HUTCHESON, Circuit Judge.
Alleging that they had deposited1 with the County certified checks to guarantee performance of contracts with respect to refunding bonds, and that they were entitled to have them back, plaintiffs sued for their return, or, if they had been cashed, for their face amount with interest from demand. The claim was that though the contracts had become impossible of performance through no fault of theirs, the county was holding on to, and claiming as its own, the checks or their proceeds. There was no denial that the deposits had been made. The defenses were that they could not be recovered (1) because the con[686]*686tracts were illegal and against public policy, (a) in that they undertook to delegate; to plaintiffs, official functions of the county, (b) in that they sought to, and did, interfere with the course, of justice in that they sought, to circumvent and prevent the enforcement of the judgment of the bankruptcy court; and (2) if the contracts were valid, they had not been performed in accordance with their terms but had been breached, and the deposits then had become the property of. the county.
There was a trial to the court without a jury, and the establishment of the facts on which he rested his judgment. The county had petitioned for a composition of its indebtedness under the Municipal Bankruptcy Act, 11 U.S.C.A. § 301 et seq., and an interlocutory .decree had -been entered March 3, 1931. Certain creditors had appealed, but there was no supersedeas. During the pendency of the appeal, plaintiffs and the county entered into the contract in connection with which the deposits sued for herein were made. On November 25, 1941, the bankruptcy court enjoined the county from going forward with the contract, and this injunction prevented further action under it until the appeal from the interlocutory decree of March 3, 1941, was, on June 2, 1942, decided, when the court vacated the injtinctive order of November 25, 1941. After the injunction was dissolved, the county demanded that plaintiffs go on with its contract. Plaintiffs, pointing out that the United States was at war, advised the county that it could not proceed with the contract and'that in addition there would not be time en'ough to complete it within the ■ year it fixed. They agreed, however, to do such things as they could do, but insisted that they be paid the compensation provided for if they did those things. The county insisted, upon full performance of the terms of the contract, and plaintiffs-declining for the reasons given to do so, the county claimed forfeiture of the funds as liquidated damages. For a time after their deposit, the county had held -the checks uncashed. It had then cashed them, but the proceeds were .kept intact by the county until after the period of the year'during which the contract was to be performed. . •
The District • Judge, of the opinion that the plaintiffs were entitled to recover, whether the contract was or was not illegal and contrary to public policy, made no ruling on the contention that the contract was void as an attempted delegation of the duties and powers of the county, under Taylor v. Williams, 142 Fla. 402, 195 So. 175, Bradford County, Fla. v. Nuveen, 5 Cir., 133 F.2d 169, and related cases. On the point that the performance of the contract would have interfered with the course of justice, the court agreed with the county’s contention, but was of the opinion that this did not prevent the recovery of the deposited funds. On its third position that the contract had not become impossible of performance, the District Judge disagreed with the county. He thought, on the authority of Moller v. Herring, 5 Cir., 255 F. 670, 3 A.L.R. 624, that, the injunction against the county had made performance impossible, and that when the injunction was finally dissolved, the conditions were such as to excuse plaintiffs from performance. He, therefore, found for plaintiffs for the recovery of the sums deposited. On plaintiffs’ claim that they were entitled to interest, finding that no benefits had accrued to the county from the use of the funds, and there was no provision in the deposit for the payment of interest, he thought, on the authority of Brownell v. City of St. Petersburg, 5 Cir., 128 F.2d 721, and Wright v. Adkins, 152 Fla. 512, 12 So.2d 296, that interest should be denied.
The county has appealed from the judgment awarding recovery of the sums deposited, plaintiffs from the judgment denying them interest.
