Do I have a case?

What is the name of your state? Pennsylvania I was a Mayor in a small town. I got in personal trouble , nothing to do with the town. Two members of council called the prosecutors office and accused me of stealing from the town. A investigation was done and no wrong doing on my part was found. Do have grounds for a civil suit against them or the town. the whole council voted to do this investigation with them. So I feel I have a case against the town council.

Probably not. You would likely need to prove they had no probable cause and perhaps malice. This would be extremely difficult if not impossible. Since you were not prosecuted your options are few unless you can prove you were directly damaged as a result of the investigation. This does no include a being embarrassed or PO’d..

The fact that it was done by the whole body will make it all the more difficult. When it was presented to the DA/Commonwealth Attorney it was proper to investigate.

When in public office the standards are different and you are subjected to closer and public scrutiny. While distasteful, it is probably prudent to let it pass and move on.

I would avoid your new "friends" like the plague.

It really depends on the specifics.

There is a possibility of a defamation action against those who accused you of theft (the two council members - not the whole town council), if you can show this false accusation was made with actual malice and was known to be false at the time it was made and, in addition, it damaged your reputation in the community.

However, you said that you also had some "personal trouble", and if this personal trouble involved criminal activity of some sort, or affected your reputation in the community, then it would be hard to prove that the accusations of theft were the sole reason your reputation has been damaged - in which case a defamation action against the two council members would probably not be successful.