Opinion
December 11, 1940.
1. TOWNSHIPS: Board. In a county organized under the Township Organization Law each township is a body corporate governed by a board of directors.
One of the duties of such board is to audit all accounts of the township officers for services and all other accounts or demands against the township which are legally presented to it.
The authority of the township board and the allowance of claims is limited to those which have been verified. [Sec. 12301, R.S. 1929.]
2. TOWNSHIP BOARDS: Warrants. Section 12301, Revised Statutes 1929, and other sections pertaining to the allowance of claims, were enacted to establish a regular and orderly procedure in the expenditure of public funds and to permit the violation of those statutes would open the door to fraud.
3. TOWNSHIPS: Warrants: Verification. A township board has no authority to allow any claim unless verified by affidavit.
Because of the affidavit, the claim becomes a solemn, formal declaration stated before an officer of the law to be true.
4. TOWNSHIPS: Claims: Affidavit. Where an affidavit is required in verification of a claim against a township but is not given, a court has no jurisdiction to proceed and its acts thereon are nullities.
An affidavit is essential to the jurisdiction of a court in an action on township warrants.
A township board comes under the same rule as a county court.
5. TOWNSHIPS: Warrants. The statutory requirement of verification of township warrants is not a mere formality but a matter of substance which is mandatory.
In approving the unverified claims on which warrants in suit were issued the township board has not only acted without authority but in direct violation of the express limitation of its power.
6. TOWNSHIPS: Warrants: Innocent Holder. A holder of township warrants unverified is not an innocent holder for value, because he is bound to know that warrants may be issued only in compliance with the express statutory provisions and that such warrants not verified by affidavits are void.
7. TOWNSHIPS: Void Warrants: Services Rendered. Where a holder of township warrants, void because not verified by affidavit, had rendered and the township received his services under legal contract, it will not be fair to allow the township to enjoy the benefit of that service without paying for it.
Where there is evidence to show that the holder of void township warrants has rights growing out of the transaction involved, the cause may be remanded to permit his petition to be amended and retrial of the cause.
Appeal from Gentry Circuit Court. — Hon. Ellis Beavers, Judge.
REVERSED AND REMANDED ( with directions).
C.C. Ross for appellant.
(1) Township warrants were ordered drawn and regularly issued according to law. Secs. 12291, 12301, R.S. 1919. (2) The provision of Section 12301, Revised Statutes 1919, requiring the presented claim to be verified and directing the trustees not to order warrants issued until verified claim is presented, is directory and not mandatory. (3) All of the warrants in question were issued either for compensation of township officers for their official duties, were contingent expenses necessarily incurred for use and benefit of township or authorized by township board for use of township and therefore not subject to the rule set out in section referred to in Point (2). Sec. 12303, R.S. 1919.
D.D. Reeves for respondent.
(1) All municipal corporations, cities, towns, villages and organized townships, under the law, derive all of their authority from the statutes of the State under which they are created, and their authority being such as is given them by the statutes consists of the statutory grant of the portion of the power and authority of the sovereignty of the State to be exercised locally and they can have and exercise such powers and only such powers as are granted to them by the State by express grant, or by necessary implication from such powers as are expressly granted. And any fair and reasonable doubt concerning the existence of such powers is resolved by the courts against the corporation. St. Louis v. Bell Tel. Co., 96 Mo. 628; 43 C.J., p. 176, sec. 174. (2) The courts hold the above-mentioned statutes to be mandatory, and that they must be complied with. State ex rel. Daniel v. Torrey, 33 S.W.2d 130; Missouri Twp., Chariton County, v. Farmers Bank, 42 S.W.2d 353; 63 C.J., p. 211, sec. 225; 15 C.J., p. 598, sec. 308; R.S. 1929, sec. 12293. (3) As to the affidavit required by Section 12301 being necessary to give the township board power and jurisdiction to proceed with the auditing and allowance of claims, I submit that the following cases show that where statutory affidavits are provided for in proceedings in courts, they are very generally held to be jurisdictional, even where the statutes do not say that the courts may not proceed without them. Feurt v. Lotspeich, 273 S.W. 240; Bick v. Tanzey, 181 Mo. 515; Hargadine v. Van Horn, 72 Mo. 370; Elsea v. Bass, 77 S.W.2d 164.
Appellant has sued to collect one hundred and forty-seven warrants issued by the Township Board of Wilson Township in Gentry County. These warrants had been presented for payment to the Township Treasurer. They were not paid but were protested by the treasurer because of lack of funds. Appellant acquired these protested warrants by purchase.
The case was tried below before a referee and before the court sitting as a jury. The defense was the warrants were not issued in compliance with the statutory requirements. There was no charge of fraud or forgery. Nor was it disputed that the warrants were given in payment for services or material furnished to the township. The report of the referee recommended judgment for respondent on the sole ground the warrants were issued on claims which had not been verified by affidavit as the statute demands. The failure to verify was undenied. Judgment was for respondent.
Gentry County is organized under the provisions of the Township Organization Law. [Chap. 86, R.S. 1929, Mo. Stat. Ann., p. 8119.] This law provides that each township as a body corporate shall be governed by a board of directors. One of the duties of the board is to audit all accounts of township officers for services and all other accounts or demands against the township which are legally presented to it. [Sec. 12299, R.S. 1929, Mo. Stat. Ann., p. 8137.] The board must determine what claims are just and proper. But the authority of the board in the allowance of claims is further limited to those which have been verified. Section 12301, R.S. 1929, Mo. Stat. Ann., at p. 8138, says: ". . . but in no case shall the township board be authorized to allow any claim, or any part thereof, until the claimant makes out a statement, verified by affidavit to the amount and nature of his claim, setting forth that the same is correct and unpaid, or, if any part thereof has been paid, setting forth how much."
