Case Name: COUNTY OF COLE, Appellant, v. CENTRAL MISSOURI TRUST COMPANY
Court: Supreme Court of Missouri
Jurisdiction: Missouri
Decision Date: 1924-01-04
Citations: 302 Mo. 222
Docket Number: 
Parties: COUNTY OF COLE, Appellant, v. CENTRAL MISSOURI TRUST COMPANY.
Judges: Woodson, G. J., and Ragland and Graves, JJ., concur; James T. Blair, J., concurs in Paragraphs I and II and the result; Walker, J., dissents in separate opinion in which David E. Blair, J., concurs.
Reporter: Missouri Reports
Volume: 302
Pages: 222–254

Head Matter:
COUNTY OF COLE, Appellant, v. CENTRAL MISSOURI TRUST COMPANY.
In Banc,
January 4, 1924.
1. CONTRACT: Between County and Depository: Shown by Record. The county, in an action against a trust company to recover interest on daily balances of county money deposited with it, based on a record contract between the county court and the trust company, which it is.claimed shows that the trust company was selected as county depository and that its bid to pay a certain rate of interest was accepted, cannot recover, where the record fails to show that its bid was accepted, that the order directing a certain fund to be transferred to it was made before the bids were opened, that such fund was not an “equal part” of the county funds, and otherwise fails to show that the proposition made by the trust company was accepted by the county court in the form tendered.
Held, by WALKER, J., dissenting, that the validity of the contract is admitted by the answer which admits that defendant was selected by the county court as the depository of the fund, that defendant accepted the trust thus imposed, that the money belonging to the fund was turned over to defendant as the county depository under the order of the court, and that said fund thus deposited was kept and used by defendant during the term of the contract; and as the record entries sufficiently show the nature of the contract, parol evidence to vary its terms was inadmissible.
2. -: -: Impeached Record: Opens Door to Evidence of True Facts and Actual Contract. The plaintiff, the county, in a suit by it against a trust company to recover interest on daily balances of county money alleged to have been deposited with it as county depository under a valid contract, having impeached its own record regarding the date of the filing of defendant’s bid, is in no position to object to evidence showing when in fact the bid was filed— -for instance, where ■ neither the bid itself nor the record showed when the bid was filed, and four years later a record entry was made showing the bid was filed on May 7, 1917, and the bid then inscribed with a file mark, May 7, 1917, the county is in no position to object to evidence showing that the bid was presented to the county court on February 15, 1917 — two months before there was any advertisement for bids and before the county court could even consider the letting of county moneys to depositories. And since the plaintiff showed that the record did not speak the truth and showed that the county court did not make the contract sued on, there is no legal reason why the defendant should not be permitted to show 'the real contract between the parties — not for the ‘ purpose of enforcing it, but for the purpose of showing that the parties did not make the contract sued on and that the county profited by a departure from the law.
Held, by WALKER, J., dissenting, that, as the orders concerning the transaction were made contemporaneously with the county court’s action, the fact that these orders were not formally entered upon the record, but were kept'on file by the clerk until some time after the consummation of the contract, in no wise affects the validity of the transaction.
8. --: -: Presumption of Regularity. Certain presumptions may be indulged in favor of the regularity of the proceedings of the county court, and especially when it is attempted to sustain by its record the validity of a transaction which-has been acted on; but such presumptions are not to be indulged where the county attempts to nullify a transaction upon which the county shows the parties acted to their mutual satisfaction, and to the definite benefit of the county, long after the matter was a closed incident so far as the performance of the arrangement was concerned. In such case, where the county attempts to recover upon a hare technicality and an alleged specific contract,' and not on the justice of its claim, no presumptions of regularity are indulged, but it must prove by its record that the specific contract was made in the manner and form required by the statutes.
H.eld, by WALKER, J., dissenting, that defendant’s answer admits that the contract between it and the county was made with it in the manner prescribed by law, and evidence of any other transaction was inadmissible.
