Opinion
April 7, 1931.
1. MANDAMUS: Return: Motion to Strike Out: Questions of Law. Strict rules of pleading are not enforced in cases originating in this court; and in a mandamus suit to compel the board of supervisors of a sewer district to levy a tax to pay outstanding warrants, begun in this court, relator's motion to strike out certain paragraphs of respondent's return on the ground that they tender issues of law only, will not be sustained, where the issues thus tendered arise naturally on the record, and may be considered without formal demurrer.
2. ____: ____: Amendment. An application to amend the return in mandamus by adding certain specified averments denying allegations in the petition which were not denied in the original return and tendering issues of fact which up to that time stood admitted, made after the commissioner has taken the evidence and filed his report, and only a few days before the date set for the argument and the briefs are due, and made so late that if allowed a continuance and a further taking of evidence would be required, should be denied.
3. LEGISLATIVE ACT: When Effective: Referendum: Emergency Clause. An act of the General Assembly providing for the organization of sewer districts, to which is attached an emergency clause stating it is necessary for the public peace, health and safety, is not prevented, by the referendum provision of the Constitution (Sec. 57, Art. IV), from going into effect within ninety days as to one particular district unless it prevents the organization of all districts which come within the terms of the act.
4. ____: ____: Emergency Clause: Sewer District: Sanitation: Invalid Organization: Quo Warranto. An averment that the territory in a sewer district, organized under a legislative act, was already served with sewers and had no immediate need of sewers to protect the health of its inhabitants, does not go to the validity of the emergency clause attached to the act stating that it was necessary for the public peace, health and safety, but challenges the right of that district to be organized under the act. It raises a question of fact regarding the regularity and validity of the organization of that particular district — a question which can be raised only in a quo warranto proceeding.
5. PLEADING: Inconsistencies: Estoppel. A party is estopped to take a position inconsistent with admissions of facts contained in his pleading, but such judicial admissions, as a general rule, are taken as true for the purposes of the action.
6. ____: ____: Sewer District: Levy of Taxes. In a mandamus to compel the board of supervisors of a sewer district to levy a tax to pay outstanding warrants, respondents admit that the district was properly incorporated by declaring in their return that they constitute a majority of the board, and that they performed certain functions on behalf of the districts as such officers; and by such admissions of fact they are estopped to deny the legal existence of the district, and the official character under which they make their return, and the authority under which they acted, and all other facts inconsistent with such admissions.
7. SEWER DISTRICT: Contract: Agreement with Others: Evidence. In a mandamus suit to compel a sewer district to levy taxes to pay outstanding warrants, issued in pursuance to a written contract, wherein respondents object that relator does not come into court with clean hands because of the provisions of said agreement, contracts of other persons with other sewer districts pertaining to the issue and purchase of warrants are irrelevant and should be excluded, where there is no evidence that relator had any agreement or understanding with the several other persons who dealt with the other districts.
8. ____: ____: Purchase of Warrants: Unlawful Purpose. The board of supervisors of a sewer district organized under the Act of 1927 is not expressly directed, but is clearly authorized, to issue warrants in payment of expenses incurred for preliminary organization, in making surveys, etc., and having issued them to its officers in payment of expenses incurred, the relator had a legal right to purchase them; and in a mandamus suit to compel the levy of a tax to pay them, any prior contract by which relator agreed to purchase them, whether lawful or unlawful, is no defense. Having acquired the warrants in a lawful manner relator's right to collect them cannot be defeated by an unlawful contract made in connection with their purchase.
9. RECOVERY: Lawful Right: Unlawful Contract. A party's right to recover on a cause of action which exists under the law and independently of any attendant or incidental agreement, cannot be defeated by proof that the incidental contract attending the transaction was illegal or unlawful. If the cause of action exists independently of the contract, it does not rest upon the contract, and proof that the contract was unlawful, or that it was entered into for an unlawful purpose, will not defeat the action.
10. NATIONAL BANK: Purchase of Securities. A national bank may acquire title to warrants lawfully issued by a sewer district, or other securities, if it purchases them at their face value.
11. SEWER DISTRICT: Preliminary Tax: Discretionary: Mandamus. The provision of the Act of 1927 (Laws 1927, p. 443) that the board of supervisors of a sewer district "may," as soon as appointed and qualified, levy a uniform tax to be used for the purpose of paying the preliminary expenses incurred and to be incurred in making surveys, plans of construction, etc., is discretionary only as to the time of the exercise of the power: the board is not required to levy the tax as soon as the supervisors qualify, but they must do so at some time; and where the board has issued and sold warrants in payment of such preliminary expenses, and refuses, after demand, to levy a tax to pay them, the legal holder, being without a plain, adequate and speedy remedy at law, has a clear right to a writ of mandamus to compel such levy.
