Reagan v. County Court

GRAVES, J. Whilst the pleadings in this case are lengthy, the facts thereof, and the issues therein can be stated in short form. Under the law, Revised Statutes 1899, section 6817, the county court of Iron county advertised for bids from such banks or bankers as might desire to become the county depositary. In response to such notice two banks of the county filed their bids. Each complied with the law in filing such bid. When the bids were opened it was found that the Bank of Ironton had offered to pay four and three-eighths per cent interest on the daily balance of county deposits, and the Iron County Bank had offered to pay two per cent on such daily balances. The latter bank also offered to receive at par items on other banks, and to issue drafts upon other banks free of charge whenever requested by county officials. The bids were opened at the hour designated by law, and owing to the insistence of counsel for the Bank of Ironton, the matter was passed upon by the county court before adjournment for dinner. The statute prescribes that the bids shall be opened at high noon, and they were so opened. It would appear that members of the court desired timé to look into the matter. — 85 — but counsel for the Bank of Ironton insisted that they should then and there make the award. Following this insistence the award was made, but to the Iron County Bank rather than to the Bank of Ironton. Relators, as taxpaying citizens, many of whom were interested in the defeated bank, brought this action, (which action and the proceedings, nisi, are well set forth in a written opinion filed in the cause by the chancellor, thus: “The plaintiffs, by their petition in this case, and in their capacity as taxpaying citizens of Iron county, Missouri, ask this court for a mandatory injunction to restrain and enjoin the county treasurer of said county from hereafter depositing the county funds, or district school funds, or capital school funds, or any part thereof, of said county, in the Iron County Bank, under, and by virtue of an order of the county court of said county, designating and selecting that bank, as the depositary of such funds, made on the first day of May, 1905, for the then ensuing two years; to restrain and enjoin the Iron County Bank from receiving or retaining such funds, or any of them; requiring the treasurer to withdraw all of such funds, as may, by virtue of said order of court, have been, by him, deposited in said bank; restraining and enjoining the county court of said county from further recognizing its said order of May 1, 1905, and requiring it to proceed, under the statute, in such cases made and provided, to designate and select some depositary of said funds. The petition, as originally drawn, contained no averment of any abuse of discretion, on the part of the county court, in the making of the order designating and selecting the Iron County Bank as the depositary of said funds, nor did it, in terms, or by implication, charge any partiality or improper motive upon the part of that court. On a demurrer being interposed, and sustained, the plaintiffs amended their peti-. tion, by inserting an allegation to the effect that the action of the county court in making the order desig — 86 — nating and selecting the Iron County Bank as the depositary of said funds, was arbitrary, and without any good, sufficient or lawful cause, and in violation of its duty, and of the law. This amounted to no averment of any substantial fact, tending even by necessary implication, to charge any abuse of discretion or any partiality, or corrupt or improper motive, on the part of the county court, in designating and selecting the Iron County Bank as the depositary of the funds, or in rejecting the application and bid of the Bank of Iron-ton. “At the time of the amendment, counsel for the plaintiffs distinctly stated to the court that the plaintiffs neither charged nor intended to charge that there had been any partiality, or improper motive, on the part of the county court in accepting the bid of the Iron County Bank, and in rejecting the bid of the Bank of Ironton, and informed the court that they relied upon the sole contention that the county court was, as matter of law, bound to accept the bid of the Bank of Ironton, and to reject that of the Iron County Bank, for the reason that the Bank of Ironton offered the highest rate of interest, and that the county court had no discretion in the matter,, and could exercise none. “Notwithstanding the fact that this court sustained the demurrer to the original petition, on the ground that no abuse of discretion or partiality, or improper motive on the part of the county court, in accepting the bid of the Iron County Bank, and in rejecting that of the Bank of Ironton, was alleged, and notwithstanding the further fact that the amendment made it no better, in that respect, the court proceeded to hear the case, with the intent to order an amendment of the petition to conform it to the facts proved, so that appropriate equitable relief might be granted, if the evidence should warrant it. “On the trial the evidence wholly failed to disclose any abuse of discretion, partiality, corruption, — 87 — or