The only question for our determination is whether the warrants are void because they were issued on claims which had not been verified. We find no decision of our courts on this precise question. However, we have considered Section 12301 and other sections pertaining to the allowance and payment of claims. We have said these statutes are enacted to establish a regular and orderly procedure in the expenditure of public funds for the purpose of safeguarding the funds and to permit the violation of these statutes would open the door to fraud. Accordingly, we held that laws for the protection of public funds must be heeded and said that this court should announce rules of law which require a compliance with such laws and should not permit an evasion of their plain intent and purpose. [Missouri Township, Chariton County, v. Farmers' Board of Forest Green, 328 Mo. 868, 42 S.W.2d 353.]
The terms of the statute are so forceful and explicit as to ward off even any shadow of a doubt about their meaning. It could hardly be more definitely stated that a township board has no authority to allow any claim whatsoever unless "verified by affidavit." Requiring such verification of the claim is an additional safeguard to the public funds. The facts stated in support of the claim are confirmed by the affidavit of the claimant. Because of the affidavit, the claim becomes a solemn, formal declaration stated before an officer of the law to be true; it is fortified because of the prohibition against making a false affidavit.
There are a multitude of instances in which affidavits are required both by common practice and by law. Where required by law they are used in a variety of situations as well as in judicial proceedings. In the latter they generally may be used to start the judicial wheels in motion. They invoke the jurisdiction of the court over the particular matter submitted to it. Where an affidavit is required but not given the court, as a rule, has no jurisdiction to proceed and its acts are nullities. In an attachment case an attachment issued without an affidavit is a nullity. Likewise we have held an affidavit of appeal is essential to invoke the jurisdiction of an appellate court. An affidavit is essential in replevin in a justice court; in the allowance of a demand in a probate court; in a proceeding for a divorce. Holding, as we do, that an affidavit is essential for the jurisdiction of a court there is a more compelling reason for a similar holding here. A township board functions not as a court of broad jurisdiction but as the agent of the township with limited authority. Consequently, it is even more essential that its authority be exercised in strict compliance with the powers granted to it. Such a board comes under the same rule as a county court. A county court is only the agent of the county with no powers except those granted and limited by law, and like all other agents, it must pursue its authority and act within the scope of its powers. [State ex rel. Quincy, etc., Ry. Co. v. Harris, 96 Mo. 29, 8 S.W. 794.] In auditing claims a county court acts merely as the fiscal or administrative agent of the county. [Sears v. Stone County, 105 Mo. 236, 16 S.W. 878; Jackson County v. Fayman, 329 Mo. 423, 44 S.W.2d 849.]
In the case at bar the statutory requirement of verification is not a mere formality which may be overlooked. It is a matter of substance which is mandatory and must be followed. [See National Supply Co. v. Izard County, Ark., 190 Ark. 744, 81 S.W.2d 842.] In approving the unverified claims on which these warrants were issued the board has acted not only without authority but also in direct violation of an express limitation on its power. Such action was a nullity and renders the warrants void. [20 C.J.S., Counties, sec. 249.]
There can be no claim that appellant is an innocent holder for value. The warrants although assignable are not negotiable. It is the established law of the land that all defenses or equities which might have been asserted against the original holder may be made against a bona fide purchaser for value. [36 A.L.R. 949. See Matthis v. Cameron, 62 Mo. 504.] Furthermore, appellant is bound to know that valid warrants may be issued only in compliance with the express statutory provisions and those warrants issued contrary thereto are void. [See Hillside Securities Co. v. Minter, 300 Mo. 380, 254 S.W. 188.]
Despite our decision holding the warrants void, still appellant may have a remedy on the debts for which the warrants were issued. The evidence indicates that the township received the services or material under legal contracts for which claims were approved by the board. In this situation it would not be fair to permit respondent to enjoy the benefits without paying for them. Dillon in his Municipal Corporations, section 862, states: "It may be laid down that, as a general rule, if the indebtedness for which a warrant is issued is a valid obligation of the municipality, the holder of the warrant, in the event it proves to be void for any reason, will be subrogated to the debt to pay which it was issued." [See also McQuillin on Municipal Corporations (2 Ed.), sec. 2417.] It has been held that if a county warrant issued in payment for equipment was found void, then plaintiff has a right to seek recovery on the theory of quantum meruit which he had pleaded in the alternative. [Southwestern Lloyds v. City of Wheeler (Tex.), 109 S.W.2d 739.] This court has frequently held, when there is evidence tending to show plaintiff has rights growing out of the transaction involved, but has misconceived the remedy, an appellate court "has discretion in the matter, and may remand the cause to permit the petition to be amended, and a retrial of the cause." [Mann v. Bank of Greenfield, 323 Mo. 1000, 20 S.W.2d 502; Williams v. Walker, 333 Mo. 322, 62 S.W.2d 840; Barlow v. Scott (Mo.), 85 S.W.2d 504; Fancher v. Prock, 337 Mo. 1119, 88 S.W.2d 179; Patzman v. Howey, 340 Mo. 11, 100 S.W.2d 851.] Upon such retrial the issues are to be determined on the evidence to be there adduced and subject to such defenses as may be properly raised.
The judgment is reversed, and the cause remanded to the circuit court with directions to allow plaintiff to amend his petition, if he so desires, and to try the cause anew in conformity with the views herein expressed, or, if plaintiff does not desire to amend his petition, to render judgment for defendant. All concur.