12. MANDAMUS: Pending Injunction. In a mandamus suit to compel the board of supervisors of a sewer district to levy a tax to pay outstanding warrants, an averment in the return that at the time relator requested a levy of the tax property owners and taxpayers had filed an injunction suit against the supervisors, attacking the legal existence of the district as unconstitutional, and to restrain them from any further exercise of the functions of supervisors, does not state that the injunction suit was pending at the time the mandamus was instituted, or that issues were tendered in the injunction which involved the right to levy the tax, or that relator was a party to such injunction suit or in any wise bound by it, and states no defense.
13. MANDAMUS: To Levy Tax: Postponement: Repudiation. In a mandamus suit to compel the supervisors of a sewer district to levy a tax to pay past-due warrants, a return which does not in reality seek a postponement of the levy, but in fact shows a repudiation, does not state a defense.
PEREMPTORY WRIT AWARDED.
B.H. Charles, Jourdan English and Charles Claflin Allen, Jr., for relator.
(1) Respondents cannot raise both issues of law and of fact going to the entire case at the same time. State v. Bright, 224 Mo. 514; Donahue v. Bragg, 49 Mo. App. 273. The office of the return is to raise issues of fact and not of law. Respondents cannot use the return as a demurrer, and parts of the return attempting to raise or argue issues of law should be stricken. State v. Bright, 224 Mo. 514; Long v. Towl, 41 Mo. 398; Taber v. Wilson, 34 Mo. App. 89. (2) Respondents may not attack the corporate existence of the district in this case, and the allegations seeking to raise that issue are immaterial. Black v. Early, 208 Mo. 281; State ex rel. v. Hunt, 199 S.W. 944; State ex inf. v. Curtis, 319 Mo. 316; Kayser v. Bremen, 16 Mo. 88; Burnham v. Rogers, 167 Mo. 17; St. Louis v. Shields, 62 Mo. 247; Supervisors v. Thompson, 61 F. 914. (3) Mere pendency of an injunction suit by taxpayers against the supervisors of this district or of other districts and respondents' "opinion" that the levy of the tax should be deferred until the litigation has been concluded are no defense to this mandamus. State v. Hackmann, 305 Mo. 685, 267 S.W. 608; State v. Sale, 153 Mo. App. 273. (4) Mandamus is the appropriate remedy of relator to compel the levy of a tax to pay its warrants. Sheridan v. Fleming, 93 Mo. 321; State v. Nelson, 310 Mo. 526; State v. Rainey, 74 Mo. 229; State v. Holt County, 135 Mo. 533. (5) Under the facts the duty to levy the tax is mandatory, not discretionary. Rex v. Barlow, 2 Stalk. 609; Mason v. Fearson, 9 How. 248; Supervisors v. United States, 4 Wall. 435. (6) Abuse of discretionary power may be corrected and its proper and lawful exercise compelled by mandamus. State ex rel. v. Public Schools, 134 Mo. 297; State v. Lafayette County, 41 Mo. 222; State v. Bourne, 151 Mo. App. 104. (7) The statute does not limit the time of the levy of the preliminary tax to immediately after organization, but contemplates the incurring of preliminary expenses and issue of warrants therefor prior to the levy and collection of the preliminary tax. Laws 1927, p. 443, sec. 7; Laws 1927, p. 455, sec. 21. (8) Respondents' exceptions based on the claim that the district is not a corporation amount to a collateral attack on its corporate existence which cannot be made. (9) The purchase by relator of the warrants was not ultra vires. Morris v. National Bank, 142 F. 25; Seward v. National Bank, 27 F.2d 224; Danforth v. National Bank of Elizabeth, 48 F. 27; National Bank of Commerce v. Francis, 246 S.W. 326. The defense of ultra vires is not available to respondents because (a) It can only be raised by the United States. Union National Bank v. Matthews, 25 L.Ed. 188; National Bank of Genesee v. Whitney, 26 L.Ed. 443; Thornton v. Exchange Natl. Bank, 71 Mo. 221. (b) It was not pleaded. German Savings Institution v. Jacoby, 97 Mo. 617. (10) The contract between relator and the Webster Groves District is not void. Laws 1927, p. 439 et seq. (11) This action is not on the contract, but to compel the performance of a duty to levy the tax, imposed on respondents, by law. (12) Under the admitted facts in this case no demand was necessary at all, as it was useless, the board having shown its intention not to make the levy at all events. State ex rel. v. Kansas City, 259 S.W. 1045; State ex rel. v. Wilson, 158 Mo. App. 105. (13) The findings of fact of the Commissioner are supported by the evidence, and not contrary thereto. The findings proposed by the respondents in their exceptions are not supported by the evidence. Musser v. Johnson, 42 Mo. 74; St. Louis Public Schools v. Risley, 28 Mo. 415; Town of Weyanwega v. Ayling, 25 L.Ed. 470; Manchester Bank v. Harrington, 199 S.W. 242. (14) All the testimony offered by respondents was incompetent or immaterial, and they are not entitled to any findings of fact based thereon. State v. Medical Society, 295 Mo. 144; State ex rel. v. Grinstead, 282 S.W. 714; Manchester Bank v. Harrington, 199 S.W. 242.
