Cleveland Nat. Bank v. Board of Education

OWEN, J.

This action was brought by the hank for money had and received by the board of education. The petition alleges the money was advanced to the hoard of education on a warrant issued by the board to its treasurer, and indorsed to the bank, and that the money was appropriated by the hoard and used in the payment of its obligations. It is conceded the warrant was not drawn in the method prescribed by the statute. and the action was not on the warrant, but one for money had and received. A general demurrer was sustained to the petition, and in support of the judgment it is urged that the petition does not state a cause of action, for the reason that it does not allege for what specific purpose the money was used, or that it was used in the payment of the legal obligations of the board of education.

The rule i's well settled that the measure of liability of a municipal corporation in such actions is the money actually held by the corporation or applied to lawful municipal uses. The obligation rests upon the broad principles of common honesty which will not permit the corporation to retain the money or the benefit of the money lawfully applied to' its use, merely because the warrant used as the means of procuring the money was not valid. In other words, the liability exists not because the money was advanced on a-warrant, or because the officers of the municipality had obtained the money and promised to pay, but because it was the money of the plaintiff used by the corporation for legitimate corporate purposes ; and the question in such an action is not what the claimant parted with to the officers of the municipality, who were not authorized to procure the money by the method used, or what the officers had promised plaintiff, but bow much had the municipality been benefited. If the money was not applied to the proper use of the municipality, there can be no recovery. On the other hand, if the money was used for lawful'purposes of the municipality, or still held by tbe municipality, then liability exists, and tecovery may be bad. Helm v. Mickleson, 66 Okla. 299 , *145 170 Pac. 704 ; Anderson v. Anderson, 65 Okla. 149 , 165 Pac. 150 ; Joiner v. Ardmore L.

& Tr. Co., 33 Okla. 266 , 124 Pac. 1073 ; Brooks t. Hinton St. Bank, 26 Okla. 56 , 110 Pac. 46 , 30 L. R. A. (N. S.) 807; Allsman v. Okla. City, 21 Okla. 142 , 95 Pac. 468 , 16 L. R. A. (N. S.) 511, 17 Ann. Cas. 184; Gaines v. Miller, 111 U. S. 395 , 4 Sup. Ct. 426, 28 L. Ed. 466 ; 1 Dill. Mun. Corp. §§ 126, 460, 461; Marsh v. Fulton Co., 77 U. S. (10 Wall.) 676 , 19 L. Ed. 1040 ; Chapman v. Douglas Co. Com’r, 107 U. S. 348 , 2 Sup. Ct. 62, 27 L. Ed. 378 ; Luther v. Wheeler, 73 S. C. 83. 52 S. E. 874 , 4 L. R. A. (N. S.) 746, 6 Ann. Cas. 754.

Under the provisions of our' statute (section 4766, Rev. Laws 1910), in construing any pleading for the purpose of determining its effect, its allegations must be liberally construed with a view to substantial justice between- the parties. And in an action for ■money had and received the general rule is that a petition alleging defendant is indebted for a certain sum for money duly paid, defendant, and unlawfully withheld from plaintiff after demand, states no cause of action. Richardson v. Moffitt-West Dr. Co.. 92 Mo. App. 515 , 69 S. W. 398 ; 27 Cyc. pp. 877, 878.

At common law the declaration was suffi-c'ont containing the allegation that defendant was indebted to plaintiff in a certain sum of money received by defendant and the promise to pay. Under the code practice it has- been held that no promised need be alleged. the liability existing, if) in equity and .good conscience the money should be paid. Tamm v. Kellogg, 49 Mo. 118 ; Mumford v. Wright. 12 Colo. App. 214 , 55 Pac. 744 ; Thompson v. Town of Elton. 109 Wis. 589 , 85 N. W. 425 .

The petition was good against a general-demurrer.

The judgment is reversed, and the cause remanded, with directions to overrule the demurrer.

All the Justices concur.