improper motive, on the part of the county court, in the acceptance of the hid of Iron County Bank or in the rejection of the hid of the Bank of Ironton. “Upon the pleadings and evidence in the case this court is of the opinion that the statute — Art. 6, chap. 97, E. S. 1899 — clothes the county courts of the several counties of this State with the power and authority to exercise a proper discretion, in the matter of the acceptance or rejection of bids of banks or bankers for the county moneys; that the authority given by section 6819, Revised Statutes 1899, to reject any and all bids is a plain grant of discretion, authorizing a proper consideration of all bids, with the power to reject any or all, and to accept such bid, as in the judgment of the court may be the best, in view of all the facts within the knowledge of the court. “The plaintiffs having failed to allege or prove any abuse of such discretion, or any partiality, or corruption, or improper motive on the part of the county court of Iron county, are not entitled to the relief sought by them, and their bill will be dismissed.” The case was fully tried out upon oral testimony, none of which imputed bad motives to the members of the county court. In fact such theory was openly disclaimed by counsel for relators. Judgment went in accordance with the written opinion above quoted, and relators bring the case here by appeal. Such sufficiently states the case. I. In this case we are met first with the proposition that there was an imperative duty upon the part of the county court to award the contract to the highest and best bidder for the county funds. In other words, it is claimed that there is no discretion in the county court. The case is one of first impression in this court. That is to say, this particular statute has not been a subject of construction by this court, whatever we may have said as to other statutes. The importance of the — 88 — question demands thorough consideration and this we have attempted to give. We are not of opinion that there was an imperative duty upon the part of the county court to grant the contract-to the party making the highest bid for the use of the county funds. We are of the opinion that there is a discretionary power in the county court in determining the award to be made in such case. It may be true that a wrongful and unauthorized discretion might be the subject of review, but the point now to be discussed is whether or not, under the statute, there is a discretion at all. The other question we will discuss later in view of the proven facts. The statute, section 6819, as amended in 1901, under which such awards are made, eliminating surplus language, reads: “It shall be the duty of the county court . . . to select as the depositary of the county funds, district school funds and capital school funds, not otherwise invested according to law, the banking corporation, association or individual banker offering to pay to said county the largest rate of interest per annum for said fund: Provided, that the court shall have the right to reject any and all bids.” The trouble arises between the terms of the body of the act and the proviso thereto. As to this section 6819 the Act of 1901 made no material change. The verbiage used is a little different from the original section, but in substance it is the same. The proviso is the same in both statutes. As it originally stood the proviso is there for what it is worth, just as it is there now. That the purpose of this proviso is to lodge discretion in the county -court, we have no doubt. The words thereof preclude a different view. Under it the court has the right “to reject any and all bids.” From any standpoint it means discretion. If the law meant that after advertising for bids the county court must accept the highest bid, then such court could not reject all bids. The very fact that the proviso allows — 89 — the rejection of all bids demonstrates that there was intended to be left a discretion in the county court. But further this proviso allows the county court not only to reject all bids, but goes further and allows it to reject “any and all bids.” Such provision but emphasizes the fact that the Legislature was lodging a discretion with the county court. Grant it that the provision in the body of the act might be construed to mean that there was an imperative duty upon the part of the county court to designate the highest bidder as the county depositary, yet the very purpose of a proviso, under the law, is to modify the broad and general terms of the act to which it is attached. This question we have recently reviewed in the case of Brown v. Patterson, 224 Mo. 639. A fundamental rule of construction is that the whole act, including the proviso, must be construed so as to give force and effect to the act as a whole, not overlooking, however, the purpose of a proviso. This purpose has well been defined by the New York court, as mentioned in the Brown case, supra, thus: “A proviso in a grant or enactment is something taken back from the power just declared. The grant or enactment is to read, not as if the larger power was ever given, but as if no more was ever given than is contained within the terms or bonds