School Dist. No. 61 v. Collins

• Decision Date: 09 February 1889
• Citation: 41 N.W. 466,6 Dakota 145
• Parties: School-District No. 61 v. Collins et al.
• Court: North Dakota Supreme Court

41 N.W. 466

6 Dakota 145

School-District No. 61 v. Collins et al.

Supreme Court of Territory of Dakota

February 9, 1889

Appeal from district court, Minnehaha county.

H H Keith, for appellant. R. J. Welles, for respondent.

TRIPP C. J.

This is an action upon a promissory note made to the plaintiff by the defendants, Collins and Anderson, for the sum of $150 and interest. The defendant Collins makes default. The defendant Anderson appears and answers, setting up three defenses: (1) He pleads a general denial.

(2) He denies specially the incorporation of plaintiff. (3) He alleges that Collins, his co-defendant, was, during the years 1882, 1883, 1884, 1885, and a part of 1886, treasurer of plaintiff school-district, and that as such treasurer he appropriated to his own use of the moneys of said district a sum exceeding $800, and that the note in controversy was given in consideration of the agreement, on the part of the district and its officers, that they and all other persons should desist and refrain from prosecuting and punishing said Collins for the crime of embezzlement, and for no other and different consideration whatsoever. At the close of the evidence on the part of the plaintiff and defendant, the court, on motion of plaintiff, directed a verdict in its favor for the amount of the note, and interest, to which the defendant Anderson duly excepted, and brings the case here for review upon the evidence.

Did the court err in directing a verdict for the plaintiff? The defendant rests his claim to have the case reversed upon two grounds: (1) That there was no evidence of plaintiff's incorporation; (2) that there was sufficient evidence of the illegal agreement entering into the consideration of the note to allow the case to be submitted to the jury. We shall not stop to consider the first point made by appellant at length as it was not seriously urged at the argument. Parties in private suits are not permitted to attack the incorporation of one with whom they have dealt in this collateral way. Eaton v. Aspin wall, 19 N.Y. 119; Methodist Episcopal Church v. Pickett, Id. 482; Stuart v School-Dist., 30 Mich. 69. But, having contracted with plaintiff as an incorporation, he is estopped to deny its capacity to so contract. Whitford v. Laidler, 94 N.Y. 151; Cowell v. Springs Co., 100 U.S. 55. Was the note void as against public policy? Section 184, Pen. Code, reads as follows: "Every person who, having knowledge of the actual commission of a crime or violation of statute, takes any money or property of another, or any gratuity or reward, or any engagement or promise therefor, upon any agreement or understanding, express or implied, to compound or conceal such crime, or violation of statute, or to abstain from any prosecution therefor, or to withhold any evidence thereof, is punishable," etc. And a similar provision is contained in the Code of Criminal Procedure, § 235: "A person may be indicted for having, with the knowledge of the commission of a public offense, taken money or property of another, or a gratuity or reward, or an engagement or promise therefor, upon the agreement or understanding, express or implied, to compound or conceal the offense, or to abstain from a prosecution therefor, or to withhold any evidence thereof, though the person guilty of the original offense have not been indicted or tried." Certain misdemeanors may be compromised by consent of the injured party upon order of the court, (sections 524, 525, Code Crim. Proc.,) but, except as therein provided, any agreement to conceal or compound an offense is a crime made punishable by fine or imprisonment, or both. And by section 953 of our Civil Code it is provided: A contract "is not unlawful which is (1) contrary to an express provision of law; (2) contrary to the policy of express law, though not expressly prohibited; or (3) otherwise contrary to good morals." So that any contract or agreement, express or implied, to knowingly conceal or compound an offense, to abstain from prosecuting therefor, or to withhold any evidence thereof, is made unlawful by the express provision of our law.