Orla M. Hill, Thomas P. Moore, John E. Mooney, Sam D. Hodgdon and George Barnett for respondents.
(1) Respondents' return does not improperly raise both issues of law and of fact. State ex rel. v. Lafayette County Court, 41 Mo. 545; State ex rel. v. Ry. Co., 114 Mo. 283. (2) Respondents' return properly submits issues both of law and of fact. State ex rel. v. Ry. Co., 114 Mo. 283. (3) The respondents do not make an attack upon the existence of a corporation organized by a court of competent jurisdiction, but on the contrary, the attack is aimed at a void order, made by the court utterly without jurisdiction. All the cases cited by relator concede the jurisdiction of the court making the order. (4) The act (Laws 1927, p. 439) was not in effect May 16, 1927, when respondent district was organized. The law did not go into effect until ninety days after the adjournment of the Legislature; the emergency clause was not effective. State ex rel. v. Tel. Co., 292 S.W. 1037; State ex rel. v. County Court, 300 S.W. 1066; Hollowell v. Schuyler Co., 18 S.W.2d 498; State ex rel. v. Thompson, 19 S.W.2d 642; State ex rel v. Maitland, 246 S.W. 267; State ex rel. v. Sullivan, 224 S.W. 327; Fahey v. Hackmann, 237 S.W. 752; State ex rel. v. Becker, 233 S.W. 641. (5) The warrants were purchased under and by virtue of the contract entered into June 1, 1928, by the relator and the respondent district, and that contract was against public policy and was void: (a) Because the contract and the consequent purchase of warrants by relator amounted to a loan to the respondent district and the supervisors of said district were without power or authority in law to contract a loan for the purpose of defraying preliminary expenses. (b) Because the contract provided an arrangement to defer the levy of a preliminary tax when the statute provides that the preliminary tax may be levied "as soon as" the supervisors are appointed and qualified, but makes no provision for a deferred levy. (c) Because the contract imposes upon the taxpayers the burden of an interest charge contrary to law. (d) Because the contract undertakes to control the future exercise of discretion on the part of the supervisors and successor supervisors. (e) Because the contract provided for the incurring of a present indebtedness without the present levy of tax to discharge the same, contrary to law. (f) Because the contract amounted to an anticipation of funds to be raised by taxation without the levy of any tax. (g) Because said contract undertakes to control the exercise of future discretion of supervisors as to where public funds should be deposited. (h) Because the contract undertakes to preclude the right of future supervisors to contract for interest on deposits as provided by Section 21 of the statute under which the district purports to have been organized. Mandamus will not compel the performance of a void contract, or the doing of an illegal act. State v. Longfellow, 169 Mo. 109; State v. Hudson, 126 S.W. 733; State v. Becker, 9 S.W.2d 153. Supervisors' power to levy tax "as soon as qualified." They have no present power. Squaw Creek Drainage Dist. v. Hopper, 245 S.W. 1092. Relator is not entitled to relief because it does not come into court with clean hands. State ex rel. v. Jackson County Medical Society, 295 Mo. 144. (i) Because the relator national bank was without power to purchase the warrants in question or to contract the purchase thereof. Its acts in such respect were in violation of law. Bank v. Johnson, 104 U.S. 276; McGee on Banks Banking (3 Ed.) 428, sec. 237; Nat. Bank v. Matthews, 98 U.S. 621; Nat. Bank v. Whitney, 112 U.S. 405. (j) Because the relator was a party to a so-called "gentlemen's agreement" the purpose of which was to control the sale of bonds to be issued by St. Louis County sewer districts by engaging in contracts for the purchase of warrants and bonds, which contracts are void, as against public policy, and said relator as a national bank had no power to engage in said contracts. (6) Mandamus will not lie because the levy of a preliminary tax is the exercise of a discretion of public officials. The law specifically invests the supervisors with