Cheney v. Unroe

• Decision Date: 29 May 1906
• Docket Number: 20,803
• Citation: 77 N.E. 1041,166 Ind. 550
• Parties: Cheney et al. v. Unroe
• Court: Indiana Supreme Court

77 N.E. 1041

166 Ind. 550

Cheney et al. v. Unroe

No. 20,803

Supreme Court of Indiana

May 29, 1906

From Newton Circuit Court; Charles W. Hanley, Judge.

Action by John E. Unroe against George M. Cheney and others. From a judgment for plaintiff, defendants appeal. Transferred from Appellate Court under § 1337u Burns 1901, Acts 1901, p 590.

Reversed.

Emory B. Sellers, for appellants.

William Cummings, for appellee.

OPINION

Hadley, J.

This is an action upon an open account for work and labor which appellee claims he performed for appellants in the construction of a certain macadamized road in White county. The road was constructed under the provisions of the free gravel road act of 1901 (Acts 1901, p. 449, § 6899 et seq. Burns 1901). The appellants were the contractors, and appellee the superintendent of the road under appointment and pay of the board of commissioners. The complaint counts on a special contract for work and labor at $ 1.50 per day, but it is not shown that the work was performed on the road of which the plaintiff was the superintendent. The answer was the general denial, and payment. Verdict and judgment for plaintiff for the amount of his claim. The questions presented arise under the overruling of appellants' motion for a new trial.

The plaintiff testified that he was appointed superintendent by the board of commissioners and gave bond for the faithful discharge of his duties, namely, to see that the contractors executed the work of construction strictly in accordance with the terms and specifications of their contract, and his compensation was to be $ 1.50 per day. Under his said appointment he acted as superintendent 224 days, for which the county paid him at the contract rate. During the time he was acting as superintendent he also worked for the contractors (appellants) at general and common labor on the road, under a contract that he was to receive for his work the same price paid the other hands on the road. Under this contract he worked for appellants 167 days and had received from them $ 54 on account. On cross-examination he testified as follows: "Why did you work for $ 1.50 per day? A. Because I was getting work from both parties. You worked for the county, and for those whom you were employed to watch, and got pay from both? A. Yes, sir; and I earned my money."

Touching the testimony, appellants, at the proper time, requested the court to give to the jury the following instruction: "If you find from the evidence that the defendants were engaged in the construction of a public macadam road in White county, Indiana, during the year 1900, under contract with the board of commissioners of said county, and that the plaintiff was appointed by said board superintendent of said road, and qualified and gave bond as such superintendent, and entered upon the discharge of his duties as such officer, and so acted upon said road during the progress of the construction of the same, and if you further find that the work and labor sued for was done by plaintiff on said road while he was superintendent thereon and acting as such and not otherwise, he would not be entitled to recover anything therefor, whether the defendants employed him to do such work or not, and it will be your duty to find for the defendants." The refusal of the court to give this instruction presents the principal question in the case.

There is a class of contracts, entered into by officers and agents of the public, which naturally tends to induce the officer, or agent, to become remiss in his duty to the public, that the courts unhesitatingly pronounces illegal and void as being contrary to public policy.

As indicating the State's disapproval of kindred contracts, the legislature has provided as follows: "Any * * * county commissioner, * * * or their appointees or agents, * * * who shall, during the time he may occupy such office * * * be interested, directly or indirectly, in any contract for the construction of * * * work of any kind erected or built for the use of the * * * township, * * * shall be fined * * * and imprisoned in the state prison," etc. § 2136 Burns 1901, § 2049 R. S. 1881. All contracts entered into in contravention of the statute are utterly void. Wingate v. Harrison School Tp. (1877), 59 Ind. 520; Case v. Johnson (1883), 91 Ind. 477; Benton v. Hamilton (1887), 110 Ind. 294, 11 N.E. 238.

It remains to be seen whether the contract sued on falls within the general class referred to above. "It is a well-established and salutary doctrine," says a distinguished author, "that he who is entrusted with the business of others cannot be allowed to make such business an object of pecuniary profit to himself. This rule does not depend on reasoning technical in its character, and is not local in its application. It is based on 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." 1 Dillon, Mun. Corp. (4th ed.), § 444. The principle is stated in 1 Clark & Skyles, Agency, § 39(e), as follows: "Any contract of agency by a public officer by which he binds himself to violate his duty to the public, or which places him in a position which is inconsistent with his duty to the public and has a tendency to induce him to violate such duty, is clearly illegal and void." Greenhood, Public Policy, p. 337, states the doctrine thus: "Any contract by one acting in a public capacity, which restricts the free exercise of a discretion vested in him for the public good, is void." See, also, page 337 quoted approvingly in Brown v. First Nat. Bank (1894), 137 Ind. 655, 667, 24 L. R. A. 206, 37 N.E. 158.

The appellee was appointed superintendent by the board of commissioners pursuant to the statute. § 6869 Burns 1901, Acts 1901, p. 439, § 2. He was a public officer. City of Ft. Wayne v. Rosenthal (1881), 75 Ind. 156, 161, 39 Am. Rep. 127. The duties of his appointment required him to be personally present on the road during its construction, and for and on behalf of the taxpayers of the township see to it for them that the road was constructed in strict accordance with the plans and specifications of the contract. The interests of the taxpayers and contractors were adverse. Otherwise appellee's appointment was a useless expense. The General Assembly, when engaged in framing the statute, evidently deemed it wise to provide for the appointment of some one to guard the interests of those who should be called upon to pay for the improvement, as against the contractor employed to make it. Such provision is in perfect accord with accepted business principles. This conflict of interest is the source whence the rule under consideration acquires its form and force by making the person who has one part entrusted to him incapable of acting or identifying himself with the other side, and by temptation be led away from the duties of his trust.

Influence is a subtle agent. It is often...