Buckeye Engine Co. v. City of Cherokee

This action is brought under the provisions of Rev. Laws 1910, sec. 6777, which reads as follows:

"Every officer of any county, township, city, town [village] or school district, who shall order or direct the payment of any money or transfer of any property belonging to such county, township, city, town [village] or school district in settlement of any claim known to such officers to be fraudulent or void, or in pursuance of any unauthorized, unlawful or fraudulent contract or agreement made or attempted to be made, for any such county, township, city, town [village] or school district by any officer thereof, and every person, having notice of the facts, with whom such unauthorized, unlawful or fraudulent contract shall have been made, or to whom, or for whose benefit such money shall be paid, or such transfer of property shall be made, shall be jointly and severally liable in damage to all innocent persons in any manner injured thereby, and shall be furthermore jointly and severally liable to the county, township, city, town [village] or school district affected, for double the amount of all such sums of money so paid, and double the value of property so transferred, as a penalty, to be recovered at the suit of the proper officers of such county, township, city, town [village] or school district, or of any resident taxpayer thereof, as hereinafter provided."

This statute was considered by this court in Territory exrel. v. Woolsey, 35 Okla. 545, 130 P. 934, where it is decided that this is a penal statute, and like all penal statutes must be strictly construed, and the burden is on the plaintiff to prove all the facts to bring the transaction under the condemnation of the statute.

In People v. Dunston, 84 N.Y. Supp. 257, an action was brought to recover a penalty imposed by statute for having quail in possession during the closed season, and the evidence showed that the witness entered the defendant's restaurant, and ordered quail to be served him, when the waiter said that he would have to see, and went into the rear of the restaurant and spoke to some one, and then served the quail, but it was held that the evidence was not sufficient to show possession in the defendant, and the action was properly dismissed.

The statute makes it necessary that any person, other than the officers of a municipal corporation, shall have notice that the payment for which the penalty is imposed was made on a fraudulent, unauthorized, or unlawful contract, and assuming, but not deciding, that there was evidence that the engine company had notice that this payment was made on a void, fraudulent, or unlawful contract, there certainly was not such evidence as would authorize the court to take this question from the jury.

As to whether the election for the first two issues of bonds was void, this seems, from the record and briefs, to depend on the question as to whether the necessary notice of the election was given, and if this is the only point, it has been held by this court that such want of notice does not render the bonds void. See City of Ardmore v. State ex rel., 24 Okla. 862,104 P. 913, where it is held:

"In ordering an election in a city of the first class, on a question of whether certain public utility bonds shall be issued, ten days' notice of such election, by publication of the mayor's proclamation calling the election in a news-paper of general circulation in such city at least ten days prior to the date of the election, is required; but, if the notice be published for a less time than ten days prior to the election, a court of equity will not, for this reason alone, declare the election void, where it is not shown or alleged that any one failed to vote because of the failure to publish the proclamation for the full statutory period, and where it is conceded that the general voting public had notice of the election and participated therein."

If it is contended that the contract of September 24, 1908, was unlawful because the bonds were not sold, and the cash actually in the treasury, there is no evidence that the plaintiff in error had notice of this fact, assuming that it was material.

If the defendant in error relies on the allegation that the contract of November 17, 1909, was fraudulent, and that it was entered into for the fraudulent purpose of getting the payment of $3,250, and with no intent on the part of the plaintiff in error to fulfill it, there is a conflict in the evidence as to whether this contract was ever made, and evidence on the part of the plaintiff in error directly contradicting the fact. In this condition of the evidence it was error to direct a verdict. In Reger v. Henry, 48 Okla. 759, 150 P. 722, it is held:

"The effect of a demurrer to the evidence and a motion for a directed verdict is well established in this jurisdiction. * * * There is a sharp conflict in the evidence, and, this being true, on a motion to direct a verdict, all the facts and inferences in conflict with the evidence, against which the action is to be taken, must be eliminated entirely from consideration and totally disregarded, leaving for consideration the evidence which is favorable to the party against whom the motion is made."

And see Gregory v. Harper, 51 Okla. 419, 152 P. 70.

There is a clear distinction between the cases holding that, in a suit by a creditor of a municipal corporation, he cannot recover because of the illegality of his contract, and a suit for the penalty imposed by section 6777, supra, because, in the first class of cases, the creditor must see that his contract is legal, and the burden is on him to establish it, while, in an action for the penalty, he must have notice that the contract is fraudulent, unlawful, or void.

We therefore recommend that the judgment be reversed, and the case remanded for a new trial.

By the Court: It is so ordered.