the discretion to determine whether a preliminary tax should be levied. Laws 1927, pp. 439-465, sec. 7; State ex rel. v. Westhues, 9 S.W.2d 612; State ex rel. v. Dauson, 12 S.W.2d 462; State ex rel. v. Scott Co. Court, 197 S.W. 347. (a) Because litigation was pending in said district and other districts of St. Louis County, Missouri, wherein the constitutionality of the law under which said district was organized was questioned. (b) Because the district in question had been organized in less than ninety days after the passage of said statute and the effectiveness of the emergency clause in said law has not yet been judicially determined. Laws 1927, p. 439. (c) Because the levy at this time would work irreparable injury to taxpayers in said district in the event it should eventually be determined that said district had not been legally incorporated. (d) The relator does not have a clear right to the writ. State v. Becker, 237 S.W. 117; State v. Hackmann, 265 S.W. 532; State v. Thompson, 293 S.W. 391; State v. Linville, 8 S.W.2d 623; State v. Armstrong, 9 S.W.2d 600.
Relator filed its petition in this court to compel the respondents, members of the Board of Supervisors of the Webster Groves General Sewer District No. 1, the Secretary-Treasurer of said board, and the Collector of the Revenue of St. Louis County, to levy a tax upon all the lands in said district and to cause said tax to be collected and the money paid over to the Treasurer and paid to plaintiffs in satisfaction of warrants issued by the said district and held by relator.
To the alternative writ respondents Holekamp and Kuhlmann filed their return as members of the Board of Supervisors of said district, and Curtis, the third member of said board, filed a separate return. Thereupon relator filed an answer to the return of Holekamp and Kuhlmann, and filed a motion praying this court to appoint a special commissioner to hear evidence and report his finding upon the issues of fact and law raised by the pleadings. The relator also filed a motion to strike out parts of the return of Holekamp and Kuhlmann, which motion was taken with the case.
The court appointed Judge Emil Roehrig Special Commissioner and he, after taking evidence September 12, 1930, made his report finding the facts and determining the issues of law in favor of the relator and recommending that the alternative writ be made peremptory. Respondents filed exceptions to the report. Relator filed its motion January 2, 1931, praying this court to confirm the report of the special commissioner.
The petition of relator alleged that the Webster Groves General Sewer District Number 1 was organized by the Circuit Court of St. Louis County May 16, 1927, under the provisions of an Act of the General Assembly approved March 25, 1927; stated the official character of the several respondents, and averred that after the incorporation of the said sewer district the board of supervisors employed attorneys, appointed a chief engineer, caused necessary surveys to be made by said engineer, and incurred expense in organizing said district and making such surveys; that warrants were duly issued by the treasurer of said district for the said expenses to the persons severally entitled thereto. The petition then set out a list of the said warrants, one hundred and eleven in number, with the dates of their issuance, the names of the several persons to whom they were issued, their amounts ranging from seven thousand dollars down to three dollars, the total amounting to $58,644.96. They were for salaries of the engineer and the supervisors, for rents, supplies, attorneys' fees and other expenses incidental to the organization of said district and the said surveys. The petition then alleged that the relator purchased each and all of the said warrants from the respective holders thereof at their face value, and the same were duly assigned to relator, which, at the time of the filing of the petition, was the owner and holder of each and all of said warrants. That each of said warrants went to protest, and the date of such protest is listed. The dates of the issuance of the warrants ran from June 7, 1928, to May 15, 1930.
