Adams v. Williams

52 So. 865 | Miss. | 1910

Whitfield, C.,

delivered the opinion of the court.

The facts in this case are as follows: P. I. Williams was duly elected secretary and treasurer of the board of levee commissioners for the Yazoo-Mississippi delta levee district, on the 13th day of March, 1906, and thereafter on the 17th day of May, 1906, the said Williams qualified to act as such treasurer in the following manner, to wit: The said P. I. Williams applied to the iEtna Indemnity Company of Hartford, Conn., to become surety for him on his official bond, which the indemnity company did. The condition of said bond, amongst other things, provided for the faithful performancé and discharge of the duties pertaining to the office of the treasurer. The said indemnity company became surety on the said bond, at the instance of said Williams, and was paid a valuable consideration by the board of levee commissioners, to wit, the sum of $300 per annum, for which sum 'the said surety company presented its bill, which bill was duly approved and allowed and regularly paid from the fluids belonging’ to said board of levee commissioners, and the receipt warrant duly filed, and the payment of said sum audited and approved by the said levee commissioners. Said bond was delivered to said Williams, who' was both the secretary and the treasurer of the said board, by the .¿Etna Indemnity Company. The said F. I. Williams failed to sign the bond, but he accepted the same as his official bond, and in compliance with an act of the state legislature, entitled an act to amend an act to incorporate the board of levee commissioners for the Yazoo-Mississippi delta and for other purposes, approved February 28, 1884, and an act to change the domicile of said board and for other purposes, approved January 19, 1886, said Williams filed said bond for record with the clerk of the chancery court of Coahoma county, and after the said bond had been regularly recorded he, as secretary of the said board, received said bond and kept the same in his possession, among other records and papers belonging to said board, until the expiration of his term of. office.

The original bill further alleged that by virtue of said bond, which was ratified, accepted, and adopted by himself, he entered upon the discharge of the duties of the treasurer, and received the salary and compensation provided by law, and did not disclose to the board of levee commissioners the fact that his said bond had not been signed by himself; that said bond served as his official bond during his entire term of office, and was recognized and treated as such, by both Williams and the ¿Etna Indemnity Company, and the board of levee commissioners. The original bill further alleged that the said F. I. Williams deposited the money or funds belonging to said board of levee commissioners with various banking institutions; that the money was placed to his credit as treasurer of said board; that said banking institutions, with whom the said money was deposited •or to whom it was loaned, paid to the said F. I. Williams interest on the public money so deposited; but, while the said Williams accounted to the said board for all moneys paid to him as treasurer by order of the board, he failed, neglected, and refused to account to the levee board for the money paid him as interest or commissions on the public funds. This interest he appropriated to his individual personal use, making no entry of the receipt thereof on the books of account, making no report thereof to the board of levee commissioners, and concealing from the said board the fact that he had received said interest. He never accounted to the board for the interest so received, by him, and now fails, neglects, and refuses to pay the sum over tb the said board, or in any way to account for the same. These are the allegations of the bill which was demurred to; the demurrer of course admitting all the allegations of fact. The object of this suit was, of course, tb compel Williams to pay the board the moneys received by him as interest. To this original bill, Williams and the .¿Etna Indemnity Company filed separate and distinct demurrers. These demurrers were both submitted to the court below on one hearing, and are to be so,considered by this court.

The questions presented for decision by these demurrers are as follows: First, are the matters involved in this allegation properly cognizable by a court of equity ? Second, has the said revenue agent a-right to maintain this suit, suing for the board of levee commissioners ? Third, does the fact that the principal, Williams, failed to sign his official bond, render the instrument void as to the /Etna Indemnity Company, which did sign it? Fourth, if the bond in the case is void, does the chancery court lose its jurisdiction, or has it the power to determine the question as to the liability of the principal, without regard to the . bond ? Fifth, is the surety on this official bond liable for interest received on the public funds by the principal, Williams ? Sixth,, is the treasurer of the levee board required to pay into' the treasury money received by him as interest on the funds intrusted to his keeping ? We entertain'no doubt whatever that under section 161 of the Constitution the chancery court had jurisdiction to try this ease; it being a suit on the bond of Williams, a fiduciary and a public officer. Code 1906, § 556, is a rescript of section 161 of the Constitution of 1890. The proposition that the revenue agent is not the proper parly to maintain this suit is answered completely by Code 1906, § 4739, in which the duties of the revenue agent are described, and by which it is made the duty of the revenue agent to investigate the accounts of levee board officers and to maintain suits against them. This power has been recognized by this court already. State v. Hill, 70 Miss. 106, 11 South. 789.

