Case Name: John T. Cathers, appellant, v. Frank E. Moores et al., appellees
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1907-01-05
Citations: 78 Neb. 13
Docket Number: No. 14,588
Parties: John T. Cathers, appellant, v. Frank E. Moores et al., appellees.
Judges: Oldham and Epperson, 00., concur.
Reporter: Nebraska Reports
Volume: 78
Pages: 13–24

Head Matter:
John T. Cathers, appellant, v. Frank E. Moores et al., appellees.
Filed January 5, 1907.
No. 14,588.
Cities: Touts of Officers: Action. Unofficial citizens cannot maintain an action on the behalf, and practically in the name, of public corporations to recover for the conversions or embezzlements, or other torts or misdeeds of officials of municipalities and of persons having dealings with them.
Appeal from the district court for Douglas county: Willis G. Sears, Judge.
Affirmed.
Byron G. Burbank, for appellant.
Weaver & Giller and W. J. Gonnell, contra.
Rehearing allowed. See opinion, p. 17, post.

Opinion:
Ames, C.
The petition alleges that the plaintiff is a citizen, resident and taxpayer of the city of Omaha, and that he prosecutes the action for the benefit of all other persons similarly situated for the use and .on behalf of the city, and that he has requested the city attorney to begin and prosecute a like suit in the name and on the behalf of the city, but that he has refused so to do, giving as his reason for such refusal that such an action would be without authority of law. The action was begun against Frank E. Moores, then mayor of the city, but now deceased, August H. Hennings, then treasurer of the city, but now deceased, Charles O. Lobeck, comptroller of the city, and four other persons, members of the city council. The city is also named as defendant, and the suit has been revived against the personal representatives of the deceased defendants. The petition alleges, in substance, that in May, 1904, the council of said city passed, with the concurrence of such of the defendants as were members of that body, and that the mayor approved and signed an ordinance purporting to appropriate the sum of $15,539.75 for the payment of certain persons for services rendered by them as common laborers in cleaning the streets of the city, and that the mayor, treasurer and comptroller had by their concurrent action disbursed that sum from the treasury in the making of the payments mentioned. But it is alleged that all the foregoing proceedings were without warrant or authority of law, and resulted in an injury and damage to the city in the sum so paid out, because the laborers for whose .services the payments were made had not, previous to the • rendition thereof, been employed, nor had their wages been fixed by any authority empowered by law to do said acts or either of them, although the city charter expressly enacts that "no laborer or employee shall receive any compensation whatsoever for services rendered prior" to the time of their employment and the fixing of their compensation by the board of public works and the mayor and council, as provided by the act. The petition therefore alleges, in effect, that the persons named were by their conduct, recited, guilty of a tortious conversion of the moneys so disbursed, for which they and their personal representatives were and are jointly and severally liable to the city. The prayer of the petition is that the defendants, except the city, be charged with, and required to account for, the moneys so paid out as trustees, and that tiie plaintiff have and recover said sum, with interest, for the use and benefit of the city, and for such further and other relief as may be just and equitable.
We fail to discover any ground for the interposition of the equity powers of the court. The cause of action on behalf of the city, if there is one, Avhich we do not decide, is in tort for a wrongful conversion or embezzlement, for which the law furnishes a plain, adequate and speedy remedy.
There was an answer somewhat in the nature of a confession and avoidance, in which it was alleged, among other things, that the services in question had been actually rendered, and that the payments complained of were not in excess of their fair value, and that the city authorities and the citizens and taxpayers generally, including the plaintiff, had had full knowledge of all the circumstances, but had made no objection by appeal from the allowance or payment of the claims or otherwise, except by the beginning of this suit some months afterwards. There was a trial without a jury and a judgment of dismissal, from which the plaintiff has appealed.
