84 Wis. 473 | Wis. | 1893
Lead Opinion
The following opinion was filed January 10, 1893:
This case, and that of State v. Harshaw, post, p. 532, which involves substantially the same legal questions, were argued together in this court. It is proper and just to say at the outset that the arguments contain abundant evidence of the great labor and research bestowed upon the cases by the able counsel of the respective parties to the controversy. We acknowledge our obligations to counsel for the great aid we have derived from their arguments. We shall not discuss all the propositions argued, and shall refer to comparative^ few of the numerous cases and authorities cited in their support, although we have carefully examined large numbers of them. These citations will be preserved in the report of the cases. We think the determination of these cases must be controlled by the construction which is given to certain statutes concerning the rights, duties, and liabilities of the state treasurer ancl the sureties in his official bond, and by the application of certain principles which are quite elementary in the law. With these preliminary observations, we will proceed to consider the McFetridge Case.
The alleged failure of the state treasurer, the defendant Edward C. McFetridge, to perform his duties as one of the commissioners of the public lands in the investment of the trust funds in the treasury, under secs. 258, 258a, 262a, S. & B. Ann. Stats., which is assigned in the complaint as a breach of the condition of the bond in suit, has no significance on this appeal, for the reasons that no findings in
It is strongly urged on behalf of the defendants that, although the treasurer may be liable to the state in some form of action for the money thus received by him on account of such loans or deposits, yet, unless the sureties are also liable therefor on the bond in suit, there can be no recovery in this action against the treasurer. This is probably a correct statement of the law.. At least, for the purposes of this case it will be so regarded. In determining whether the sureties are liable on the bond for the alleged breach thereof, it will not be forgotten that their liability must not be extended by mere implication beyond the letter of their undertaking. This court has always held rigidly to this rule. In its latest deliverance on the subject, in Drinkwine v. Eau Claire, 83 Wis. 428, in the opinion by Mr. Justice Pinney it is said: “The liability of a surety is st/rict/lsswni juris, and cannot be extended by implication. He has a right to stand on the exact words of his contract. ‘ The bond speaks for itself, and the law is that it shall so speak, and that the liability of sureties is limited by the exact letter of the bond, and, if the words will not make them liable, nothing can.’. There is no con
In the light of the above rule we are to determine whether there has been any breach of the condition of the bond in suit, to the injury of the state, for^which, under legal rules, the sureties can be held liable on their bond. If there has been such breach, it is of the condition that “ said Edward C. McFetridge shall deliver over to his successor in office ... all moneys . . . belonging to his said office.”' As a matter of course, if he has not done so there is also a breach of the condition that he “ shall faithfully discharge the duties of the said office of state treasurer,” one of which duties is to deliver to his successor, at the expiration of his official term, all moneys belonging to his office remaining, or which should be, in his hands. It will be assumed for the purposes of the case that, if the deposits in question were made without lawful authority, the interest thereon was illegally received by the treasurer, and that in such case there is no liability therefor on the official bond of the treasurer. If the money received by Treasurer McFetridge-from banks as interest on the state funds loaned to or deposited with them was lawfully received by him, and if the same belonged to his office as state treasurer, — ■ that is to say, if such interest is of right the money of the state, and not of the treasurer in his individual capacity,— it was his duty to deliver or pay over the same to his successor in office, and his failure to do so is a breach of the condition of his bond for which he and his sureties are liable, in an action at law thereon, to the extent of the money thus' received and not accounted for. Hence the question is, Was the money-received by Treasurer McFet-ridge from the various banks as the consideration of his depositing the public funds with them lawfully received by him, and, if so, does it belong to the treasurer individu
If we correctly understand the argument on the part of the defendants, it is that on either of three propositions or hypotheses the money here in controversy belongs to the treasurer individually. These propositions are:
First. The legal title to the public money which came to the hands of Treasurer McFetridge is in him, and not in the state; that the relation between him and the state was that of debtor and creditor only, and hence that it is no concern of the state what the treasurer did with the public money, or how much profit he made out of it, provided he accounted properly for what he received; that his obligations to the state were fully performed when he paid or delivered to the persons entitled thereto the amount of money which he received in the first instance; and hence that the sums received by him from the banks in which he deposited the public funds, as interest on such deposits, whether paid to him as a gratuity or pursuant to a previous agreement or understanding, belonged to him individually, as incident to the legal ownership of the money.