The county urges with vigor that the refunding contract was illegal and void as undertaking to delegate to private persons the public duties and obligations of the county, and that plaintiffs may not, therefore, invoke the aid of the court to recover moneys deposited, to guarantee its performance, and to indemnify the county against suits on account of its making. We cannot agree. Plaintiffs, in order to recover, do not need to invoke or rely upon the contract. Neither is this a case where an illegal contract has been performed by one party, and the other party is endeavoring to obtain -benefits from that performance. ; If we could agree with defendant that the contract was illegal, we should have to hold that the deposits were on familiar principle's, recoverable in the form of action chosen here. "Where money has been furnished for an illegal purpose but it has not been used in fulfillment of that purpose, it may be recovered back. In such an action [687]*687all that the plaintiff has to prove in order to recover is that the person sued has money of plaintiffs which he is not in equity and good conscience entitled to retain, and refuses to turn it over to him. 4 Am.Jur. § 28, p. 519.2 If, therefore, appellant were right in its view that the contracts were illegal and for that reason could not be performed, this would advantage not appellant but appellees. For, the contract being illegal could not be complied with, failure to comply with it could not be chargeable to plaintiffs, in equity and good conscience, defendant would not be permitted to unjustly enrich itself, and plaintiffs would be entitled to have their money returned. Contracts, Restatement, § 605; 6 Williston on Contracts, § 1788; Nuveen v. Board of Public Instruction of Gadsden County, 5 Cir., 88 F.2d 175. We do not, however, agree with the county that the contract was illegal. The contract fails to contain the objectionable provisions of the contracts in the cases appellant invokes. In addition, by express provision,3 it removes therefrom the vice condemned, and thus prevents the operation of the. principle laid down in Taylor v. Williams and Bradford v. Nuveen, supra, and in State v. City of Fort Myers, 145 Fla. 135, 198 So. 814. It remains only to determine whether plaintiffs have shown that they did not default in the performance of the contract and are, therefore, entitled to the return of the deposited money. We think they have. Of the many provisions in the contract, two of the most important were, (1) that plaintiffs guaranteed to bid on the new refunding bonds a price of 103 and interest, and (2) “that the Board shall not consider any bid for less than our guarantee”.
Free access — add to your briefcase to read the full text and ask questions with AI
HUTCHESON, Circuit Judge.
Alleging that they had deposited1 with the County certified checks to guarantee performance of contracts with respect to refunding bonds, and that they were entitled to have them back, plaintiffs sued for their return, or, if they had been cashed, for their face amount with interest from demand. The claim was that though the contracts had become impossible of performance through no fault of theirs, the county was holding on to, and claiming as its own, the checks or their proceeds. There was no denial that the deposits had been made. The defenses were that they could not be recovered (1) because the con[686]*686tracts were illegal and against public policy, (a) in that they undertook to delegate; to plaintiffs, official functions of the county, (b) in that they sought to, and did, interfere with the course, of justice in that they sought, to circumvent and prevent the enforcement of the judgment of the bankruptcy court; and (2) if the contracts were valid, they had not been performed in accordance with their terms but had been breached, and the deposits then had become the property of. the county.
There was a trial to the court without a jury, and the establishment of the facts on which he rested his judgment. The county had petitioned for a composition of its indebtedness under the Municipal Bankruptcy Act, 11 U.S.C.A. § 301 et seq., and an interlocutory .decree had -been entered March 3, 1931. Certain creditors had appealed, but there was no supersedeas. During the pendency of the appeal, plaintiffs and the county entered into the contract in connection with which the deposits sued for herein were made. On November 25, 1941, the bankruptcy court enjoined the county from going forward with the contract, and this injunction prevented further action under it until the appeal from the interlocutory decree of March 3, 1941, was, on June 2, 1942, decided, when the court vacated the injtinctive order of November 25, 1941. After the injunction was dissolved, the county demanded that plaintiffs go on with its contract. Plaintiffs, pointing out that the United States was at war, advised the county that it could not proceed with the contract and'that in addition there would not be time en'ough to complete it within the ■ year it fixed. They agreed, however, to do such things as they could do, but insisted that they be paid the compensation provided for if they did those things. The county insisted, upon full performance of the terms of the contract, and plaintiffs-declining for the reasons given to do so, the county claimed forfeiture of the funds as liquidated damages. For a time after their deposit, the county had held -the checks uncashed. It had then cashed them, but the proceeds were .kept intact by the county until after the period of the year'during which the contract was to be performed. . •
The District • Judge, of the opinion that the plaintiffs were entitled to recover, whether the contract was or was not illegal and contrary to public policy, made no ruling on the contention that the contract was void as an attempted delegation of the duties and powers of the county, under Taylor v. Williams, 142 Fla. 402, 195 So. 175, Bradford County, Fla. v. Nuveen, 5 Cir., 133 F.2d 169, and related cases. On the point that the performance of the contract would have interfered with the course of justice, the court agreed with the county’s contention, but was of the opinion that this did not prevent the recovery of the deposited funds. On its third position that the contract had not become impossible of performance, the District Judge disagreed with the county. He thought, on the authority of Moller v. Herring, 5 Cir., 255 F. 670, 3 A.L.R. 624, that, the injunction against the county had made performance impossible, and that when the injunction was finally dissolved, the conditions were such as to excuse plaintiffs from performance. He, therefore, found for plaintiffs for the recovery of the sums deposited. On plaintiffs’ claim that they were entitled to interest, finding that no benefits had accrued to the county from the use of the funds, and there was no provision in the deposit for the payment of interest, he thought, on the authority of Brownell v. City of St. Petersburg, 5 Cir., 128 F.2d 721, and Wright v. Adkins, 152 Fla. 512, 12 So.2d 296, that interest should be denied.