The transcript is not accompanied by a bill of exceptions, but there are annexed to the judgment entry, as though a part thereof, certain special findings of fact upholding the allegations of the answer, and "by reason" of which, as the journal recites, the court "found generally against the plaintiff," that is, found, in effect, that the plaintiff is without equity. What the force and effect of these special findings might in other circumstances be, it is, in our opinion, unnecessary to decide. If, as we have already intimated, the petition had been filed by and in the name of the city of Omaha as plaintiff, we are of opinion that it would have presented no matter of equitable cognizance; but we are equally convinced that it presents no matter which the plaintiff is entitled to litigate in any form of action in any court. The courts in this country have gone to extreme lengths in entertaining suits by taxpayers against local boards and officers to restrain the latter from entering into unauthorized or irregularly executed contracts, and from wrongfully and unlawfully, or, perhaps, negligently, disbursing public moneys or disposing of public property; but the origin and foundation of jurisdiction in all such actions is that the plaintiff and others similarly situated are without other remedy; that is to say, that, unless the court shall exert its equity powers to prevent the doing of the threatened act, the plaintiff or taxpayers will have no means of repairing the damage after it has been committed. But this, in our opinion, is the limit to which the court could go with safety, (iven if principle were supposed to extend further. The result of an action like the present, if one could be maintained, would, of course, have the same quality of conclusiveuess with respect to parties and privies as has a final judgment in other similar cases. It seems to us that the truth of the proposition is so obvious as to ('all for no argument in its support ; that the policy would be an extremely hazardous one which would permit unofficial citizens to constitute themselves public agents, and to begin and prosecute actions on the behalf, and practically in the name, of public corporations to recover for the conversions and embezzlements, or other torts or misdeeds of officials of municipalities and of persons having dealings with them. The opportunities for collusive actions and judgments, and for taking advantage of the incompetency and irresponsibility of plaintiffs, which such a practice would afford are too manifest to require specification. Only less injurious to the public interests would be the confusion and embarrassment into which municipal affairs would be thrown by the encouragement that such a practice would afford for the gratification of personal and political prejudice and rancor, and the multiplicity of litigation to which they would almost inevitably give rise. It may well be doubted whether under such circumstances honorable and responsible persons could be induced to accept office, or, if they should do so, whether they would not be so hampered and annoyed as to render the due discharge of their necessary functions extremely difficult, if not practically impossible.
Section 40, ch. 12a, Comp. St. 1905, provides that "the city attorney shall attend to all cases in any court in this state, except in the police court, and appeal cases therefrom, wherein the city may be a party, plaintiff or defendant, or a party in interest," except in those cases in which he shall have a personal interest, and in such cases the mayor and council are directed to appoint some other person to act temporarily in his stead. By sections 143 and 144 the mayor and council are given general legislative and administrative control over the affairs of the city, and of the prosecution and defense of suits by it and on its behalf. In our opinion, these provisions are exclusive, and the city or its officers cannot be put to the trouble, annoyance or expense, or required to incur the risk, of litigation in suits of this character instituted by persons having no special or peculiar interest, and suffering no particular injury.
1. Cities: Toets of Officers: Action. A resident taxpayer of a municipal corporation may maintain an action against its officers who Rave squandered or dissipated its funds, or paid them out for an unlawful or unauthorized purpose, to recover such funds for the use and benefit of the corporation where its proper law officer neglects and refuses to prosecute such an action.
2. -: -: -. To entitle a taxpayer to a judgment in such a case, it must appear that the municipality could Rave maintained the action in the first instance.
3. -: Liability. WRere a municipal corporation receives and-retains substantial benefits under a contract which it was authorized to make, but which was void because irregularly executed, it is liable in an action brought to recover the "reasonable value of the benefits received; and where it has paid for such benefits it cannot maintain an action to recover back such payment.
4.-: Claims: Action by Taxpayer. A taxpayer who has full knowledge of the allowance of a claim by the municipal authorities, and is afforded an opportunity to appeal from such allow anee, and fails to avail himself of that remedy, is not thereafter entitled to maintain an equitable action against the officers of the municipality to recpver the money disbursed upon such allowance.
We therefore recommend that the judgment of the district court be affirmed.
Oldham and Epperson, 00., concur.
By the Court: For the reasons stated in the foregoing opinion, it is ordered that the judgment- of the district court be
Affirmed.