Second. The deposit of the public funds in banks by Treasurer McFetridge was without authority of law, and it was not in the contemplation of the state or the sureties in his official bond that he would make such deposits and receive interest thereon. Hence liability for such interest, even though the state may recover it of the treasurer, is not within the true intent and meaning of the condition of his bond, and the sureties are not liable therefor.
Third. If the first proposition above stated is negatived and the state held to be the owner of the public funds that came to the hands of Treasurer McFetridge, he is still absolutely liable on his bond' to account for and pay over to the persons entitled thereto, or deliver to his successor in office, all such funds. Because he is thus absolutely liable therefor, the ordinary liability of a trustee to account to his cestui que
We now proceed to consider the above propositions in the order stated, and the determination of them is believed to be decisive of the judgment which ought to be rendered in the case.
I. It is assumed for the purposes of the case that, if the legal title to the public funds which lawfully came to the hands of Treasurer MoFein'idge was vested in him, there can be no recovery by the state, either against him or the sureties in his official bond, for any profit he may have made by the use of such funds. The question whether the state is the owner of the public funds in the hands of its treasurer, or whether the legal title thereto is in the treasurer, must be determined by the statutes prescribing the rights, duties, and liabilities of the treasurer. These statutes -will be referred to and considered as briefly as possible.
Sec. 152, R. S., is as follows: “The treasurer shall keep his office at the capitol, shall receive and have charge of all money paid into the state treasury, and shall pay out the same as directed by law.’-’ Sec. 153 requires him to give a bond, with sureties, conditioned (among other things) for the faithful discharge of the duties of his office, and that he shall deliver to his successor in office, or other person authorized to receive the same, all moneys, property, etc., “belonging to his said office.” Sec. 154 requires the governor to exact an additional bond of the treasurer in several contingencies, one of which is, “ whenever the funds in the treasury shall exceed the amount of the treasurer’s bond.” Sec. 151, subd. 1, makes it the duty of the treas
The above statutes were all in force when, and for a
Before leaving this branch of the case it may be observed that, in the argument of this appeal, the question of the ownership of these funds was not made as prominent as it appears to have been on the trial of this and the Harshaw Case in the circuit court. At least one of the counsel in the latter case conceded that the state remains such owner. However, all of the counsel for the defendants who participated in the argument disclaim that they conceded in
II. Was the deposit by the treasurer in banks, in his name of office, of the public funds in his hands belonging to his office, which were deposited subject to his draft therefor at any time as such and only as such treasurer, an unauthorized and illegal use of those funds? Many adjudications elsewhere hold the doctrine that, if the treasurer rvas prohibited by law to make such deposits, he is not liable to account to the state for any interest received by him thereon. So far as we have been able to discover, none of the adjudications contain a very satisfactory statement of the principle upon which they rest. But we suppose it to be that such unlawful deposit of the funds is a conversion thereof by the treasurer to his own use,.as indicated in Sargeant v. Downey, 49 Wis. 528, and other cases in this court, the measure of damages for which conversion is the sum thus converted, Avith interest thereon from the time he should have paid the money to the creditors of the state, or delivered the same to his successor in office, as required by law. If, before any lawful demand therefor, the treasurer thus pays over or delivers the amount so converted by him, the damages which the state might otherwise have recovered of him and his sureties are satisfied, and the right @f action is gone, although he may have made gains by Avay of interest, or otherwise, out of the money thus converted.
