Turner v. Cruzen

30 N.W. 483, 70 Iowa 202

• Court: Supreme Court of Iowa
• Decided: December 8, 1886
• Status: Published

Opinion

Adams, Cu. J.

The contract alleged to be ultra wires was made by'the county with the defendant Cruzen, whereby the i. county: poor-farm;1 ultra vires: setting asido contract at payer* county not a party. county purchased of him a certain farm, and improvements thereon, for the use of the county » „ as a poor-iarm, lor the agreed pnce ox $8,800. 1 , ’ SR v ’ ^ie wan^ °i' powei' to make the contract is pred-jcated upon the alleged fact that it was not authorized by a vote of the people. The question presented arises upon the pleadings, there being a demurrer to the defendants’ answer. The action is brought, not only against Cruzen, as the county’s vendor, and Hunter, as county treasurer, but against the supervisors of the county, but not against the county itself. The answer appears to be filed by Cruzen alone. It shows, among other things, that the contract has been fully executed on his part by a conveyance of the property to the county, and that the county has been occupying the same as a poor-farm for two years; that the reasonable rental value of the property is $800 a year, and that the county has never offered to reconvey the property, nor pay for the use of the same; that the property was worth more than the contract price; that the plaintiffs had full knowledge of the contract many months before the deed was executed, but stood by, and saw the contract carried out without objection; and • that, by reason of the occupancy of the farm as a poor-farm, it has become depreciated in value. The defendant Cruzen, in his answer, further avers, in substance, that no request has ever been made of the county or board of supervisors to take any steps to cancel the contract, nor has any officer refused to bring an action to cancel it, and that the plaintiffs, without such request and refusal, are not the proper persons to bring such action. He further avers, in substance, that, in any event, Adams county should be made a party, and that, if the suit is to be maintained by the plaintiffs, the county should be made defendant.

The legal title to the property having been placed in the county, we are unable to see how the county could be divested by a decree to which it is not a party. It may be that the county has no desire to rescind, and could, in fact, show that its contract of purchase was not ultra vires. Without question, the county has a right to be heard before its title can be disturbed. Possibly the court below did not intend to disturb the title. The language of the decree is “that the contract between the defendant Cruzen and the board of supervisors of Adams county, for a poor-farm, is absolutely null and void.” It may be that the intention in decreeing the invalidity of the contract was merely to afford a basis for enjoining the payment of warrants issued for a part of the purchase money. If this is so, then the court proceeded upon the theory that the county could be relieved of a part of the burden of its contract while retaining the entire benefit of it. Of such decree the county could not, of course complain. But such a decree, cannot, in our opinion, be sustained.

It appears to us to be well settled as a rule, with one exception, that, where the consideration received by a corpora-2. wrorioiPAi. cancellation of ultra vires contract: restoration o£ consideration, R°n under an ultra vires contract can be restored, a court oi equity will not relieve the corpora- . . , ,. ...... 7.. tion, as against the contract, without providing1 7 ° . ’ 1 ° for a restoration of the consideration. Pratt v.

Short, 53 How. Pr., 506; Leonard v. City of Canton, 35 Miss., 189; Argenti v. San Francisco, 16 Cal., 255, (282); Moore v. Mayor, etc., of New York, 73 N. Y., 238; Lucas Co. v. Hunt, 5 Ohio St., 488.

It is no sufficient' answer to say that Cruzen might still have his action against the county for reconveyance of the title. His right to a reconveyance should be decreed to him at the same time that the county is relieved from payment. There is nothing in the decree now which would estop the county from contesting the right of Cruzen to a reconveyance, because the county is not a party to this decree. Nor is it a sufficient answer to say that Cruzen has already received a large part of the purchase money, and that no judgment is rendered against him for it, and that none is asked. If a court of equity could deprive him of a part of the pur-.í chase money without decreeing a reconveyance of the farm,] it might have deprived him of the-whole, if the farm hadj been sold wholly on credit, and no payment had yet been \ made. The principal involved would be the same. We are aware that there is a class of cases where courts of equity declare a contractultravires, and grant relief in favor of a corporation, without any decree for the restoration of the consideration received by the corporation. This is so where municipal bonds have been issued in excess of the constitu-j, tional limit of indebtedness, and the money obtained thereon; has been expended. Courts of equity decree the cancella-1 tion of such bonds, or enjoin payment, without decreeing repayment to the bondholders of the money received by the corporation on the bonds. But this results from the necessity of the case. If the courts should decree repayment, the very object of the constitutional provision would be defeated.

Many qitestions have been raised in this case which we have not noticed, but, in the view which we have taken of the case, it does not appear to us to be necessary to notice them.

The decree of the circuit court must be

REVERSED.