State, ex rel, v. Fronizer et al. [Vol. VIII, N. S.

We therefore hold that we have jurisdiction in this case, and that the prisoner should be discharged.

H. M. Rulison, L. B. Sawyer, E. M. Ballard and Froome Morris, for the petitioner.

Frank F. Dinsmore and Wm. L. Dickson, contra.

RECOVERY OF MONEY PAID ON ILLEGAL BRIDGE CONTRACTS. [Circuit Court of Sandusky County.]

THE STATE OF OHIO, EX REL M. W. HUNT, PROSECUTING ATTORNEY, V. S. M. FRONIZER ET AL.

Decided, May 19, 1906.

Actions-For Recovery of Moncy Wrongfully paid out of County Treasury-Section 1277-Empowering Prosecuting Attorney to Bring Suit-Auditor's Certificate that Money is in Treasury to Meet Contract-Failure to Comply with Requirement of Section 2834b with Reference to-Res Judicata-Voluntary Payment-Equitable Defenses.

1. Section 1277, Revised Statutes, as amended April 25, 1898, authorizing the prosecuting attorney to institute actions in the name of the state to recover back for the use of the county public moneys misapplied, withheld from, or illegally drawn out of the county treasury, or to recover for the benefit of the county damages resulting from illegal contracts, does not give to the public when thus represented by the prosecutor a new and different cause of action from any theretofore existing in its favor, but merely confers upon the prosecuting attorney authority to represent the public in suits upon causes of action which are not created by the statute and are not new. State, ex rel Schwartz, v. Zumstein et al, 4 C. C., 268, and Jones, Auditor, v. Commissioners of Lucas County. 11 C. C., 136, followed and approved; Jones, Auditor, v. Commissioners of Lucas County, 57 O. S., 189, doubted; Buchanan Bridge Co. v. Campbell et al, 60 O. S., 406, and Vindicator Printing Co. v. State, 68 O. S., 362, distinguished.

2. Moreover, this statute does not so operate upon causes of action as to change their nature, or remove any infirmities or conditions that may attach to them, or any defenses that may be interposed to them, such as res judicata or voluntary payment.

3. While a prosecuting attorney is empowered under this statute to institute an action for recovery of money paid for a bridge under an

illegal contract, recovery of the whole amount paid will not be permitted unless a willingness is exhibited to relinquish any claim of the county to the bridge.

4. Where the facts pleaded show good faith in all that was done, failure through inadvertance to file an auditor's certificate that the money needed to carry out the contract is in the treasury, as required by Section 2834b, does not necessarily render the contract so void that no rights or liabilities can grow out of the transaction; but where the contract has been repudiated, and there is no fraud claimed, and effort is being made to place the parties as nearly as possible in statu quo, the effort should be forwarded by the courts. *Affirming, State, ex rel Hunt, v. Fronizer et al, 3 N. P.-N. S., 303. Points from brief of Basil Meek, of counsel for plaintiff in

error:

For a statement of the facts in this action, reference is made to 3 N. P.-N. S., 303.

The question in this case is whether or not Section 1277, Revised Statutes, 1880, as amended in 1898 (93 O. L., 408), authorizes the recovery back by the prosecuting attorney of money paid on county commissioners' bridge contracts, void under Section 2834b, Revised Statutes, for the lack of the county auditor's certificate as therein required without first offering to return to the contractors the bridge structures erected by them and accepted by the county commissioners under such void contracts? The contention in other respects was decided in the common pleas court in favor of the plaintiff.

Prior to the amendment of 1898 payment on such void contracts, where they were not completed, could be perpetually enjoined, but if the injury had already been done by the completion of the contract and the payment of the money, the public was without remedy. On the other hand, if payment was so enjoined, no action could be maintained by the contractors for the recovery of the value or any part of it, of such bridge structure.

The case of The Buchanan Bridge Co. v. Campbell et al, 60 O. S., 406, is in point, and was one where a contract for bridge material was made in 1894, in disregard of the statutory requirements. The material had been furnished to completion, accepted by the commissioners and in use by the public. Payment of the contract price being perpetually enjoined, an action

State, ex rel, v. Fronizer et al. [Vol. VIII, N. S.

was brought to recover the fair value of such material. The Supreme Court held:

"A contract made by the county commissioners for the purchase and erection of a bridge in violation or disregard of the statutes on the subject, is void, and no recovery can be had against the county for the value of such bridge. Courts will leave the parties to such unlawful transactions where they have placed themselves, and will refuse to grant relief to either party." 60 0. S., supra.