Eor reasons hereinafter stated it is unnecessary to determine AAffiether, if the treasurer illegally made such deposits,
These deposits were made in the name of the treasurer, in his official capacity as such. No time of credit was given upon them, but they were payable whenever required by the treasurer, and they could only be drawn on the official draft or check of the treasurer. They were made in accordance with the usual and long-continued course of business in that department of the state government. They were not made primarily for the purposes of gain or profit to the treasurer, but because the exigencies of the business of the department, and the reasonable convenience of creditors of the state, rendered it almost absolutely necessary that state funds should be kept in different portions of the state, and in the cities of Chicago and New York, against which the treasurer might draw to pay appropriations. Such methods had prevailed, and deposits had been made in banks, and drawn against, by all the different state treasurers, for thirty years or more before the execution of the bond in suit. A large portion of the public funds were thus kept on deposit during that whole period, and disbursed through the instrumentality of tens of thousands — even hundreds of thousands — of drafts or checks
It may correctly be assumed, we think, that if the making of such deposits was prohibited at all the prohibition must be found in one or more of the following statutes: Secs. 152, 155, 160, Ml9, R. S., above referred to, and the provisions for the investment of the trust funds, being secs. 258, 258a, 262a, S. & B. Ann. Stats. It is maintained in behalf of the state that under secs. 152 and M19 it was the duty of the treasurer to pay out, or deliver to the persons entitled thereto, the same identical coin and currency paid into the treasury, and that the deposits in question came within the provision of the latter section, making it a crime on the part of the treasurer to loan or deposit the public funds for his own gain, profit, or advantage, without special authority, which of course would render the deposits unlawful. Also, that under sec. 159, until lawfully paid out, it was the duty of the treasurer to keep such coin and currency in the vaults of the treasury, which is claimed to be the vault or safe in the treasurer’s office in the capítol; and, further, that the deposit thereof with banks by the treasurer, on his own responsibility, was an investment of the funds prohibited by secs. 160, 258, S. & B. Ann. Stats. These statutes will now be examined with
First. It is claimed that the provision in sec. 4419, E. S., making it prima facie evidence of embezzlement if any officer or other person who has the care, custody, or possession of the money or property of another, loans or deposits it for his own gain, profit, or advantage, without special authority, prohibits the state treasurer from making the deposits in question, inasmuch as he made them with the intention of converting to his own use (and afterwards did so) any interest the banks should thereafter pay him on such deposits. The question is, therefore, Were the deposits in question made for the gain, profit, or advantage of Treasurer McFetridge, within the true intent and meaning of that provision V We are of the opinion that this question must be answered in the negative. To subject a public officer to the serious penalties of the statute there must be something in the character and incidents of the deposits to show that he has disregarded the obligations of his trust in making the same, or it cannot justly be said that he deposited the money for his own gain, profit, or advantage. So long as his actions are within the line of his duty he is not an embezzler, although he may intend at some future time unlawfully to appropriate to his own use the trust funds, or some portion thereof, or the interest realized thereon. The deposits under consideration (assuming that there was no other legal objection to the making thereof) were regularly made by the treasurer, in his official capacity as such, for the benefit of the state, and .could only be drawn on his' official draft. The authority to contract for interest on such deposits is as broad as the right to make them, for the statutes contain no special restriction in the matter of such interest. True, there was a question between the treasurer and the state as to which
Had the treasurer made such deposits in his individual name, and it could be proved that he did so for the pur
We conclude, therefore, that Treasurer MoFetridge did not commit a criminal offense under sec. 4419 when he made the deposits in question.