The petition then alleged that September 26, 1929, the supervisors of said district found that expenses had been incurred on behalf of said district in organizing, providing funds, causing surveys, etc., and duly levied a uniform tax of five cents per square one hundred feet of all land in said district to provide funds for the purpose, but took no further steps to assess or certify to the collector said preliminary tax. It is then averred that June 6, 1930, the board of supervisors adopted a purported resolution, repealing the resolution of September 26th to levy said tax; that the said district has not and never has had any funds in its treasury for the payment of the aforesaid warrants; that the act of the board, June 30, 1930, was arbitrary, capricious, for the purpose of repudiating and avoiding the warrants. It was further alleged that the Circuit Court of St. Louis County had never determined whether or not the cost of constructing the improvements is less than the benefits assessed against the land and no decree has ever been entered assessing the benefits and damages against the land in said district. The petition then averred that July 8, 1930, the relator presented all of said warrants to the board of supervisors and demanded the payment thereof, which payment was refused; that relator demanded that the said board levy a tax for the purpose, which the board failed and refused to do.
The return of Holekamp and Kuhlmann, filed September 13, 1930, is in the nature of an avoidance without explicit confession. It is largely argumentative and pleads facts which it claims would make it unlawful for the supervisors to grant the remedy prayed. It does not deny any facts alleged in the petition except in one particular, but denies that relator had a right to request or demand a remedy, denies that the tax warrants held by the relator constituted a valid lien against the land of the district, and denies that the warrants constitute a legal claim of any kind or nature against the lands or property of said district; denies the existence of any emergency as to sanitary sewage disposal in the district, denies (the only issue of fact joined) that relator acquired the purported tax warrants in good faith or in the regular course of business expecting that a regular uniform tax would ever be levied.
The separate return of Supervisor Curtis admits in the main the facts alleged in the petition.
I. The relator filed its motion to strike out certain paragraphs in the return of Holekamp and Kuhlmann on the ground that such paragraphs tendered issues of law and not issues of fact. This on the ground that the respondent could Pleadings: not raise both issues of fact and issues of law Enforcement. going to the entire case at the same time. This motion was taken with the case. We do not enforce strict rules of pleading in cases originating in this court. We find that the issues of law thus tendered in the return arise naturally on the record, and we may consider them without a formal demurrer. The motion is therefore overruled.
II. On December 30, 1930, respondents Holekamp and Kuhlmann filed a motion asking leave to amend their return and with it the amendments suggested. This return denies certain facts alleged in the relator's petition which were not denied in the Amendment original return. It tenders issues of fact which to Return. stood admitted and were not in issue at the time the evidence was taken and the report of the commissioner filed. The commissioner after taking evidence filed his report December 12th. The case was set for argument in this court February 4, 1931. Briefs were due to be filed thirty days before that time, which would not be later than January 5th. The amendment which these respondents asked leave to file comes six days before that and fourteen days after the report of the commissioner. To allow the amendment would compel the relator to prove certain facts alleged in its petition which stood admitted at the time the evidence was taken. It would require a continuation of the case so as to give an opportunity to take evidence upon such issues. These respondents present no reason why they did not know at the time they filed their original return all that they know now, why they were not as well prepared then as they are now to try the issues arising on the new matter alleged in their amended return. They suggest no reason for the continuance of the case for the purpose of taking evidence upon such issues.
The law is liberal in allowing amendments even after judgment in furtherance of justice. [Sec. 1274, R.S. 1919.] Such amendment may be made after a trial so as to make the pleadings conform to the facts proved. It is not claimed by the respondents that the amendment which they propose is necessary to conform to the facts proved. No facts are mentioned in the application and no evidence referred to in the record as facts proven, which would justify the amendment. The application is therefore overruled.
III. The Act of 1927 under which the Webster Groves General Sewer District No. 1 was organized was approved March 25, 1927. The district was organized May 16, 1927, within ninety days. The respondents claim that the law did not go into Invalidity of effect until ninety days after its enactment. An District: emergency clause was attached to the act stating Emergency Act. that it was necessary for the public peace, health and safety. Respondents argue that conditions did not authorize an emergency clause and cite several cases to the effect that a declaration in an emergency clause that it was necessary for the public peace, health and safety, as provided in Section 57, Article IV of the Constitution, authorizing a referendum, did not make it so. It would have to appear in the text of the act, that the measure applied to a subject within that clause of the Constitution. [State ex rel. Westhues v. Sullivan, 283 Mo. l.c. 577; State ex rel. v. Bell Tel. Co., 292 S.W. 1037; State ex rel. v. Linville, 300 S.W. 1066.]
The respondents, however, tender the issue as a question of fact relating to this particular district, as follows:
"Respondents deny the existence of any emergency as to sanitary sewage disposal within said district, and deny that any such emergency has ever existed within said district."