4. -: -: Estoppel. A county may be estopped to deny a contract into which it entered illegally. Especially is the county estopped to deny the contract where it has received the benefit of the illegal contract into which it actually entered — a benefit far in excess of what it would have received if it had proceeded according to the requirements of the statute — and has retained that benefit, and the arrangement was acted upon in good faith by both parties and was completely performed by the defendant to its own detriment.
Held, by WALKER, J., dissenting, that the public, in this case the county, cannot be estopped by the ultra vires acts of its officers; and the county court could enter into no contract for the letting of public money which relieved the county depository from its statutory obligation to pay interest on daily balances.
5. -: -: Interest on Daily Balances: Instead Agreement to Pay Interest on Time Certificates: Estoppel. The county had issued $300,000 of five per cent road-construction bonds, which it could not sell because of some irregularity in connection with their authorization. At the time the county court had let contracts for road construction amounting to $50,000, but had no money to meet the contracts, because the bonds could not be sold. Thereupon the defendant trust company offered to take the entire bond issue at par, provided (1) the county would refund the bonds at 4.75 per cent interest presumably free from the technical objection to the first issue, and (2) it should become the depository of all county money pertaining to the road-construction fund. In order to avoid the payment of interest on daily balances, as required by statute, defendant agreed to pay 4.75 per cent interest on the money deposited with it provided the money so deposited were put in the form of time certificates, and the certificates were arranged to fall due at such times as the county estimated money would be needed to pay road contracts. In order to give the arrangement an appearance of regularity, the trust company in February presented an undated letter to the county court in which it “bids 4% per cent annual interest for one equal part of the county money advertised to be let by your body Monday, May 7, 1917.” There had then been no_ advertisement for bids, nor under the statute could the court then have considered the letting of county funds to depositories; but thereafter and on April 12th the county advertised for bids and recited in the notice that “said county funds will be divided into two equal parts, and sealed proposals for one or both of said parts will he received on or before the first Monday, the 7th day of May, 1917.” An order of the court of May 7, 1917, recited that it was ordered that the trust company “be and is hereby designated the county depository for all money belonging to the road-construction fund of the county,” the said company “being found by the court to be the highest and best bidder for said funds.” The next order was dated May 9th and recited that “now on this day the court proceeds to open bids as per advertisement for county depository” and finding a certain bank to be the highest and best bidder “said bank is hereby declared to be the county depository for all county funds except the moneys belonging to the road-construction fund,” and the county treasurer was ordered to transfer to the trust company all moneys belonging to that fund. The letter from the defendant was not a sealed bid, it was for the first time marked filed four years after it was presented and then for the first time an order was made entering upon the record the proposal as a “bid.” The arrangement between the county court and the defendant made in February, 1917, was carried out in good faith, and if the money had been needed by the county for the construction of roads as was contemplated at the time it was made the county would have received a far greater amount of interest at 4.75 per cent on the time certificates than it would have received on daily balances at 2.15 per cent, the prevailing rate; .but after the World War came on, the county could not make contracts for road construction as rapidly as it had expected, and after the certificates became due considerable sums in the checking account were left on deposit with defendant and were not used by the county for some time, and it is for 4.75 per cent interest on those deposits in the checking account, as interest on daily balances on money deposited with a “county depository,” that the county sues; in other words, the county now contends that under the statute defendant was a “county depository,” and that all the road-construction fund in its hands on any particular day should be considered a daily balance, and that it should be charged with 4.75 per cent on the daily balances, less the interest it has paid on the time certificates. Held, that the county is estopped to deny the validity of this illegal contract with defendant, because (1) through the a,id of defendant it was enabled to nego tiate the $300,000 of road bonds, 'which, it otherwise was unable to dispose of; (2) it negotiated them at a lower rate of interest than the original bonds bore; (3) it received more interest from the time certificates than it would have received if the money had been let to the highest bidder; and (4) because the arrangement has been acted upon in good faith by both parties, and completely performed by defendant to its detriment; and while the contract was illegal and a nullity, so was the contract which the county tried to prove.
