Opinion
No. 33652.
April 10, 1939.
1. COUNTIES.
An order of county board of supervisors for issuance of funding bonds to pay claims against supervisor's district, expressly adjudicating that claims were valid obligations of district, in absence of appeal therefrom, became a "final judgment" adjudicating that indebtedness represented by claims was due and owing to claimants (Code 1930, section 5977).
2. COUNTIES.
Where no appeal was taken from order of county board of supervisors which provide for issuance of funding bonds to pay claims against supervisor's district and which expressly adjudicated that claims were valid obligations of district, chancellor was without jurisdiction to pass on validity of claims in validation proceeding, since objections then made constituted collateral attack on board's order, and no testimony in regard thereto was competent (Code 1930, section 5977).
3. COUNTIES.
The only remedy of one aggrieved by order of county board of supervisors which provided for issuance of funding bonds to pay claims against supervisor's district, and which expressly adjudicated that claims were valid obligations of district, was by appeal to the circuit court within time and in manner provided by law (Code 1930, section 5977).
4. COUNTIES.
The statute prohibiting the incurring of an indebtedness unless there is sufficient money at time in particular fund from which allowance for payment thereof is to be made is inapplicable to outstanding obligations incurred by county for expenses in connection with roads and bridges in cases of emergency (Code 1930, section 5979).
5. COUNTIES.
An order of county board of supervisors which provided for issuance of funding bonds to pay claims against supervisor's district, but which failed affirmatively to adjudicate that debt limitation would not be exceeded, was void and subject to attack on such ground in proceeding to validate the issue (Code 1930, section 5977; Laws 1932, chapter 235, section 5).
6. COUNTIES.
County board of supervisors must find as jurisdictional fact that proposed funding bonds to pay claims against supervisor's district when added to district's outstanding bonded indebtedness shall not exceed 10 per cent of assessed valuation of taxable property within district and set forth such facts in its order before bonds can validly be issued or validated (Code 1930, section 5977; Laws 1932, chapter 235, section 5).
7. COUNTIES.
Where order of county board of supervisors for issuance of funding bonds to pay claims against supervisor's district was void because of failure to adjudicate that debt limitation would not be exceeded, Supreme Court was required to reverse validation decree without prejudice to right of county to provide for payment of indebtedness by legal issuance of other bonds or in other authorized manner (Code 1930, section 5977; Laws 1932, chapter 235, section 5).
APPEAL from the chancery court of Simpson county; HON. BEN STEVENS, Chancellor.
A.M. Edwards, of Mendenhall, for appellants:
The court erred in granting a decree for the validation of the said bonds in question in this case. We submit that this assignment of error is well taken for the reason that the said indebtedness, incurred by the board of supervisors against District No. 2 of said county in the sum of $6000 in favor of the said Mississippi Tractor Equipment Company, and the Choctaw Culvert Machinery Company, according to the testimony in this case, does not constitute a legal and undisputed obligation of said county, but on the other hand the testimony shows most conclusively that said indebtedness was made and said claims allowed in violation of law.
Section 5977, Code of 1930.
The second assignment of error is that the decree of the court validating the said bonds is contrary to the law and the evidence in the case.
We submit that inasmuch as the said indebtedness incurred by the board of supervisors was in violation of Section 5979, Code of 1930, as shown by the undisputed evidence in the case, that the objections filed by the objectors in this case objecting to the validation of the said bond issue is well taken.
This court said among other things, speaking through ANDERSON, J., in the case of Marshall County v. Callahan et al., 94 So. 5, as follows: "Section 3, chapter 209, Laws of 1918, as amended in chapter 326, Laws of 1920, which provides that no warrant shall be issued or indebtedness incurred by any county, unless there be sufficient money in the particular fund from which such allowance is to be made to pay such warrant or indebtedness, prohibits a county from allowing any claim against it, as well as issuing a warrant therefor, unless there is sufficient money in its treasury in the particular fund from which such allowance is to be made or such warrant paid; and the inhibition of the statute applies to allowances by a county to a road contractor on monthly estimates by the engineer in charge of construction."
