Buhrer v. Baldwin

• Decision Date: 16 July 1904
• Citation: 100 N.W. 468,137 Mich. 263
• Court: Michigan Supreme Court
• Parties: BUHRER, County Treasurer, v. BALDWIN et al.

100 N.W. 468

137 Mich. 263

BUHRER, County Treasurer, v. BALDWIN et al.

Supreme Court of Michigan

July 16, 1904

Error to Circuit Court, Wayne County; Robert E. Frazer, Judge.

Action by Charles A. Buhrer, as Wayne county treasurer, against Stephen Baldwin and others. From a judgment for plaintiff defendants bring error. Affirmed.

Tarsney & Fitzpatrick, for appellant Baldwin.

F. H. &amp G. L. Canfield, for appellants Farwell and Mills.

Ormond F. Hunt, Pros. Atty. (C. D. Joslyn, of counsel), for appellee.

CARPENTER, J.

August 20, 1895, Alexander I. McLeod, county treasurer of Wayne county, the board of auditors of said county, and A. Ives &amp Sons, a copartnership engaged in the business of banking in the city of Detroit, entered into a written agreement whereby said A. Ives & Sons agreed to 'receive and safely keep all such surplus funds of the county of Wayne as may be offered or deposited by the treasurer and board of auditors of said county, and to reimburse or pay the same to said treasurer or his successor in office, or whoever may be lawfully entitled to receive the same, whenever called for and to pay interest on said surplus funds * * * at the rate of 3 1/2 per cent. per annum, to be computed on daily balances.' On the same day the defendants signed a writing guarantying 'the full payment of any and all sums and balances which may become due to the treasurer of the county of Wayne or his successor in office upon or by virtue of the above and foregoing agreement, according to the terms and conditions thereof.' At the expiration of the term of office of said Alexander I. McLeod there was a balance in the hands of said A. Ives & Sons, deposited by virtue of the foregoing agreement, of $5,630.

A check for this amount was given by said McLeod to plaintiff, his successor in office. Plaintiff, instead of having the check cashed, passed the same to his credit as county treasurer on the books of said A. Ives & Sons, who, about 15 months thereafter, became insolvent. This suit is brought to obtain this balance by enforcing the contract of guaranty. It is brought in the name of the county treasurer, 'for the use and benefit of the county of Wayne,' by the prosecuting attorney of said county. Plaintiff recovered verdict and judgment in the court below. Defendants seek to reverse that judgment, for several reasons.

1. It is insisted that the suit cannot be maintained in the name of the county treasurer. We think this objection is answered by Berrien County Treasurer v. Bunbury, 45 Mich. 79, 7 N.W. 704.

2. It is insisted that no action can be maintained on the writing signed by defendants, because it was executed in violation of law. The law in question is Act 393 of the Local Acts of 1879. This act made it 'the duty of the county treasurer of the county of Wayne to deposit daily his entire receipts from all sources, and all moneys, drafts or checks on hand, to the credit of the county of Wayne, in such bank or banks, incorporated under the laws of this state or of the United States, as may be designated by the treasurer and the board of auditors of said county as the depository of the funds of the county.' The act makes it a felony for the county treasurer to violate its provisions. It is contended that as A. Ives & Sons was a partnership, the deposit in question in its bank was prohibited and made a felony by this statute, and that, as a consequence, the undertaking of the defendants was an illegal contract, which cannot be enforced. If this suit is to be regarded as the personal suit of the county treasurer, who has violated the statute, there would be great force in this contention. It is earnestly insisted that the court should so regard it; and it is said that, if this action should fail, the county will lose nothing, since it is fully indemnified by the bond of the county treasurer. We cannot regard this suit as the personal suit of the county treasurer. The form of the declaration, the prosecution of the suit by the prosecuting attorney, the objection already discussed and disposed of all indicate that it is a suit by the county to recover its money. The fact, if it be a fact, that the people of the county of Wayne have double security for this money, is a circumstance of no legal importance. If they are so secured, the officials of that county, and not this court, have the right to determine to which security they will first resort. They have determined to resort to the obligation of defendants. Nor does this record enable us to say with certainty that the sureties on the treasurer's bond are now responsible. It cannot, therefore, be said that the county will not lose its money if defeated in the present action. Assuming this suit to be the suit of the county to recover the money illegally deposited with A. Ives & Sons, does the statute prevent the enforcement of the contract? Did the Legislature, in enacting the statute of 1879, intend that those who agreed to make good a loss to the people, caused by a violation of that law, should be released from their contract? No such legislative intent is expressly declared in the statute. Shall it be inferred? The learned trial judge, in speaking of the statute, said: 'It simply means that this was a protection to the money of the people * * * against the county treasurer depositing it in a place that the lawmakers deemed insecure. * * * This statute was not enacted for the purpose of preventing the county getting back their money. * * * It seems to me it would be a very unreasonable interpretation of the statute' to hold, 'because a public officer violates the law, and does an act that he has no right to do, that therefore the people lose their money.' This reasoning, in our judgment, is sound, and is sustained by authority. In Deming v. The State, 23 Ind. 416, suit was brought to foreclose a mortgage securing the payment of school funds. These funds were loaned on property which was subject to a prior incumbrance, in violation of law, requiring such money to be loaned on unincumbered property. In opposition to the suit it was contended that the mortgage was void, and could not be enforced. This defense was declared untenable, and the reasoning of the court so thoroughly covers this case that we insert it in this opinion: 'These provisions [the statutory provisions respecting loaning on incumbered land] defining the duty of the auditor were obviously intended as safeguards for the preservation of the fund. Their whole tenor indicates a careful purpose of the Legislature to make every loan secure beyond any contingency. This, too, was unquestionably the only object sought to be attained. Should we hold that the mortgage is void because the auditor chose to disregard that provision of the statute which required him to make no loan upon lands incumbered, we should defeat the very object of the law, and enable the party who had obtained the loan by taxing the good...