Held, by WALKER, J., dissenting, first, that this illegal agreement constitutes no defense to plaintiff’s action, and evidence to establish it was' inadmissible; and, second, estoppel applies only to irregularities of county courts, and not to their ultra vires acts.
Appeal from Cole Circuit Court. — Mon. John G. Slate, Judge.
Affirmed.
Galfee $ Westhues and M. J. Westimes for appellant.
(1) The only way a county court can select a depository for county funds, is by complying with Article 8, chap. 86, R. S. 1919. Harris v. Langford, 277 Mo, 527. (2) It was the duty of the county court to substantially comply with said Article 8 in letting the county moneys, and in so doing the county court had no right to connect the letting of the moneys and the selecting of a county depository with any other proposition whatever. Barratt v. Stoddard County, 246 Mo. 501. (3) A substantial compliance with said Article 8 is sufficient. 15 C. J. 549, 550, sec. 243, note 7; Barratt v. Stoddard County, 246 Mo. 501; Harris v. Langford, 277 Mo. 527. (4) In this case the county court complied with the law in selecting depositories for county funds. It ordered the clerk to advertise. The clerk advertised for bids. Bids were received. The money was let in two parts, Bond for depository by defendant was filed and approved. Money was ordered transferred to defendant. Defendant acted as depository. This is a substantial compliance with the law. Article 8, chap. 86,-R. S. 1919. (5) Any oral agreements and understandings, if any were had, as alleged in the second part of defendant’s answer and the entire matter of defense alleged in the second part of defendant’s answer are no defense in this case, (a) Because the county court can only make contracts in writing, (h) Because the county court can speak only by and through its record, (c) Because if any such understanding was had as alleged in defendant’s answer, it was contrary to law and not binding on the county. Barratt v. Stoddard County, 246 Mo. '501; Morrow v. Pike County, 189 Mo. 610; Harris v. Langford, 277 Mo. 527.
Dumm $ Goolc for respondent.
(1) Defendant’s objection to the introduction of any testimony on the part of the plaintiff should have been sustained, for the reason that the petition wholly fails to state a cause of action against the defendant. The petition charges that the defendant submitted a hid for one equal part of the county money advertised to be let by the county court on May 7, 1917, and then alleges that on said date the county court made an order of record designating defendant as the county depository for all money for the county belonging to the “Road Construction Fund” for a period of two years. Assuming, for the present purpose, that these allegations of the petition were true, it appears on the face of the petition that the bid was for one thing and the designation or acceptance was for another and a different thing; and the petition, therefore, failed to plead a contract or agreement between the county through its county court, on the one part, and the defendant on the other, and failed to state a cause of action against the defendant. 13 C. J. pp. 265, et seq.; Robinson v. Railroad, 75 Mo. 494; Strange v. Crowley, 91 Mo. 287; Taylor v. Yon Schraeder, 107 Mo. 206; McLean v. Association, 64 Mo. App. 55; Cangas v. Rumsey Mfg. Co., 37 Mo. App. 297. (2) The trial court should have sustained defendant’s demurrer, offered at the close of the plaintiff’s case. Even if the petition could be held to state a cause of action, there .was a total variance between the pleading and the proof. The petition alleged that defendant submitted a bid for one equal part of the county money advertised- to be let by the county court. The record introduced by plaintiff showed that defendant was designated the county depository for all money belonging to the “Road Construction Fund” for a period of two years, without either pleading or proving that the money belonging to the “Road Construction Fund” constituted one equal part of the money advertised to be let. Since plaintiff sought to rely upon a contract, made up of the bid and the acceptance, it was incumbent on it to prove such a contract ; and this it wholly failed to do. Authorities supra; -Chapin v. Cherry, 243 Mo. 375, 401; Stone v. Trust Co., 150 Mo. App. 331, 344; Curry v. Greffet, 115 Mo. App. 364, 368; Gaus & Sons Mfg. Co. v. Chicago Lumber & C. Co., 115 Mo. App. 114. (3) There being no contract established by the record entries of the county court, parol evidence was admissible for the purpose of showing what the arrangement and agreement between the county court and the defendant really were. Riley v. Pettis County, 96 Mo. 318, 321, 322; Ray v. Woodruff, 168 Ky. 563, 567; Ferguson v. Rafferty, 128 Pa. 337, 6 L. R. A. 33; Gilbert v. Bank, 160 Pa-c. (Okla.) 635; Klueter v. Brew. Co., 143 Wis. 347, 32 L. R. A. (N. S.) 383; 22 C. J. pp. 1084, 1144. (4) The county, through its county court, having accepted from the defendant interest on time certificates of deposit to the credit of the “Road Construction Fund,” without objection on its or their part, is now estopped from claiming or assert- • ing that it is entitled to interest on daily balances. 21 C. J. pp. 1206, 1215; Sparks v. Jasper County, 213 Mo. 243; Simpson v. Stoddard County, 173 Mo. 466.