The third assignment of error is that the court erred in dismissing the objection of the said Joe Brown and L.R. Floyd filed in this case. We submit that the proceedings of the board of supervisors in undertaking to issue the proposed bond issue were void and of no effect, for reasons already given, and that the said proceedings may be attacked in validation proceedings.
98 So. 149.
The Chancellor erred in construing the law applicable to the facts in this case.
We submit that the proceedings of the board of supervisors proposing to issue said bonds show upon the face of said proceedings that they were issued for the purpose of paying claims unauthorized by law, and that the testimony at the trial of the case show the same; and this being true the said bonds are illegal.
Bd. of Suprs., Prentiss County v. Holley, 106 So. 645.
We submit that the rule of law in this state is well settled that void orders and judgments can be attacked in a collateral proceeding.
Bryant v. Bd. of Suprs., Yalobusha County, 98 So. 148; Borroum v. Purdy Road Dist., 131 Miss. 778, 95 So. 677; Harvey v. Covington County, 138 So. 403.
The order of the board of supervisors providing for the issuance of the said bonds in the sum of $6000 under section 5977, Code of 1930, does not adjudicate that the bonds proposed to be issued when added to the outstanding bonded indebtedness of said District No. 2, will not exceed 10 per centum of the assessed value of the taxable property within said district according to the last completed assessment for taxation.
We submit that this jurisdictional fact being left out of the said order proposing to issue said bonds rendered them null and void, and therefore subject to collateral attack.
Lee v. Hancock County, 178 So. 790. W.M. Lofton, of Mendenhall, for appellee.
It is our contention that in view of the fact that the board of supervisors in passing the said order at the regular meeting in June 1938, proposing to issue said bonds, did adjudicate as a fact that the said claims, which the proposed bonds were intended to pay, were legal and undisputed, outstanding obligations of the county or district No. 2 of said county, and also adjudicated the fact that there were insufficient funds in the depositories to pay them, that this adjudication is in the nature of a judgment of the board of supervisor's court, and that the same cannot be attacked by filing written objections thereto, but can only be attacked by an appeal, and can only be done by an appeal if that is seasonably set up. If the appeal is seasonably set up, then this would be a direct attack on said order, and this is the only way that it could be done, and that the same is not subject to collateral attack. In this case there was no appeal.
Harvey v. Covington County, 138 So. 403, 161 Miss. 765; Hegwood v. Smith County, 140 So. 223; Liddell v. Municipality of Noxapater, 92 So. 631, 129 Miss. 513.
We are not contending that the objectors do not have a right to file their objections in common form to the validation in the proposed bond issue in this case, but they are limited in the matters to be set forth as constituting their objections. And we do insist that as to that part of the order of the board of supervisors, adjudicating the fact that the said claims of said creditors mentioned in said order, were legal and undisputed outstanding obligations, the same being the judgment of the board of supervisor's court, that it was not subject to collateral attack, and that this is what is meant by said objections but that this part of said order could not be attacked in that way, but only by a direct appeal. So this part of the order must stand, and no testimony, either oral or documentary, can be introduced to vary or contradict that part of said order.
So we submit in conference that the decree of the lower court validating said bond issue is supported by all the law and facts in this case, and that there are no objections that have been raised in said cause that have any merit in them, and that the decree of the lower court validating and confirming said bond issue will be affirmed by this court.
Argued orally by A.M. Edwards, for appellant, and by W.M. Lofton, for appellee.
At its June 1938 meeting, the Board of Supervisors of Simpson County adopted and spread upon its minutes an order for the issuance of $6000 of funding bonds for supervisor's district number 2 thereof for the purpose of paying a claim of $5700 to the Mississippi Tractor Equipment Company and a claim of $300 in favor of the Choctaw Culvert Machinery Company, and which said two claims had been allowed for payment by the board at its December 1937 meeting, and which the said order providing for the issuance of such bonds expressly adjudicates to be legal, valid, and undisputed outstanding obligations of said supervisor's district. The order for the issuance of said bonds also recites that the supervisor's district has no money in the fund from which these claims are payable, or other available funds, to meet the payment of said two claims; and directs the issuance of said bonds under section 5977 of the Mississippi Code of 1930, prescribes the form thereof, and orders the clerk to transmit to the State Bond Attorney a certified copy of the proceedings pertaining to the issuance of said bonds in order that the same might be validated. This order was unappealed from, and is now a final judgment adjudicating the fact that the indebtedness represented by the two claims aforesaid are now due and owing to the two creditors, respectively, hereinbefore named.