Turning to one of the propositions now most seriously urged by the appellee to sustain the action of the court below, which sustained the demurrers and dismissed the bill, to wit, that the bond was void because Williams never signed it, we are clearly of the opinion that this contention cannot be maintained successfully under our statutes and decisions. It is to be noted that the surety in this case became such for a valuable consideration, $300 per annum. The case mainly relied on by the appellee is the case of State v. Martin, 56 Miss. 108. The case was decided in 1878 under the Code of 1871. The Code of 1880 materially changed the law regarding liability on official bonds. Section 403 of the Code of 1880 provided the condition of official bonds, and then added that this provision was declaratory only, and that a failure to observe the form therein prescribed should not vitiate any official bond, but that all official bonds should be valid and binding in whatever form they might be taken, whether in the proper penalty or without any penalty, whether correct or incorrect in their recitals of any hind, whether properly payable or not, and whether approved by the proper officer, or not approved at all, and whether irregular in any other respect whatever, if only such bonds should be delivered as the official bond of the officer and serve as such. This section expressly provided that such bonds should be obligatory on every one who should subscribe them as such. This provision was not in the Code of 1871. Section 403’ of the Code of 1880 is section 3463 of the Code of 1906, and was section 3055 of the Code of 1892. The obvious purpose of the legislature, in the passage of this section of the three Codes of 1880, 1892, and 1906, was to make an official bond binding on all who subscribed it without regard to any irregularity whatever, and whether the instrument should be signed by the principal or not. This last point, which is conclusive of the contention here, was expressly held in Gloster v. Harrell, 77 Miss. 793, 23 South. 520, 941, 27 South. 609. This case is much stronger for appellants than the Gloster case, in which also there was a demurrer, because in the Gloster case it was admitted that the bond was not signed or adopted by the principal Ratcliff, and that he did not request the sureties to sign it, and that he did not even know that any of the sureties had signed it; whereas, in this ease, the allegation, admitted by the demurrer, is that the .Ætna Indemnity Company signed at -the instance and request of Williams, and that Williams ratified and adopted the bond, and that he, himself for the board, paid the surety $300 per annum. The fact, therefore, that Williams failed to sign the bond is of no avail to the appellees.

It must be kept in mind that the bond in this case is a joint and several obligation, and this is an answer to several cases cited in brief of learned counsel for appellees; as, for example, Sacramento v. Dunlap, 14 Cal. 421, and People v. Hartley, 21 Cal. 585, 82 Am. Dec. 758. The bonds in those two cases were joint and not several, nor is the statute of California identical at all with our statute. Code 1906, § 3463. The liability of Williams as treasurer was fixed by the law, and was not affected' by his failure to subscribe the bond. Under our statutes, the plain purpose of Code 1906, § 3463, was to hold both the principal and the sureties on the official bonds liable without any regard to irregularities whatsoever, if only the bond served as the official bond during the term for which it was given. The purpose of the law was to declare, emphatically, that no official, and no surety on any official bond, should be relieved of’ liability thereon, provided only that such bond was accepted, and that such bond served as the official bond intended by law. The statute is grounded in the highest possible considerations of justice and right. It is not to be tolerated that Williams, or the surety here, shall come into a court of conscience, when this official bond had served the same purpose precisely that the bond would have served had he signed it,' and quibble about liability with the state or the levee board, whose treasurer he was and whose funds he handled. It comes with poor grace from the ¿Etna Indemnity Company — this technical quibbling — when it knew, or had every reason to know, that the bonds had not been signed by Williams, and when it was scrupulously careful to collect every year its $300 paid to it for its signature to the' bond. There was not the slightest obstacle to its ascertaining the fact that Williams had not signed, by the exercise of the very slightest degree of care. We said, in the case of Oloster v. Harrell, and we reiterate now, that “it is not for the treasurer or his sureties, the money of the levee board being traced to his hands by competent evidence, to find shelter in the fact that his bond was not approved by resolution; neither he nor they can be heard to make such defense.”