Second. The next question is: Do sec. 152 and the provision of sec. 4419, above quoted, require that the treasurer shall keep and pay out the same identical money he received by virtue of his office,— that is to say, the same specific coin or currency thus received by him ? The above statutory provisions have their origin in R. S. 1849, ch. 134, sec. 30, or perhaps at an earlier date, and are retained in R. S. 1858, ch. 165, sec. 34. Said sec. 30 required any person having public funds in his hands to “ pay over the same money that he may have received in the discharge of his duties.” The object sought to be attained by such statutes is very plain. Their enactment was due to the fact that a large portion of the circulating medium of the country -consisted of bank notes, which passed freely as money but were not legal tender for pecuniary obligations. The value of this kind of currency was constantly fluctuating. When depreciated, treasurers were liable to be tempted to purchase it at a discount-with more valuable funds, perhaps coin, in their hands, and pay the public creditors with such depreciated currency at the face value, thus making for themselves the amount of the discount. That this practice prevailed to a considerable extent in the times when such depreciated currency was in circulation, to the manifest injury of public creditors and the disgrace of the public service, is well known. The law was enacted, and has since been retained, to prevent such dishonesty and wrong. Inasmuch as, practically, all the currency now in circula
Third. Was Treasurer McFetridge required by law to keep, in legal tender coin or currency, all the public funds in his hands as treasurer in the vaults of the treasury? If so, he could not, of course, lawfully make general deposits thereof in banks. The claim that such was his duty is rested solely upon the provisions of sec. 159, R. S., which has already been copied at length herein. This section was first enacted in 1876, and stands as sec. 5, ch. 340, of the laws of that year. It is arguéd that the term “the vaults of the treasury ” means the iron vault or safe in the office of the state treasurer in the capítol, and that the term “ money,” as employed in the statute, means the actual coin and currency of the country. This construction is, we think, too narrow, for it ignores the customary and neces
On the contrary, in addition to the conditions already mentioned, it is well known that a large portion of the revenues of the state — ninety per cent, thereof, it is said — ■are paid into the treasury in the form of checks, drafts, and certificates of deposit. The construction of sec. 159 ■contended for would require the treasurer to demand that the revenues of the state should be paid to him in lawful money, that is, legal tender funds, or else would compel him to collect such checks, drafts, or certificates of deposit in lawful money, and place the proceeds, and other money thus received by him, in the vault in his office, in order to he prepared for the official inspection of the governor and' attorney general. It is impossible to impute any such absurd intention to the legislature.
It may be conceded, for the purposes of the case, that such restricted construction of the statute in respect to what is meant.by the term “ vaults of the treasury” is the correct one (a proposition we might hesitate to hold were it necessary definitely to determine the meaning of the term), but we^cannot agree that the word “money,” as there employed, means only the actual coin and currency in circulation as money. Such a construction would be extremely ^technical, and is, we think, uncalled for. “ Money ” is ^.generic term, and may mean, not only legal-tender coin and currency, but also any other circulating medium, or any instruments or tokens in general use in the
Certificates of deposit, or other vouchers for money deposited in solvent banks, payable on demand, are a most convenient medium of exchange, and are extensively used in commercial and financial transactions to represent the money thus deposited, and as the equivalent thereof. Hence the same are “ money,” within the meaning of sec.. 159, and its requirements in that behalf were complied with by the treasurer if, in their examination under that section, the governor and attorney-general found “ in the vaults of the treasury ” the amounts called for by the books of the secretary of state and treasurer, although portions thereof were in such certificates or vouchers.
We conclude there is nothing in sec. 159 which rendered it unlawful for Treasurer MoFetridge to make the deposits in question.
Fourth. Was the making of such deposits a violation of sec. 258, S. & B. Ann. Stats., which expressly prohibits the investment of the trust funds in any manner not authorized thereby, or of sec. 160, which bj^ implication prohibits the treasurer from making investments of any other funds in the treasury without the approval of the governor? By those statutes such investments are restricted to the purchase of bonds of the United States, and of several states specified in sec. 258, and to loans to counties, towns,
The 'distinction between a general deposit of money in a bank payable at any time on demand, and an investment of such money, is plain and substantial. By such a deposit the .depositor does not lose control of the money, but may reclaim it at any time. True, he loses control of the specific coin or currency deposited, but not of an equal amount of coin or currency having the same qualities and value, which, as we have seen, is all that is required of him.