of the proviso.” The terms of the proviso limit the general terms of the broad act and it can make no difference as to the force and effect of a proviso, whether its purpose is to limit the terms of a statute which grants rights, or whether it limits the powers of a' statute which restricts rights. It is argued in this case that the first provision of this statute restricts the rights of the county court, but granting that to be true, the proviso, which is the later legislative expression, removes some of the restrictions. Construing this statute as a whole we have no qoubt that discretionary power is lodged in the county — 90 — court in the matter of selecting a county depositary. Nothing’ in Henry County v. Salmon, 201 Mo. l. c. 169, cited by appellant, is to the contrary. Such was the holding in State ex rel. v. Hawkins, 130 Mo. App. 41, by Bland, P. J., in the St. Louis Court of Appeals, after this case was tried below. Such is the reason of the thing. Whilst it is true that it provides for a bond, and the bond may preclude the county from ultimate loss at the end of a lawsuit, yet it cannot be said that the county court, the agent of the county, should be required to place the public funds in the hands of unknown and irresponsible institutions simply because such institutions offered a higher rate of interest, and tendered a good bond. With the county there is something more than the mere ultimate recovery' of the county and other public funds from the bondsmen. Such funds are needed in the progress of municipal affairs, and this must be held in view by the county court. No better illustration can be cited than Henry County v. Salmon, supra. There, the county, after prolonged litigation, obtained from the sureties on the depositary bond the funds of the county, but how about the county, school and road finances in the mean time ? To our mind the very purpose of this proviso was to give the county court a right to consider the bids from all standpoints and not merely from the standpoint of the highest rate of interest offered or tendered by any particular applicant. Such court should consider not only the rate of interest offered, but also the fact whether or not the funds would at all times be subject to check for the use of the public interests of the county. An action upon a solvent bond does not always meet the conting'ency of the municipality. We, therefore, hold that under this statute there is a discretion in the county court in the selection of a county depositary. II. That the proper exercise of discretion will not be reviewed, we take to be unquestioned1 law. Not — 91 — withstanding scanty pleadings npon the part of relators the trial court heard evidence as if the case was being tried upon the theory of a failure to exercise proper discretion by the county court in the selection of a county depositary. It is not necessary for us to pass upon some questions urged, for the reason that whatever be our view of the law, it would not change this case. It does appear that this case was tried by relators largely upon.the theory that it was the imperative duty of the county court to award the contract to the highest bidder. The views above expressed preclude this idea. But if we even go to the question of the abuse of discretion upon the part of the county court, for which there may be remedy, yet under the facts, such abuse of discretion is not in this case. Under the facts the Bank of Ironton had its attorney present when the bids were opened. He insisted, as under the law he had a right to insist, .that the bids be opened on the day named at high noon; he insisted, as under the law he did not have the right to insist, that the award be made at once on the bids; at least two members of the court wanted further time to consider, but in obedience to the insistence of counsel for the unsuccessful bank, they passed upon the question without adjourning for dinner. From the evidence it appears that the Bank of Ironton had only been recently organized; that the relators are largely persons interested in this bank; that its capital stock was but $15,000, with only half thereof paid up; its officers were unknown to the court; it was running its business in the back end of a hardware store; its-cashier was unknown to the county court; his experience in banking was unknown; he came from another state and another business, i. e., the patent medicine business; the other bank had been the county depositary; its officers and their responsibility were known to the county court; for some years the public funds — 92 — had been deposited there. Under these circumstances counsel for the Bank of Ironton was insisting that the decision for the award be rendered before the court adjourned for dinner. If investigation should, have been made, relators or the Bank of Ironton are responsible for such failure. It is hardly necessary to discuss this question in view of the admissions made by relators as to the good faith of the county court. However, even if the reasonable exercise of discretion be a vital question in the case at bar, we could not say that there had been a breach of such discretion under the facts. The judgment is, therefore, affirmed. All concur.