Another contention of learned counsel for appellees is that the bond is void because it contains conditions not prescribed by tlie statutes. In other words, because it contains the following conditions: “And it is further provided that the said surety shall not be liable to the obligee by reason of public moneys being now deposited, or hereafter placed or deposited with any bank depos-itory, or depositories; it being the true intent and purpose of this bond to indemnify said obligee from any loss by reason of the personal acts only of said principal to the extent of the penalty of this bond subject to the terms, covenants, and conditions thereof.” But the bond had the proper condition, that said Williams “should properly account for and dispose of the money coming into his hands -for the Yazoo-Mississippi delta levee board and should faithfully perform all other duties devolving upon him as such treasurer.” The act of 1884 (Laws 1884, c. 168), providing for' the creation of the levee board, and fixing the condition of this bond, provided that the treasurer should give bond “conditioned for the prompt and efficient discharge of the duties required by him, to be performed under the provisions of this act for the safekeeping, accounting for and paying over all moneys, property or effects that may come into his custody.” It is perfectly obvious that the condition of. the bond as written is a substantial compliance with the condition prescribed above by the said act of 1884. The bond as executed had the condition the law required, and the addition to the condition of the bond, which we have hereinbefore set out, is mere surplusage. If the bond contained, as executed, the conditions which the law required, the sureties can neither add to, nor detract from, those conditions by anything, they may choose to insert. The law fixed, the liability of the treasurer, and of the sureties, and the law' prescribed the exact conditions on which liability should attach, and it is not for the principal nor for the sureties, nor for both, by any evasions or subterfuges or adroit efforts to escape the law, to add anything that should have any effect on the conditions in the bond required by the law. The law declares all such surplus conditions absolutely void, and this is expressly laid down in the case of Johnson v. Erskin, 9 Tex. 1, cited by learned counsel for appellees. This ease was decided after the case of Mays v. Lewis, 4 Tex. 1, and Lawton v. State, 5 Tex. 210. And in addition to all this, the express language of Code 1906, § 3463, ends all controversy along this line. So as the conditions in the bond do not provide for the performance of an act in violation of the law, the form of the conditions is immaterial, provided only the bond served its office as his bond. In the case of State v. Smith, 81 Miss. 651, 40 South. 22, we said: “When one signs what purports and is intended to be an official bond, whether as principal, obligee, or surety, the law writes in all necessaiy recitals. No other interpretation of the statute can subsist without disturbing the whole governmental system and ignoring the plain intendment of the legislative department.” We thinh section 3463 applies to the bond of the levee treasurer as well as to all other official bonds, and it is immaterial as to whom the bond of the treasurer was payable, the state or the levee board. We held that this statute applied to a municipal treasurer, although his bond was payable to a municipality. Gloster v. Harrell, supra. There can be no sort of doubt, on any rational view, that this section 3463 of the Code of 1906 does apply to the bond of the treasurer of the levee board, and that such bond is an official bond, within the meaning of that section. See, in this connection, United States Fidelity Co. v. Union Trust Co., 142 Ala. 532, 38 South. 177.

Consider for one moment tke preposterousness of tke claim of Williams and of kis surety. Tkis surety received tke $300 per anniun every year through Williams himself, as the secretary and treasurer of tkis board. Williams drew kis salary regularly as suck treasurer. He exercised full authority and control of tke funds of tkis board which were committed to his charge by virtue of this bond. In other words, from the beginning to the end of his term of office, he exercised in all respects the same authority and control over these funds, and in all other respects as treasurer, that he could possibly have exercised had he signed the bond, and had it been in -absolutely perfect technical harmony with the statutes. He was bound to 'have known that he had not signed the bond, and, under the facts of this case, this surety company was also bound to have known that this bond had not been signed by Williams. To argue to the contrary is superficial to the last degree, and will not bear analysis.

Williams was both secretary and treasurer of this board. As secretary, he was the lawful custodian of all records, bonds, etc., belonging to said board. At his election, he applied to the .¿Etna Indemnity Company to become his surety. That company did so for a valuable consideration, and properly executed and delivered to Williams the bond. Upon receipt of this bond, Williams had it filed and recorded by the clerk of the chancery court of Coahoma county. When it was recorded, it was returned to him as secretary of the board, and was 'held by him until the expiration of his term of office. By authority of this bond, he collected his salary, received and controlled hundreds of thousands of dollars of the people’s money, and enjoyed all the privileges of the office. Never once did he indicate to the board that he had failed to sign this bond. In the face of these facts, it is worse than idle for either Williams, or the surety company, to attempt to escape liability on the ground that the bond was not signed by Williams. No such defenses will be tolerated in a court of conscience, on the facts in this record.