But if the funds in the treasury are invested in United States or state bonds, or in loans on time to counties, cities, etc., the treasurer loses control thereof, and the same cannot be replaced in the treasury until such bonds are paid or sold, or such loans become due and are collected by due course of law. The retention by the treasurer of substantial control over the funds in the one case, and his loss of such control in the other, mark the leading distinction between a mere deposit of the funds and an investment thereof, as those terms are used in statutes. This principle was applied by the supreme court of Pennsylvania in the case-of Law’s Estate, 144 Pa. St. 499. In the opinion of the court we find the following language: “ A deposit is where a sum
We are of the opinion, therefore, that in making the deposits in question with banks Treasurer McFetridge did not invest the state funds, and hence that he did not thereby violate the statutes which prohibited him from so doing.
It is believed that the foregoing discussion covers all the reasons urged in support of the contention that the deposits in question were illegally made and interest thereon illegally received by Treasurer McFetridge.
Our conclusion on the second principal proposition or hypothesis above stated is that Treasurer McFetridge did not violate any law of the state when he made general deposits of the state funds with banks, subject to his drafts therefor, payable on demand. It follows as a corollary to such conclusion that it was not unlawful for him to stipulate for payment by the banks of interest on such deposits, and to receive such interest. It is understood — indeed, is a matter, of common knowledge — that when the present state treasurer, Mr. Hunner, went into office, he continued the former practice of depositing the funds in banks and exacting and receiving interest thereon, but, contrary to such practice, he accounted to the' state for such interest, "by charging himself therewith in his account with the state, and paid out the same as the money of the state. In all
On the theory that the deposits in question were illegally made and interest thereon illegally received, it was claimed on the argument for defendants that it is essential that the legislature waive such illegality, and ratify those transactions of the treasurer, before the state can maintain this action. It is said that, in the absence of such ratification, the state is claiming the fruits of illegal transactions. Whatever force there might be in this position were the money sought to be recovered the proceeds of an illegal contract, it ceases to be significant after it has been determined that the transactions through which the money was obtained were legal. If there has been a breach of the condition of Treasurer McFetridge's official bond to the injury of the state, it was the duty of the attorney general, on request of the governor or secretary of state (which request will be presumed), to bring suit on such bond, and special legislative authority to do so is not essential to the maintenance of the (action. R. S. sec. 163.
III. Having détermined that the public funds which came to the hands of Treasurer McFetridge belonged to the state, and that he violated no law when he deposited such funds in banks' and stipulated for and received interest thereon, we are next to determine the third and last proposition or hypothesis of the defendants, which is that the treasurer was absolutely liable to the state on his official bond for all the money of the state which came to his hands by virtue of his office, and that, because of such absolute liability, any interest he may have realized on such deposits belonged to him individually. 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
The case of State v. Walsen, 17 Col. 170, recently decided by the supreme court of Colorado, is much relied upon by counsel for defendants to sustain their contention. Like this action, it was brought by the state on the official bond of a former state treasurer, against him and his .sureties therein, to recover interest received by such treasurer on deposits of public funds made by him in banks, which interest was retained by him to his own individual use. It was held by the trial court on demurrer that the complaint failed to state a cause of action against the treasurer or his sureties, and the supreme court affirmed a judgment for defendants in such demurrer. We understand that the judgment in that case is rested by the court on two separate and distinct grounds, to wit: (1) IJpon the statutes of that state; and (2) upon the absolute liability of the treasurer to account to the state for the public funds which come to his hands.