A. G. Brown, the treasurer of plaintiff district, and successor of defendant Collins, was examined as a witness on the part of the defendant. There were also examined on the part of the defendant, George H. Brace, a banker, J. E. Colton, county superintendent of schools, and the defendant Anderson in his own behalf. The co-defendant Collins was not produced as a witness, nor were the other officers of the district, except the director Lowell, whose evidence was not abstracted by appellant. It appears from the abstract that the plaintiff school-district, No. 61, was organized under the old school law of 1877; that the term of office of the defendant Collins expired in June, 1886; that upon the qualification of his successor it was discovered that Collins was behind in his accounts. It does not clearly appear what was the amount of the deficit, but in the negotiations of settlement it was claimed to be in the neighborhood of $800. There was much contention, it seems, between Brown, the new treasurer, and Collins and his friends, as to the immediate settlement of this alleged shortage. Collins was behind. After several weeks of negotiation the difference was finally adjusted by allowing Collins to make payment to the district of $200 cash, and to give his note, signed by Anderson, for $150, the balance agreed upon between the parties. The note so given is the note in controversy. We have examined this evidence with care, and are unable to extract from it anything that could be construed into a contract or agreement on the part of plaintiff district, or any one pretending to represent it, that "it would desist or refrain from prosecuting the defendant Colllins for the crime of embezzlement," or that "the note was given," in whole or in part, "to compound or settle" such crime, as alleged in the answer. The defendant Anderson testifies to some threats on the part of the treasurer, Brown, and there are vague statements running through the testimony of the witnesses that Brown said he would "stop the prosecution," and "would not prosecute him further," if Anderson would sign the note; and Anderson himself says, "I would not have signed it, [the note,] if he had not agreed to stop the prosecution;" but there is no statement anywhere by any of the witnesses that the "prosecution" referred to by the witnesses was a criminal prosecution, nor does it distinctly appear from the evidence what the terms of the agreement were, if such agreement was made. Mr. Brace, who makes many vague, indefinite references to the "threatened prosecution," and the "understanding" that "the prosecution would be stopped" if the note was given, when asked the direct question: "Was there anything said by Mr. Brown in relation to the district prosecuting or not prosecuting Mr. Collins, if this note was not given?" answered: "Mr. Brown stated that if he could get this settlement, they would settle all they claimed the district had against Mr. Collins, by the giving of this note and the money they received. They would settle the civil process of the district against Mr. Collins. The district never afterwards proceeded against Mr. Collins criminally, to my knowledge." Mr. Colton testifies to some "understanding" he had that the district officers were to take the money and note, and "leave matters just as they were; just stop further proceedings;" but he was not present at the settlement, and he testifies that "the most he knew was told him by the officers and those directly interested." Mr. Brown, the treasurer, and Mr. Lowell, the director, were both produced as witnesses, and not only denied that any agreement was made not to prosecute, but denied that any threats of prosecution were made.

In defenses of this kind, where it is sought to invalidate a written contract by parol evidence, it should be made to clearly appear that the agreement was in contravention of public policy. Vague and indefinite statements are not sufficient. The understanding or agreement relied on must be positive and certain; entered into and relied upon by both parties. Says Judge CALDWELL in Swann v. Swann, 21 F. 299: "No court ought to refuse its aid to enforce a contract on doubtful and uncertain grounds. The burden is on the defendant to show that its enforcement would be in violation of the settled public policy of this state, or injurious to the morals of its people. Vague surmises and flippant assertions as to what is the public policy of the state, or what would be shocking to the moral sense of its people, are not to be indulged in." Says the Lord Chief Justice in Walsh v. Fussell, 6 Bing. 163: "To hold a contract void on the ground of its impolicy or inconvenience, we ought to be clearly satisfied that the performance of it would be necessarily attended with injury or inconvenience to the public." In Malli v Willett, 57 Iowa, 705, 11 N.W. 661, one witness being asked what the consideration was, said that A. wanted to "prosecute" B. for adultery with his wife, and the note "was executed so as not to have any fuss with him about it,--to settle up that matter." The court held that the design to compound a criminal prosecution did not clearly appear; and that a verdict should have been for the plaintiffs. Says Chit. Cont. 664: "An agreement is not void on this ground, unless it expressly and unquestionably contravenes public policy, and be manifestly injurious to the interest of the state." Iowa likens it to declaring a law unconstitutional and void. Says Judge COLE in Richmond v. Railway Co., 26 Iowa, 202: "The power of courts to declare a contract void for being in contravention of sound public policy is a very delicate...