Since we hold that the bond was not void, it is, of course, unnecessary to discuss the question whether, if it had been void, and surety released, equity would have had any jurisdiction.

We come now, after disposing of these preliminary matters, to the real point in this case, the soul of the whole controversy, and that question is: Can Williams and his surety be held for the interest he received for the use of this money by the bank % The duty which the law — Act 1884, § 6 — put upon Williams was, amongst other thing's, “to safely keep, account for and-pay over all moneys, property or effects that might come into his custody as treasurer, under that act and by direction of said board, as said board might require or direct.” This obligation the law wrote into his bond. In addition to the condition just above recited, it is further provided by section 6 of the act of 1884 (Laws 1884, p. 140, § 6) as follows: “In addition to the duties herein specifically required of him, it shall be the duty of the treasurer to receive, safely keep and account for all moneys required to be paid to, or received by, him, by the provisions of this act, or by the direction of said board; and all-other moneys, property and effects for which he is properly accountable as such treasurer.” We think the necessary intendment of this concluding clause was to hold the treasurer liable for everything that might come into his hands by virtue of his office. The act first made him accountable for any money paid to him by virtue of any act of the legislature. It then made him accountable for all moneys which might come into his hands in the usual way, and then, out of abundance of caution, this last clause was added, providing that he should be liable for all other moneys for which he, ás such treasurer, might be accountable.

The appellees contend that the interest collected by Williams came into his hands colore officii, that he got it as a result of wrongdoing, and that the surety cannot be held liable therefor, any more than the surety could be held liable for the act of the , treasurer in robbing a bank or holding up a train. This court disposed of this contention as applied to the facts in this case in the following language in Lewis v. State, 65 Miss. 468, 4 South. 429: “There has been much quibbling in the books in behalf of the sureties on official bonds, who are sought to be held responsible for the misconduct of their principals as to whether the act of the officer was done 'colore officii/ or ‘virbube officii/ While the liability of the surety is not to be extended beyond the terms of his agreement, the public is entitled to some consideration as well as the sponsors of unfaithful public officers, and it must be remembered that if an official, under bond to-faithfully discharge the duties of his office, does an act as such officer injurious to the county or to others in regard to a subject over which he has jurisdiction and control, his sureties cannot escape liability for the act, no matter by what technical name it may be called.”

In the same case, it is said, at page 472 of 65 Miss., at page-430 of 4 South., speaking of the circuit clerk: “Construed.according to its manifest scope and legal import and-with reference to the subject-matter to which it relates, the bond was a contract by which Bracy and his sureties covenanted and agreed, in effect, not only that he would faithfully perform the duties enjoined by law, but that he would not, by virtue or under color of his office, commit any legal act to the injury of the county or-others. Indemnity to this extent is within the terms of the bond, and the contemplation of the law which required it to be given.” Again, in the same case, at page 473 of 65 Miss., at. page 430 of 4 South., the following passage is quoted with approval from the case of the People v. Treadway, 17 Mich. 480: “If such an officer is to be regarded as acting unofficially whenever he violates his duty, it is not easy to see what object there-can be in requiring official bonds. They are not meant to be mere formalities, and they can only be made to secure against the consequences of some sort of misdoings. Their object is to-obtain indemnity against the use of an official position for wrong purposes, and that which is done under color of office, and which would obtain no credit except from its appearing to be a regular-official act, is within the protection of the bond and must b© made good by those concerned.” We think this quotation states the principle, which is the soul of the whole controversy on this subject. Neither the officer nor his sureties can be liable while he has violated no law; and if it is to be held that the mere fact that he has, in his official capacity, violated some law, constitutes the release of the sureties, then the very object for which the bond was given fails, and there had just as well be no bond .at all.