The validation proceedings were duly instituted, and a day was set for the hearing before the chancellor upon due notice to the taxpayers interested. The hearing was had as required by law upon the orders and proceedings providing for the issuance of said bonds, the opinion of the State Bond Attorney approving the validity thereof and on the objections filed by the appellants against the entry of a decree of validation. The chancellor rendered a decree validating the bonds, and the objectors appealed.
Appellants contend (1) that the order of the board of supervisors which provides for the issuance of said bonds is void on the alleged ground that the indebtednesses for the payment of which the bonds were to be issued do not constitute valid, legal and undisputed outstanding obligations or indebtedness of said supervisor's district for the reason that such indebtednesses were incurred in violation of section 5979 of the Code of 1930, which prohibits the incurring of an indebtedness unless there is sufficient money at the time in the particular fund from which allowance for the payment thereof is to be made; and (2) because the said order of the board of supervisors failed to adjudicate the necessary jurisdictional fact that the bonds, when added to the outstanding bonded indebtedness of said district, will not exceed ten per centum of the assessed value of the taxable property therein, according to the last completed assessment for taxation.
The position of the appellants on the first proposition above stated is not well taken for the reason that it was held by this court in the cases of Harvey et al. v. Covington County, 161 Miss. 765, 138 So. 403, and Hegwood et al. v. Smith County, Miss. 140 So. 223, that in a proceeding to validate bonds proposed to be issued for the payment of outstanding warrants and obligations the validity of the items of such warrants and obligations cannot be adjudicated by the chancellor; such objections constituting collateral attacks on the orders and judgments of the board of supervisors. The two claims had been adjudicated by the board of supervisors to be legal, outstanding, and undisputed obligations against the district, and there had been no appeal from that order so thus adjudging. The chancellor was without jurisdiction to pass on the validity of the claims. No testimony in regard thereto was competent; the only remedy being by appeal to the circuit court, within the time and in the manner provided by law. Moreover, section 5979 of the Code of 1930 has no application to outstanding obligations incurred by the county, where there were no funds in the treasury to the account of the proper fund for the payment of such obligations, when they were incurred for expenses in connection with roads and bridges in cases of emergency, such as the testimony of the member of the board of supervisors from that particular district discloses to have existed when these indebtednesses were incurred. Choctaw County v. Tennison et al., 161 Miss. 66, 134 So. 900; Tucker Printing Company v. Attala County, 171 Miss. 608, 158 So. 336.
The failure of the board of supervisors, however, to affirmatively adjudicate in the order here in question that the debt incurred, when added to all of the then outstanding indebtedness of the supervisor's district, both bonded and floating, did not result in the imposition upon any of the property in such district of an indebtedness for road purposes of more than ten percent of the assessed value of such property, as ascertained by the last completed assessment for taxation, constituted fatal error and rendered such order of the board null and void, on its face, and subject to attack in this proceeding, for the reason that it was held in the case of Lee v. Hancock County, 181 Miss. 847, 178 So. 790, 179 So. 559, that boards of supervisors must find as a jurisdictional fact that the proposed funding bonds, when added to a county's outstanding bonded indebtedness shall not exceed ten per centum of the assessed valuation of taxable property within the county, and set forth such fact in its order before the bonds can validly be issued or validated. The bonds in that case were sought to be issued under section 5977 of the Code of 1930, as in the present case; the only difference being that in the former case the bonds were on behalf of the entire county and the court was applying section 3 of chapter 235 of the Laws of 1932, whereas, in the present case we are applying section 5 of said Act, which relates to a supervisor's district.
So far as this validation proceeding is concerned, it is necessary that we hold that the chancellor was in error in rendering the decree of validation in view of the fact that the order of the board for the issuance of the bonds was void; and also that we reverse the case without prejudice to the right of the county to provide for the payof said indebtednesses by the legal issuance of other bonds under said section 5977, or in such other manner as may be authorized by law.
Reversed and decree here for the appellants.