As to the first of these grounds. In March, 1889, one branch of the Colorado legislature, pursuant to a practice which seems to be’ authorized in that state, submitted to the supreme court certain questions relative to the validity of certain proposed legislation affecting the care, custody, and control of the public funds. In answering those questions the court took occasion to say: “ It is eminently proper, and in view of sec. 13, art. X, of the constitution it
But, as before stated, the court also rested its decision upon the further and independent ground that, because of the absolute liability of the treasurer to account to the state for all funds coming to his hands by virtue of his office, he cannot be required to account for interest received by him on the public funds thus deposited. This is laid down as a
Perhaps the most effectual way to test the existence of the alleged rule is to examine the cases on the authority of which the Colorado court held that it existed. These are Rock v. Stinger, 36 Ind. 346; Shelton v. State, 53 Ind. 331; Renfroe v. Colquitt, 74 Ga. 618; Comm. v. Godshaw (Ky.), 17 S. W. Rep. 737. Other cases are cited to the proposition that the liability of a public officer for public funds is not necessarily, perhaps not usually, that of an ordinary bailee or trustee of money or property, who must always account to his bailor or cestui que trust for gains and profits made by him out of the trust estate. These last-mentioned cases will not be especially considered, for the proposition to which they are cited is undoubtedly correct. The liability of the treasurer in this case must be measured and determined by the statutes prescribing his duties and obligations. It is not sought to charge him with any mere common-law liability of a trustee or bailee.
In each of the Indiana cases cited it was held that the treasurer was the owner of the fund received by him as such treasurer, and for that reason he was relieved from the obligation to account for interest which he realized thereon. Renfroe v. Colquitt, 74 Ga. 618, like this and the Walsen Case, was an action on behalf of the state, against the state treasurer and the sureties in his official bond, to recover interest on deposits of public funds, which interest the treasurer failed to account for to the state, but appropriated the same to the use of himself and others. Like the Colorado case, it came before the supreme court of Georgia on writ of error from a judgment for defendants upon demurrer to the complaint. If we read the opinion of the majority of the court correctly, it was held that it appeared from the complaint that, ip making such deposits of the public funds, the treasurer violated a penal statute
Comm. v. Godshaw, 17 S. W. Rep. 737, is in some respects a very peculiar case. It was brought in behalf of a county upon the official bond of a county officer designated as “ trustee of the jury fund.” Under the statutes of Kentucky in force from 1880 to 1886, this officer received for disbursement large sums of money, some of which lawfully remained unexpended in his hands a considerable time. In 1886 the statute was repealed, and another enacted in its place, requiring that the portion of the fund not required for immediate use should be paid to another officer. For some insufficient reason (as the court held) the fund was all paid
The foregoing seem to be the cases most relied upon to sustain the proposition that Treasurer McFetridge and his sureties are relieved from liability on his official bond for the interest claimed, because of his absolute liability to the state for the public funds received by him by virtue of his office. With all due deference to the able courts which
It has already been held herein that the public funds were lawfully deposited by Treasurer McFetridge with the banks, and that he lawfully received from such banks compensation by way of interest for the use of such deposits. Under those circumstances, and in the absence of any statute separating the interest from the fund 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 without stipulation, both the treasurer and the banks intending that he should retain the same as his own amd 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 state 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 receives money which of right belongs 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. The fact remains that he received it mrtute officii. This is a most salutary rule, -which should never be departed from unless clearly abrogated by some statute. We find no such statute in this state.
Probably some of the above decisions were influenced by special statutes; at least, such seems to be true of the Illinois cases. Yet it is believed that in all those cases the general rule of law is laid down and enforced, which, as applied to this case, is that the interest on the deposits in question received by Treasurer McFetridge was an increment to the funds of the state deposited by him in banks in his official capacity, and that the right to such interest was' thereby vested in the-state, and on receipt thereof by Treasurer McFetridge it became and was money in his hands belonging to said office. He not having accounted therefor, this action by the state on his official bond to recover the same may be maintained.
A large majority of the adjudications cited in the arguments of the case, aside from those specifically commented upon herein, may be classified as follows: (1) Those which hold that the officer owns the public funds which came to his hands, and for that reason cannot be required to account for gains derived therefrom. (2) Those which hold that, although the officer is not the owner of the funds, if he unlawfully use the same for his own profit, his gains cannot be recovered in an action on his official bond. (3) Those which hold that he is not such owner, and that
Having determined that the fund thus deposited in banks by Treasurer McFebridge belonged to the state, we assume the accuracy of the rule held by the cases in the second class above mentioned, and under the rule of the cases in the fourth class, which we approve, we hold Treasurer Mc-Fetridge and his sureties liable in this action for the interest in question.
