Fergus County v. Osweiler

Counties ? Illegal Contracts ? Constitutional Law ? County Deposits in Insolvent Bank ? Postponement of Obligation Owned by County by Taking Note of Bondsman ? Right of County to Enforce Payment ? Appeal and Error. Appeal and Error ? Correct Judgment, Wrong Reason Therefor ? Affirmance. 1. Where, on appeal, it is found that the conclusion of the trial court in a case tried without a jury is correct, the judgment must be affirmed even though the court may not have given the correct reason therefor. Constitutional Law ? Release or Postponement of Obligation Owned by County Prohibited ? Purpose of Constitutional Provision. 2. The provisions of section 39, Article V of the Constitution, declaring that no obligation or liability of any person, association or corporation held or owned by the state or any municipal corporation therein shall, inter alia, be postponed by the legislative assembly, nor in any way extinguished except by payment thereof into the proper treasury, were designed for the benefit of taxpayers by protecting the obligations and liabilities owned by state and municipal corporations. Contracts ? Exception to Rule That Party to Illegal Contract cannot Enforce It. 3. While, generally, a party to an illegal contract will not be permitted to enforce it, an exception uniformly accepted by the courts is that where refusal to enforce would produce a harmful effect on parties for whose protection the law making the transaction illegal was enacted, enforcement is allowed. Same ? Counties ? Insolvent Bank ? County Taking Note of Bondsman on Depository Bond ? Illegality of Note Under Constitution ? Action on Note ? Countys Right to Enforce Payment. 4. Held, that where the funds of a county deposited in an insolvent bank were secured by a depository bond executed by a number of individuals, and the board of county commissioners offered to release a bondsman from further liability if he would make a cash payment of a given amount or execute a promissory note for such amount payable within four years, and the bondsman signed such note but after making several payments thereon defaulted, he, on suit being brought on the note, claiming that the note was illegal and void as offending against the provision of section 39, Article V, of the Constitution, in that its execution was an attempt to postpone an obligation or liability owned by the county, defendant under rule 3 above, was not in a position to raise the question of the illegality of the note, and that the county could enforce payment. - Page 467