Opinion:
WHITE, J.
Action to recover interest claimed to be due from defendant as county depository.
The plaintiff filed its suit in the Circuit Court of Cole County, April 6, 1920, alleging that at the May term, 1917, it advertised for bids from banking corporations, etc., for the privilege of being selected as county depository; that said bids were opened at said May term, and the.defendant, having submitted a bid of four and three-fourths per cent annual interest for one equal part of the county money advertised to be let on that day, the county court designated the defendant as a depository for all the money of the county belonging to the road construction fund, defendant being the highest and best bidder for said fund; that defendant filed its bond in accordance with the statute, and received from the county treasurer money of the county in the sum of $266,487.17; that defendant accepted the money May 10, 1917, and from that date to July 1, 1919, acted as depository. The petition sets out the amount of deposits to the credit of the county with defendant during various periods extending from May 10, 1917, to July 1, 1919, and alleged that the amount of interest computed upon the daily balances, as provided by the statute, during the different periods, was $15,963.61; that defendant at divers times had paid the interest by placing to the credit of the county different sums of money amounting to $8086.79, leaving a balance due of $7876.82, for which the defendant asked judgment.
The defendant makes here some objections to the sufficiency of the petition. It is unnecessary to consider those objections, as the questions thus raised will be considered below in connection with the record introduced by plaintiff for the purpose of making out a case.
The answer of the defendant and the evidence offered and admitted by the court in support of the answer shows that in February, 1917, long before the county was authorized by law to select at the May term, 1917, a depository for its funds, the county was in difficulty on account of $300,000 bonds which has been voted by the people for the construction and maintenance of roads in Cole County. Those bonds could not be sold because of some irregularity in connection with their authorization. They bore five per cent interest. The county court had let contracts for road construction amounting to nearly $50,000, but had no funds on hand to meet the contracts because no bids were offered when they attempted to sell the $300,000 bonds.
Thereupon the defendant, February 15, 1917, offered to take all the $300,000 issue of bonds, provided the county would refund them at four and three-fourths per cent interest with other bonds presumably free from the technical objection to the first issue. This reduced rate of interest on the refunding bonds — manifestly to the advantage of the county- — was arranged upon condition that the defendant should become the depository of all the money in the road construction fund. In order to avoid the payment of daily balances as required by statute, the defendant agreed to pay four and three-fourths per cent, which was far in excess of the rate then prevailing, provided the money on deposit would be represented by time certificates. The county was to estimate the different times at which money would be needed to pay on road contracts; the time certificates of deposit were arranged to fall due at such time, and it was understood that the defendant was not to pay interest on the checking account. In this way, if the money had been required by the county as was contemplated when the arrangement was made, it would have received a far greater amount of interest at the rate of four and three-fourths per cent on the time certificates than it would have received on daily balances at the prevailing rate of 2.15 per cent. It happened, however, that the war came on, the county could not make contracts for con struction as rapidly as it expected, and after the time certificates became dne considerable sums in the checking fund were left on deposit with the defendant and were not used by the county for some time.
