Bay v. Davidson

• Decision Date: 13 March 1907
• Citation: 111 N.W. 25,133 Iowa 688
• Parties: B. C. BAY ET AL., Appellees, v. J. S. DAVIDSON ET AL., Appellees, WOOD BINNING, Appellant
• Court: Iowa Supreme Court

111 N.W. 25

133 Iowa 688

B. C. BAY ET AL., Appellees, v. J. S. DAVIDSON ET AL., Appellees, WOOD BINNING, Appellant

Supreme Court of Iowa, Des Moines

March 13, 1907

Appeal from Decatur District Court.--HON. H. M. TOWNER, Judge.

ACTION in equity for an injunction. The opinion states the case. From a decree in favor of the plaintiffs, the defendant Wood Binning appeals.--Affirmed.

Decree affirmed.

C. W Hoffman and M. L. Temple, for appellants.

V. R McGinniss and Marion Woodard, for appellees.

OPINION

BISHOP, J.

The plaintiffs are residents and taxpayers of the town of Grand River, in Decatur county. The defendants are, respectively the mayor and members of the town council of said town, among whom is defendant Wood Binning, who alone appeared and answered. It is alleged in the petition that said defendant Binning is a merchant in said town, and that during the year 1903 he sold and delivered to and for the use of the town certain lumber, paints and oil, and machinery, which were used by the town in constructing and repairing sidewalks mowing weeds, etc. The prayer is for an injunction restraining payment therefor. The answer admits the sale of the merchandise, and alleges that the sale was upon open market, in good faith, and for the reasonable value; that at the time there were but two merchants in and proximate to the town from whom such merchandise could be purchased, viz., the answering defendant, and one Griffin; the latter also a member of the town council. In addition, said defendant alleges that the fact of his furnishing lumber, etc., for sidewalks, crossings, etc., was well known to plaintiffs and the other residents and taxpayers of said town, and that no objection was ever made thereto; that accordingly plaintiffs are estopped. The answer was met by a general demurrer, and, upon being submitted, the demurrer was sustained. Defendant electing to stand on his answer and the ruling on the demurrer, decree was entered as prayed in the petition.

In our opinion the ruling upon the demurrer was correct and the decree entered should be sustained. Plaintiff's principal reliance was upon the provisions of Code, section 668, subdivision 14, which provides that no members of any council shall be interested, directly or indirectly, in any contract or job for work, or the profits thereof, or services to be performed for the corporation. And it is the argument in this court, as it was in the court below, that the statutory prohibition by fair intendment includes sales of merchandise to the town by a member of council. The trial court declined to adopt this view, but held that such contracts of sale must be held void in virtue of the common law. We agree that such contracts are not within the statute. The prohibition has relation to "contracts or jobs for work." It is plain that the expression "contract or job" is to be construed in the conjunctive. What was intended was to forbid in connection with municipal work the employment by the council of one of its own members. And this is rendered more probable when we consider that, as held by the court below, contracts such as are here in question are not only prohibited by statute, but by general law. The compensation to be paid a councilman is fixed by Code, section 669, and it is exclusive of any other. It cannot be increased either by direct payment, or indirectly through the medium of profits on sales of goods. As pertinently said in Council Bluffs v. Waterman, 86 Iowa 688, 53 N.W. 289, if an officer feels that he is not properly compensated for the services required of him, there is no law to prevent him from resigning. The following cases are also in point: Fawcett v. County, 55 Iowa 154, 7 N.W. 483, Moore v. District, 55 Iowa 654, 8 N.W. 631, Moore v. County, 61 Iowa 177, Adams County v. Hunter, 78 Iowa 328, 43 N.W. 208, Massie v. County, 129 Iowa 277, 105 N.W. 507.

Now, by general law contracts of sale as here shown cannot be upheld because they are not only violative of the fundamental law of agency, but are contrary to public policy. The defendant Binning was an officer and agent of the town, and the duty and obligation which the law cast upon him in such relation forbade him from acting in any transaction for himself as an individual on the one part, and as an officer and agent of the town on the other part. And it can make no difference that in the particular transaction he refrained from voting for the purchase of goods as made. It was his duty to vote, and he could not reap an advantage by avoiding that duty. As said by Judge Dillon in his work on Municipal Corporations, section 444:

It is a well-established and salutary rule in equity that he who is intrusted with the business of others cannot be allowed to make such business an object of pecuniary profit to himself. This rule does not depend upon reason technical in character, and is not local in its application. It is based upon principles of reason, of morality and of public policy. It has its foundation in the very constitution of our nature, for it has authoritatively been declared that a man cannot serve two masters, and is recognized and enforced wherever a well-regulated system of jurisprudence prevails. One who has power, owing to the frailty of human nature will be too readily seized with the inclination to use the opportunity for securing his own interest at the expense of that for which he is intrusted. . . . The law will in no case permit persons who have undertaken a character or a charge to change or invert that character by leaving it and acting for themselves in a business in which their character binds them to act for others.

See, also, People v. Board, 11 Mich. 222; City of Ft. Wayne v. Rosenthal, 75 Ind. 156 (39 Am. Rep. 127); Gas Co. v. West, 28 Neb. 852 (45 N.W. 242); Smith v. City, 61 N.Y. 444.

In the case last cited it appeared that a committee of the city of Albany, having in charge a celebration, had hired carriages of Smith, a member of the council, and he sought to recover compensation from the city therefor. In refusing to recognize his claim the court said: "The council of the city were the agents of the city, and, while holding their relation to it, each member of that body was under such an obligation of absolute loyalty to the interests of the city, as prohibited him from entering into any arrangement with his associates by which his individual interests could come in...