The argument here, in large part, is that because section 29 of the acts of 1884, approved February 28, 1884, made it a misdemeanor for any one intrusted with the custody or disposition of any money intrusted to his'care by virtue of his office to use such money for his own benefit, therefore the sureties are not liable if the treasurer violates this section, and this contention has two branches: First; that the condition of the bond itself is, as provided by law (Code 1906, § 3463), that official bonds shall be valid except “insofar as they may be conditioned for the performance of acts in violation of the laws of the state;” and, second, “that it never could have been within the contemplation of the sureties that they should become liable for the acts of Williams, the treasurer, which amounted to a violation of any law.” So far as the first proposition is concerned, it has no application to the condition of the bond involved. Of course, if there was a condition in the bond providing for the. violation of some law, the condition would be utterly illegal, and sureties would not be bound for a violation of such condition. This is not that sort of case. There is no statute prohibiting the treasurer from depositing the funds in a bank, nor was there any statute prohibiting his contracting for interest, provided he had done what he ought to have done, ■contracted for the interest to be paid to the. levee board, which ■owned the money. The treasurer, in depositing the money in the (bank, deposited it by virtue of his office, under authority of' his office, and was fully within the right and law of his office, in so doing'. His wrong consisted in abusing that power, by making the interest payable to himself instead of to his principal, whose money he had loaned. The Renfroe case, infra,. decided in Georgia, is wholly unlike this case in this respect, on its facts, though we do not desire to be understood as approving the principle of that case in any respect.

As to the second proposition above, that it was not within the-contemplation of the sureties in this case that it should become-liable for an act of Williams in violation of the law, the answer is that the surety company accepted it with the knowledge of the-law as set forth in section 6 and section 29 of the act- of 1884 (Laws 1884, p. 140). Section 6 provided that the treasurer should execute a bond “for the faithful performance of the-duties of his office, and also conditioned for .the prompt and efficient discharge of the duties required of him to be performed under the provisions of this act, and for the safe-keeping, accounting for, and paying over all moneys, property, and effectstliat may come into his custody and possession under this act, and by direction of said board, as said board might require; audit contained this further provision: “In addition to the duties herein specifically required of him, it shall be the.duty o'f the treasurer to receive, safely keep and account for all moneys required to be paid to, or received by him, by the provisions of this act, or by the direction of said board; and all other moneys, property and effects for which he is properly accountable as-such treasurer.” The surety knew, when it signed the bond, that this was the law of the bond, and that Williams was, by the conditions- aforesaid last-recited, especially required to account for all other moneys for which he was properly accountable as treasurer, and to pay over to the board all moneys required to be paid over by the law. These moneys coming into-his hands were the money and property of the board, and not his money, and the interest, which was a mere accretion on this ■money, was payable, like the property to which it was an accretion, to the board, whose property the same was. Because thereof, the surety knew of these conditions in the bond, and ■because these conditions required the treasurer to pay over all increments on the fund to the levee board as well as the principal, this defense is unsound. The act of Williams in depositing the money in the bank was legal, and an act done “virbute officiif the abuse being his applying the interest to his individual use in violation of section 29. The case of State v. Harney, 57 Miss. 863, and of Adams v. Saunders, 89 Miss. 784, 42 South. 602, are direct authorities in support of this proposition; that the act of Williams in taking this interest for his own use was an illegal act, done, however, by virtue of his office, and an act that could not have been done except by virtue of his office, and because he was such treasurer and handled this vast sum of money. What all the world knew, this court certainly knows, to wit: That the moneys which Mr._Williams deposited in the bank came from and through the levee board whose property the money was.

One of the authorities chiefly relied on by the counsel for the appellees to show that the act of Williams in this case in taking the interest payable to himself was done colore officii, but not virtue officii, is the case of State v. Conover, 28 N. J. Law, 224, 78 Am. Dec. 54, in which it was gravely held that a sheriff, who, having an execution against A., levied upon the property of B.-, was not thereby guilty of a breach of his official bond, and that his sureties were not liable. Such nonsense as this has long since been exploded by the march of modem jurisprudence. Mr. Freeman,- in his note to this case, at pages 64 and 65, states “that the weight of authority clearly shows the contrary proposition” from that laid down in the principal case to be the law. There can. be no rational doubt, on the allegations of this bill, that this money of the levee board was loaned by Williams, as treasurer, under and by virtue of his office, and because he was such officer, and the argument that it was not so done is wholly unsatisfactory on principle or sound authority. But the learned counsel for the appellees have two other contentions upon which they earnestly insist: First, “that Williams was an absolute insurer of all levee board money which came into his possession or under his control, by virtue of his office, and therefore was not liable to account to his principal for this interest.” And second, that the legal title to all moneys which thus came into his possession vested in him, as an individual, and that, being an insurer of .such money, the relationship of debtor and creditor immediately arose between him and the levee board, and therefore he was only legally liable to account for the exact amount so received by him, and not for any interest.