It was shown that at the time the defendant became the depository the county was receiving 2.15 per cent on daily balances. Members of the county court testified that it was impossible to secure a greater rate than that on daily balances, and the interest actually paid by defendant under the arrangement mentioned was several hundred dollars more than the county would have received if the county had received fro.m defendant the prevailing rate of 2.15 per cent on daily balances. It is claimed by the defendant, and the evidence shows without contradiction, that this arrangement was carried out; that it was very much to the advantage of the county, that no objection was made to it until in 1919 when the new county court was elected and it was discovered that the statute providing for interest on daily balances.had not been complied with, and this suit was brought.
All this evidence was objected to by the plaintiff. The objection was overruled by the trial court, and that ruling constitutes the main assignment of error presented by the appellant. The record and the evidence in relation to the contract which the respondent seeks to establish will be considered below.
This outline of the facts as shown by the record is not complete, because it will be more convenient to consider the issues and the record in connection with the points raised.
The judgment of the trial court was for defendant and the plaintiff appealed.
I. The plaintiff plants its case upon the doctrine that the county court speaks only by its record. It insists upon the strictest application of the rule and strenuously argues that no evidence can be heard to supplement the record.
Apply that principle to the evidence offered by the plaintiff in making out his case.
The statute, Section 9582, requires that the county court in letting the funds of the county to depositories, "shall, by order of record, divide said funds into not less than two nor more than ten equal parts, and the bids herein provided for may be for one or more such parts."
The section then provides that notice shall be. published and outlines the procedure when bids are received.
Section 9584 provides that at the May term in each year the county court shall open the bids, and "cause each bid to be entered upon the records of the court," and select as county depository the corporations or individuals, "whose bids respectively made for one or more of said parts of said funds shall in the aggregate constitute the largest offer for the payment of interests per annum for said funds."
The section then provides for interest to be paid on daily balances. The evidence offered by plaintiff I mention in its logical order:
The advertisement for bids published beginning April 12, 1917, stated that the county court desired to select depositories for the ensuing two years, and continued: "Said county funds will be divided into tivo equal parts, and sealed proposals for one or both of said parts will be received by the clerk of said court on or before the first* Monday, the 7th day of May, 1917." The notice then said that the interest is to be computed on the daily balance and that each bid is to be accompanied by a $300 check.
The bid of the Merchants' Bank was offered. It stated that pursuant to the notice mentioned it would give 2.15 per Gent per annum for one of the two equal parts proposed to be let on the 7th day of May, 1917.
The bid of the Central Missouri Trust Company, the defendant, was offered, as follows:
"To the Honorable County Court, Cole county, .
Jefferson City, Mo.
"The Central Missouri Company bids four and three-fourths per cent annual interest for one equal part of the county money advertised to be let by your body Monday, May 7, 1917. Enclosed find check for $300 called for in your advertisement.
"Respectfully, Sam B. Cook, president."
The proceedings of the May term, 1917, of the county court, from May 7th to May 9th, appear in the record as follows:
"May term, 1917. Monday, May 7, 1917, twenty-second day.
"At a regular term of the county court begun and held on Monday the seventh day of May, 1917, there were present Hon. I. D. Bond, P. J., J. R. Taylor, a J., A. B. Richter, sheriff, and C. A. Dirckx, clerk, when the following proceedings were had, to-wit:
"Ordered by the court that the Central Missouri Trust Company be and is hereby designated the county depository for all money belonging to the 'Road Construction Fund' of the county, for a period of two years, said Central Missouri Trust Company being found by the court to be the highest and best bidder for said funds.
"May term, 1917. Wednesday, May 9, 1917, third day.
"Court met'pursuant to adjournment with all members present, when the following proceedings were had to-wit:
"Now at this day the court proceeds to open bids as per advertisement for 'County Depository' and finding the Merchants' Bank of Jefferson City to be the highest and best bidder, said bank is hereby declared to be the County 'Depository for all the county funds except the moneys belonging to the 'Road Construction Fund' for a period of two years at an interest rate of 2-15-100 per cent.
"Comes now the Central Missouri Trust Company by Howard Cook, and presents its bond as ' County Depository' for the 'Road Construction Fund' which bond the court examines, finds sufficient and orders approved and filed.