The county has appealed from the judgment awarding recovery of the sums deposited, plaintiffs from the judgment denying them interest.
The county urges with vigor that the refunding contract was illegal and void as undertaking to delegate to private persons the public duties and obligations of the county, and that plaintiffs may not, therefore, invoke the aid of the court to recover moneys deposited, to guarantee its performance, and to indemnify the county against suits on account of its making. We cannot agree. Plaintiffs, in order to recover, do not need to invoke or rely upon the contract. Neither is this a case where an illegal contract has been performed by one party, and the other party is endeavoring to obtain -benefits from that performance. ; If we could agree with defendant that the contract was illegal, we should have to hold that the deposits were on familiar principle's, recoverable in the form of action chosen here. "Where money has been furnished for an illegal purpose but it has not been used in fulfillment of that purpose, it may be recovered back. In such an action [687]*687all that the plaintiff has to prove in order to recover is that the person sued has money of plaintiffs which he is not in equity and good conscience entitled to retain, and refuses to turn it over to him. 4 Am.Jur. § 28, p. 519.2 If, therefore, appellant were right in its view that the contracts were illegal and for that reason could not be performed, this would advantage not appellant but appellees. For, the contract being illegal could not be complied with, failure to comply with it could not be chargeable to plaintiffs, in equity and good conscience, defendant would not be permitted to unjustly enrich itself, and plaintiffs would be entitled to have their money returned. Contracts, Restatement, § 605; 6 Williston on Contracts, § 1788; Nuveen v. Board of Public Instruction of Gadsden County, 5 Cir., 88 F.2d 175. We do not, however, agree with the county that the contract was illegal. The contract fails to contain the objectionable provisions of the contracts in the cases appellant invokes. In addition, by express provision,3 it removes therefrom the vice condemned, and thus prevents the operation of the. principle laid down in Taylor v. Williams and Bradford v. Nuveen, supra, and in State v. City of Fort Myers, 145 Fla. 135, 198 So. 814. It remains only to determine whether plaintiffs have shown that they did not default in the performance of the contract and are, therefore, entitled to the return of the deposited money. We think they have. Of the many provisions in the contract, two of the most important were, (1) that plaintiffs guaranteed to bid on the new refunding bonds a price of 103 and interest, and (2) “that the Board shall not consider any bid for less than our guarantee”. Qualifying the provision for a guaranteed bid was Provision I, which, among other things, provided : “Our guarantee to bid for said new refunding bonds shall be subject to * * * and that at the time of the delivery of said new refunding bonds the United States of America is not involved in war.”
Through no fault of plaintiffs but because of an injunction preventing the county from going on with the refunding contract,4 the county and plaintiffs were not able to bring the contract to completion until after the United States had become involved in war. When then the injunction was dissolved many months after-wards, plaintiffs were unwilling to comply, and defendant was not in a position to demand compliance, with the important terms of the contract that plaintiffs advertise a public sale and at that sale bid for the bonds a price of 103 and interest. The contract having thus become impossible of performance without fault on plaintiffs’ part, plaintiffs became ex aequo et bono, entitled to a return of the deposited funds, and the judgment ordering their return was right.- On the cross-appeal, we think it clear that the District Judge was right in denying interest, upon the authorities cited and for the reasons given. Normally interest follows the recovery of money due as matter of law. Where, as here, however, the action is for money had and received, an action in form legal but in its basis equitable,5 and to prevent unjust enrichment [688]*688the money ought, ex aequo et bono, to be returned, there is a discretion to refuse interest. Here no payment of interest on the deposit was contemplated, and the court found that the county had not benefited by the use of the money. The discretion to deny interest was not abused. It was properly exercised and should be sustained. The judgment as to both direct and cross appeal is affirmed.