The return then goes on to allege that the district before the passage of the act was supplied with sufficient sewage disposal. That averment does not challenge the propriety of the emergency clause in the act. The question of fact thus raised could be considered only in determining whether the conditions in the district brought it within the terms of the act. Appellant assumes that if the conditions in this district did not authorize a passage of the act they could not exist in any other territory.
The constitutional provision relating to the referendum, which would nullify an emergency clause (Sec. 57, Art. IV), could not be construed to allow referendum part of the subjects covered by a bill and inapplicable to other subjects covered by the same bill. If it could be so construed the act does not declare the emergency applies to some subjects and not to others. The act went into effect at the same time as to every sewer district which could come within its terms. If the emergency applied to one it applied to all. If we give effect to it no district could be organized unless a menace to health required immediate action. Therefore the averment that the territory in Webster Groves General Sewer District No. 1 was already served with sewers and had no immediate need of sewers to protect the health of its inhabitants, does not go to the validity of the emergency clause, but challenges the right of that district to be organized under the act. It raises a question of fact regarding the regularity and validity of the organization of the particular district — a question which could be inquired into only in a quo warranto proceeding. Such an attack could not be made collaterally. [State ex rel. Waddell v. Johnson, 296 S.W. 806; State ex rel. Consolidated School District v. Jones, 8 S.W.2d 66, l.c. 69.]
Respondents Holekamp and Kuhlmann who, in their return assert the invalidity of the incorporation of the district, are not in position to make that point. Their return begins:
"Now come respondents Carl H. Holekamp and F.C.E. Kuhlmann, majority members of the Board of Supervisors of the Webster Groves Sewer District No. 1 of St. Louis County, Missouri, and F.C.E. Holekamp as Secretary of said board and make return to the alternative writ of mandamus," etc. . . .
They then plead that the supervisors of said district, under the Act of 1927, could not levy the tax for the purpose demanded in the alternative writ, and set forth various reasons why, under the provisions of the act, the various officers could not be compelled to levy a tax.
The general rule is that facts admitted in the pleadings must be taken as true for the purpose of the action. The pleader is estopped to take a position inconsistent with such judicial admissions. [49 C.J. 122-125; Lilly v. Menke, 143 Pleading: Mo. 146; Bensieck v. Cook, 110 Mo. 173; Richards v. Admissions. Johnson, 261 S.W. 53; Knoop v. Kelsey, 102 Mo. l.c. 297.] Numerous cases are cited in the footnote to that citation in Corpus Juris. Those rulings comprehend various situations in which such estoppel occurs where the record shows that the pleader states facts or assumes a position in his petition or answer, he cannot be heard to take a position inconsistent with such statement.
Whether or not the Webster Groves Sewer District was properly incorporated as such was a question of fact. These respondents admit the fact by declaring in their returns that they are a majority of the board of supervisors. That is an admission that under the provisions of Section 5 of the act they took the oath of office as such supervisors of the district which they now want to say did not exist. They performed certain functions as such officers which they now declare they had no right to do. They attempt to plead themselves out of existence as parties to the suit in the character which they assert in filing their return. Their return asserts they are bound by certain provisions in the act which they attempt by this defense to say have no binding force. They are estopped to deny the official character under which they make their return, and therefore the legal existence of the district under the authority of which they acted.
IV. Respondents Holekamp and Kuhlmann in their return tender their one issue of fact in this form:
"Respondents deny that relator acquired its purported tax warrants in good faith or in the regular course of business expecting that a preliminary uniform tax would ever Good Faith. be levied against the property and lands within the said district."
This does not mean that the relator bank did not purchase and pay for the warrants at par, for that is admitted in another part of the return. It means, we find from respondent's brief, that the warrants were purchased by relator in pursuance of a contract which they plead in their return. The relator in answer to the return denies that the contract mentioned is of the purport and has the effect set out in the return. The burden was upon the respondent to introduce the contract, but relator anticipating the issue introduced it. The contract recites the organization of the district, incurring of expense in preliminary surveys, the agreement of relator to purchase at par warrants issued by the district, the agreement of the district to issue the warrants, with other stipulations as to amount, manner and form, and a stipulation by the district to levy a tax within a given time to pay the same.
Respondents find several infirmities in this contract which are specifically mentioned in their brief and presented argumentatively in their return, as follows: the purchase of warrants under the contract amounted to a loan; the contract provided an arrangement to defer the levy of the preliminary tax; it imposes upon the taxpayers the burden of interest charges; undertakes to control the discretion of the supervisors; incurs a present indebtedness without a present levy of tax to discharge it.