"Ordered by the court that Peter J. Schell, County Treasurer, transfer to the Central Missouri Trust Company all moneys in his hands belonging to the 'Road Construction Fund' of the county.
'Now at this day the court proceeds to open and file bids on road and bridge work as per advertisement.
"Ordered court adjourn to nine o'clock to-morrow morning.
"I. D. Bond, Presiding Judge."
This is the entire record offered to show a contract between the plaintiff and the defendant.- It will be noticed that the bids received pursuant to the advertisement were opened May 9th, and the hid of 2.15 per cent by the Merchants' Bank of Jefferson City was approved,- and that hank was selected as depository for all the money of the county except the road construction fund.
The appellant contends that the bid of the Central Missouri Trust Company (copied above) was in response to- the advertisement and was so conclusively shown by the record, because it is a hid for one of the equal parts of the money advertised — -one-half the money which the county had to deposit; and that the record cannot be impeached by testimony showing that the bid was not in response to the advertisement.
Just here the plaintiff encounters difficulty in making out its case. The record does not show that that bid was accepted by the county. Let the record alone speak and it shows that on May 7th- — two days before the opening of any bids in response to the advertisement —the county court selected the Central Missouri Trust Company as depository for the money in the road construction fund. Every entry in the record relating to the defendant refers to the road construction fund alone.
Thus the order selecting defendant is a variance from the bid for several reasons: (a) The order does not mention the defendant's actual bid, nor any feature of it. (b) It was made before the bids were opened; be fore there was any consideration or comparison of the competitive bids; before the county court knew what the bids of the county funds were; before they had any authority to select a depository, (c) The alleged acceptance is not for one equal part of the county funds, as the advertisement and the bids read, but it is the selection of a depository for the whole of one distinct fund.
Before a contract can be entered into by reason of a proposition and acceptance, the minds of the parties must meet upon all the terms of the contract. The rule was stated by this court in the case of State ex rel. v. Robertson, 191 S. W. l. c. 991, where this court said: "The proposition presented by the one must be accepted by the other in the form tendered; and if the acceptance omits, adds to, or alters the terms of the-proposition made, then neither party to the negotiation is bound."
This is the condition if we let the record alone speak. It must be borne in mind that the plaintiff is not suing upon the contract which was acted upon and recognized by the parties, but suing upon the contract which was never recognized as valid between the parties and was never acted upon. Suppose that after that order was made the County Treasurer had refused to deposit the money with the defendant; and suppose the Trust Company had sued to compel such deposit, the answer of the County Treasurer and the County Court would have been:
"The county has made no contract with you for several reasons: first, the statute requires that before we can let the money we must by order of record divide it into equal parts; we must advertise for bids and receive sealed bids and accept the highest bids for one or more of such equal parts. Those things were not done. The county had no authority to make any contract without dividing the money into equal parts, and if it had divided it into equal parts, it had no authority to let all of any particular fund without a showing by the record that the money let was one of the equal parts.
"Thus the record fails to show that the county had power to make such a contract, because the Central Missouri Trust Company was selected in defiance of the law, before it could lawfully be done, without consideration of competitive bids, at variance with the advertisement and bid, and for a fund which the county had no right to deposit in that way."
Such answer of the county court in such a suit would have stated a complete defense. A contract is not binding unilaterally, it must be binding upon both parties to it.
IT. Further, the plaintiff impeached its own record:
In the progress of the trial this colloquy occurred:
"The Court: I take it for granted these bids were fixed up anyhow as a mere formal compliance&emdash;
"Mr. Westhues: Of the law; sure.
"The Court: Yes.
"Mr. Irwin: The county court didn't make it competitive.
"The Court: The absolute proof doesn't conform to the record made out and the bids filed.
"Mr. Westhues: Inconsistent with it.
"Ti-ie Court: Certainly it is inconsistent.
"Mr. Westhues: Yes.
"The Court: The record appears all right on its face in a way, but it occurs to me there is a lot of this record made here and bids filed after everything had been settled for the purpose of making it appear and show&emdash;
"Mr. Westhues: That they had conformed with the law f
"The Court: Yes.
