Russell v. Tate

52 Ark. 541

• Court: Supreme Court of Arkansas
• Decided: November 15, 1889
• Status: Published

Opinion

Sandels, J.

1. munipal Corporations: illegal appropriation of funds. An analysis of the case shows six questions r ... tor decision. 1

First — Has equity jurisdiction as to the matters stated in , the bill ?

Second — Are residents and tax-payers proper parties plaintiff?

Third — May affirmative as well as injunctive relief be had in such a proceeding ?

Fourth — Was the appropriation of the $1000 by the council valid or void?

Fifth — Are Aldermen, as such, liable to an action for votes given upon measures before them ?

Sixth — What liability, if any, did the Mayor, ordering, the Treasurer making, and the council receiving the payment, incur by reason of this transaction ?

The so-called appropriation was a nullity. Jacksonport v. Watson,33 Ark., 704; Sykes v. Mayor, 55 Miss., 115; scc. 5, art, 12, Const.; Minot v. West Roxbury, 112 Mass., 1.

2 same: Remedy parties. The officers of the city are trustees in the management and application of the funds and property of the people of the city. 2d Dill Mun. Corp., 915. The application of municipal funds to illegal purposes by them is a breach of trust. 2d Dill. Mun. Corp., 919, and notes. Equity has jurisdiction to prevent the misapplication or waste of trust property. 2 Story Eq. Jur., 1252, and note. The fact that after the suit was brought the City Council recalled and cancelled the unpaid warrant did not oust the jurisdiction of the court. That was but part the purely equitable relief demanded. It was desired to prevent its reissue and cancel the appropriation. Besides, under our chancery system had the ccncellation of the warrant been the only original ground of equity jurisdiction, it was not lost. Price v. State Bank, 14 Ark., 50.

Suits by tax-payers against towns and their officers to prevent or remedy misapplication of town funds are not only allowed by statute but it is the prevailing doctrine in America, that tax-payers may maintain them, in the absence of statute. Their relations to the municipality are analogous to those of stockholders to a private corporation. Mansf. Dig., sec. 929; Jacksonport v. Watson, 33 Ark., 704; Crampton v. Zabriski, 101 U. S., 601; 2 Dill. Mun. Corp., 914-915; Blakie v. Staples, 13 Grant (Canada), 67, cited in note on p. 902; 2 Dill. Mun. Corp.

3. Same: same. There is no foundation in the authorities for the claim that the power of chancery is only injunctive. It would be a reproach to justice if it were true. In the present case the appropriation was made, the warrant was drawn, and the money paid, by the Treasurer before an attorney could have comprehended the situation and have written the caption of a complaint. Chancery has ample power to prevent further wrong and require reparation for that which has been done. 2 Story Eq. Jur., 1252, and notes; Frost v. Belmont, 6 Allen, 152; Citizens Loan Assn. v. Lyon, 29 N. J. Eq., 110; Attorney Genl. v. Poole, 1 Craig & Ph., 17; People v. Fields, 58 N. Y., 491; Attorney Genl. v. Boston, 123 Mass., 460; Atty. Genl. v. Dublin, 1 Bligh. 312; 2 Dill. Mun. Corp., 909-912.

4. Same : same. As against the liability of these defendants, it is contended that a City Council being in some sort a legislative body, its members are not liable for the erroneous exercise of their discretion in voting upon measures before them. This is true. Jones v. Loving, 55 Miss., 109; Freeport v. Marks, 59 Pa. St., 253.

But where, after exercising their discretion in voting $1000 of the money of the town, to pay an obligation which they and a few others had bound themselves to discharge, they or their building committee took the money, it was a conversion of trust funds, for which each of them, as also the Mayor who ordered, and the Treasurer who made, the payment, are liable. Frost v. Belmont, 6 Allen. 152; Citizens’ Loan Assn. v. Lyon, 29 N. J. Eq., 110; Atty. Genl. v. Poole, 1 Craig & Ph., 17; Atty. Genl. v. Wilson, 1 Craig & Ph., 1; Blakie v. Staples, 13 Grant (Canada), 67.

The vote of confidence given appellants at the next ensuing city election does not effect their liability to repay the money which they took from the city treasury.

Affirmed.