The purpose of the amendment was to protect the public against the acts of county commissioners in disregard of statutory requirements as to their duty, whether acting ignorantly or otherwise, and to provide a remedy as full and complete for the recovery back of money actually paid on such void contracts as that previously existing to prevent such payment.

In the case of The Vindicator Printing Co. v. The State of Ohio, 68 O. S., 362, held:

"The act of April 25th, 1898 (93 O. L., 408), clothes the prosecuting attorney with power to recover back money so illegally drawn from the treasury on and after its passage.

And on page 372, the court say:

"Manifestly it is the purpose of this statute to re-imburse the treasury for unauthorized payment for it, not otherwise provided for."

This right of action is provided for tax-payers through the prosecuting attorney, and not for the county commissioners, nor for any other party to such void contracts. It is significant that no provision whatever is made in the amended act for any party but the public. All parties to such void transactions are left without remedy, just where they placed themselves.

If, as held in Bridge Co. v. Campbell et al, supra, no action could be maintained by the bridge contractor under such void contract for the recovery as upon an implied contract, of the fair value of the structure furnished, where payment of the contract price had been perpetually enjoined, it is difficult to see the consistency of holding that the structure itself shall be returned by the public in pursuing the remedy provided for it alone, not being a party to the void transaction.

This would be equivalent to holding that the bringing of an action to obtain the benefit of the remedy provided for the public, would operate to purify the unlawful transaction between the commissioners and the bridge company, or its agents. Equities do not arise from unlawful transactions. Parties seeking equity must have clean, not soiled, hands. The defendants were bound to, and did know the law (60 O. S., 425), and having acted in disregard of its provisions, did so at their peril, and must suffer the consequences, whatever they may be. The public had nothing to do in making such void contracts, nor placing the structures contracted for, and are under no obligations to restore them to the outlawed contractors or their agents. What such outlawed contractors might do toward reclaiming, and themselves removing such structures, is not a question in this case.

As held in Jones, Auditor, v. Commissioners of Lucas County et al, 57 O. S., 189:

"The board of county commissioners represents the county in respect to its financial affairs only so far as authority is given to it by the statutes."

It would seem that Judge Wildman in holding, in the court below, that the bridges should be returned, must have based his decision upon the theory that some act of the public by way of a rescission, is required to avoid these contracts notwithstanding Section 28346 declares them void, as he makes frequent use of the term "rescission."

The contracts involved being in contravention of law, null and void from the beginning-not voidable-no act of rescission. or restoration is required from the prosecuting attorney to the public, neither being a party to the contract.

"The act of rescinding is where a contract is canceled, annulled or abrogated by the parties or one of them." Black's Law Dict., "Rescission."

The author (Black) under this term quotes from 1 Cal., 281: "There is a distinction between rescission' and 'nullity.' Nullity takes place where the act is in contravention of the law Rescission is where an act, valid in appearance, conceals a defect which may make it null if demanded by any of

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State, ex rel, v. Fronizer et al. [Vol. VIII, N. S.

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the parties, as for example, mistake, fraud, force, deceit, want of age, etc. Nullity relates generally to public order and can not, therefore, be made good by ratification or prescription. So that the tribunals ought for this reason alone to decide that the null act can have no effect, without stopping to inquire whether the parties to it have or have not received any injury. Rescission on the contrary may be made good by ratification or by silence of the parties."

In other words, rescission and restoration apply to voidable contracts, and not to nullities such as are the contracts in the case at bar.

As to the application of the terms "void" and "voidable": 28 A. & E. Ency. (1st Ed.), 475, and note 2; 6 Metc. (Mass.), 415; 14 O. S., 68; 1 Ohio, 458, 468.

The amendment of 1898 being remedial should, like all remedial statutes, be construed liberally for the suppression of the mischief provided against and the advancement of the remedy. The old law, the mischief and the remedy are the points to be considered. 1 Cooley's Blackstone, 3d Ed., 86. In 31 O. S., 367, the court say:

"It is a rule of interpretation universally accepted that in giving construction to the statute, the court will consider the policy and the mischief to be remedied, and give it such an interpretation as appears best calculated to advance its objects by effectuating the design of the Legislature.

In 60 O. S., 425, supra, the court say:

"It is necessary to so construe the statutes in order to prevent the evils which induced the enacting of them. If such statutes could be evaded, there would always be found some public servants who would be ready and willing to join in transactions detrimental to the public, but favorable to themselves or some favored friend."

If such "public servants" and their "favored friends" were satisfied that the law would be construed to allow their beneficiaries to retain the money so unlawfully obtained, until such bridge structures should first be returned, they would not fear to ply their vocation, for they might reasonably conclude that the public would be slow to pursue a remedy having such a burdensome and impracticable condition attached.