A further objection is made that relator did not come into court with clean hands. This appears in the exceptions to the finding of the commissioner in this form:
"g. Both before and after the agreement (Relator's Exhibit No. 1) the relator bank had participated in meeting of representatives of the Mississippi Valley Trust Company, Kauffman-Smith Co., George H. Burr Co., Stix Co. and Oliver J. Anderson Co., which resulted in a `gentlemen's agreement' to undertake to contract the purchase of warrants and bonds to be issued by sewer districts formed and to be formed in St. Louis County, Missouri, and pursuant to said `gentlemen's agreement' the several parties named did contract the purchase of both warrants and bonds to be issued by the Central Sewer District, Overland Sewer District, Jennings Sewer District and the Lemay Ferry District."
The several contracts mentioned were introduced in evidence over the objections of relator. They were irrelevant because it was not shown that relator ever knew anything about any of them.
As to the meeting at which it is claimed that by the gentlemen's agreement there entered into the relator did not come into the case with clean hands, the evidence of the respondents' witnesses was to the effect that the Boatmen's National Bank, relator, was never represented at any such meeting. There was no evidence to show that relator had any agreement or understanding with the several other parties who dealt with other districts. The commissioner's finding of fact upon that proposition is as follows:
"6. That no other agreement, understanding or arrangement except the contract quoted above relating to the time when or the manner in which said warrants should be paid, was made or had between relator and respondent district, directly or indirectly."
The commissioner as a conclusion of law found that the relator did not at any time by any agreement, oral or written, waive, defer, modify, forfeit or otherwise impair its legal right either to demand the immediate levy of the said tax or the issuance of the writ petitioned for. The conclusion, therefore, of the commissioner was that the contract was perfectly legal. We think the record supports that conclusion, but we find it unnecessary to go into the elaborate arguments, pro and con, on that subject.
The Act of 1927, page 441, provides for the appointment by the court of three supervisors, prescribing their duties: that the board of supervisors shall appoint a competent civil engineer, who shall make necessary surveys of the land, report a plan for disposal of sewage and for storm sewers, including any necessary outlets, etc., extending beyond the boundaries of said district, etc. The supervisors are required to adopt his report or a modification of it and file the same with the secretary of the board.
The board of supervisors " may as soon as appointed and qualified levy a uniform tax in paying the expenses incurred and to be incurred in organizing the district and making surveys of the same and assessing benefits and damages and in paying other necessary expenses prior to the time when said board shall be empowered by subsequent provisions of this act to provide funds with which to pay the total cost of improvements and works of the district; that the tax shall be paid as soon as assessed, and become delinquent if not paid by December 31 of that year; that the board of supervisors shall have full power and authority to plan, construct, excavate and complete any and all works or improvements which may be needed to carry out, maintain and connect the sewer system; may appoint attorneys to act for the district and advise the board."
It is made the duty of the collector of revenue for the county to collect the taxes.
The secretary of the board (Section 21) shall act as treasurer and is authorized to pay out funds of the district only on warrants issued by the district. The form of such warrants is set out.
If any warrant issued under the act is not paid when presented to the treasurer of the district, because of lack of funds, such fact shall be endorsed upon the back of such warrant, and thereafter shall draw six per cent interest.
There is no express direction to the board of supervisors to issue warrants for expenses incurred in making preliminary surveys, etc., but it is clearly implied from their authority to incur the expenses mentioned. They did issue the warrants sued on. Their authority under the act to issue them is not disputed.
This is not a suit upon the contract which came into the case only incidentally because the respondents pleaded it. Under the statutes mentioned above the board of supervisors had a right to incur the expense of preliminary surveys. That expense was incurred. They had a right to issue warrants for the payment of that expense. Relator had a right to purchase the warrants. It stands admitted that the relator did purchase them at their face value. It is not even claimed that they could have been sold for more, even if that were competent under the pleadings. It had the same right to enforce the collection of those warrants that the original holders of the warrants had.
Since the respondents did only what they had a right to do in the performance of their duty as supervisors, since the plaintiff acquired the warrants as it had a legal right to acquire them, it would not matter if any prior agreement or understanding by which it agreed to purchase them was without lawful authority; it would not matter even if relator entertained an unlawful purpose in purchasing them; as long as it acquired them in a lawful manner its right to collect them cannot be defeated. A criminal purpose to do a lawful act would not invalidate the act. The general rule is stated thus in 6 Ruling Case Law, page 822:
"But an illegal agreement made by a plaintiff will not defeat him unless his cause of action is founded upon, or arises out of, such agreement. His right to recover upon a ground of action that exists independently of the contract is not affected thereby."
