Kagy v. Independent District

89 N.W. 972, 117 Iowa 694
CourtSupreme Court of Iowa
DecidedApril 9, 1902
StatusPublished
Cited by24 cases

This text of 89 N.W. 972 (Kagy v. Independent District) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kagy v. Independent District, 89 N.W. 972, 117 Iowa 694 (iowa 1902).

Opinion

Weaver. J. —

This action is brought by a resident taxpayer of the defendant school district against its president, directors, secretary, and treasurer, alleging that certain purchases made and expenses incurred by the board of directors were without warrant or authority of law, and asking that payment be enjoined, or, if already made, that judgment be had against the defendants for the return of the moneys so expended. Certain other persons w-ith whom the dealings complained of were had are made parties, and judgment is asked against them for a return of the money received. The defendants admit the expenditures mentioned in the petition, but deny all other allegations therein made.

To avoid undue length of statement, the expenditures alleged to be wrongful and unauthorized may be grouped as follows:

(a) The defendant W. 0. Harbach during the period covered by said dealings was a member of the board of directors, and was at the same time employed in some capacity in a furniture store kept by his father, Louis Harbach. During his term of office the board of directors purchased furniture of Louis Harbach to the amount of $1,172.83.

(b) The defendant Louis C. Kurtz was president of the board of directors, and was at the same time employed in some capacity with or for his son, L. H. Kurtz, a hardware dealer and plumber. During his term of office the board of directors purchased materials of the said L. H. Kurtz to the amount of $3,778.82.

(c) The defendant J. D. Kowen was a member of the board of directors, and at the same time engaged, either alone or in company with others, in the business of job printing. During his term of office the board of directors let to him, or to the firm in which he was a partner, numerous jobs of printing, aggregating $1,025.79.

[696]*696(d) Certain annexes to school buildings in the defendant district were constructed without first being authorized by a vote of the electors, and without obtaining an approval of the county superintendent of the plans adopted, •and without observing other requirements imposed by the ¡statute in such cases.

(e) The board of directors became involved in litigation over its act in suspending or expelling one Bacon from "the schools of the district, and caused the expenses thus incurred to be paid out of the district treasury.

(f) It is also charged that, unless restrained therefrom, the board of directors will cause the expenses incurred by them in defending the present action, to be also paid from said treasury.

The matters stated in the foregoing paragraphs are ¡admitted, or shown without dispute. Plaintiff further '■claims that the defendant W. 0. Harbach is a partner in, or part proprietor of, the furniture business of his father, Louis Harbach, above mentioned, and that the defendant Louis 0. Kurtz is a partner in, or a part proprietor of, the hardware and plumbing business conducted in the name of his son, L. H. Kurtz; but these allegations are denied, and their truth is not sufficiently established by the evidence. All of the contracts of which complaint is made have been fully performed, and all of the bills and expenses referred to, except the sum of $47 to Louis Harbach, were audited and paid before the commencement of this suit. The transactions between the school district, or the board of directors in its' behalf, with Louis Harbach, L. H. Kurtz, and J. D. Bowen, cover periods of 1-^ to years. There is no allegation that, in any of the transactions mentioned, the board or its members acted fraudulently or corruptly. So far as shown, no concealment was practiced concerning these matters, and the records of the district were at all times open and accessible to its citizens.

[697]*697I. The appellant presents a citation of authorities in support of his right to maintain this action in his own name on behalf of the district, but as that question is not raised by the pleadings, nor urged in this court by the appellee, we do not undertake to pass upon it. But see Independent Dist. v. Goodkin, 72 Iowa, 387. Assuming, then, for the purposes of this case, that such an action is maintainable, do the facts established by the evidence entitle him to recover? The' demand for a money judgment being dependent upon the same circumstances which are ¡relied upon as the basis of equitable relief, we proceed at ■once to their consideration.

II. If plaintiff is permitted to maintain the suit, it is not in his individual right, but as the representative of the district whose interests are alleged to be jeopardized by the inefficiency or maladministration of its officers. He therefore stands in court with no other or higher right than the distrct itself could claim were the action prosecuted in its own name. The dealings of which he complains have been fully consummated. The district has received and accepted the buildings, materials, labor, and supplies contracted for, and has paid the stipulated consideration. The things furnished and the expenses incurred are in each instance (unless we except the expenses of the Bacon litigation) such as the board could have rightfully contracted for if the preliminary steps had been properly observed. It is not claimed, nor is it shown, that in any instance (with the one exception above noted) the district did not receive full and fair value for its money. Under these circumstances, does the fact that the directors, by mistake or design, made certain improvements or additions to a •school house, as “repairs,” when they should properly have submitted the question to the electors, or that in procuring necessary supplies they dealt with a member of the board, •or with some relative of a member, afford any sufficient ground for an action to enforce a repayment of the money [698]*698so expended? We think it does not. We agree with the appellant that the policy of the law forbids a member of the board of directors becoming a party to, or the beneficiary of, any contract made by such board; and had the plaintiff, or any other citizen of the district, seen fit to sue out an injunction in due season, at least a part of the expenditures complained of would have been promptly restrained. But as we have already said, the school buildings, the plumbing, the repairs, the furniture, the printing, have been received, and paid for, at prices not shown to be excessive. An injunction to forbid an act already accomplished would be an idle form. Shall the district, then, while keeping and enjoying the fruit of the contracts which it says were illegal and void, have judgment requiring the money paid upon such contracts to be returned to its treasury, and that, too, without any suggestion of a willingness to place the other parties in statu quol There are cases which hold that money paid upon a contract entered into by public officers in violation of an express statute, or where the money is paid for a purpose that is in itself illegal or immoral, may be recovered, without returning the consideration received; but we think that no such recovery has ever been sustained where the contract is assailable only'as against public policy, because of having been made with one who stood in a fiduciary or official relation to the corporation with which he contracted, and the corporation retains the fruits of the contract sought to be repudiated. This doctrine is expressly recognized in Berka v. Woodward, 125 Cal. 119 (57 Pac. Rep. 778, 779, 45 L. R. A. 420, 73 Am., St. Rep. 31); City of Concordia v. Hagaman, 1 Kan. App. 35 (41 Pac. Rep. 134); Gardner v. Butler, 30 N. J. Eq. 702; Currie v. School Dist.,

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89 N.W. 972, 117 Iowa 694, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kagy-v-independent-district-iowa-1902.