The leading authority in support of these views is the case of the State v. Walsen, 17 Colo. 170, 28 Pac. 1119, 15 L. R. A. 456. Indeed, this is the only case directly in support of thesviews. The states of Indiana, Kentucky, Colorado, and the territory of New Mexico, in effect, sustain this doctrine, resting their decisions, however, not on general principle wholly, but upon their particular statutes. The Georgia case (Renfroe v. Colquitt, 74 Ga. 618) rested in part upon a special statute, but may be classed as substantially supporting this view. All the authorities along this line are reviewed in the McFetridge case, 84 Wis. 473, 54 N. W. 1, 998, 20 L. R. A. 223, and this whole line of reasoning repudiated as utterly unsound. The courts of the states of New York, Ohio, and Wisconsin, and the territory of Oklahoma, held the direct opposite of the Colorado supreme court, and, after a most- careful examination and comparison of these conflicting authorities, we announce our approval of the doctrine of the McFetridge case, and our repudiation of the doctrine of the court of Colorado as announced in the Walsen case. See Richmond County Supervisors v. Wandell, 6 Lans. (N. Y.) 33; Eshelby v. Cincinnati Board of Education, 66 Ohio St. 71, 63 N. E. 586; Thompson v. Territory of Oklahoma, 10 Okl. 409, 62 Pac. 355; McFetridge case, 84 Wis. 473, 54 N. W. 1, 998, 20 L. L. A. 223. And see also sjoecially United States v. Mosby, 133 U. S. 273, 10 Sup. Ct. 327, 33 L. Ed. 625, in which the United States supreme court approves the doctrine of' the McFetridge case. The supreme court of the United States said that the moneys in that case were public moneys, and that any interest on them was an increment belonging to the owner of the funds, the government, and it expressly stated that, whilst the counsel in that case was not required to put the funds out at interest, yet, if in fact he did, the accretion belonged to the 'government. The supreme court of New York, in the Wandell case, supra, said very pertinently: “The notion that a’ public officer might keep back interest which he has received upon a deposit of public money as a prerequisite of office is an affront to law and morals, and such act is nothing more than an embezzlement.” The great underlying principle here is that the interest on this money logically, legally, and necessarily belongs to whoever owns the money. The use of that money earns the interest. 'The interest is a mere increment to the principal fund, and it is impossible, on any clear thinking in logic, or in law, to escape the conclusion that the interest is necessarily payable to the owner of the principal fund. "Whenever, therefore, the question is settled as to who owns the principal fund, all the rest follows without difficulty. Nothing more is necessary to show who is the owner of this fund than a reading of our statutes. Always and everywhere, public money is referred to and treated as the property of the state, or the county, or the' levee board, etc., etc. In no just legal sense can it be possible to say that the treasurer, Williams, was the owner of this money; that he had the legal title to this money in the sense that the money was his absolutely. He is the custodian of the money. He handles -the money, he deals with it, but he has the custody, he handles it, deals with it for, and on account of, his principal, the levee board. The money is the money of the levee board. If Williams died, the money did not go' to the administrators of his estate as Williams’ money. It would pass into the hands of his administrator, temporarily only; but it is made the statutory, legal duty of his administrator to promptly pay over the money to the proper authorities. Code 1906, §§ 3485, 3486. See Bank v. Fogg, 80 Miss. Y50, 32 South. 285, a case which supports the appellant, not the appellee, and shows that the money is the property of the levee board.