Brief reference will now be made to the argument that •certain legislation in 1876 went upon the theory that theretofore interest on deposits was a lawful perquisite of the treasurer, which was cut off by such legislation, and restored by the Eevision of 1878.
In February, 1876, Mr. Kuehn, who had just entered upon a second term as state treasurer, in reply to a resolution of inquiry, stated to the senate that during his first term as such treasurer he received between $24,000 and $25,000 as interest on deposits of state funds, which he claimed the right to retain as his own money in accordance with the alleged practice of his predecessors in office. In March of that year the legislature enacted ch. 341, Laws of 1876, fixing the salary of the state treasurer at $5,000 per
Whatever force there may be in the above argument, as applied to the interest retained by state treasurers before 1878, we think the omission of the term “perquisites ” from the revision of that year had no significance when*applied to such retention of interest after that date. When the statute provides that the salary of the treasurer shall be “ in full for all services rendered by him in his official capacity,” it cuts off all fees and perquisites as effectually as though the same were specially prohibited. After such statute took effect, but for other provision therein, the treasurer could not lawfully have exacted fees. But because the legislature desired to continue the collection of fees for the benefit of the state, it provided therefor and
It has also been suggested that weight should be given to the alleged fact that it was well known — was really a matter of common knowledge — that all the state treasurers for more than thirty years before 1891, constantly received and retained to their own use interest on deposits of public funds, without objection by the legislature or other authorities of the state. However the fact may have been before 1878, there is no sufficient proof that the people or legislature, or the executive or administrative officers of the state, generally, had such knowledge, although, as a witness puts it, “ it was in the air ” that the practice prer vailed after the legislation of 1876 took effect. There is much testimony tending to show that the practice was kept from the knowledge of the public as far as practicable.
Moreover, if every citizen and officer of the state knew that the practice prevailed, it would be difficult to show that a usage which takes from the state and gives to one of its officers, without authority of law, large sums of money belonging to the state, could be upheld as a valid custom.
In determining this case the court has adopted many of the views of the learned circuit judge, but withholds its approval of others. Inasmuch as we arrive at the same conclusion reached by him, although by different processes of reasoning, it is unnecessary further to discuss the propositions in his very able opinion which we are not prepared to adopt.
By the Court.— The judgment of the circuit court is affirmed.
Upon a motion for a rehearing it was contended on behalf of the appellants that the judgment allowing interest upon the claim of the state against the treasurer and his sureties from the expiration of his term of office was erroneous. The right of action was not complete until demand made. Until then there was no breach of the condition of
For the respondent, in opposition to the motion, it was argued that the right of action in favor of the state was complete upon the failure of the outgoing treasurer to account for and pay over these interest moneys, and no previous demand was essential to such right of action. Joint School Dist. v. Layford, 27 Wis. 506; Kewaunee Co. v. Knipfer, 37 id. 496; Milwaukee Co. v. Pabst, 70 id. 352, 371; Fond du Lac v. Moore, 58 id. 170; Remington v. Ward, 78 id. 539; Supervisors v. Wandel, 6 Lans. 33; Monroe Co. v. Clark, 92 N. Y. 391. The amount of these interest moneys was known to the treasurer and capable of being accurately ascertained at any time. Interest was therefore chargeable on the account. School Dist. v. Dreutzer, 51 Wis. 153; 11 Am. & Eng. Ency. of Law, 386. Although interest was not expressly reserved in the bond, it was implied by the nature of the contract. It therefore became a part of the .obligation, and is recoverable as of right. This proposi
The following opinion, entitled as in this case and also as in the case of State v. Sawyer and others (post, p. 532), was filed April 11, 1893:
Rehearing
Motions for rehearing are made in these cases upon the ground that interest should not have been allowed upon the interest moneys received by the treasurers from the date of the expiration of their respective terms of office, but only from the time of the commencement of these actions, or, at most, from the time when demand was made. The ground is taken that these demands
By the Court. — Motions denied.