The principle is expressed thus in 13 Corpus Juris, page 502:
"An agreement will be enforced, even if it is incidentally or indirectly connected with an illegal transaction, provided it is supported by an independent consideration, or if plaintiff will not require the aid of the illegal transaction to make out his case." See 2 R.C.L. Supplement, 212, 213; Commercial Club of Joplin v. Davis, 136 Mo. App. 583; Walters National Bank v. Bantock, L.R.A. 1915C, p. 531; McDearmott v. Sedgwick, 140 Mo. 172, 183; Roselle v. Beckemeir, 134 Mo. l.c. 391; Finley v. Williamson, 202 Mo. App. l.c. 289; State ex inf. Gentry v. American Can Company, 319 Mo. l.c. 456.
In the Beckemeir case the court said:
"The facts bring him (plaintiff) within the protection of a recognized principle that a party seeking a recovery cannot be defeated on account of the illegality of his prior conduct, when he can make out his case otherwise than through the medium of an illegal transaction."
In this case the relator did not plead the contract. He could have made out his case without any reference to it.
V. Respondents make the point that the relator is a national bank and was without power to purchase the warrants which it seeks to collect. The respondents cite no part of the National National Banking Act which supports that position. The Bank. first case cited, Bank v. Johnson, 104 U.S. 276, is where a national bank discounted an obligation at a rate not allowed by the National Banking Act and was sued for the excess. The other cases cited are equally irrelevant. On the contrary we find cases from the Federal Court holding that national banks may acquire title to securities when they purchase them at their face value. [Morris v. Third National Bank, 142 F. 25.] In this case it is not disputed that the relator purchased the warrants at their face value.
VI. It is further claimed by respondent that mandamus will not lie because the levy of preliminary tax is discretionary with the supervisors. The act (Laws 1927, p. 443) provides Discretion: that the board of supervisors "may" as soon as Mandamus. qualified levy a uniform tax to be used for the purpose of paying expense incurred. Respondents construe that section as leaving it discretionary with the board of supervisors whether they take any steps to pay the preliminary expense which the act requires them to incur in making surveys and making a plan of the sewer. It is further suggested that they must levy such tax "as soon as appointed and qualified," and cannot postpone such levy. The inference is that the levy could not be made at all if postponed. The use of the word "may" in Section 7 refers to the exercise of discretion as to the time when the supervisor shall make the levy. They may do so as soon as appointed. But they must do so at some time or other, or else the law leaves them at liberty to defeat a lawful debt by the mere act of postponement.
The conclusion of the commissioner that the relator is without a plain, adequate and speedy remedy at law and has a clear right to a peremptory writ of mandamus is supported by the record.
VII. Respondents in their return allege that at the time the relator requested a levy of the preliminary tax the property owners and taxpayers had filed an injunction suit against the supervisors attacking the legal existence of said district, as unconstitutional, and to restrain the supervisors of Injunction. the district from any further operation; that the Prosecuting Attorney of St. Louis County has filed intervening petitions on behalf of the State of Missouri in numerous cases pending against the sewer districts in St. Louis County, and that the supervisors, respondents here, have been duly informed of the pendency of such suits. There is nothing in this averment of the return to show that the injunction suit mentioned was pending at the time this suit was instituted, nor does the return aver that issues were tendered in the injunction suit which involved the right to levy the tax in this case, or that relator was a party to such suits or bound by them in any way. Nor have we been cited to any proof to that effect. There is no allegation in the return that other suits pending against other districts has any relation whatever to the issues pending here.
It seems to be claimed further that the respondents do not repudiate their warrants, but merely desire to defer the tax for good cause. They do not mention any other means by Repudiation. which these debts may be paid or that there is any intention later to levy such tax. On the contrary, the entire scope of the return shows a repudiation. They deny the existence of the corporation or the right to levy any such tax.
All the equities in this case are with the relator. The evidence shows that it purchased the warrants in good faith. Some of those warrants were issued to officers of the district, including the predecessors of these respondents, supervisors, and were sold by them to the relator for cash at par. Many of the objections which are now urged to the validity of the district and the inequitable conditions which arose on its formation have been litigated and determined by the courts against the contentions of respondents in cases to which this relator was not a party.
The peremptory writ is awarded. All concur.