It is a very singular confusion of mind into which some courts have fallen, when they say, as is argued for appellee, that, if an officer is absolutely bound as an insurer, therefore any interest which he receives on the money is his, and not the state’s. As well remarked by Judge Newman, quoted in the McFetridge case: “Nobody ever heard of the claim that a common carrier, by reason of its absolute liability, became the owner' of the goods it carried.” And in the main case (84 Wis., at page 517, 54 N. W., at page 11, 20 L. R. A., at page 237) the court says: “While such absolute liability of the treasurer will be assumed, for the purposes of the case, it seems to us that no such conclusion necessarily results therefrom. The treasurer may well be held liable absolutely *£or all money of the state coming into his hands, and be held liable also for interest on deposits. As stated in another form, such absolute liability does not estop the state to maintain that such interest was received by the treasurer, by virtue of his office, and belongs to his office.” And this we think is plainly sound. It is a complete non sequitur to say that, because Williams was an absolute insurer, therefore the interest belonged to him. The two principles have no relation whatever to each other. Once settled clearly and definitely whose money the principal sum was, the interest necessarily belongs to that person as an increment to the principal fund, and to argue to the contrary is simply to lose one’s self in a metaphysical fog of sophistry, failing to give effect to the central principle of right and justice, making the interest the property of the party who owned the principal sum. As said by the court in the McFabridge case again: “It has already been held herein that the public funds were lawfully deposited by Treasurer MoFetridge with the banks, and that he lawfully, received from such banks compensation by the way of interest for the use of such deposits.” Under those circumstances, and in the absence of any statute separating the interest from the funds and diverting it to other uses, such interest was an accretion or increment to the fund, thus becoming a part of it, and logically and necessarily belongs to the owner of the fund, to wit, the state.

It is immaterial that the treasurer stipulated for interest on the deposits, or that the banks paid him such interest, or that both the treasurer and the banks thought he should retain the interest as his own, believing that he was entitled thereto. Such intention and belief cannot affect the ownership of the interest, or its essential character as a portion of the public funds in the hands of the treasurer. Notwithstanding such intention and belief, the interest was, in fact, paid to the said treasurer, and belonged to his said office, within the meaning and intention of the bond in suit. A lawful act cannot be rendered unlawful merely because the actors intended to follow it by an unlawful act. So when the treasurer lawfully received money, which of right belonged to his office, he receives it by virtue of his office, and cannot, by forming and executing an intention to retain the money as his own, divest the act of receiving the money of its official character. It remains that he received it “virfute officii." In the light of these principles, the contentions above referred to by the learned counsel for the appellee all fall to the ground. In the Furlong case, 58 Miss. 717, the act was illegal. The act here of depositing the money was not illegal, and the citation of the Furlong case is beside the mark. In the Eshelby case, supra, it was said: “It does not follow from the absolute liability of the treasurer that the funds coming into his hands are his, nor that upon the receipt of money in his official capaeity the relation of debtor and creditor is established between himself and the district. On the contrary, it is quite clear that, instead of being the debtor of the district, he is its treasurer, the custodian of its funds, and that he acquires control of the funds, without acquiring title to them.”

Speaking of its own statutes, which for this purpose are just as our own, the court, in the McFetridge case, 84 Wis. 473, 54 N. W. 1, 998, 20 L. R. A. 223, says: “From beginning to end, they are entirely inconsistent with the theory that the legislature intended by the enactment of any of them to vest the said treasurer with the legal ownership of the public moneys which come into his hands, thus making him merely the debtor of the state in respect thereto. If such were his relation to the state, it would be difficult to show that such funds were not subject to be seized for his debts, or, in case of the death of the treasurer in office, that the same would not go to his administrator as part and parcel of his estate; the state being, perhaps, a preferred creditor. It is inconceivable that any legislature intended such results, and there is nothing in any statute which forces the conclusion that they did so say. A close analysis of the above statut&s, or any extended discussion of them, is quite unnecessary. A perusal of them is sufficient to carry conviction to ihe mind that the legislature never. intended to divest the state of its title to the public funds, in the hands of its treasurer, and the consequent control over these funds which results from ownership thereof.”

The learned counsel on both sides in this case have filed briefs of signal ability, showing the most exhaustive research. It follows that the court below erred in sustaining the demurrers of the defendant Williams, and the defendant the .¿Etna Indemnity Company. These decrees are therefore both reversed, both demurrers overruled, and the cause remanded, with leave to answer within thirty days from the filing of the mandate in the court below.

Per Curiam.

The above is adopted as the opinion of the court.

Reversed and remanded.

Case Details

Case Name: Adams v. Williams

Court Name: Mississippi Supreme Court

Date Published: Mar 15, 1910

Citation: 52 So. 865

Court Abbreviation: Miss.