"Mr. Westhues: When in fact they had not?"
This was not an inadvertent or casual occurrence. Here is a solemn admission in open court by counsel for the plaintiff that the record, which is now claimed to import absolute verity, did not speak the truth at all, but was entered three or four days before the trial, in nocently enough no donbt, but-for the purpose of furnishing evidence in the case.
Counsel for appellant claim that this admission relates only to the order following:
"Ordered by the court that the county clerk be and is hereby ordered to enter upon the court record all the bids on file.for the year 1917 and 1919 during May terms of said years for the county funds, as required by law, with reference to county depositories. Laws of 1915, p. 249."
But the admission relates to much more than that. The statute requires that the bids shall be entered upon the records of the court at the time they are opened and considered, so that people may know what bids have been received, but this record was made four days before the trial, February 4, 1921, nearly four years after the bids under consideration here were received and-opened.
The bid of the defendant offered in evidence bore a file mark, May 7,1917. The deputy county clerk, Charles Smith, testifying for the plaintiff, said that the file mark was put on that bid "the other day." That is, at the time the above order was made, four days before the trial. Further, Smith said that it had no file mark on it prior to that, and there was no record showing when it was presented to the county court. The record of the proceedings of the county court was signed by Presiding Judge I. D. Bond of the county court, a few days before the trial and about four years after the record was made.
Having impeached its own record regarding the date of filing defendant's bid, the plaintiff was not in position to object to evidence showing when in fact the bid was filed. This is true particularly because the plaintiff's attorney endeavored to show that the bids had been "on file all the time." That is a rather comprehensive period and the plaintiff's counsel did not designate any date to be recognized as the beginning of "all the time."
This record, which must import absolute verity in order to sustain the plaintiff's contract, includes the file mark made four days instead of four years before the day of the trial. The file mark is comprehended in the naive admission of plaintiff that those records were arranged "for the purpose of making it appear and show" that they had conformed to the law, "when in fact they had not."
The significance of this date of the presentation of the bid is apparent.
It was shown without contradiction that it was presented February 15th, two months before there was any advertisement for bids, and before the county court could even consider the letting of money to depositories, which must be done at the next May term. It was not .a sealed bid as the notice required. The bid then could not have been in response to'the notice, but was gotten up for the purpose of giving the appearance of regularity to the proceeding which all recognized to be irregular. It was not a bid at all, because it was not a sealed bid and was not competitive. Taking the record introduced, -the admission of plaintiff's counsel, and proof of the time at which the bid really was presented, we have all the evidence presented by the plaintiff in making out its case. It fails to make out a case because it lacks two links in the chain of negotiation necessary to close the contract sued on; the bid was not in response to the advertisement, and the letting of the funds was not an acceptance of the bid. This is true even if the county court had had authority to make the contract on which it sued.
Since the plaintiff showed that the record did not speak the truth and showed that the county court did not make the contract which was sued on, there appears to be no legal reason why the defendant should not be permitted to show the real contract between the parties, the one. that was acted upon, — not for the purpose of enforcing it, but for the purpose of showing that the parties did not make the contract sued on, and that the county profited by the departure from the law. Of course, certain presumptions may be indulged in favor of the regularity of the proceedings of the county court. That is especially true when it is attempted by the record to sustain the validity of a transaction which has been acted upon. But this is not that kind of a case. This is an attempt to nullify a transaction upon which the parties acted to their mutual satisfaction, as, plaintiff's evidence shows, and to the definite benefit of the county, long after the matter was a closed incident so far as the performance of the arrangement was concerned. The plaintiff does not seek to recover on the justice of its claim but upon a bare technicality, because the defendant, through favorable treatment of the county, became involved in a legal snarl.
It may be said that the defendant used the money and therefore should pay for its use, according to the statute. Even if the county could recover interest computed according to the statute on money not deposited under the statute, the petition does not count on such recovery. The plaintiff seeks to recover on a specific contract which it has not proved.
