Board of Supervisors v. Board of Supervisors

Cooper, J., delivered the opinion of the court. The pleas upon various grounds challenge the validity of the bonds executed by Chickasaw County and of the subscription under which they were issued. The conclusion sought to be reached is that if there was no authority of law for the execution of the bonds and none for the subscription on which they were based, then neither the subscription nor the bonds created a debt against Chickasaw County, and, therefore, that Clay County cannot be called upon by Chickasaw to reimburse it for any money paid by it in the discharge of the supposed obligations under which it rested. The theory of the defendant is that from the date of its creation [337] and its organization under its own officers, those officers became and were its sole representatives, both as to the future and the past; that from that date the officers of Chickasaw County became strangers to the new county and all its territory and inhabitants, and were equally without authority to bind it for future- or to represent it in past transactions. Standing upon this premise, the defendant asserts two propositions, first, that by the act creating Clay County, it was charged only with its proportionate share of the debts legally owing by the counties from which it was created; second, that the subscription to the Grenada, Houston, and Eastern Railroad by Chickasaw County was without authority of law and created, no debt against Chickasaw County. Admitting the correctness of both these propositions, they nevertheless constitute no sufficient, defense, unless the premise assumed by the defendant is also true, and we are satisfied-it is not. Manifestly it was not the purpose of the legislature to impose upon the new county the payment of anything other than its fair proportion of the debts with which the old counties were then burdened; it is equally clear that it was intended for it to pay a due proportion of such debts as were then outstanding against them. At the time of the passage of the act creating Colfax County the subscription to the railroad company was recognized both by the officials of Chickasaw County and by its inhabit-ants as valid and obligatory, as is shown by the fact that a tax was levied by the county authorities and paid by the people for two successive years in payment of the first two annual installments of the sum subscribed. It would be a strained construction of the- act by which the conclusion could be reached that the legislature did not intend to include or intended to exclude this debt, which was recognized by those most interested in its existence, as one of which Colfax County should pay its proportionate part..' The act creating the new county contained no provision designating the manner by which the debts of the various counties from which Colfax was created should be established, audited, or adjusted. [338] Why was this not done? The obvious reply is that there was already provided by the general law machinery for the adjustment of all claims against the counties. Primarily such claims were to be presented to the boards of supervisors for allowance, and unless the claim was presented to .and rejected by the board the creditor could not resort to the courts for redress; if the claim presented to the board was rejected by it, then the creditor might appeal from such decision to the courts or proceed by original action at law. Creditors of the old counties were not by the act creating Colfax County given a remedy against that county • they continued, as before, creditors of the old counties and their sole right was to recover from them. The effect of the allowance of a claim by the board of supervisors of a county is not so broad as that which results from the rendition of a judgment in a suit against the county, for in the former case the board of supervisors, acting under and in pursuance of statutes, cannot allow any claim not authorized by law, and if such claim is allowed the taxpayer may by proper proceedings attack and vacate the order and procure a cancellation of the warrant issued by the board, or may resist the collection of taxes levied for its payment; but if no steps are taken and payment of the warrant is made, the individual taxpayer is without relief. On the other hand, where a suit is brought by the creditor against the board and a judgment recovered, such judgment is final and conclusive against the board, and in the absence of fraud and collusion is conclusive against the taxpayers, upon the ground that they are real though not nominal defendants therein. Clarke v. Wolf, 29 Iowa 197 ; Freeman on Judgments, § 178. The citizens of Chickasaw County were then bound by the judgments in favor of the bondholders against the board of supervisors of that county, because they were the real parties in interest therein and were represented by the board, and for the further reason that if the judgment had been in favor of the defendants, it would have operated to discharge them from liability on the bonds. [339] It is evident that Colfax County would also have been discharged from liability by a judgment in favor of the Board of Supervisors of Chickasaw County, and, therefore, it may be said that it was a real party in interest, and if this release would have arisen, not collaterally and incidentally, but directly and because of the fact that the defendants stood in a representative capacity to it, it follows that it is bound by the judgments against such representatives. Was it also a party by representation ? We must assume that at the time of the passage of the act creating Colfax County those couuties from which its territory was taken occupied the usual condition of other counties, with outstanding contracts for the support of the poor, the teaching of the public schools, the building and repairing of bridges, and in relation also to the many other subjects of internal police. Over all such contracts surely the boards of supervisors were invested with jurisdiction and might audit and allow the claims of persons Avho had rendered the services contracted for. In the exercise of such jurisdiction, the fact of the indebtedness of the county, as constituted at the time when the contracts were made and performed, was necessarily determined, and there is nothing in the act creating the new county indicating a legislative intent that such determination should be less binding- upon the excised territory or upon the county into which it had been incorporated than upon the territory which remained in the old counties. Colfax County took the excised territory cum onere, and whatever debts bound Chickasaw County were in due proportion binding upon it. In the absence of an express legislative declaration, we cannot assume that it was intended that in the apportionment of the .debts Chickasaw County should be required to establish anew the validity of those debts which had been audited and allowed by its constituted authorities and paid, or for which judgments had been rendered against it. Ample protection against fictitious or fraudulent claims was offered to the new county by the fact that Chickasaw County could only demand from it the payment of a proportionate part of those debts which had been legally fixed against itself, either by the action of its board of supervisors or [340] by the judgment of a oourt of competent jurisdiction. We are satisfied that under the act creating Colfax County the boards of supervisors of the old counties remained the auditing boards of the new county as to all pre-existing debts, and that their action in reference thereto was binding and conclusive upon Clay County to the same extent that it bound and concluded the taxpayers of the original counties. Nor are we able to distinguish between the case of an allowance of a claim by the board of supervisors and one in which the liability was fixed on the board in invitum by the judgment of a court of law. If the board in the exercise of its judicial or ministerial functions could bind Colfax County because it stood in that act as the legal representative of that county, for the same reason a judgment in an action inter partes was obligatory upon it. We are, therefore, of the opinion that both in the suits at law on the bonds and in the payment of those on which no suits were brought the county officials of Chickasaw County were the representatives of all that territory which composed the county when the debts, real or assumed, were contracted; that the excised territory was bound because Chickasaw was, and that Colfax County was bound because the territory it acquired was bound. From this it follows that it is too late for day County (formerly Colfax) to interpose the objections set up in its pleas. It should have acted to restrain the payment by Chickasaw County of those of the bonds upon which, no.judgments had been rendered. Having failed so to do, it is now bound for its proportion of the debts paid by Chickasaw County, not because such debts were in fact legal debts, but because they have been treated as such by the authorities of Chickasaw County with the acquiescence of Clay County, or have been judicially found to be legal debts in a suit brought against the Board of Supervisors of Chickasaw County. The time has passed when the inquiry- invited by the pleas might have been made. The decree is- reversed, the pleas disallowed, and the defendant given leave to answer within thirty days after the mandate shall have been filed in the court below.