment Co. v. Claflin, supra; 26 C.J. 1141.) The board had no right to rely upon statements made by defendant. Obviously, at the time the representations were made, it had the means at hand to ascertain the truth thereof; having failed to do so, plaintiff cannot now complain. (26 C.J. 1149.)
Many of the items charged by defendant, as shown by the [7] exhibits, were for a less number of blanks than the minimum number fixed by law as the basic rate. Apparently plaintiff takes the position that defendant was entitled to charge only a proportionate part of the price fixed by section 4482. In this we think plaintiff is in error. A fair construction of the provisions of this section allows the charge for a less number than the minimum at the full rate. For example: The maximum rate fixed for 1/2 sheet 14 x 8 1/2, printed on one side, is $10.25, for the first 500; if defendant furnished, upon request of the proper county official, only 250, he would be entitled to charge the full rate of $10.25. ( Stevens v. Ravalli County, 25 Mont. 306, 64 P. 876.)
We are of opinion that the complaint is sufficient as to moneys paid in excess of the statutory rate, and that the court erred in sustaining defendant's demurrer thereto.
For the reasons stated, the judgment is reversed, and the cause remanded, with directions to set aside the order sustaining defendant's demurrer and enter an order overruling the same.
MR. CHIEF JUSTICE CALLAWAY and ASSOCIATE JUSTICES MATTHEWS, GALEN and ANGSTMAN concur.
ON MOTION FOR REHEARING.
On petition for a rehearing counsel contend that the court failed to consider and pass upon the objections made to plaintiff's complaint by defendant's special demurrer. While the questions presented were not discussed in the opinion, they were, however, all carefully considered and found to be without merit. The petition is denied.