III. Eespondent contends that plaintiff is estopped to deny the contract set up in the answer and proved by the defendant, and that the trial court for that reason correctly admitted the evidence. This is on the theory that the county received and retained certain benefits from the contract alleged proven by the defendant:
(a) The county, through the instrumentality of the defendant, was enabled to negotiate its road-construction bonds, when otherwise it was unable to dispose of them.
(b) It negotiated at par the $300,000 refunding-bonds at a lower rate of interest than it would have had to pay if it had sold the original road-construction bonds.
(c) Under the arrangement it received more interest from the defendant as the repository of the road-construction fund than it would have received if the money had been let to the highest bidder under the statute, and interest paid on daily balances.
Judge Happy of the county court testified that the court was receiving 2.15 per cent from the depository at that time, and that 2.15 per cent was all it was able to get; the evidence showed that was the prevailing rate. The defendant paid 4.75 per cent; more than double— and in explanation Mr. Cook said they would not have thought of paying that rate except under the arrangement whereby they were to pay interest on time certificates and not on checking accounts. Had it not been for the intervention of the war, which delayed the construction work, the county would have received even more than it did from the depository. The defendant invested $300,000 at par in the bonds and paid four and three-fourths per cent interest. The investment, or an amount of it equal to the deposits on hand 'from the county, yielded nothing to the defendant because it paid the same rate of interest on the money deposited that it was receiving for the bonds.
As a- general rule it is correct that circumstances and facts which would estop an individual usually do not es-top a county in its official capacity. But a county may be estopped to deny a contract which it entered illegally.
The rule is stated in 21 C. J. 1215: "Where the act or contract of a municipal or quasi-municipal corporation is not one which it is without corporate power to make, but is unenforceable merely because of an irregular exercise of power, in the making or execution of it, it may be estopped to deny the validity of the contract where it has accepted the benefits thereof. ' '
This court said, in the case of Mullins v. Kansas City, 268 Mo. 444, l. c. 459, a case cited by the appellant: "We recognize that the modern doctrine is tending more and more toward the view that a municipality, no more than an individual, ought not to be allowed to so act towards others as to induce them to pursue a course harmful to them and then in the end refuse to comply with the promise inducing such action."
The St. Louis Court of -Appeals in the case of Edwards v. Kirkwood, 147 Mo. App. l. c. 615, in speaking of estoppel by municipal corporations, said: "There is a distinction made, too, in some of the cases where the doctrine of estopel is invoked as to contracts which had been performed in good faith by one dealing either with a municipal or private corporation, and the infirmity lies in a defect of power with respect to a matter not prohibited by law."
See also Sparks v. Jasper County, 213 Mo. l. c. 243-244; Simpson v. Stoddard County, 173 Mo. l. c. 465.
Now in this case the county court had authority to loan the county's money, including that particular fund which the defendant received. The arrangement which the defendant made with the plaintiff was in form and method unlawful. The only irregularity of %ohich the plaintiff complains was the arrangement for the payment of interest by departing from that statutory requirement. The county obtained a benefit by that departure, has retained it to this day, and does not seek in this proceeding to put the defendant in. statu quo. It may be said that because this is a contract which the county court had no authority whatever to make, it was not a mere irregularity, but a nullity from the start and the county could not be estopped. The same may be said with equal propriety of the contract which the plaintiff sought to prove. The county had no authority whatever to let money to a depository except under the terms of the statute, in equal parts, and the designating of the defendant as a depository by the county court without such division by order of record was entirely without authority of the law.
The county having received the benefit of the illegal contract which it actually entered into — a benefit far in excess of any it would have received by a proceeding according to the statute — and having retained that benefit, the arrangement having been acted upon in good faith by both parties and completely performed by the defendant to its own detriment, the county is estopped to deny the arrangement.
The judgment, accordingly, is affirmed.
Woodson, G. J., and Ragland and Graves, JJ., concur; James T. Blair, J., concurs in Paragraphs I and II and the result; Walker, J., dissents in separate opinion in which David E. Blair, J., concurs.